NBJ
Acquisitions heat up in natural and organic personal care market

Acquisitions heat up in natural and organic personal care market

U.S. natural personal care sales grew only 1 percent in 2009, despite posting a CAGR of 11 percent from 2000 to 2008, according to Nutrition Business Journal figures. But manufacturers and marketers remained optimistic through 2010, and this early activity in 2011 gives reason to be hopeful going forward.

The natural and organic personal care (N&OPC) market rang in 2011 with a flock of acquisitions, with two completed in January 2011 and one in late 2010. On December 16, New York-based investment company TPR Holdings announced its purchase of Trilogy Fragrances, a manufacturer of natural and organic fragrances, including essential oils. Trilogy is a leader in the natural fragrance space. It owns a USDA-certified organic processing facility in Lakewood, New Jersey, and has been a qualified vendor for Hain Celestial since 2005. Hain’s chairman and CEO, Irwin Simon, said that, with TPR’s acquisition, Hain and Trilogy could expect an “expanded relationship” going forward. Hain operates several N&OPC brands, including Jason, Avalon Organics and Alba Botanica.

Later, on January 3, India’s fourth-largest CPG, Dabur India Ltd., continued expansion in the U.S. N&OPC market with its $100 million acquisition of Namaste Laboratories. Dabur’s wholly owned U.S. subsidiary Dermoviva Skin Care completed the transaction, gaining access to Namaste’s U.S., European and African markets. Namaste, founded in 1996, manufactures its Organic Root Stimulator line of natural personal care products for the ethnic hair care market.

Then on January 26, Chicago-based HallStar announced its acquisition of N&OPC supplier BioChemica International. HallStar is a chemistry company specializing in polymer additives and personal care ingredients. BioChemica sources essential oils and exotic butters to personal care manufacturers.“Based on marketplace trends and our current position as a provider of innovative personal care ingredients, expanding into the naturals space is a logical move that will help us better serve our customers while also delivering profitability,” said HallStar president and CEO John Paro in a press release. In 2009, HallStar introduced its SolaStay S1 photostabilizer ingredient, which greatly increases the sun protection abilities of sunscreens.

NBJ bottom line: a sign of hope

It’s good to see money moving in N&OPC, the natural products category most imperiled by recession. U.S. natural personal care sales grew only 1 percent in 2009, despite posting a compound annual growth rate (CAGR) of 11 percent from 2000 to 2008, according to Nutrition Business Journal figures.

But manufacturers and marketers remained optimistic through 2010, and this early activity in 2011 gives reason to be hopeful going forward. Hain’s Simon spoke to NBJ this summer about his outlook on the N&OPC market. “Last year was a tough year,” he said of 2009. “Chain drugstores got hit hard, and higher-end personal care products were one of the first areas where consumers reduced spending in the recession. The category is back growing again, led by Whole Foods and some mass market. We aren't seeing recovered growth in chain drugstores yet, however.”

At least the financial market looks healthy, with interest coming from a variety of buyers. Be they investment firms, international buyers or conventional manufacturers, interest in N&OPC appears to be coming from the outside in, as old-growth sectors continue to notice the growth potential of natural products. NBJ estimates that N&OPC sales could reach nearly 20% of U.S. conventional health and beauty care sales by 2017.

NBJtakes a deep dive into the natural personal care and nutribeauty markets in our upcoming March issue, including new sales figures, manufacturing and ingredient trends, expert interviews and more. To order or become a subscriber, please visit the NBJsubscription page.

Related NBJ links:

The World Is Increasingly Embracing N&OPC Products

NBJ’s 2009 Archived Natural & Organic Personal Care Web Seminar

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