The increase in spend means that the market is growing by an average of 20 per cent a year, according to market researcher Organic Monitor, significantly above that of most other categories in the market where activity has remained largely stagnant in recent years.
The market demand for natural products is now feeding a vastly increased product offering, which can be seen by taking a look at retail shelf space around Europe, where a dizzying array of products purporting to have natural and organic ingredients seem to abound.
This has been fed by major players launching or extending natural lines, as well as retailers themselves launching a wide variety of private label lines featuring organic and natural-based ingredients.
"Initially most demand for natural cosmetics was from consumers who suffered from ailments like skin rashes and allergies, however demand has broadened in recent years" commented Amarjit Sahota, director of Organic Monitor.
But Sahota points out that now many consumers are turning to natural cosmetics because they contain minimal levels of synthetic ingredient, that consumers often associated with dangers and potential toxicity.
He also says that other consumers are choosing natural-based products for their functionality and more specifically organic-based ingredients for their traceability and ethical sourcing.
Right now the fastest growth is to be found in the German and French markets. But it is Italy and Germany that are the biggest markets in Europe, with a combined sales that make up 70 per cent of the annual total.
In Germany the market is well established, but continued growth means that it is strengthening its number one position in Europe.
As an indication of its development Sahota says that even discount retailers in Germany have begun to get in on natural cosmetics, with many launching their own private labels, one reason why naturals now account for 4 per cent of all sales in the country, with that figure set to rise to 10 per cent of total sales by 2012.
Looking at the supply of natural and organic cosmetic products in Europe, Organics Monitor says that there are over 400 companies now involved in the market, with most being small companies that lack a regional representation.
Currently Weleda is the leading producer of natural cosmetics in Europe. It is one of the few pan-regional players, distributing throughout Europe from its Switzerland base.
However, high growth rates are leading to new entrants on to the market and increased competition. This means that Weleda is seeing its market share eroded as larger players launch lines with aggressive marketing and advertising campaigns.
One hurdle the segment is facing is the fact that consumer trust is being hampered by a lack of industry regulation. Often consumers are confused by the number of industry certification bodies and the labels they use. Although legitimate bodies such as the Soil Association and BDIH operate well recognised certification schemes, many others also existing, making it hard for consumer to identify what each body represents.
According to the study this means that often products that are legitimately marketed as natural products are competing against products that are being marketed more on the basis of a natural image, rather than the actual ingredients.
Organic Monitor believes that this inconsistency is not only confusing consumers but also stifling demand as consumers are unable to differentiate between certifications bodies and what the certification really means. According to Sahota, "market winners will be those companies that can successfully differentiate their products from competing ones; natural and conventional".