It’s good, but it’s not as good as it should be! That’s the
recent message from Organic Monitor (www.organicmonitor.com) about the current
state of the European natural cosmetics market. The overall view is positive and
Europe is outpacing the global cosmetic sector (12% growth is expected for 2010)
… but the sting in the tail is that that growth should be in the region
of 20%. The deceleration from previous years is a direct result of an influx of
new entrants and the associated rise in levels of competition. It’s a dog
eat dog business out there! Irrespective of the ongoing debate about what is and
what isn’t really natural, it seems that since the recession kicked in,
companies avoiding the much-heralded double dip are those offering competitively
priced brands. Consumers are attracted to the value prepositions offered by such
brands — certified natural and organic products at low prices — with
private labels doing exceptionally well. It seems that most growth in the European
market is coming from mainstream retailers, with brands targeting these channels
gaining ground. To reach the mass consumer market, supermarkets, drugstores, organic
food retailers and even discount stores have introduced private labels. To cite
an example, Alverde, the private label of DM drugstores in Germany, is emerging
as the country’s leading brand of natural cosmetics; more than 300 products
are being marketed under the Alverde brand, with many priced below €2.
Not everyone is taking a P.T. Barnum approach to riding out the economic downturn.
Other new entrants are taking a segmented approach, focusing on specific consumer
groups and/or channels and others are taking the direct route to get closer
to consumers. Apart from online retailers, a growing number of companies are
opening concept stores across Europe. Paris is, perhaps not surprisingly, becoming
the epicentre of natural cosmetic retailers, seeing a rise in both the number
of concept stores and the hub of numerous international retail networks. Organic
Monitor does rather state the obvious and suggests that not all of the new entrants
will be successful. With many large, established brands entering the natural
and organic cosmetics market, competition will increase, shelf space will become
limited and there’s the ever-present issue of being green (and cost-effective).
So what’s the answer? Well, it’s not a new message, but one that
doesn’t fade with iteration: product differentiation is key. And, if I
can throw my few cents into the mix, companies could do a lot worse than following
UK brand Bulldog’s example by expanding their ranges of natural male grooming
products. That’s a market begging to be exploited!