The U.S. Market for Natural Personal Care Products: Beauty and Grooming for a New Age

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Published Aug 1, 2003 | 246 Pages | Pub ID: LA867421

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The boom in natural grooming products is a phenomenon that mainstream HBC marketers must heed: Natural/organic skincare, haircare and cosmetics items are breaking the $3.9 billion mark at retail in 2003, and shall rocket to $5.8 billion by 2008, according to The U.S. Market for Natural Personal Care Products, a new Packaged Facts report. Thus far, most of the dollars are transacted in a still burgeoning natural foods/HBC channel - but natural grooming departments are poised to spread like wildfire in America’s supermarkets, chain drugstores, and mass merchandisers. Credit a holistic approach to wellness, self-doctoring, improved availability of ingredients, and billion-dollar natural food/HBC chains such as Whole Foods and Wild Oats, as key drivers. Featuring the Packaged Facts emphasis on in-depth analysis, both mainstream and “natural industry” execs will be enlightened by the report’s historical and projected sales patterns, in-depth analyses of societal factors and marketing trends, and competitive profiles of such players as Johnson & Johnson, Levlad, Burt’s Bees, Tom’s of Maine, Aubrey Organics, Estee Lauder, and others. Also, the natural personal care consumer is profiled.

Chapter 1: Executive Summary

Scope and Methodology

The Products
Three Main Categories: Skincare, Haircare, Cosmetics

    Skincare
    Haircare
    Cosmetics

The Market
Overall Sales Rocket to $3.9 Billion in 2003

    Skincare Sales
    Haircare Sales
    Cosmetics Sales
During 2003-2008, Overall Sales in Bullish Charge to $5.9 Billion
Table 1-1: U.S. Retail Dollar Sales of Natural Grooming Products, by Category, 1998-2008
Mass Accounts for at Least a Fifth of Sales

Factors In Future Growth
A Holistic Approach to Living
Natural Retail Channel Building Strength
Higher Price-Points for Natural HBC
Sourcing of Ingredients
Great Variations in Product Performance
Potential in Mainstream Trends

    Boomer Trends
    Teens/Tweens
    Ethnic Consumers
Mergers/Acquisitions to Spell Higher Turnover, Lower Prices

The Natural Skincare Category
Core Skincare Products Yield Half of Category Value
Table 1-2: Share of U.S. Retail Dollar Sales of Natural Skincare Products, by Segment, 2003
Boomers Look to Fix Effects of Aging
Mainstream HBC Marketers Push Skincare, Natural Players Benefit
Natural Skincare Has Prestige Image
Stress and Appearance
Skin Cancer

The Natural Haircare Category
A Greater Range of Hairstyles Is Acceptable
Washing It, Styling It, Keeping It
For African-American Audience, Fewer Chemicals
Potential in Teen/Tween Sectors

The Natural Cosmetics Category
A Third of Cosmetics Sales Transacted in Mass Retail Channel
Wellness, Cosmetic Sophistication to Support Expanded Retail Presence
Non-Natural Product Trends Help Cosmetics Sales
Teens/Tweens Using Cosmetics Earlier in Life

    Ethnic Consumers Want Natural Cosmetics

The Competitive Situation
Natural HBC Marketplace Is Retail-Driven
Natural Marketers Build Mass Presence-Mainstreamers Toy with Natural Channel

Marketer Shares
J&J, Body Shop, and Estee Lead the Whole Pack
Levlad the Strongest Natural Channel Specialist
J&J Leads Much Narrower Field in Mass
Table 1-3: Share of U.S. Retail Dollar Sales of Natural Grooming Products, by Top 10 Marketers, 2002

Product Trends
Natural HBC Arena a Natural for Skincare Regimens
Cosmeceutical Skincare
Skincare Products with Aromatherapeutic Aspects
Skincare Products for Men and Children
Ethnic Skincare Products
Baby Skincare Assortment Expanding
Weatherproofing the Hair
Natural Haircare for Kids
For Ethnic Haircare Consumers
Industry Still Building Basic Cosmetics Assortments

The Consumer
40 Million Households Shop Organic
Boomer and Youth Population Trends
Boomers and Aging
Satisfaction with Appearance Falters in Middle Age
Teens/Tweens Present Untapped Potential
Table 1-4: Projected U.S. Population, by Age, Featuring Baby Boomer and Teen/Tween Brackets, 2003-2010
African Americans a Prime Sector to Target
Table 1-5: Projected U.S. Population, by Race and Hispanic Origin, 2003-2010
Older Americans Also Present Surprising Potential

