Natural Foods Merchandiser
2011 personal care market overview

2011 personal care market overview

Natural Foods Merchandiser's in-depth look at 2010 personal care sales data reveals which categories were hot, which fell flat and what you can expect for the rest of 2011. 

After a dismal 2009 saw natural and organic personal care sales dip for the first time in several years, the category rebounded in 2010. According to Schaumburg, Ill.-based market research firm SPINS, natural products store shoppers spent $295.3 million on NOPC in 2010, a 7.1 percent increase from the previous year. NOPC sales rose in conventional stores as well, improving 9.2 percent to a total of $510.2 million; conventional-channel sales had also stalled in 2009, registering a 3.1 percent decline on the heels of a whopping 25 percent sales surge between 2007 and 2008. 

Market analysts and industry insiders agree that the nation’s economic upswing played a significant role in NOPC’s revival. But it wasn’t the only factor driving sales.

“We’re seeing a resurgence in consumer skepticism,” says Lynea Schultz-Ela, owner of Hotchkiss, Colo.-based consulting firm A Natural Resource. “Everyone has gotten their feathers ruffled by new information about parabens, phthalates, sodium lauryl sulfate, etc., so they’re examining labels more closely.” The result, she says, is more shoppers seeking—and purchasing—NOPC.

Retailers should expect consumer demand for cleaner, more natural PC products to persist, even intensify, says Jay Jacobowitz, founder and president of Retail Insights, a Brattleboro, Vt.-based consulting service for natural products retailers. “Right now, NOPC has a halo and momentum. And this isn’t a fad—it’s a long-term trend.”

This momentum is precisely why NOPC didn’t fall completely on its face in cash-strapped 2009, says David Browne, a senior analyst with international market esearch firm Mintel. “During the recession, people may have traded down to less-expensive private labels, but they didn’t abandon NOPC entirely.”

Along with consumer demand, manufacturer and retailer efforts also played a hand in NOPC’s 2010 resurgence. “Manufacturers had to get much more creative and assertive in order to create value,” Schultz-Ela says. “We’re seeing larger product sizes to provide value and more creative promotional events, such as dual-purchasing programs. This started in a big way in 2009 but didn’t really show its fruit until 2010.”

Farah Ahmed, vice president and associate general counsel of the Washington, D.C.-based Personal Care Products Council, the U.S. personal care industry’s largest trade association, also credits manufacturer research and innovation. “Companies have made a lot of investment into green initiatives and sustainability, such as improving their packaging,” she says.

Breaking down the categories

A closer look at SPINS’ data reveals that natural-channel sales of every NOPC category increased last year, except for first aid, which took a slight 0.8 percent hit, and body care kits and travel packs, which sunk 13.9 percent. Schultz-Ela attributes the latter category’s decline to consumers spending less money on gifts in general, and not wanting products with excess packaging; also, she says, until late 2010, the travel industry was depressed. This category struggled in the conventional channel too, as did cosmetics and beauty aids, which suffered a 28.1 percent sales drop.


Conversely, in the natural channel, cosmetics and beauty aids sales outpaced all other categories, netting a 17.2 percent increase (even though, at $10.4 million, this category’s total sales remain significantly lower than most others’). Why are shoppers increasingly turning to naturals stores for cosmetics? For one, “more people are shopping at natural and organic markets, and the personal care sections within these stores are growing,” Ahmed says. The mineral makeup trend has also driven sales, Schultz-Ela says. “Mineral makeup has long been available in natural products stores, but consumers didn’t know what it was. Now, because of it being sold on TV, they see it [in naturals stores], see that it’s safe and buy it.”

Skin care, consistently a top-selling category, stayed strong, reeling in
$89.7 million in the natural channel and $168.2 million in conventional. Within the category, sun protection and tanning lotions made huge gains in naturals stores, jumping 25 percent from the previous year. While SPINS reports that sales of these products decreased 7.7 percent in conventional stores, “I can say with confidence that consumers across the board are turning to sun care—but especially to products with natural ingredients,” Schultz-Ela says.

Other big sales boosts in both natural and conventional stores included the oral care and deodorant and antiperspirant categories, both increasing by 7.7 percent. Browne describes both as customarily “fence-sitter” categories—ones shoppers hesitate to buy into because they’re skeptical about product efficacy. Therefore, the fact that sales of these traditionally less popular natural products shot up in both channels likely reflects the growing interest in safer ingredients across the board, he says.

Sales of natural and organic hair products bumped up 8.1 percent in the natural channel, netting a healthy $47.2 million, and skyrocketed to $98.7 million, a 31.5 percent increase, in conventional stores, making this the channel’s fastest-growing category.

Clearly, 2010 was a good sales year, and experts project continued and exponential growth through 2011 and beyond. But could spiking NOPC sales in the conventional channel eventually harm those in natural? “It’s no different than the pressure they’ve already seen in food and supplements,” Jacobowitz says. “Natural personal care is 7 percent of the industry, so the effect on natural retailers won’t be life threatening—it’s just a part of natural products becoming more available to mass.”

And it gives natural products stores prime opportunity to differentiate from NOPC-selling chains like Target and Walgreens by promoting superior customer service, knowledgeable staff and quality product selections—the very assets that have set naturals stores apart for decades.

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