The in-cosmetics trends presentations are always a great source of information and inspiration. Imogen Matthews rounds up the discussions from this year’s sessions
This year’s in-cosmetics marketing trends presentations provided opportunity for debate on green beauty and eco consciousness, with a whole day devoted to these themes. As always, the presentations attracted large numbers of visitors who also came to learn about the latest global trends data and hear presentations on nutricosmetics and influences within the professional salon sector.
THE DEFINITION DILEMMA
Several speakers described the difficulty in understanding the terms natural and organic, which have no recognised formal definition. Gillian Morris, director, chemicals and materials consulting practice, Kline, said: “There’s a lot of clever marketing but are there any companies with truly natural products on the market?”
Kline has devised its own method of definition by assessing 26 ‘natural’ cosmetic and toiletries brands. Included are recent acquisitions by leading multinationals, including The Body Shop and Sanoflore by L’Oréal and Tom’s of Maine by Colgate Palmolive. On a scale of one to ten, Kline identified brands which used almost exclusively synthetic ingredients and virtually no natural ones, to those who use mainly botanical extracts from organically farmed sources and only a tiny proportion of non-natural ingredients.
Kline values natural personal care at 2% of the $180bn global personal care market and growing by 15% in 2007, compared to the average of just 4.5%. By contrast, 30% of the $8-10bn personal care ingredients market can be classified as green.
“Natural does not necessarily mean that it is better for the environment,” maintained Kline’s director, personal care products industry, Carrie Mellage. “Natural ingredients may also have performance limitations. She analysed key ingredients used in personal care products in terms of their “green-ness” versus performance capabilities. Hair fixative polymers give hair styling products their high level of functionality and performance, yet less than 1% are derived from natural sources. Emollients fare better in terms of green-ness as 75% of their ingredients commonly used are green, such as shea butter and squalane. “Formulators are driving the natural/green trend,” affirmed Mellage. “With few exceptions, ingredients suppliers are not leading it.”
Organic Monitor’s Amarjit Sahota also described the difficulties in defining natural and organic cosmetics as there is no legal protection. “Anyone can do it,” he maintained. “Organic products should be made with organic ingredients and natural products should contain natural ingredients and typically no synthetics,” he offered. There are moves to harmonise standards for natural and organic products, which Sahota described, with European certification bodies now in closer co-operation. “In a second development there is the introduction of NSF and OASIS in the US. Meanwhile, there are a number of private standards in Canada, Brazil and the UK and retailers, such as Boots, are developing their own standards,” he said.
The company values the natural market at $5.9bn, up by 17% in 2007. Two in three purchases globally are made in North America. Europe is the second largest region valued at $1.5bn and Germany accounts for half of all revenue.
Sahota described the mainstreaming of natural and organic cosmetics and emergence of UK private label brands as a significant trend. Natural brands Korres and Weleda are opening their own shops while organic food shops are starting to launch their own personal care ranges. Department stores and Sephora are also devoting space to natural and organic brands.
Key ingredient trends include the growing importance of synthetic alternatives, traceability of ingredients through the supply chain and Fair Trade ingredients. “As yet there is no standard for Fair Trade, although you can say a percentage are Fair Trade,” he pointed out. “Companies want to be seen to be greener and sustainability goes beyond making natural or organic products.”
Further discussion on natural and organic issues followed with a panel of five representatives from Organic Apoteke, Circaroma, Weleda, Group Lea Nature and the Borlind Group. “When consumers buy natural products they want them to be 100% natural and should not contain even 1% of synthetics,” said Rainer Plum of the Borlind Group consultancy.
One of the main problems relates to labelling. “Water is one ingredient that will never get certification, yet it is one of the most important,” Nitasha Buldeo, founder and ceo of Organic Apoteke pointed out. “There are other ingredients that can be used instead but they can have a detrimental effect. Is it worth harvesting a plant when water is readily available? It’s not sustainable.”
Barbara Scott, founder and ceo of Circaroma noted: “According to Soil Association certificiation, if a formulation is water-based it cannot be 100% organic. It’s therefore easier to produce an oil-based formulation than one that is not.”
President of Weleda USA, Erk Schuchhardt raised the challenge of ingredient availability. “It’s easy at the start, but once a brand reaches a certain size there may be shortages of organic ingredients,” he said, pointing out that the launch of organic private label brands may result in ingredient shortages.