Chapter 2: The Overall Market
Market Definition
Natural vs. Organic vs. Semi-Natural vs. Semi-Organic
Clarification of Other Terms

    Cosmeceutical
    Market/Category/Segment
    Prestige
    Supermarket
>Methodology
    Share Data from IRI and Other Sources
    Demographic Data from Simmons, Others

The Products
Three Main Categories: Skincare, Haircare, Cosmetics

    Skincare
    Haircare
    Cosmetics
Common Ingredients
Cosmeceutical Value
Materials Supply Has Improved

Regulation
No Applicable National Standards for Natural Grooming Products
OTA’s Quality Assurance Committee to Suggest Guidelines
Does the Industry Want Regulation? …Yes!
Many Certifiers for Organics
The USDA, the NOP, and the Organic Seal
The Cruelty-Free Rabbit

Overall Market Size and Growth
Sales Rocket to $3.9 Billion in 2003
Societal, Retail, Industrial Trends Have Driven Sales
Table 2-1: U.S. Retail Dollar Sales of Natural Grooming Products, by Category, 1998-2003
Natural Skincare in Strong Push to $2.6 Billion
Natural Haircare Catapaults to $936 Million
Natural Cosmetics Shines on at $314 Million
Skincare Is Largest Category
Table 2-2: % Share of U.S. Retail Dollar Sales of Natural Grooming Products, by Category, 1998-2003
Skincare Also Biggest Contributor to Growth
Table 2-3: Share of Growth in U.S. Retail Dollar Sales of Natural Grooming Products, by Category, 1998-2003
Personal Grooming in the Wider Natural Context
Natural Foods/HBC Accounts for 71% of Retail Dollars
Table 2-4: Share of U.S. Retail Dollar Sales of Natural Grooming Products, by Retail Channel, 2002
Mass Now Accounts for at Least a Fifth of Sales
Figure 2-1: Share of U.S. Retail Dollar Sales of Natural Grooming Products, by Retail Channel
Table 2-5: Share of U.S. Retail Dollar Sales of Natural Grooming Products, by Category, in Mass Channels, 2002

Factors in Future Growth
A Holistic Approach to Living
Self-Doctoring Is the Norm
Natural Retail Channel Building Strength
Higher Price-Points for Natural HBC
Allergies on the Rise
Sourcing of Ingredients
Great Variations in Product Performance
Prospective Regulation Welcomed
Potential in Mainstream Trends

    Boomer Trends
    Teens/Tweens
    Ethnic Consumers
Mergers/Acquisitions to Spell Higher Turnover, Lower Prices

Projected Overall Market Sales
Natural Grooming in Bullish Charge to $5.9 Billion in 2008
Table 2-6: Projected U.S. Retail Dollar Sales of Natural Grooming Products, by Category, 2003-2008
Largest Category, Skincare, to Rocket to $3.9 Billion
Haircare to Brush Past $1.5 Billion
Cosmetics in Climb to $447 Million
Figure 2-2: Projected U.S. Retail Dollar Sales of Natural Grooming Products, 2003-2008

Overall Consumer Advertising Expenditures
Natural Grooming Marketers Buy $162 Million Worth of Media in 2003
J&J Leads Narrow Field of Spenders

Chapter 3: The Natural Skincare Category
Protecting the Skin That Protects Us
Six Natural Skincare Segments
Face and Body
Soap

    Bath Products
    Deodorants
    Shaving Products
    Fragrance
Skincare for Ethnic Consumers and Teens/Tweens

Category Size and Growth
Natural Skincare Breaks $2.6 Billion Mark in 2003
Table 3-1: U.S. Overall Retail Dollar Sales of Natural Skincare Products, 1998-2003
Fear of Aging Has Been Strongest of Drivers
Figure 3-1: U.S. Overall Retail Dollar Sales of Natural Skincare Products, 1998-2003
Core Skincare Products Yield Half of Category Value
Table 3-2: % Share of U.S. Overall Retail Dollar Sales of Natural Skincare Products, by Segment, 1998 and 2003
Figure 3-2: % Share of U.S. Overall Retail Dollar Sales of Natural Skincare Products, by Segment, 2003
Mass Accounts for Less Than a Fifth of Skincare Sales
Table 3-3: Share of U.S. Retail Dollar Sales of Natural Skincare Products, by Segment, in Mass Channels, 2002

Factors in Future Natural Skincare Growth
Boomers Look to Fix Effects of Aging
Table 3-4: Projected U.S. Population, by Age, 2003-2010
Mainstream HBC Marketers Push Skincare, Natural Players Benefit
Natural Skincare Has Prestige Image
Stress and Appearance
The Day Spa Factor
Skin Cancer

