The market for natural personal care products has persevered through the recession, posting strong gains around the world, reports Nancy Mills, industry manager, consumer products, for global market research provider Kline. Spurred by growing consumer awareness, better raw material supplies, and wider availability of more affordable products, the naturals market posted double-digit gains in 2009. “It is a sustained pattern of strong growth that has personal care product marketers of all sizes looking to seize the growing opportunities in worldwide markets to tap into this attractive industry,” she reports.

With more than a 15% compund annual growth rate (CAGR) over the last five years, the naturals trend seems to have solidified its position as more than just a passing fad, says Mills. “While the trend is growing steadily worldwide, what makes it most interesting is the diversity of impact in each region. Kline’s Natural Personal Care 2009 report—the only such study to examine the naturals industry in the United States, Europe, Asia, and Brazil—reveals significant differences among the major markets with regard to consumers’ adoption of the trend, the popularity of products, the competitive landscape, and the degree to which so-called natural products really live up to their billing.”

As a clear indication of the growing naturals appeal, manufacturers are pushing the envelope of what passes for natural in order to get on the bandwagon. Kline’s ingredient analysis finds that nearly 75% of so-called natural personal care products are not so natural after all. Mills says the overwhelming majority are considered “natural-inspired,” comprised mostly of synthetics with just enough natural ingredients thrown in to take advantage of low consumer differentiation. “Unfortunately, the lack of explicit standards that define the degree of naturalness in most markets makes it possible for manufacturers in some countries to call their products ‘natural’ just by adding a flowery label to the package,” she adds.

According to the report, Brazil is the world’s second largest country market for naturals, due in part to growing consumer purchasing power. By the sheer size of its population, growth in GDP, and disposable income among consumers, the Asian market is also quite attractive to global marketers. In addition, a rich heritage of Ayurvedic and herbal medicine, particularly in India and China, means that consumers are quite familiar with the principals of natural remedies.

In Europe, the naturals market is thriving on an increase in the supply of products and the expansion of specialized skin care offerings with anti-aging and sun protection benefits. While less than one-third of the overall market comprises truly natural products, this segment is growing here as marketers reformulate their products to meet increasing demands of certifying bodies.
Meanwhile, in the U.S., the market for naturals posted relatively modest growth in 2009, but was still impressive compared to the cosmetics and toiletries market as a whole.

“With overall growth in the naturals industry expected to average just over 12% through 2014, the trend will no doubt spark even more product innovation as marketers reformulate products to capitalize on consumers’ interest,” says Mills.