COVER STORY

Sustaining
Natural Growth
Growth in natural and organic personal care products is strong, but it’s
not been without its challenges including definitions and enforcement,
channel expansion, sustainability and supply chain management.

BY KAREN A. NEWMAN
T
he pace of natural and organic product
launches has been accelerating since
2002, when 624 such introductions
were recorded by Mintel’s Global New
EXECUTIVE SUMMARY Products Database (GNPD). In 2004, the
GNPD reported 2,900 new natural or organic
cosmetics and toiletries launched. As reported the word natural is used in marketing and
• WHAT’S IN A NAME? in GCI last May, Mintel saw natural-oriented packaging,” said Duber-Smith.
The term “natural” has never launches across all categories including lip “Organic ingredients, on the other hand,
been adequately defined, making
plumpers by companies such as Jason Natural are defined by the USDA and enforced by the
it impossible for the industry to
draft, let alone adopt, a common Products and organic hair colorants by Tints FDA and FTC,” said Duber-Smith. “Recent
standard and certification process of Nature from Herb in the U.K. This past concerns that organic regulations didn’t
for the purpose of enforcement and January, Baby Bouquet released a new line apply to topical personal care products have
consumer understanding. of natural baby skin care products. Aubrey been addressed, opening an entire universe
Organics launched its sun care line including for companies wishing to gain product
• CHANGING ATTITUDES, a tinted sunscreen SPF 20 Natural last month differentiation and competitive advantage
CHANGING CHANNELS at the annual Natural Products Expo West. by positioning brands as organic.” He added
“Products are available in an Numerous launches aside, the segment is not that organic foods and beverages have been
increasing number of channels as without its challenges. growing at rates of more than 20% annually
evidenced by major players like
for quite some time.
Tom’s of Maine and Burt’s Bees
Producers of natural and organic products
enjoying success in mass retailers What’s in a Name?
like Wal-Mart and Target, the around the world work under different
expanding role of e-commerce Darrin Duber-Smith, MS, MBA, president regulatory and standard criteria, but abiding
and other direct channels, and the of Green Marketing, Inc., said one of the by the standards and using the available
continued growth of natural, spa, challenges for the natural personal care logos and indicators are an important way
salon and prestige channels,” said industry is that the term “natural” has never to communicate with consumers about the
Darrin Duber-Smith. been adequately defined, making it impossible quality of their products.
for the industry to draft a common standard Waleda, the 85-year-old Swiss manufacturer
• SUSTAINABLE SUPPLY and certification process for the purpose of of organic and biodynamic body care
“As a manufacturer, we are not enforcement and consumer understanding. products, is certified by the BDIH, a
only committed to using recycled
The International Association of Natural European organization that follows a broad
and renewable resources. We
also support local and regional Product Producers has been working on range of criteria to ensure its standards are
communities to implement more drafting just such a standard for the past 16 met. Compliance allows manufacturers to
recycling programs and education months, and Duber-Smith said the group use a special mark acknowledging quality
about sustainable living,” said recently posted its first draft of a standard for ingredients, products and business practices,
Laura Setzfand. review at its Web site, www.ianpp.org. “The according to Jennifer Barckley, Weleda public
group’s efforts could eventually redefine how relations and communications manager.

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 expanding base of U.S. consumers who report
using natural and organic personal care
products. “Growth is driven by increasing
“This is significant,
attitudes in favor of health and wellness and because consolidation
environmental sensitivity as well as more
product availability,” said Duber-Smith. usually forewarns of a
“Products are available in an increasing maturing market.”
number of channels as evidenced by major
players like Tom’s of Maine and Burt’s Bees —Darrin Duber-Smith
enjoying success in mass retailers like
Wal-Mart and Target, the expanding role of
e-commerce and other direct channels, and Singapore, Hong Kong, Malaysia, Kuwait
the continued growth of natural, spa, salon and Dubai, and six Korres stores in Athens,
and prestige channels,” he said. London, Barcelona and Helsinki.
For Korres, a natural products company For Zia and Jason, the distribution strategy
established in Greece and with roots in the has and will continue to focus primarily on
first homeopathic pharmacy in Athens, the the natural channel, given the tremendous
channel strategy varies upon the special opportunity to continue to improve depth
JASON NATURAL PRODUCTS

