Kline: Natural personal care markets in Western Europe, U.S. remain vibrant

PARSIPPANY, N.J. — The 2011 growth of the natural personal care segment waned slightly but still consistently outperformed the overall beauty market, according to recent findings from consulting and research firm Kline & Co.

According to Kline & Co., demand for natural personal care products remained strong within the well-established markets of Western Europe and North America, maintaining high growth rates. Research showed that, while the segment's 2011 growth waned slightly compared with the five-year compound annual growth rate of 13.9%, it still consistently outperformed the overall beauty market.

Both of these markets are distinctly different as market leaders vary from region to region; moreover, within Europe, the dynamics of the naturals market vary significantly between countries. In Western Europe, the natural segment is becoming more mainstream, but it’s the largely untapped markets of Central and Eastern Europe where opportunities show great promise, according to Kline & Co.

In addition, Western European and North American shares of the total market have been decreasing over the last five years at the expense of the emerging markets of Brazil and China. The latter are expected to draw the focus of astute companies keen to establish critical footholds in these budding markets. Savvy marketers also are opening up and exploring new channels of distribution, allowing access to new consumers and ultimately broadening demand, Kline noted.

Large, predominantly German drug stores, such as DM, Schlecker and Rossmann, represent the fastest-growing pan-European channel. In the United States, traditional natural health food stores still lead the way; however, mass outlets, such as Walmart — which as an indicator of the retailer’s faith in the naturals’ market recently introduced its own private-label products — are quickly increasing in significance, Kline & Co. stated.

The benefits are manifold: By increasing the channels of distribution and allowing consumers easier access to natural products, both ultimately contribute to the segment’s growth.

Kline's consumer industry manager Nancy Mills attributed the resilience of the natural personal care sector to ever-growing consumer awareness of health, environmental and sustainability concerns. "These drivers are near universal, but their influence varies significantly between markets,” Mills stated. “In Western Europe, consumers have a higher awareness and interest concerning product ingredients, business ethics and sustainability practices, and many are astutely avoiding products [that] are natural only in positioning. In Eastern Europe, where the movement is starting to blossom, consumers aren’t yet as discerning.”

“Natural personal care is not a fad, but a genuine movement that’s manifesting itself in ever diverse product applications,” Mills added. “The consumer is better educated, and this can serve the marketer well, particularly as credible certification standards are being implemented and recognized.”

The global market for natural personal care products is expected to maintain strong growth with a compound annual growth rate of almost 10% through 2016. The growth of truly natural products likely will outpace that of natural-inspired brands across most regions; however, natural-inspired brands will continue to dominate the global natural personal care market, according to Kline.

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