A Natural Beauty Revolution

Transcription

1 May 14 16, 2017 Dubai International Convention and Exhibition Centre, UAE A Natural Beauty Revolution

2 A natural beauty revolution Introduction Natural and organic has become a key trend in the past decade, particularly in the food and beverage sector. More recently, there has been a growing focus on natural and organic beauty and there has been a flurry of new natural and organic cosmetics (NOC) brands and products entering the beauty and personal care market. Heightened awareness on the potential harmful ingredients in some products means that today s discerning consumers want to buy natural beauty products so they are fully aware of the quality of the ingredients that make up their beauty regime. In this report, Beautyworld Middle East takes a look at what is meant by the term natural and organic with a particular emphasis on NOC products. It briefly looks at the existing certification bodies that exist for NOC personal care products and the harmonising of standards which is an ongoing development. NOC personal care products are rising in popularity and the report explores the driving factors behind this while also touching on some of the players helping to shape this niche sector.

3 1. What does natural and organic actually mean? While there is a broad understanding of the term, there is no official definition for natural or organic products. Simply put, natural refers to any naturally derived ingredients that come exclusively 100 per cent from natural raw materials, but qualifying this can, and does, cause widespread debate. An organic product will use ingredients that were grown without the use of pesticides, fertilisers and other chemicals. The United States Department of Agriculture (USDA) under its National Organic Program, explains Natural & Organic as, A labelling term for food or other agricultural products that have been produced using cultural, biological and mechanical practices that support the cycling of onfarm resources, promote ecological balance, and conserve biodiversity in accordance with the USDA organic regulations. This means that organic operations must maintain or enhance soil and water quality, while also conserving wetlands, woodlands, and wildlife. Synthetic fertilisers, sewage sludge, irradiation, and genetic engineering may not be used.

4 2. What defines a Natural & Organic Cosmetics (NOC) product? There is no harmonised definition for NOC thus far and the organic term is not regulated. Inroads are being made to develop definitions and criteria in order to set a benchmark for defining and calculating what can be accepted as a natural and/or organic beauty product. The International Standardization Organization (ISO) in collaboration with the cosmetics industry and NATRUE, the International Natural and Organic Cosmetic Association, are working on such regulations. According to beauty blog Alyaka, more than 1,400 named chemicals have been banned in the beauty and personal care industry, but in the US only 10 are banned. It is expected that standards will become more harmonised with time, but there is still a way to go. In the meantime there is any number of organic certifications run by national certification bodies, which can award an NOC label such as French-based EcoCert, which conducts inspections across more than 80 countries making it one of the largest organic certification organisations in the world. This is why both consumers and manufacturers need to be wary of green washing. With no standard regulations in place to police, consumers need to be well informed in their purchasing decisions. Similarly, manufacturers must ensure that all their products rigorously conform to the claims they make about them, or risk harming their brand image. In 2013, the Soil Association surveyed shampoos and creams labelled as organic and found some of them to have chemicals. Both Nivea s Pure & Natural and Boots Botanics ranges were amongst well known brands criticised in the findings.

5 3. The Natural & Organic Cosmetics (NOC) industry With initial explanations out of the way, Beautyworld Middle East takes a look at the NOC industry which has stormed into the beauty and personal care sector in recent years and is now enjoying modest success. Let s first take a look at the overall beauty and personal care market. Euromonitor International research estimated the global beauty and personal care market to be worth circa USD 426 billion (bn) in 2015 and predicted a cumulative average growth rate (CAGR) of three per cent until The Middle East and Africa (MEA) is demonstrating the fastest growth rate in the world at an average of 6.4 per cent, more than double that of the global average. Insights reveal that niche products, personalisation and NOC will be amongst the key growth drivers in the industry in the coming years as cosmetics companies look beyond traditional formats to uncover potential in the more untapped markets in what is an increasingly competitive environment. There are no clear metrics defining the market value of the NOC industry. Different research companies suggest that it could range from anything between USD 16 bn and USD 66 bn by 2020 with some predicting an approximate 10 per cent CAGR for NOC beauty and personal care products until 2020, significantly higher than the aforementioned global growth rate of three per cent for the beauty and personal care sector. According to research by Euromonitor International, more than 30 per cent of respondents in an 8,000 strong sample across 16 major markets cited a product being natural or organic as one of the major factors that they would consider when buying skin care products. There is no doubting that it is certainly a sector to watch and one that holds huge potential, particularly for ambitious entrepreneurs who have the drive and innovation to enter into this relatively niche field.

6 4. What s driving demand? Consumer preferences are changing around the world at a rapid rate and companies are racing to stay ahead. There are many factors driving demand for natural and/or organic products, most notably the growth in mindful consumption, whereby today s consumer is more aware about the negative impacts of bad practices or toxic substances. With a proliferation of information available online, consumers are more informed than ever before on the perils of potentially harmful ingredients that can be found in beauty and personal care products. Shoppers are more conscious about what ingredients form part of their beauty regime and are anxious to ensure they are using products that are neither harmful to themselves nor to the environment. Furthermore, they want to be reassured that the product was manufactured in an ethical manner. Recent research by Mintel, for example, revealed that 42 per cent of UK consumers prefer to use NOC personal care products because they are better for the environment. And with rising disposable incomes around the world, consumers are willing to pay more for NOC products than their synthetic equivalents.

7 5. The players Euromonitor International breaks the NOC market down into four categories: Commercial players with natural lines/brands Identifying the upward trend in the cosmetics sector for all things natural, some of the global cosmetics giants were keen to get in on the act, acquiring already well established brands known for their natural or environmentally-friendly credentials. L Oréal acquired The Body Shop in 2006 in a GBP mn (USD 867 mn) takeover deal. Elsewhere, manufacturer Clorox is the parent company of Burt s Bees, a company that specialises in natural personal care products. Many international players are giving natural credentials to their brands such as Nivea s Pure & Natural range which claims that up to 95 per cent of its ingredients are of natural origin, or Herbal Essences that launched a Clearly Naked range with hair care products that are free of silicone, paraben and colorant. Private labels with natural lines/brands Private labels have also jumped on the bandwagon with brands such as Pantene, Balea and Weleda introducing clean ingredients to their shampoo and conditioner ranges. Local/regional players There are different players enjoying success with their NOC products in different parts of the world. The Aesop skin care range originally launched and became successful across Australia before it grew to enjoy global success, while Innisfree is a popular brand across Asia Pacific, but has not fully penetrated the European or American markets. Niche brands Young entrepreneurs, in particular, are enjoying inspiring success stories in the niche NOC market. For example, Aurelia Probiotic Skincare is an NOC brand which launched in 2013 that is now available to buy in many online stores and has become one of the fastest growing skin care ranges in popular department store Liberty in London.

8 6. Conclusion The NOC beauty and personal care industry is firmly in the spotlight as it steadily grows its market share. A relatively new industry, everyone from the global cosmetics giants to the local budding entrepreneur, is jumping on the NOC bandwagon. The corporate giants are firmly viewing the NOC market as integral to their continued growth. While there are no official definitions or standards for natural and organic cosmetics, inroads are being made to standardise the industry and there is an increase in associations and certification bodies helping to drive the agenda forward. Visit the Natural and Organic section at Beautyworld Middle East to stay abreast of the latest trends in the NOC beauty and personal care market and discover a range of niche products that are not only kind to the skin, but are kind to the environment too.