characteristics of every market. “In Greece, of distribution in these outlets, according to

our products are distributed to more than Setzfand. “In recent years, specialty stores and
5,000 pharmacies,” said Maggie Vasilyadis, mass outlets with a commitment to natural,
spokesperson for Korres Natural Products. health and wellness have offered additional
“Selling our products in Greek pharmacies opportunities for our lines as consumer
is therefore very natural as we ourselves awareness and demand for natural products has
also started from a pharmacy.” In other increased. We will continue to evaluate these
U.S. brands Zia Natural Skin Care and Jason countries, the concept of a pharmacy is very opportunities to grow our brands and educate
Natural Products, both part of The Hain- different and doesn’t always fit the Korres consumers about the difference between natural
Celestial Group, are free of animal-derived image. Korres works instead with well-known and mainstream products,” Setzfand said.
ingredients and it is company policy to not department and beauty stores, which often Just last month Jason introduced Red
test on animals or use ingredients that were have a special area for the niche beauty and Elements Skin Care based on red tea. Red
tested on animals. “This commitment is very lifestyle brands from around the world, Elements is advertised as combining the power
important to our consumers and (is) indicated according to the spokesperson. of red tea, advanced peptide technology and
on our packaging through the leaping bunny “In the United States, as awareness powerful elements from the earth to firm, tone
symbol,” according to company spokesperson has grown about our brand’s quality and and fight the signs of aging. The nine-product
Laura Setzfand, director of marketing for both effectiveness, our distribution has expanded Red Elements line includes gel and lotion
companies. “The recycle symbol and natural from small independent beauty boutique cleansers, toner, day and night moisturizing
ingredients logo are also extremely important shops to prestige beauty chains. Thirty percent creams, an exfoliating scrub and more.
to our consumers.” of our business is currently represented For Weleda, the natural market is the primary
The challenges for this segment don’t end through our independent accounts, and 70% distribution channel and it is committed to that
with definitions and standards, however. Zia and through the prestige beauty chains. In the direction for the future. In the United States, the
Jason are two examples of what Duber-Smith short term, we see a continuous growth and company distributes in natural markets such as
characterized as “the wave of consolidation” that awareness of our brand within the prestige Whole Foods Market and other organic food
has been going on in the natural and organic market,” said Vasilyadis. stores, co-ops and apothecaries. “In addition,
personal care segment in recent years. “This Korres distributes through a variety of we work (as a small percentage of our market)
is significant,” said Duber-Smith, “because retail operations around the world
consolidation usually forewarns of a maturing including Sephora in the United
market.” Burt’s Bees, Dr. Hauschka, Avalon States, France and Italy; Henri
and others also have undergone some kind of Bendel and Whole Foods in the
acquisition or equity funding in recent years, United States; Harvey Nichols,
according to Duber-Smith. Liberty, Harrods and Selfridges, in
the U.K.; Ludwig Beck, Quartier
ZIA NATURAL SKIN CARE

206, Apropos in Germany; Le

Changing Attitudes, Changing
Bon Marché, La Samaritaine and
Channels
Pharmacie du Corner in France;
Growth in the segment shows no signs of and Kit Cosmetics in Australia.
slowing, due mainly, said Duber-Smith, to the Korres also distributes in stores in