In her presentation entitled What’s natural today? Nica Lewis, head consultant for Mintel GNPD Cosmetic Research, reiterated the question posed by the other speakers. She maintained that consumers associated natural with good, while synthetic, petrochemical and plastics equate with bad. However, authenticity is another aspect that marketers should take into consideration. “People are looking at the purity and provenance of ingredients,” she said. “This is a trend that highlights a respect for ancient traditions and consideration for the social, environmental and economic impact of production, distribution and sales.”
Lewis presented Mintel’s research into what consumers believe natural and organic to mean. “One in two believe natural and organic products contain no unnecessary chemicals and are free from harmful ingredients,” she said. Two out of three are fans of natural beauty products but Mintel found that a lack of clarity on green issues is causing confusion.
In exclusive research for the in-cosmetics trends presentation, Mintel interviewed consumers in the UK, France and the US, whose decision to buy skin care was strongly influenced by a natural ingredient formulation. French consumers are more likely to opt for organic formulations than either the Americans or British. Organic skin care is perceived as being good for the skin by all three nationalities.
Lewis reviewed recent natural product launches in skin care and make-up, and in particular the trend for mineral make-up. “Natural and ‘free-from’ formulas contribute to the perception that is better for skin health,” she pointed out. She discussed other issues that consumers are starting to consider when choosing natural/organic, such as the ethical aspects of natural. “What is better for the environment?” she asked. “Natural, organic, wildcrafted, free-from or Fair Trade?”
Then there is the issue of packaging, which Sahota addressed in his presentation on sustainable packaging innovations for cosmetics. “If it’s natural or organic on the inside, why isn’t the packaging biodegradable?” he questioned. He went on to review the advantages and drawbacks in using reusable, recyclable and biodegradable packaging.
Marck de Roeck, market development manager for Innovia talked about NatureFlax, a new transparent cellulose film made from woodpulp. “It is obtained from managed plantations which are accredited and is 95% renewable,” explained de Roeck.
35 YEARS OF JOJOBA
The ingredient jojoba was highlighted in presentations by James Brown, president, International Flora Technologies, and Weleda’s Schuchhardt. Brown described how wild jojoba was first domesticated in the 1970s and is now grown on all continents. Prices have fluctuated but are now fairly stable at around $7 per kilo.
Cold pressed jojoba oil is used in various forms by the cosmetics industry. For example, hydrogenated jojoba is used to make jojoba beads used in exfoliators and peeling products. “Jojoba is natural, botanically derived, renewable, non petroleum-based and has excellent tactile properties, similar to natural skin lipids,” explained Brown.
Erk Schuchhardt described the importance of jojoba to Weleda which uses it in 16 of its products. Weleda is the number one purchaser of organic jojoba. Schuchhardt discussed the natural trend in personal care, saying: “We are seeing an increased consolidation of natural brands and more aggressive launches from conventional brands. Natural decorative cosmetics, especially mineral-based ones, will be the next big thing.” He also mentioned how nutricosmetics to improve skin, hair and nail health will take off, and that baby boomers will shape the way that products are formulated over the next decade.
KEY DRIVERS IN GLOBAL C&T
According to Euromonitor International, the global C&T market was worth $290bn at the end of 2007, having grown by 5% CAGR since 2001. Skin care is the fastest growing category, contributing to almost a third of total market growth, but it is underdeveloped sectors, such as men’s grooming, driving percentage increases.
Euromonitor’s Izaskun Bengoechea identified “glocalisation” as a growing trend, which is the drive for companies to think global but act local. “There is a need to take ethnic and cultural nuances into account,” she affirmed. “The local approach can also reach out to ethnic minorities and immigrant groups within countries,” she said, citing Nunu baby care, a Saudi brand which launched into southern India due to the large presence of Middle Eastern migrants in the region.
She also discussed other key drivers, including premiuminsation of brands, especially within sun care, baby care and bath and shower products. Baby care is also one of the areas of strongest growth in natural and organic products. “Consumers are a lot more informed and look for authenticity. But they are even more worried about what they put on their babies,” affirmed Bengoechea.
In contrast, cosmeceuticals are also experiencing good sales turnover, driven by an ageing population. Cosmeceuticals are most developed in mature western markets and in Latin America where anti-ageing products account for 60% of cosmetic sales. “Consumers in Eastern Europe are fast developing a taste for anti-agers and other cosmeceuticals,” confirmed Bengoechea.
