Green Beauty

Are ‘natural’ beauty products positioned to bypass the recession? Here’s an insider’s look at how consumers interpret the verbiage—and where the growth lies.

By Karen Grant,
vice president of beauty and NPD global industry analyst and a member of Beauty Packaging’s board of advisors.

Green,” “eco-friendly,” “socially responsible,” “natural,” “organic:” It seems to be everywhere you look. Yet, what exactly is “it”? Is everything “organic?” Is that the same as “green?” Is a “green” product “socially responsible?” What do our consumers really think? Do they get “it”? Does “it” matter?

Often described as the “green movement,” today, consumer goods across industries as divergent as food, building materials and beauty, are offering a variety of earth-friendly products. Whether consumer demand is driven by the desire to save the planet or, on a more personal level, due to concerns regarding product safety and potential health risks, or, for some, just to be “on-trend,” being part of the current environmental movement is good business. Reportedly, some 35 million Americans regularly buy products that claim to be earth-friendly.

While there is considerable buzz around these green products, is this trend really viable for beauty? Is it growing? And, are there continued opportunities for growth?

Across channels, two out of three women (64%) age 18 years and up who use beauty products state that they have used natural beauty products. Evidence of this popularity can be seen in the dollar sales growth within makeup and skin care according to NPD’s BeautyTrends point-of-sale tracking service. In prestige beauty, while the overall industry struggled in 2008, that was not the overall trend among products aligned as natural.

As of year-end 2008, sales in U.S. department stores of makeup products aligned as natural had more than doubled in four years to reach almost $200 million. In fact, in 2008, compared to other more established makeup brand types, natural brands were among the few to post growth across the face, eye, and even lip categories. In skin care, where long established brands like Origins have been at the forefront of the natural trend, there has been an explosion of new brands. Today, of the brands claiming some affiliation with natural skin care, there are 70% more prestige brands than there were just over five years ago. In 2008, sales from natural brands in prestige skin care have grown to reach $300 million and these brands outpaced the growth of cosmeceutical (doctor) brands.

All in the Consumer’s Mind

In the minds of women who use beauty products, there appears to be significant blurring regarding the terms natural, organic, green/eco-friendly, and socially conscious/responsible. Many use the same words and phrases to describe both natural and organic for beauty products, and similarly, with the phrases used to describe green/eco-friendly and socially conscious/responsible. However, while there is blurring, there are some distinctions in how each of these terms is perceived. For three out of four women, the term natural resonates foremost as “safe”—for use on skin. These products are perceived as being without dyes or additives, healthier for you, and mineral-based by about seven-in-10 women and particularly among women age 35-54, followed by women 18-34.

Where is the interest and usage? (Source: NPD Natural-Organic Trends in Beauty 2008)

The top perception for the term organic is somewhat less personal. For two out of three women itis first, simply manufactured “without chemicals.” And, while six-in-10 women perceive these products as healthier for you and made without dyes or additives, that is somewhat less than those making similar statements regarding natural products. Also, just a little more than half (54%) perceive these products as safe to use on your skin compared with the 73% for natural products. Interestingly, while 18-34 year olds are most likely to perceive these beauty products based on what is in them (without chemicals, dyes or additives), women age 55-64 are most likely to perceive these products from the personal health aspect (is healthier for you, safe to use on your skin).

Green/eco-friendly syncs overwhelmingly with “helping the environment.” Eight out of 10 women perceive these products as safe for the environment, having biodegradable packaging, and packaging made of recycled material. And, three out of four women perceive them as made of renewable resources and made by companies utilizing renewable energy such as wind or solar. Whites and Hispanics are more likely to agree with these perceptions, and given the current popularity of all things green, it is not surprising that women age 18-34 are far and away the most likely to identify with these perceptions with almost 90% perceiving green/eco-friendly beauty products as being safe for the environment. While these products are highly identified with being safe for the environment, only one out of four women who use beauty products perceive green/eco-friendly beauty products as safe to use on your skin or healthier for you.

For socially conscious/responsible beauty products, the perception across age groups is primarily about the company–that it gives back to the community (80% describing) and does not test on animals (70% describing). These products are less associated with being environmentally friendly. Only about half of beauty product users perceive that these products are made by companies that utilize renewable energy, have packaging made of recycled material, biodegradable packaging, safe for the environment, or made of renewable resources. And, while these products are least likely to be perceived as made without dyes or additives, or as manufactured without chemicals, they are slightly more likely than green/eco-friendly products to be perceived as being safe to use on your skin. This may be due to the fact that the consumer perception is on the company, like Avon and Johnson & Johnson, which are perceived as offering trusted beauty products, and top the list of brands associated with being socially conscious/responsible.

Certification Importance

Overall, half of adult female beauty product users are familiar with the idea of “certification,” Of the certification terms, the most identified were certified organic, certified naturally grown and certified green.

While there is some debate as to whether there is really a need for certification of products in beauty, it does appear that certification provides consumers with a measure of reassurance. To a beauty product consumer, seeing a beauty product labeled as certified naturally grown, certified organic or certified green appears to mean that the product has met certain standards or been approved by the appropriate board.

How important is certification to beauty consumers? Interestingly, the two certification phrases that beauty consumers reported being the least familiar with are the ones rated highest in terms of being important to have on a beauty product label.

More than eight in 10 beauty product users who are familiar with the certification phrases certified green and certified naturally grown feel that these terms are very or somewhat important to have on a beauty product label compared with seven out of 10 women who feel this way about the phrase certified organic. Even on a top box basis, the same is true. About four out of 10 women feel that it is very important for a beauty product label to say certified green or certified naturally grown compared with only one in four citing certified organic as being very important to have on a label.

Only a minority of women feel that certification is not important. Of women beauty product users, three in 10 feel that it would not be very or at all important for a beauty product label to say certified organic, and just under two in 10 beauty product users feel that way about the phrases certified green and certified naturally grown.

Opportunities for Growth

Given the high degree of interest in eco-beauty products, its continued growth in the beauty market, and the still untapped levels of usage among beauty product users, there is significant sales opportunity in converting interest into usage. How do we turn these potential sales into reality?

In addition to gaining awareness and increasing the level of interest in eco-beauty products, the first opportunity for growth will be in overcoming the barriers to purchase for women who are already interested in eco-beauty products, but are non-users. For a number of these women, statements such as “I don’t have time to research to figure out what to buy” and “I will only purchase a natural
or organic beauty product if I can try it first to make sure it smells and feels like my usual brand” tell us that consumers are interested, but cautious before investing.

Convincing the beauty consumer to use eco-beauty products can be done through education and by giving the beauty consumer the opportunity to sample and try these products without monetary risk. This will be key to helping consumers to see the benefits, the effectiveness, and that these products are definitely worth the price.

Join Beauty Packaging’s Board of Advisors on May 21 at 11am, at Luxe Pack NY, for
a session entitled “Creating Brand Loyalty.” More info: www.luxepacknewyork.com