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 COVER STORY

in natural and organic foods appears to always been a challenge, especially as the
“Our goal is to extend extend to personal care products, as well,
according to Jason Naturals’ Setzfand. “Most
industry has taken a paraben-free stance,”
said Setzfand. “Jason has been paraben-free
our commitment to the consumers are introduced to natural personal since 2002 and will continue to research and
care through their interest in food,” she said. evaluate alternative methods of preserving our
natural products industry “Enhanced packaging and marketing are products effectively.” Educating consumers
and the environment also encouraging nonusers to try natural for about the difference between a truly natural
the first time and formula improvements brand such as Jason or Zia and a natural
throughout our supply are changing the perception that natural brand in name and marketing only is another
chain. This commitment products are less effective.”
Weleda sees consumer response to its
big challenge for the company. “There is
significant consumer confusion regarding
is important to our products growing throughout the world. the definition of natural and organic and
“We are very well-established in Western how natural means vastly different things to
consumer and an integral Europe, however, in the United States different brands,” said Setzfand.
part of the brand.” and Canada, we are also expanding,” said “The organic personal care market in
Barckley. She said the growth and brand the United States is becoming increasingly
—Laura Setzfand exposure can be attributed to two factors: competitive with newcomers to the market
The organic market is growing overall in both with fresh marketing approaches,” said Weleda’s
the food and personal care categories;
EASTERN EUROPE and, Barckley. So, the company works continually
Weleda is increasing its marketing through to differentiate itself from competitors,
with various professionals at spas, wellness ads in targeted trade publications and communicating product quality, history, brand
centers and with doctors and pharmacists,” said communication support at the retail level. philosophies, efficacy and more.
Barckley. Weleda opened its flagship store in Consumer response to Korres natural
North America in Palisades, New York, 15 miles products seems to be fast-growing, according
Sustainable Supply
outside New York City. “In the short term, we to Vasilyadis. “Both our product quality that
do not see this changing for us. We see a great promotes purchase repetition and our strong It stands to reason that a company committed
deal of development potential in our existing image have contributed to that progress. In to producing and marketing natural and
markets, particularly in the natural industry,” Greece, we are now very well-established organic products would seek to extend the
Barckley said. as we have become the leading Greek skin product benefits to the environment and to
Baby Bouquet, the Santa Ana, California, care brand in Greek pharmacies. Our export push that thinking along the supply chain.
marketer of luxury natural baby care products, activity is also growing. The choice of the Weleda uses recyclable packaging that
finds itself facing the challenge of building a right distributors has been definitely a is safe for its products and safe for the
niche within the naturals niche. It has worked parameter of great importance. environment. They use either glass bottles
to create winning formulations; its packaging “Moreover, especially in the U.K. and the or aluminum tubes with protective plastic
is a hit with mothers for its hands-free pump, United States, we have experienced a great coating to protect the formulations, or
its logo, whimsical. Still, it struggles with progress. This positive feedback is definitely polyethylene terephthalate (PET) bottles.
promoting to the naturals channel. “Many the result of our strategic move to operate Their packaging serves to preserve its
stores have tried baby lines early on and did in these two countries through our own products as no synthetic preservatives
not have very much luck with them. They are subsidiaries. We are now, therefore, closer to are used in their formulations. Therefore,
very hesitant to try them again,” said John Dee, both our retailers and consumers,” Vasilyadis packaging is very hygienic. “We are also
company owner. “But the market has changed continued. In addition, U.S. consumer
over the past five years. The fastest-growing demand has grown significantly due to the
“new parent” age group is the 35-to-45-year- press the company receives in consumer
olds.” These parents have established careers, fashion and beauty publications. “Our
college degrees and lots of extra income, Dee retailers reinforce our brand image and offer
said, and are willing to spend money on the credibility and product awareness to our
best products available to keep their babies safe, brand as well,” she said.
KORRES NATURAL PRODUCTS

happy and healthy. They are also part of what’s As personal care product marketers, natural
driving the success in the natural foods space, products companies face the same challenges
said Dee. as any company doing business in the fast-
moving and highly competitive personal care
market. A commitment to producing natural
Consumer Interest
and organic products, as can be imagined,
Sales data showing continuing growth in the brings its own set of challenges, chiefly
category are borne out by what marketers product stability and preservation.
are seeing in the stores. Consumer interest “Product stability and preservation have

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 COVER STORY

constantly working to make our packaging With so much attention paid Androceuticals and Metro
even more user-friendly and globally these days to how products flow Male offer men’s skin care
sustainable for both the end user and for the through the entire supply chain, it products ranging from
environment,” said Barckley. is no surprise that natural product eye cream to shave cream.
At Zia and Jason, they seek to utilize companies seek to carry their “Natural personal care
materials made from renewable resources and commitment to natural products brands need only position
recycled materials. This extends to marketing throughout the chain. their products to men with
collateral, labels, packaging and packing Weleda maintains its own slight formula adjustments to
material. “In the past, sourcing such materials biodynamic gardens throughout begin capturing this market,”

