Kline: Global natural personal care market remains strong
PARSIPPANY, N.J. — The natural personal care market continues to see strong growth, posting healthy double-digit gains globally with Brazil and China taking the lead as the fastest-growing natural personal care markets, according to consulting and research firm Kline & Co.
The natural personal care market posted a 10.6% increase globally to reach $29.5 billion at the manufacturers’ level in 2013. Brazil and China are the fastest-growing natural personal care markets, with sales in China increasing nearly 24% in 2013 and slowly challenging the United States’ global market share, according to Kline’s recently published Natural Personal Care: Global Market Brief.
Growth within mature markets — driven by the large number of brands present in the regions competing on products, price, and product efficacy — remains impressive as exemplified by a 7% increase in the United States and 6% in Europe.
“Within the flourishing Chinese market, while both domestic and foreign brands are enjoying growth, domestic ones still claim an estimated 80%-plus share of the market. Notably, of these local players, those offering mostly TCM (traditional Chinese medicine) products account for approximately less than two-thirds of the Chinese natural personal care market. However, international natural brands are becoming more accepted by Chinese consumers, as they are considered to be of a higher quality,” said Zachary Ferrara, project lead for Kline in China.
In the last five years, several global brands have entered the Chinese natural beauty market, including Jurlique (2009), Kiehl’s (2009) and Origins (2010).
The strength of the Brazilian market is being driven by leading marketers Natura and O Boticário, which collectively claim an estimated 85% total market share, according to Kline. The Brazilian market is well developed with regard to sourcing of organic and natural ingredients, but companies still have a high concentration of synthetics in their formulations.
The natural beauty market across the globe is extremely fragmented, with only six companies enjoying a share of 3% or more, Kline noted. The leading brands differ regionally, with Aveeno and Bare Escentuals leading in the United States, L’Occitane and Saishunkan in Japan, Chando and Inoherb in China and Yves Rocher and Oriflame in Europe.
The channel mix also varies significantly between regions. In Europe, pharmacies dominate the scene while mass outlets post the highest growth. Direct sales lead in Brazil, and health and natural food stores rank first in the United States.
Due to high manufacturing costs and limitations of natural preservatives, natural-inspired products are preferred by many manufacturers, and they dominate the market. However, encouraged by growing consumer awareness and improved technology, several companies are seeking to reformulate their existing product lines to remove synthetic ingredients. With no strict government-mandated directives and standards, various certifying agencies are taking initiatives to regulate the market, but the challenge is to scan for its naturalness, according to Kline. In addition, only a few marketers take the initiative to approach the certifying agencies to get their products certified.
Experiencing double-digit growth since 2008, the natural personal care market has seen a compound annual growth rate of 11.3% over the last five years and is projected to post an increase of 9.2% to reach $46 billion in 2018.
“Although growth numbers have settled, many factors — including a focus on new natural ingredients, the opening of new channels of distribution and consumer movement demanding greater transparency in labeling — are stimulating the industry. Moreover, marketers are offering products specifically designed for such specific demographic groups as men and babies, thereby opening up greater opportunities,” said Carrie Mellage, VP of Kline’s Consumer Products practice.
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Skin care brand Ahava names new president
NEW YORK — Dead Sea mineral-based skin care brand Ahava has appointed Beth Ann Catalano as president of Ahava North America, effective Jan. 1, 2014.
Catalano succeeds Elana Drell-Szyfer, who recently joined the ranks at Kenneth Cole Productions.
Catalano formerly served as SVP sales, administration and education at Steiner Leisure where she oversaw the Bliss, Elemis and Remede portfolios. Prior to that, she co-founded the hair care startup, Jonathan Product, breaking numerous retail sales records and winning industry awards by executing a strategy that utilized reality TV, namely Bravo’s "Blow Out," to market the brand. Her industry experience also includes positions at Shiseido, Unilever and Lancome.
"Ahava has made tremendous strides in the U.S. market — both consumers and retailers alike are taking notice of Ahava because there is a real appreciation for unique, authentic brand stories. I am very excited to be leading the business and look forward to building the business into a true powerhouse,” Catalano stated.
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3FLOZ opens automated retail store at Atlanta’s airport
NEW YORK — A chain of stores that stock small items for travelers has opened its latest location in Atlanta.
3FLOZ announced Monday the opening of its newest fully automated retail store at the Hartsfield-Jackson Atlanta International Airport. The store features beauty, personal care and other products in sizes that allow travelers to pack light. Products include sunscreen, hairspray, toothpaste and 3FLOZ’s private-label Essentials travel kits.
The chain already operates fully automated retail stores, or FARS, at the airports in Houston, Dallas, Las Vegas, Minneapolis, New York and Raleigh-Durham, N.C.
Congratulations to 3FLOZ. Back in 2006 I made a prediction that some in-airport retailer would emerge to fill the void and capture the sales opportunity. Glad to see that this has come to fruition. Personally, I believe their FARS format will continue thrive. And, opportunity exists to broaden assortment to include other travel essentials.