Driven largely by the consumer’s quest for a healthier home environment, the natural household products market affords one of the best opportunities for growth within the natural products universe. It is now common knowledge that the average home interior is often 5 to10 times more polluted than the environment outside the home, mostly due to the presence of toxins.
There is no reason to assume that the sustained trend toward consumer use of natural products has any limitations since healthy lifestyles pervade many aspects of North American lives. Indeed, millions of consumers have turned towards more natural alternatives to traditional cleaning products found in most every home, as these healthier options have become increasingly available in a wider variety of channels.
San Francisco-based SPINS reports that natural household product sales within the natural supermarket channel (Whole Foods, Wild Oats, etc.) have increased by over 20% per year since 1998 and were up 22% for the 12 months ending September 2002. San-Diego-based Nutrition Business Journal estimates that the industry is currently $450 million across all channels, and The Freedonia Group estimates that product penetration among mainstream households is 17.6%. This is excellent, considering how small the market was even five years ago!
The Natural Marketing Institute, based in Harleysville-PA, recently studied consumer attitudes in this area and found that 69% of the general population prefer a natural detergent to one derived from synthetic ingredients. Considering past consumer perceptions of poor product effectiveness and the overall lack of availability of these products, the growth rates are staggering and suggest that increased research and development, leading to a proliferation of products, will lead to sustainable double-digit growth rates for many years to come.
Mother Nature’s Identity Crisis
Although there is great debate as to what actually constitutes ‘natural’, it is important to remember that simply not using the word ‘natural’ in your marketing efforts is a poor way to address the issue. Actually, it fails to address the issue completely. Consumers understand that natural is healthier and that the word means something to them (even if their understanding is limited to the absence of synthetically-derived ingredients and the presence of natural ones). Therefore, products positioned in this way will, in fact, reach the growing market demanding natural alternatives. Savvy marketers can simply identify the presence of certain natural ingredients such as Palmolive’s Aromatherapy and Pledge with Orange Oil, found in more mainstream channels. Or, they can choose to formulate their products with a majority of natural ingredients and broaden the availability of their products through the natural channel, the traditional gatekeeper of truly “natural” products. Examples of these brands include products made by Seventh Generation, Heather’s (Jason Natural Cosmetics) and Vermont Soapworks.
Value chain members can also sort through the natural quandary by earning certification from a third party organization such as Green Seal, a Washington DC-based not-for-profit certifier of products which have minimal impact on building occupants and the outdoor environment while still delivering high performance.
Perhaps the “natural” concept should be viewed by all in more of an academic framework, in terms of “degrees of natural,” on a continuum, instead of one or another extreme. Then, one can view one product as “more natural” than another and not resort to absolutes.
A Bright, Shiny Future
The major trend in this market is the proliferation of product sku’s and brands. In addition, increasing numbers of mainstream marketers are getting into the act and natural producers have increased in both quantity and quality, with consumer demand for these products continuing to grow. Even personal care companies that have traditionally focused on hair and body care brands have acquired business units in this area, which was the case when JASON Natural Cosmetics (Culver City, CA) acquired Heather’s. The company intends to grow this brand within the natural channel.
Present market conditions clearly indicate that organizations can penetrate this marketplace and reach objectives with a reasonable degree of predictability. Understanding the natural marketplace is a challenging proposition, even for the “Proctor and Gamble’s” of the world, so the effective and efficient use of strategic planning methodology will increase the likelihood of success.
Darrin C. Duber-Smith, MS, MBA, is president of Green Marketing, a Colorado-based strategic planning firm offering marketing planning and marketing plan implementation to natural products companies in all stages of growth. He has 15 years of specialized expertise in the natural products industry and is currently an adjunct marketing professor at Metropolitan State College’s School of Business in Denver, CO. He can be reached at [email protected].