KORRES NATURAL PRODUCTS

has not only been challenging, but also in many the world and claims to have the according to Duber-Smith.
cases cost-prohibitive,” said Setzfand. “However, largest biodynamic gardens in Zia Natural Skincare offers
our suppliers have been very responsive and Europe “Many of our ingredients a men’s line including five
supportive as our volume and demand for for both our medicines and body products said to cleanse skin
environmentally friendly materials grow.” In care products are harvested here utilizing the properties of
addition, technological advances have led to by our expert team of farmers. We the active natural ingredients
the creation of more sustainable materials that also develop Fair Trade projects in without dehydrating or
are more cost-effective. Increasingly, items various areas of the world to attain causing irritation. The line
are made from corn-based resins instead of the highest quality of organic and includes HydraClean Face
petroleum, and post-consumer waste paper has purely natural ingredients
EASTERN for ourEUROPE
products Wash, ActiClean Face Scrub, HydraShield
improved dramatically over the last few years, and to support local communities,” said Shave Cream, ActiShield Shave Gel and
said Setzfand. Barckley. Weleda’s new production facilities DualAction Face Lotion.
Zia will launch a new line, Brilliance, in and offices throughout the world utilize Color cosmetics offers opportunity as well.
May 2006. Packaging will utilize unit cartons innovative, low-impact systems such as water “Many female consumers are more aware of
made from post-consumer waste materials recycling systems, solar panels and natural what putting synthetic ingredients on their
and manufactured with wind power. The cooling systems. “As an environmentally skin, and around their eyes and lips, can do,”
company’s store displays are made from friendly company, we always pay extremely said Duber-Smith. “The rising demand for
renewable, non-petroleum-based resources. close attention to our impact on the natural products has been consistent and well-
“As a manufacturer, we are not only environment,” Barckley said. documented. The vast majority of females wear
committed to using recycled and renewable Regarding our raw materials and packaging, makeup of some sort. You can do the math.”
resources. We also support local and regional we always seek to find suppliers that follow Finally, fragrance is an underdeveloped
communities to implement more recycling green business practices,” said Korres’ Vasilyadis. area. According to Duber-Smith, only 3% of
programs and education about sustainable “This is not always feasible, but the further the fragrances in personal care products are
living,” said Setzfand. expansion of our green supply chain is always a natural. “Most pure essential oils are unstable,
Korres is a member and financial challenge for us.” can cause allergies and are expensive,” he
contributor of the Hellenic Recovery and “Our goal is to extend our commitment said. He believes, however, that addressing
Recycling Corporation (HERRCo SA / EEAA to the natural products industry and the these concerns will allow natural ingredients
AE) that was established by industrial and environment throughout our supply chain. This marketers to enjoy increased penetration into
commercial companies either distributing commitment is important to our consumer and the category. Aubrey Organics introduced its
packaged products to the Greek market or an integral part of the brand,” said Setzfand. line of natural fragrances at Natural Products
manufacturing different types Expo West last month. Scents include Spring
of packaging. Floral, Jade and Spice, Light Citrus Floral,
Room to Grow
“Moreover, we support the Ocean Waters, Musk and Angelica. Each is
use of recyclable materials. According to Duber-Smith, all packaged in a two-ounce spray.
Being a cosmetics company, natural segments are experiencing Despite the many challenges, marketers are
we have to use plastic as healthy growth, but he said that finding ways to translate the broader world of
one of our major packaging for men’s care, color cosmetics cosmetics and personal care products into the
materials,” said Vasilyadis. The and fragrance, demand is high but natural and organics market, bringing their
KORRES NATURAL PRODUCTS

company uses polyethylene supply in the naturals area may customers new options in skin care and color
(PE), polyethylene offer opportunity for growth. cosmetics and breaking into new segments
terephthalate (PET) and As GCI reported last such as men’s products and fragrance. ■ GCI
polypropylene (PP), which are September, Euromonitor
common recyclable plastics. International predicts overall
“Korres avoids the use of sales of male grooming products
KAREN A. NEWMAN is
editor in chief of GCI magazine.
polyvinyl chloride (PVC), due will surge 67% to $19.5 billion
to its toxic emissions when by 2008. Brands including
burned,” said Vasilyadis. Nivea for Men, MenScience

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