Pharmacy power? Natural & organic cosmetics to grow outside of specialty retail – Ecovia Intelligence

In 2020, the global natural and organic cosmetics*​ market was worth €10.28bn ($11.9bn), up 2.9% on the previous year, with the European market pegged at €3.89bn ($4.5bn), according to UK-headquartered research and consulting firm Ecovia Intelligence. Globally, the US, Germany and France were the three leading markets in natural and organic cosmetics.

*​Ecovia Intelligence defines natural and organic cosmetics as follows: For ‘natural’, a product must be made using plant extracts and other natural ingredients and avoid 'contentious' synthetic chemicals such as parabens, petrochemicals, artificial formaldehydes, mineral oils, aluminium salts and phthalates etc. For ‘organic’, the definition is the same as natural but containing certified-organic ingredients.

Natural and organic specialty stores ‘more saturated’ in Europe​

Speaking at this week’s digital SEPAWA 2021 event, Iveta Kovacova, research manager at Ecovia Intelligence, said future growth of the natural and organics cosmetics sector in Europe would primarily take place in pharmacies and parapharmacies and non-specialist retail channels like beauty and department stores, spas and salons and e-commerce.

This, Kovacova said, was because specialist natural and organic retailers were now “more saturated”​ in Europe, with shelf space stable and no significant expansion anticipated. The COVID-19 crisis has also driven consumer demand for wider access of these products, she said, particularly online.

Trends in France – one of the most significant natural and organic cosmetic markets in Europe – were a good indicator of this growth happening beyond specialty stores, she said. Between 2005 and 2019 in France, sales revenues of natural and organic cosmetics from specialist retailers grew from €64.7m ($75m) to €220m ($255m) but sales from pharmacies and parapharmacies grew from €7.7m ($9m) to €257.4m ($298m). Sales growth from ‘other’ channels, which included spas, salons, department stores, beauty retailers and online grew from €18.9m ($22m) in 2005 to €114m ($133m) in 2019.

“So, we see that the biggest growth actually came from pharmacies and parapharmacies, as well as other channels, and we expect this trend to continue,”​ Kovacova said.

In Europe, the rise of multi-brand concept stores like Mademoiselle Bio would also continue to shape the future of where natural and organic cosmetics were distributed and shopped, she said.

New entrants, NPD and private label lines ​

Kovacova said the market would also continue to see a steady influx of new brands and new product concepts hit shelves, including those from larger more “conventional”​ conglomerates. Personal care major Colgate-Palmolive, for example, launched its vegan-certified toothpaste line Smile for Good in 2020​ and L’Oréal also launched its Garnier bio range​ in the last few years, she said.

Many of these major companies would also continue with merger and acquisition activity in the natural and organics space, she said, and continue to segment out portfolios to target specific consumer groups, including lines dedicated to men’s grooming and baby care.

Product development would also continue in the private label space, she said, though success here would stay “mixed”.​

“Private labels haven’t been equally successful in all European countries,” ​Kovacova said.

One example of a “very successful brand” ​was the private label brand of Coop Switzerland Naturaline which offered a wide range of certified products and held a “significant position”​ in Switzerland’s wider natural and organics sector. Another “very, very successful”​ line was Alverde – the private label brand of German drugstore chain dm, she said.

Labels, labels, labels – food, environment and social​

Moving forward, Kovacova said there would be also be a continued shift in the packaging and marketing of natural and organic cosmetics with the ongoing rise and expansion of labels.

“We see increased penetration of food labels, for example the vegan label is becoming very popular which is related to increasing popularity of the vegan lifestyle. Also, gluten free, halal and Non-GMO Project Verified,”​ she said.

Fairtrade would also continue to widen reach across natural and organic cosmetics, she said, as consumers continued to express interest in the “social aspect of sustainability”, ​alongside a range of other environmental and eco labels. A few examples, she said, included the EU Ecolabel, Nordic Ecolabel and various marks that pertained to various aspects of sustainability, such as the Green Tab, Green Seal and Allergy-Certified. The broader Cradle-to-Cradle concept would also continue to prove important for natural and organic cosmetic product development and marketing, she said.

“European consumers have a very high level of awareness and they look for certifications, especially those that pertain to formulation of a product,”​ Kovacova told CosmeticsDesign-Europe in the Q&A following her webinar.

Her overall message to brands? “Make sure you have the right certification and consumers will respond to it.”​