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Consumers spending green on organic beauty items

BY Antoinette Alexander

Eco-beauty continues to represent growth opportunities for manufacturers, as environmental and safety concerns prompt more consumers to opt for “natural” alternatives. But the opportunities may be even greater at mass than first thought, as the economic crunch could give rise to “pseudo-natural” or “naturally inspired” products that are typically cheaper.

According to research by consulting and research firm Kline & Co., the natural personal care market in the United States topped out at just over $2 billion in sales at the manufacturers’ level, up nearly 19% compared with 2007.

Consumers’ desires for products free of harsh chemicals and those that are environmentally friendly has given rise to the whole natural and organic movement in beauty—but throw the current recession into the mix and it opens the doors for mass retail channels and those lower-priced “pseudo-natural” or “naturally inspired” products. These products contain natural extracts but also contain synthetic ingredients for their functional performance.

“Major marketers are in an excellent position to leverage the naturals proposition that began with the smaller niche players,” stated Carrie Mellage, director of Kline’s Consumer Products practice. “Manufacturing economies of scale, a stronger position for negotiating supplier agreements, and well-developed distribution channels will allow master brands, [such as] Unilever’s Dove and Colgate-Palmolive’s Softsoap, to ride the naturals wave even during lean times.”

One recent example of this movement is the new Aveeno Nourish+ hair care collection from Johnson & Johnson Consumer Cos. The products feature Aveeno’s Nourishing Wheat Complex, which is a blend of wheat germ oil plus wheat protein.

Echoing the sentiment is a recent report by market research firm the NPD Group, which found that at least 2-out-of-3 beauty product users said they are interested in some form of eco-beauty products. Eco-beauty products can be defined as being either natural, organic, green/eco-friendly or socially conscious/ responsible beauty products.

“Whether the consumer demand is driven by the desire to save the planet, concerns about product safety and potential health risks, or just being ‘on-trend,’ being part of the current environmental movement makes good business sense,” stated Karen Grant, VP and senior global beauty industry analyst for NPD.

NDP has found that, according to stated interest and usage, organic and green/eco-friendly beauty products have the greatest opportunity for expansion, followed by socially conscious/responsible beauty products, with nearly 4-outof-10 women stating they have used these products.

For example, actress Kate Hudson and hairstylist David Babaii have developed David Babaii for WildAid, a brand of professional hair care products and styling tools. A percentage of the revenue from the line benefits the global wildlife conservation organization WildAid. Made with a blend of natural ingredients, the products are free of sulfates, parabens, animal products and are not tested on animals. The products currently are sold within several mass-market retailers, including Rite Aid and Duane Reade, and, as of June 1, the company added Sally Beauty stores to its distribution channel.

There’s also the Out of Africa line of personal care products, which are not only made with 100% all-natural ingredients, but also donate 3% of sales to School Children Unite, a foundation providing education to children of West Africa.

For 2009, the company has developed several new products, including 9-oz. and 8-oz. shea butter body lotions, 2-oz. shea butter hand creams and 0.25-oz. shea butter lip balms. In addition, the 3.75-oz. shea butter bar soaps have new packaging to better communicate the company’s support of School Children Unite.

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Kroger declares quarterly dividend

BY Michael Johnsen

CINCINNATI The Kroger Co. announced that its board of directors declared a quarterly dividend of 9 cents per share to be paid on Sept. 1 to shareholders of record at of the close of business on Aug. 14.

Kroger, one of the nation’s largest retail grocery chains, employs more than 326,000 associates, who serve customers in 2,475 supermarkets and multi-department stores in 31 states.

On Thursday, the company announced that its president and COO Don McGeorge was retiring. McGeorge has been replaced by W. Rodney McMullen.

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Walgreens to test diabetes care model

BY DSN STAFF

NEW YORK Walgreens continues to flesh out its revamped strategy to be the nation’s most convenient and accessible provider of pharmacy and health-and-wellness services.

 

The latest plank in that platform is its plan to test a pharmacy-driven outreach and support program for patients with diabetes.

 

Diabetic-care services and product presentations are nothing new in the nation’s chain and independent drug stores; every pharmacy leader knows that diabetes is a major, (often undiagnosed) health challenge and a “gateway” disease that usually subjects its sufferers to a slew of other related conditions involving the circulatory system, the skin and other organs. It’s also no secret that diabetics generate far more in annual drug store sales to treat these related conditions.

 

What makes Walgreens’ pilot program worthy of notice are two things.

 

 

First, with some 6,800 retail pharmacies, 350 in-store and worksite clinics and a network of specialty pharmacies across the United States, the company wields enormous potential power in the healthcare marketplace. If it expands its fledgling diabetes pilot beyond the test stage, it has thousands of “points of care” through which it could offer diabetes support programs and other disease management offerings. It’s a huge potential resource to offer diabetic patients and their employer-based or government-sponsored health plans, not to mention those patients’ overburdened, time-constrained primary care doctors.

 

 

Second, Walgreens is very deliberately positioning its diabetes care offering as a part of a much broader, integrated healthcare platform that links patients in the program to all the company’s health-and-wellness capabilities, said Walgreens CEO Greg Wasson. And it dovetails neatly with the Obama administration’s call for “more preventive care and better access,” in the words of Walgreens’ top manager.

 

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