Projected Natural Skincare Sales
Skincare Category to Reach $3.9 Billion in 2008
Table 3-5: Projected U.S. Overall Retail Dollar Sales of Natural Skincare Products, 2003-2008
Figure 3-3: Projected U.S. Overall Retail Dollar Sales of Natural Skincare Products, 2003-2008

The Marketers
Hundreds of Natural Skincare Marketers-But 60 Are Players
Mostly Privately-Held Specialists
Table of Marketers and Brands
Table 3-6: Marketers of Natural Skincare Products and Their Brands

Natural Skincare Product Trends
Natural HBC Arena a Natural for Regimens
Cosmeceuticals
Products with Aromatherapeutic Aspects
Products for Men and Children
Ethnic Products
Baby Product Assortment Expanding
Table 3-7: New Introductions of Natural Skincare Products, 2001-2003

Consumer Advertising and Promotion
Natural Skincare Marketers Spend $116 Million on Media in 2003
J&J Far Outpaces Spending by Estee, Earth Therapeutics, and Murad
Consumer Advertising Positioning: Beauty Pure and Simple
For You(th
Neutrogena’s Functional Approach
Stress Relief
For Men
Natural Plus Organic
Ethnic Ad Themes
Consumer Promotions: Few Marketer-Run Natural Skincare Promos for Public
Sample Sizes Used Extensively
But Trade Promos Preferred
Activism Is Good P.R.

Chapter 4: The Natural Haircare Category
Same Product Types as in Mainstream Haircare
Shampoo and Conditioner

    Styling Products and Treatments
    All Other
Cosmeceutical Functions
No SLFs

Category Size and Growth
Natural Haircare Hits $936 Million in 2003
Table 4-1: U.S. Overall Retail Dollar Sales of Natural Haircare Products, 1998-2003
Figure 4-1: U.S. Overall Retail Dollar Sales of Natural Haircare Products, 1998-2003
Wellness, Style Awareness Were Natural Haircare Boons
Naturals/Organics Account for a Tenth of Haircare Sales in Mass
Table 4-2: U.S. Retail Dollar Sales of Natural Haircare Products in Mass Channels, 2002

Factors in Future Natural Haircare Growth
Wellness and Therapeutic Issues
A Greater Range of Hairstyles Is Acceptable
Washing It, Styling It, Keeping It
Haircare Price Issues in Changing Retail Marketplace
For African-American Audience, Fewer Chemicals
Potential in Teen/Tween Sectors

Projected Natural Haircare Sales
Haircare to Break $1.5 Billion Mark
Table 4-3: Projected U.S. Overall Retail Dollar Sales of Natural Haircare Products, 2003-2008
Figure 4-2: Projected U.S. Overall Retail Dollar Sales of Natural Haircare Products, 2003-2008

The Marketers
Natural Haircare Marketers Are Legion: Just 50 Are Significant
A Few Giants, But Mostly Small Specialists
Table of Marketers and Brands
Table 4-4: Marketers of Natural Haircare Products and Their Brands
Regimens Here, Too
Weatherproofing
Natural Haircare for Kids
For Ethnic Haircare Consumers
Table 4-5: New Introductions of Natural Haircare Products and Their Brands, 2001-2003

Consumer Advertising and Promotion
Natural Haircare Marketers Spent $19.7 Million to Advertise in 2002
J&J and Estee Are the Only Notable Spenders
Consumer Advertising Positioning: Beautiful Manes, Beautiful Bottles
Hair Health
Color Enhancement
Targeting Ethnics
Consumer Promotions: Marketers’ Natural Haircare Promos Relatively Rare
Sample Sizes a Frequent Tactic
Helping the Environment, Civil Rights
Here, Too, Trade Promos Preferred

Chapter 5: The Cosmetics Category
Four Natural Cosmetics Segments: Face, Eye, Lip, Nail

    Facial Makeup
    Eye Makeup
    Lip Color
    Nail Polish

Category Size and Growth
Natural Cosmetics Reach $314 Million in 2003
Table 5-1:U.S. Overall Retail Dollar Sales of Natural Cosmetics, 1998-2003
Category Grew With Product Availability
A Third of Cosmetics Sales Transacted in Mass Retail Channel
Table 5-2: U.S. Overall Retail Dollar Sales of Natural Cosmetics Products in Mass Channels, by Product Segment, 2002
Figure 5-1: U.S. Overall Retail Dollar Sales of Natural Cosmetics, 1998-2003

