Natural Foods Merchandiser

PC postioned for rebound

Sales of natural personal care products have grown about 8 percent in the United States in 2009, a slowing growth rate from 15.3 percent a year earlier, but still healthier than the personal care industry as a whole, according to new research.

And personal care will rebound in 2010, driven by natural products, global demand and value lines, New York-based Kline Group predicts.

“The naturals segment remains a relatively high-growth proposition from both a product and packaging standpoint in personal care and home care,” Carrie Mellage, Kline Group’s director of consumer products, wrote in a newsletter.

Value brands and private-label products have also surged in growth, with double-digit gains in sun care products, shampoos and personal cleansing products, as shoppers look for cost savings.

“Personal care was hit pretty hard in the last year, less so in the natural sector,” said Lynea Schultz-Ela of A Natural Resource in Hotchkiss, Colo.

Better growth will be driven by new products, where small companies have the edge because they’re able to bring items to market faster, she said.

“Innovation is the name of the game in personal care,” Schultz-Ela said.

Mellage told NFM that greater availability of natural products has pushed down prices, hampering dollar growth. But the “relatively untapped” area of private label natural personal care has the potential to grow, as cash-strapped naturals consumers are lured back into the category by house
brands with natural ingredients.

“I think we will also see a greater shift toward mass natural brands, so prices will be pushed downwards,” Mellage told NFM.

High-growth overseas markets have put their own unique spin on natural personal care, with Brazilian natural products emphasizing biodiversity and the rainforest, while Indian consumers favor products based on Avurveda and Chinese products reflect China’s heritage of herbal medicine, Mellage noted.

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