Green Future: Natural Cosmetics Market

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1 Green Future: Natural Cosmetics Market in the United States by Ewa Grigar, Senior Market Researcher, Kline & Company A presentation at: September 24, Kline & Company

2 Kline & Company is a leading management consulting and market research firm One-way flow of people, ideas and information MARKET RESEARCH REPORTS CUSTOM RESEARCH MANAGEMENT CONSULTING Providing industry information and insights to help clients identify market opportunities and create action plans Customized service providing accurate, cost effective and expert business intelligence within tight timeframes Working with individual clients to resolve tough business issues and help implement solutions Project examples Assessment of trade classes, competition, regional differences, opportunities and sales forecasts. Analysis of opportunities in specific product category Detailed information on the chief competitors, covering a specific type of marketing program, product procurement, and distribution. We work with large multinational and mid-sized companies in the industries we serve. Our clients demand insights and solutions and expect integrity Kline & Company 1

3 We serve clients around the globe We execute local research assignments or global consulting engagements Global Headquarters Parsippany, NJ Kline Europe Brussels, Belgium London, UK Milan, Italy Prague, Czech Republic Kline Asia Shanghai, China Tokyo, Japan New Delhi, India Hyderabad, India Kline Latin America São Paulo, Brazil 2013 Kline & Company 2

4 Natural Personal Care: Global Market Brief Natural Personal Care: Global Market Brief is an analysis of the global market for natural personal care products, focusing on key trends, developments, challenges, business opportunities, and natural ratings. The research addresses such issues as: What is the definition of "natural"? How big is the market for truly natural products? What are the fastest growing male grooming brands, and why? Who are the market leaders? Where are the opportunities for personal care marketers? Features: ingredient analysis and natural ratings NEW! Plus, 2 optional in-depth companion reports, with comprehensive details and deep insights i on the Natural Personal Care Market in China, And in Japan Kline & Company 3

5 We define natural as all brands that are positioned as natural, and then further segment the market into truly natural vs. natural-inspired NATURAL PERSONAL CARE Truly natural brands/products Natural-inspired brands/products Skin care products Hair care products Makeup Fragrances Oral care products Other Toiletries Excludes: Back-bar products Prescription products All sales figures reported at the manufacturers level l (factory/net t shipments) unless otherwise noted 2013 Kline & Company 4

6 The United States accounts for over 15% of the global natural and organic personal care market Sales of Natural Personal Care Products by Region, 2013 United States Rest of world Asia Brazil Europe Global Sales: USD 29.5 billion (2013 manufacturer s level) 2013 Kline & Company 5

7 In 2013, sales of natural cosmetics in the U.S. are estimated to reach almost USD 4.5 billion USD Billion mfr Growth of the Natural and Organic Cosmetics Market in the US, 2008 to % est. CAGR: 7.1 % 2013 Kline & Company 6

8 Certifying associations and organizations worldwide are working hard to regulate the naturals market In the United States, a harmonized standard does not exist. Besides U.S. labels, some of the brands are also certified with European certification bodies, such as ICEA, ECOCERT, or Soil Association. Products may display the USDA Organic Seal and must display the certifying agent s name and address, only if: 100% organic - Product must contain (excluding water and salt) only organically produced ingredients. Organic - Product must contain at least 95% organically produced ingredients (excluding water and salt) Kline & Company 7

9 Consumers and associations support transparency in labeling The Organic Consumers Association (OCA),encourages retailers to take action to address widespread organic labeling fraud in their health and beauty care aisles In 2010, Whole Foods Market introduces its own policy on the organic labeling of personal care products "Organic" or "Made with Organic Ingredients." Product ratings and reviews are available from consumers and independent organizations, such as Skin Deep 2013 Kline & Company 8

10 The natural market in the United States is very fragmented with top 5 leading marketers accounting for 26% of the total market share Aveeno Bare Escentuals Burt's Bees Aveda Arbonne All other The market is beginning to consolidate with large companies acquiring smaller brands to gain share of the market sales. The U.S. market in estimation 2013 Kline & Company 9

11 Trends in Product Categories In terms of value, skin care is the leading product category in the natural personal care market in the United States in Fragrances Oral care Makeup Hair care Other Toiletries Skin care The U.S. natural cometics market, est Kline & Company 10

12 Hair care is the best performing product category in 2013 Hair care is estimated to increase by almost 7%. Oral care is the least dynamic with estimated sales increase of less than 2% Kline & Company 11

13 New trend among the U.S. consumers: non-gmo The fear of GMOs in food and beverages translates into growing interest in purchasing non-gmo beauty products. More consumers are beginning to recognize the Non-GMO Seal, when used on packaging. Andalou Naturals is the first complete personal care brand to be verified by the Non-GMO Project in Alcohol, glycerin (corn derivatives), soy and canola oils ingredients with GM risks for cosmetics Kline & Company 12

14 Channels of distribution Health and natural food stores and supermarkets Mass outlets Pharmacies and drug stores Specialty stores Department stores Direct sales All other -10% -5% 0% 5% 10% 15% % Growth Total: USD 4.5 Billion 2013 Kline & Company 13

15 Trends in distribution channels Mass outlets t offer ample Af few brands in the shelf space to the private luxury naturals market label products in order to continue to rely heavily take the higher profit on distribution though margins of private-label specialty retail stores, products. boutiques, and spas. The smaller brands in the prestige segment continue to focus on their primary channel of distribution, not taking the risk of moving to mass markets Kline & Company 14

16 Product Trends What s hot in natural personal care? Natural brands upgrading their portfolio with organic lines Increasing demand and offer of natural fragrances BB Cream Makeup with natural ingredients 2013 Kline & Company 15

17 The U.S. market for natural personal care products is expected to show moderate growth with a CAGR almost 6% through 2018 USD Billion mfr Kline & Company 16

18 Kline is a worldwide consulting and research firm dedicated to providing the kind of insight and knowledge that helps companies find a clear path to success. The firm has served the management consulting and market research needs of organizations in the chemicals, materials, energy, life sciences, and consumer products industries for over 50 years. For more information, visit If you require additional information about the contents of this document or the services that Kline provides, please contact: Americas Asia Europe Ewa Grigar Senior Analyst, Ph.D., Consumer Products Phone: Ewa.Grigar@KlineGroup.com Kristina Zablecke Account Manager, Consumer Products Tel: Kristina.Zablecke@klinegroup.com

An Overview of the Global Hair and Skin Care Market

An Overview of the Global Hair and Skin Care Market A Presentation to: The Society of Cosmetics Chemists: MidWest Chapter Chicago, IL April 12, 2011 www.klinegroup.com 2011 Kline & Company Contents Overview