Factors in Future Natural Cosmetics Growth
Wellness, Cosmetic Sophistication to Support Expanded Retail Presence
Pricing Key to Category’s Retail Expansion
Non-Natural Product Trends Help Sales
Teen/Tween/Ethnic Potential

    Teens/Tweens Using Cosmetics Earlier in Life
    Ethnic Consumers Want Natural Cosmetics

Projected Natural Cosmetics Sales
Cosmetics to Reach $447 Million in 2008
Table 5-3: Projected U.S. Overall Retail Dollar Sales of Natural Cosmetics, 2003-2008
Figure 5-3: Projected U.S. Overall Retail Dollar Sales of Natural Cosmetics, 2003-2008

The Marketers
Only Dozens of Notable Natural Cosmetics Marketers - For Now
Two Public Giants, the Rest Are Privately-Held Specialists
Table of Marketers and Brands
Table 5-4: Marketers of Natural Cosmetics and Their Brands

Natural Cosmetics Product Trends
Industry Still Building Basic Assortments
Table 5-5: New Introductions of Natural Cosmetics, 2001-2003
Consumer Advertising and Promotion
Natural Cosmetics Supported with $26 Million in 2002
J&J the Sole Million-Dollar Spender

Consumer Advertising Positioning
Neutrogena = Cosmeceutical, Aveda = Sacred Nature
Consumer Promotions - Cosmetics Is Least Promo-ed Natural Grooming Category
A Discount on Shipping
Activism
Some Measure of Trade Promos

Chapter 6: The Competitive Situation
Natural HBC Marketplace Is Retail-Driven
Natural Marketers Build Mass Presence -- Mainstreamers Toy with Natural Channel
All Websites Are Created Equal
Natural Marketers Rife for Acquisition
Private Label Action Heating Up

Marketer Shares
Special Note on Share Data
J&J, Body Shop, and Estee Lead the Whole Pack
Levlad the Strongest Natural Channel Specialist
Table 6-1: Share of U.S. Retail Dollar Sales of Natural Grooming Products, by Marketer, 2002
J&J Leads Much Narrower Field in Mass
Table 6-2: U.S. Retail Dollar Sales of Natural Grooming Products, by Marketer, 2002

Competitive Profile: Aubrey Organics
Sales Estimated at $45 Million
A Long String of Firsts
Freshness a Neglected Positioning
Aubrey a Surprisingly Slick Player

Competitive Profile: Burt’s Bees, Inc
Burt’s Sales Jump by 30% in 2002
A Cool Old Hippie Is Trend Savvy
Burt’s in Mass

Competitive Profile: Calif.-All-One-God-Faith, Inc./Dr. Bronner's
Sales of Dr. Bronner Soaps Estimated at $30 Million
No One Can Imitate This Marketing Plan
Opposed to Use of Hydrosols

Competitive Profile: Estee Lauder Companies, Inc./Aveda Corp.
A Billion-Dollar Player with Powerful Leverage in Mass and Prestige
Natural/Organic Aveda Sold Through Own Specialty Chain, and Prestige
Expect More Organic Products from Aveda
Aveda Light Elements

Competitive Profile: Jason Natural Cosmetics
Jason Sales at $25 Million
Good Value, and the Makings of a Multi-Brand Stance
Making Over All 300 SKUs - Plus Many New Organic Launches

Competitive Profile: Johnson & Johnson
A Decentralized Corporate Giant
Neutrogena Positioning Has Evolved to Medical Cachet
Table 6-3: U.S. Retail Dollar Sales of Neutrogena-Branded Grooming Products In Mass Retail Channels,* 2002

Competitive Profile: North Castle Partners LLC/Avalon Natural Products
Avalon Has Sales of $25 Million
Multibrand Strategy Unusual for Natural Grooming Arena
Acquisition by North Castle

Competitive Profile: Tom’s of Maine, Inc.
A $40 Million Company
A Shrewd Multi-Channel Marketer from Almost the Beginning
Expanding Haircare Involvement
High-Profile Philanthropy

Competitive Profile: WALA Heilmittel/Dr. Hauschka
U.S. Sales of $20 Million
WALA = Warmth, Ash Light, Ash

Competitive Profiles: Companies to Watch
Avon, Inc
Erbaviva
Frontier Natural Products Co-Op
Para Laboratories, Inc.

