Clearly, the cosmetics and toiletries market is not meeting current consumer expectations regarding natural and organic products. The gap does fully explain why sales remain flat but certainly significantly contribute to the trend.
“Consumers are turning to natural and organic products as they wish to avoid contentious synthetic chemicals in cosmetics and toiletries. The primary motive is avoidance of parabens, SLS / SLES, and chemicals with associated health risks,” explains Ecovia Intelligence, a research and consulting company that focuses on the natural and sustainable product industries.
As a consequence, giant cosmetics makers are trying to jump on the natural cosmetics bandwagon launching their own natural ranges.
With Seed Phytonutrients, which launched in the United States on Earth Day in April 2018, L’Oréal aims to “plant the seeds of health, well-being, and sustainability for future generations” thanks to a harmonious balance between the environment, beauty, agriculture, and sustainable business.
In Europe, the multinational has bought, in August 2018, Germany’s Logocos Naturkosmetik and has launched a new organic cosmetic brand dubbed La Provençale. The group also announced that a new Garnier organic range would hit shelves in France and Western Europe as of early 2019.
In a similar move to capitalize on consumer demand for ‘clean beauty’ products, Unilever has launched the Love, Beauty and Planet brand, while Henkel, known for brands like Schwarzkopf and Dial, is doubling down on vegan beauty with the launch of a new brand dubbed Nature Box.
Even more launches of natural products are expected from multinationals, however all may not be successful.
“Prior to the natural product launches route, the favoured mode of entry of multinationals was acquisitions. Yet, not all have provided dividends. In 2007, L’Oreal purchased The Body Shop and the organic cosmetics brand Sanoflore. The former brand was sold off to Natura Brasil last year, whilst Sanoflore remains a ‘marginalised’ brand. Critics argue that L’Oreal’s recent purchase of the Logona and Sante brands will suffer the same fate. Since purchasing the Logocos business in August, some organic food retailers in Germany are considering delisting,” highlights Ecovia Intelligence.
The market research firm sees consumer acceptance as a major challenge for multinationals. According to a recent research consumers identify small / indie brands with green values. “The same consumers will shun green products of large corporations,” forecasts Ecovia. The way forward maybe integration whilst differentiation: acquire natural or organic brands yet maintain their independence and core values.
Nevertheless, as ethical consumerism becomes mainstream and natural and organic products continue to make inroads in conventional channels, the multinationals cannot ignore this important trend. According to Ecovia Intelligence, global retail sales of natural and organic cosmetics have grown from almost nothing to USD 10.2 billion between 2002 and 2017.
“Large companies like L’Oréal and Unilever will continue to hedge their bets between developing green products and outright acquisitions. Market winners will be those who can successfully align brand values to consumer expectations. Others are likely to underperform as they find the green road is littered with obstacles,” concludes the market research firm.