Vast potential for green cosmetics

COSSMA: What made you get involved with the cosmetics industry?

Amarjit Sahota, Founder and CEO of Ecovia Intelligence: I was initially exposed to the (ethical) cosmetics industry when I was just 19 years old. Whilst at university, I had a summer job at The Body Shop. Although I was just a seasonal worker on the shop floor, I was deeply impressed by their ethical ethos and company mission. That early experience left an impression with me, building a desire to work in ethical industries. At the times, I had just started my undergraduate degree in Applied Chemistry. 

What led to the establishment of the involvement with cosmetics at Organic Monitor, now Ecovia Intelligence? 

Ecovia Intelligence was initially formed as Organic Monitor, with the mission to assist operators in the organic products industry by providing business intelligence. We had built up considerable expertise in the organic food industry since 2001. In 2003, we started doing market research on natural and organic cosmetics, see box. 

What was the situation then concerning the natural cosmetics market?

When we first started researching the market in 2003, it was very much a niche. Apart from Germany, the market share in almost each European country was below 1 percent. The market landscape was characterised by small green brands that were mostly present in health food and organic food shops. 

I recall going to the In-Cosmetics trade show in 2006, and visiting exhibitors; hardly any company was interested in natural cosmetics. They considered it a non-starter and too niche. The situation changed considerably over the years. Now, almost every ingredient firm offers natural ingredients and/or sustainable raw materials. 

What have been the most striking developments in the European and in the global cosmetics market in the past few years?

There have been many developments over the last 5–10 years. The natural and organic cosmetics market is becoming more mainstream, because of the following two factors: First, consumers are becoming more aware and conscious of chemicals in their cosmetics and toiletries. This is partly because of the growing use of mobile devices, which have given consumers greater information at their fingertips. They are asking more questions about cosmetic chemicals, leading them to buy natural and organic cosmetics. Various research studies have shown this. For example, consumer research we did a few years ago in the UK showed that 90 percent of consumers buy natural and organic cosmetics because they wish to avoid synthetic chemicals. The same study showed that the Internet was the primary source of information on natural cosmetics. 

The second major trend is distribution; natural and organic cosmetics are making their way into mainstream distribution outlets (used by conventional cosmetics). Specialist retailers (organic and health food shops) are still important, however most growth is coming from other channels: drugstores, pharmacies, beauty retailers, department stores and online retailing. For instance, natural food shops now comprise 35% of natural cosmetic sales in the US market. The channel comprised over half of all natural cosmetic sales in 2008. In North America, the biggest rise in sales has been observed from mass market retailers and beauty retailers. The same trend is happening in Europe and other regions. 

What are the most striking regional trends?

There are various differences between the three major regions. In Europe, we have over 500 brands of natural cosmetics. Most have a national presence, with few operating regionally. The leading brands, such as Weleda, Dr Hauschka, Neal’s Yard Remedies, remain privately owned. Most sales are still from organic food and health food shops.

In North America, the leading brands are almost all owned by large multinationals and few sizeable natural and organic brands remain independent. Some of the multinationals with a strong presence in the North American market are Unilever, Estée Lauder, Colgate-Palmolive, and Clorox. Standards are less important in North America, with very few brands having certified products.

In Asia, we are seeing the emergence of local brands in the last five years. Large companies, like AmorePacific and The Himalaya Drug Company, have launched natural and organic cosmetic ranges. At the same time, new Asian brands are emerging. A major issue in Asia is the high level of greenwashing. It is common for brands with conventional cosmetic formulations to have self-designated logos and symbols. This leads to consumer confusion as to what pure natural and organic cosmetics are.