Organic food companies get in on cosmetics act

Industry analysts have already tipped 2007 as being a big year for the natural and organic cosmetic market, with further consolidation expected to follow on from the fervent activity witnessed over the past two years.

In 2006 the biggest name in the business, L'Oreal, made big inroads into the market, with the acquisitions of Sanoflore and Body Shop. And in line with these kind of moves, natural and organic food companies have also been busy tapping into the market by extending their branding into the cosmetics field.

In Germany organic food supermarkets, drugstores and even discounters have already launched natural cosmetics under their own private labels.

And according to Organic Monitor other European countries are set to follow suit.

This has been evinced by this month's launch of the bnatural line by the UK's leading food retailer, Tesco - an achievement that makes it the first British mainstream retailer to gain Soil Association-certified private label cosmetics.

But as well as food retailers, food companies are getting in on the act, too. "Leading organic food brands like Duchy Original and Alnatura have already developed natural and organic cosmetic product lines,"​ says a newly published Organic Monitor report.

The report also points out that Hain Celestial, the world's largest organic food company, is set to make a big impression on the European market, particularly ain light of its acquisition of Avalon Natural products last month, giving it a good positioning there.

With the help of its Jason Natural brand, Hain Celestial is already highly successful in the all-important UK natural food and cosmetics market, a position that is likely to help it build a bridge towards the mainland European market.

Organic Monitor believes that to enable the company to make this leap, it is likely that it will make an acquisition in mainland Europe in the course of the next year, following in line with the strategy it has already deployed in the non-dairy products and vegetarian food segments.

However, making that acquisition may prove easier said than done, particularly in light of the fact that many of the leading independent companies have already been snapped up, leaving a limited number of opportunities.

But once Hain Celestial has found its points of entry into the European market, that move should put it in direct competition with the big natural cosmetic players in Europe - a market that is currently dominated by L'Oreal and Estee Lauder.

One thing is sure though, with the inevitability of further merger and acquisition activity in the European market, together with a significant a continued increase in the number of product launches, 2007 is likely to prove to be a significant year for the natural and organic cosmetic market.