Global market for organic personal care driven by production innovation and certification
If the current rate of growth continues under the right market conditions, market researcher Grand View Research predicts the market value will reach USD$15.98 billion by the year 2020, at a CAGR of 9.8%.
The naturals market has also continued to register similar growth. But the organic market can be much a much more regulated and exacting category if products are certified, which invariably requires that the total percentage of organic ingredients in any given formulation exceeds 90%.
However, there is still no formal requirement for organic certification, which means that non-certified product lines can still make dubious claims about their organic content and get away with it.
Certification plays a big part
One of the biggest boosts to the category has been the increased effectiveness and recognition of the certification bodies, both on a national and international basis.
In particular the report points to the part the that certification bodies have played in facilitating the approval of organic status for a spectrum of personal care products, and how that has helped to feed growth, both in the country and internationally.
This is also playing a big part with consumers, who are increasingly recognizing certification logos, which in turn is helping them to both identify organic products while also assuring them that they are of the right quality and organic content.
However, there is still a significant amount of fragmentation and there remains to internationally cohesive body for which consumers can refer to for universal recognition, which is holding the category back in many respects.
International regulations on emissions
Attempts to change global manufacturing processes could also have a bearing on manufacturing practices that may lead to requirements for lower emissions and more sustainable products.
Indeed, the report notes that the adoption of the Montreal Protocol and Kyoto Protocol in both the U.S. and Canada, may eventually encourage some personal care manufacturers to seek out more sustainable ingredients and production methods in an effort to comply with the protocol terms, though tangible changes are difficult to see at this early stage.
Technological innovations help production
Organic personal care products have been traditionally difficult and expensive for manufacturers to produce, which invariably gets passed along to consumers in the form of a high price tag.
However, the report also points to the fact that new and enhanced technologies for organic personal care production are leading to more cost-effective product lines, with companies such as The Body Shop, Aveda and the Estée Lauder brand Origins, all expected to take advantage of this in the coming years.
Ultimately this should make many organic personal care lines more amenable to the average consumer, giving way to increased scope for the category.
Changing consumer perception and spend
This also ties in with changing consumer perception towards such products, particularly with the fact that consumers are now more and more aware of the importance of buying products with a lower environmental impact.
More specifically, organic or naturally derived products can invariably lay claim to being more sustainable because of reduced pollution and a lower reliance on unsustainable ingredients, particularly those that are petroleum-derived.
Likewise, rising consumer spend in developing countries, specifically India, China and Brazil, is also likely to build on a market that has been created by demand in developed countries such as Germany, France, the UK, and to a lesser extent the U.S.
Challenges and opportunities
Despite the growth of the category and the fact that many of the big names have a clear footing in the organic personal care market, the report points out that the market remains fragmented by many small players.
Most of these small-scale players have a strong hold in their domestic markets – invariably in North America and Europe – but have not made the step to go international.
However, moves to expand internationally are being seen as more and more of the smaller key players are bought up by multinationals, with similar moves by Clorox to buy up Burt’s Bees and L’Oreal acquiring both The Body Shop and Kiehl’s likely to become more common during the course of the next five years.