Euromonitor industry analyst, retail, Magdalena Kondej based her presentation on the growth within the BRICs and other emerging markets. Brazil is the third largest market globally and Russia tops the forecast tables with a more sophisticated consumer base than other BRICs. India too has good prospects but still has many obstacles to overcome, such as poor infrastructure, an outmoded retail market and low disposable income. China due to its sheer size has attracted the most attention from global companies and there are signs that people are moving upmarket. “The urban population is more sophisticated and wants quality products,” explained Kondej. “China is one of the most important markets for premium brands.”
Kondej identified 22 smaller, emerging “frontier” markets as ones to watch. They include Vietnam, Ukraine, Nigeria, Ecuador and Tunisia. Furthermore high disposable incomes and a demand for premium brands suggests that the Middle East could be the next boom market.
FOOD INGREDIENTS IN BEAUTY
Food ingredients are nothing new in beauty, but beauty ingredients are now being used increasingly within beverages and foods. James Pruden, consultant beauty, personal care US, Mintel, not only highlighted a number of the trends with examples in his presentation but also provided visitors with the opportunity to taste some beauty foods at the in-cosmetics Innovation Zone.
Certain food groups are attracting the attention of beauty brands, including superfruits, dairy, Amazonian fruits, teas, berries and sweets. Pruden gave examples of popular food ingredients in beauty products, including Arctic cloudberry, cranberry, guarana, chocolate, licorice and almond. “The next trends will be more spicy and savoury ingredients, such as ginger, turmeric, tomato, mushrooms and African potato,” he predicted. “Ancient grains, such as quinoa and amaranth, are starting to make an appearance in skin products.”
Many food and beverage launches making beauty claims come from Asia and in particular Japan. Some feature skin care ingredients such as collagen, ceramide, hyaluronic acid and antioxidants including co-enzyme Q10. To westerners, some of these products may seem strange, but Pruden is confident that consumer acceptance will come if people believe in the benefits. “The greatest hurdle will be legislation,” he said. “We will see more products making soft claims related to skin health and overall wellness.”
Kline’s Mellage continued the theme with a definition of nutricosmetics. They are ingestible products formulated and marketed specifically for beauty purposes. Kline values the global nutricosmetics market at $1.5bn, with Europe accounting for 55% and Japan 41% of total sales. “Nutricosmetics is tiny in comparison to other personal care markets,” said Mellage, who sees good growth potential. “People are worn out and look for ways to replace what they are going through.” In Europe, the largest market for nutricosmetics, pharmacies are playing a strong role in educating consumers. “People trust what pharmacists have to say,” Mellage said. “The legal framework varies country to country and can be tricky for newcomers.”
Nutricosmetics is far more mainstream in Japan where products are sold in mass channels. “The Japanese consumer likes novel and highly innovative products, especially in skin care which is of the utmost importance,” said Mellage, pointing out that price points are correspondingly much lower here.
The nutricosmetics category has yet to take off in the US, where consumers are more sceptical and less willing to try. “There is also no pharmacy channel as there is in Europe, so consumers don’t have the same trusted relationship,” Mellage continued. US consumers are also less health conscious than the rest of the world.
INSPIRATION FROM THE SPA
Many retail beauty products take their inspiration from spas and will continue to influence the products we buy in the future. Fiona Rauh, marketing director, Liquidrock, presented findings from the company’s Future Footprints report on salon spa trends. “Spas will become a place to offer advice and become more important as people age,” she maintained.
Among the top ten spa trends, Rauh highlighted techno beauty (scientific techniques to achieve functional results) and spas dealing with lifestyle problems, such as ageing, modern anxiety and the inability to slow down.
Key driving influences include competition and the need to constantly innovate and a new focus on the consumer and corporate ethics. “There is a lot more technology – not just tweaks on traditional things, but radical new technologies,” she affirmed. “Also, people have become hungry for new experiences. It’s not just about how well something functions, but also about how much fun it is and the kind of interactions you can have with it.”
Looking ahead to 2009, Rauh provided 14 key trends. Consumers will want to feel the best of the best, preparing to upgrade on luxury. They want brands to be “really real”, ie transparent and with integrity. Yet the opposite, falseness, can be very aspirational; it is fine to have long hair (extensions) and extravagant colour. “It is acceptable as long as it is beautiful,” said Rauh.
As Rauh concluded: “The future will bring extra experiences to the consumer. It needs to be emotional combined with professional guidance and integrity.”