Chapter 7: Distribution and Retail
Marketers Both Direct Ship and Use Distributors
Natural HBC Sections Catching On in Supermarkets
More Than 20,000 Stores in Natural Channel
High Margins on Personal Care in Natural Channel
Organics Account for Fifth of Personal Care $ in Natural Channel
Lots of P.O.P. Materials Replace Consumer Advertising
New Retail Concept: Elephant

Retail Focus: The Body Shop International PLC
A Leader in the Pop Prestige Movement
Pop Prestige and Natural Products Attract Youth
The Body Shop at Home

Retail Focus: Whole Foods Market, Inc
The First Billion-Dollar Natural Foods/HBC Chain
Modern, Gourmet, and Both Natural and Non-Natural
Whole Body at Whole Foods Market

Chapter 8: The Consumer
40 Million Households Shop Organic
Boomer and Youth Population Trends
Table 8-1: Projected U.S. Population, by Age, Featuring Baby Boomer and Teen/Tween Brackets, 2003-2010
Boomers and Aging
Satisfaction with Appearance Falters in Middle Age
Middle-Agers Score Highest in FMI’s Self-Care Index
Teens/Tweens Present Untapped Potential
The Younger LOHAS Consumer
African Americans a Prime Sector to Target
Table 8-2: Projected U.S. Population, by Race and Hispanic Origin, 2003-2010
Asians, Blacks Biggest Consumers of Organic Foods
Older Americans Also Present Surprising Potential
Wellness and “Functional Personal Care”
A Small Sector Practices Aromatherapy Consciously
Methodology for Interpretation of Simmons Data

The Consumer: Brand Use
Numbers of Users by Brand
Table 8-3: Numbers of Users of Natural Grooming Products by Brand, 2002
Affluence, Youth Shape Neutrogena Cleansing Cream Use
Table 8-4: Demographic Characteristics Favoring Use of Neutrogrena Cleansing Creams, 2002
Varied Profiles for Moisturizer Brands
Table 8-5: Demographic Characteristics Favoring Use of Natural Moisturizers, by Brand, 2002
Neutrogena Medicated Skincare Use Marked by Low/High Income
Table 8-6: Demographic Characteristics Favoring Use of Neutrogena Medicated Skincare Products, 2002
Aveda Shampooers Affluent, Neutrogena Shampooers Older
Table 8-7: Demographic Characteristics Favoring Use of Aveda and Neutrogena Shampoos, 2002
Few Factors Discernible in Aveda and Neutrogena Hair Conditioner Use
Table 8-8: Demographic Characteristics Favoring Use of Aveda and Neutrogrena Hair Conditioners, 2002
Aveda Styler Use Skews to Midwesterners and Married Folks
Table 8-9: Demographic Characteristics Favoring Use of Aveda Hairstyling Products, 2002
College Attendance Influences Neutrogena Cosmetics Use
Table 8-10: Demographic Characteristics Favoring Use of Neutrogena Cosmetics (Foundation, Blusher, Lipstick/Lip Gloss), 2002

The Consumer: Psychographics
Seventeen Attitudes Examined
Numbers of Consumers with Relevant Attitudes
Table 8-11: Numbers of Persons with Certain Attitudes Regarding the Environment, Animal Testing, Spending on Health/Appearance, and Being Well Informed About Health, 2002
Environmental Consciousness: Women, Older Folks Care the Most
“I Never Buy Animal-Tested Cosmetics”
Demographic Characteristics Favoring Environmental Consciousness, by Certain Attitudes, 2002
Table 8-12(a): Demographic Characteristics Favoring Environmental Consciousness, by Certain Attitudes, 2002
Table 8-12 (b): Demographic Characteristics Favoring Environmental Consciousness, by Certain Attitudes, 2002
Table 8-13: Demographic Characteristics Discouraging Purchase of Animal-Tested Cosmetics, 2002
“I’ll Spend Anything on Health or to Look Younger” - Skews to Youth and Old Age
Table 8-14: Demographic Characteristics That Favor Spending on Health or Looking Younger, 2002
Black Boomers’ Willingness to Spend to Recapture Youth
The “I Know What I’m Talking About” Consumer
Table 8-15(a): Demographic Characteristics That Favor Spending on Health or Looking Younger, 2002
Table 8-15(b): Demographic Characteristics That Favor Spending on Health or Looking Younger, 2002

Chapter 9: Trends and Opportunities
Advice One: Cross the Great Divide!
Advice Two: Respect Ways of the Natural Foods/HBC Channel
Advice Three: Target Youth, Men’s, Baby-and-Mom, Ethnic Markets
Advice Four: Clearly Define Products as Natural or Organic
Advice Five: Improve Product Efficacy
Advice Six: Advertising Can Do More Than Tout Product Attributes
Advice Seven: A Wave of Mergers/Acquisitions Is Imminent

Appendix: Addresses of Selected Marketers