“Organic personal care products market is growing at rapid pace across the world,” states a report recently published by Transparency Market Research.
According to the study titled “Organic Personal Care Products Market for Skin Care, Hair Care, Oral Care and Cosmetics - Global Industry Analysis, Size, Share, Growth, Trends and Forecast, 2012 - 2018”, rising concerns for health safety, increasing green consciousness and growing consumer’s awareness about the hazards in synthetic chemicals have fuelled the demand for organic personal care products worldwide. As a result, the global demand for organic personal care products, which was over 7.6 billion US dollars in 2012, is expected to reach 13.2 billion US dollars by 2018, growing at a CAGR of 9.6% from 2012 to 2018.
North America leads the way
Considering the regional repartition of the market, Transparency Market Research notes that North America was the largest consumer of natural and organic personal care products in 2011 and accounted for over 34% of the global consumption. The North American market is witnessing growth partly due to increased awareness about the organic principle and mainly due to entry of new multinationals, which are making organic products more easily accessible and visible for the consumer.
Europe followed North America in terms of demand and accounted for over 29% of the global natural and organic personal care product demand in 2011. Germany and France were the primary consumers of organic personal care products in Europe together accounting for over 30% of the European demand.
Japan, which is expected to register the fastest growth among all regions, accounted for over 42% of the total demand for natural and organic personal care products in Asia-Pacific. “The belief in natural and organic remedies is already well ingrained in the Japanese culture therefore it became easier for the manufacturers to make the organic culture acceptable to the consumer,” comments the market research firm.
Skin and hair care dominate
Skin care products are the largest segment and accounted for over 32% in terms of revenue across all the product segments in 2011. Transparency Market Research considers they will continue to dominate the organic personal care product market. The major factors contributing to the growth of this segment are launch of new products and widening distribution channels.
Hair care was the next largest product segment accounting for roughly 25% of the total revenue in 2011.
Fragmented market
The natural and organic personal care products market is fragmented, with the top 10 companies accounting for little over 53% of the market share in 2011.
According to Transparency Market Research, Bare Escentuals was the largest manufacturer for this product category in 2011 and accounted for over 7% of the market share by revenue. Estee Lauder, Burt’s Bees and The Hain Celestial Group were the next largest companies in the natural and organic personal care market accounting for over 20% of the market share together in 2011.
“As the organic personal care products market show high growth potential many new companies are entering the market through mergers and acquisition route or through shifting their production line from synthetic to organic,” adds the market research firm.
Consumer confusion
Despite good growth prospects, Transparency Market Research deems that low consumer understanding of natural and organic personal care products, curbing pseudo-organic products competing with authentic products, multiple standards creating consumer confusion are some of the few factors dampening the demand for these products.
