Provide greater authenticity was the resounding message from the New York edition of the Sustainable Cosmetics Summit (www.sustainablecosmeticssummit.com) last week. With the North American natural personal care industry dogged by a number of high profile law suites and greenwashing accusations, several industry leaders called for legitimate companies to authenticate their natural & organic products by adopting sustainability initiatives and consider third party certification.
Organized by Organic Monitor, the summit took place at Grand Hyatt New York Central on March 24-26th and brought together over 150 senior executives from the beauty industry. The summit comprised two interactive workshops followed by a 2-day conference program. The three-day program tackled key industry issues such as ethical marketing, technical & formulation hurdles, eco-labeling & standards, practical sustainability initiatives and investments.
Horst Rechelbacher, founder of Aveda and Intelligent Nutrients, opened the 2-day conference with a key note titled Save Our Society. Citing research on the adverse effects of chemical pollution on human health, he encouraged cosmetic companies to remove synthetics from their product formulations.
The first conference session explored different pathways to sustainability. Dr. Liliana George from Estee Lauder Companies looked at the use of green chemistry to reduce the environmental impact of beauty products. Her key message was that ‘using natural & organic ingredients does not make a product green’. She highlighted the need for a life cycle assessment, stating that consumers look at recyclability, pollution and packaging when considering sustainability.
One key aspect of sustainability is ethical sourcing of raw materials. The Brazilian company Beraca shared its experiences in setting up sustainability projects at the edge of the Amazon basin. It showed such projects can protect biodiversity, support local communities as well as meet the ingredient needs of cosmetic companies.
The subject was further explored by the presidents of Dr. Bronner’s Magic Soaps and Canaan Fair Trade. The two companies have partnered to ethically source organic & fair trade olive oil from Palestine. The project has benefited over 1,700 small farmers who face problems such as land confiscation, trade embargoes and water access.
Robert Bennett from Burt’s Bees showed how some natural personal care companies have embedded sustainability into their corporate culture. Sustainability goals are set for each employee at Burt’s Bees; the company has also undertaken numerous initiatives such as using ecological packaging, reducing waste and energy efficiency. Other papers looked at practical sustainability initiatives and global industry challenges.
An update on eco-labels and regulations was given in the second conference session. The Personal Care Products Council outlined the legal framework and loopholes in labeling and marketing cosmetic products. With natural & organic cosmetic standards continuing to generate high interest, the preceding papers were from the leading certification agencies. Joe Smillie from QAI International gave details of the newly introduced NSF ANSI 305 ‘contains organic’ standard, which could become regulated similar to the USDA NOP standard for organic foods. Details were also given of the NPA and OASIS standards, followed by Cosmos in Europe. Julie Tyrrell from NaTrue stated the purpose of its standard was to maintain the integrity of natural and organic cosmetics. Although there are differences between the various standards, all certification agencies agreed on the need for authenticity to validate legitimate brands.
This sentiment was echoed by Jeff Binder from the North American retailer Saffron Rouge. A survey of 1,252 of its customers revealed that 77% have trust and confidence in third party certification, whereas 72% did not trust natural & organic claims made by brand owners. His company found that natural & organic brands that formulate and process their own ingredients have greater authenticity over others. His paper delivered a key message to brand owners, ‘natural claims have an expiry date that is past, whereas third party certification was the way forward.’
Green washing and natural claims was the subject of the opening key note of the second day of the conference. John Marshall Roberts, professional speaker and psychologist, commented that greenwashing was a result of corporate cynicism that served to create negative energy in consumers. Later in the morning, his paper on social media gave examples of companies that are successfully deploying this new communication tool to strengthen relationships with consumers. Dr. Hauschka, Aveda and Seventh Generation were demonstrated as brands with a strong social media presence. According to Roberts, ‘empathy is the number one business skill in the twenty-first century…whereas cynicism is the major barrier.’
Green marketing without crossing the line of greenwashing was further explored by Professor Darrin C. Duber-Smith. The ethical marketing session also had papers from Kiss My Face, Jurlique and Sustainable Youth Technologies. Tim Brasher, CEO of Jurlique, stated that consumer appeal for its organic skin care products stemmed from product performance, safety and the value preposition. Authenticity was again cited as a critical success factor. The brand has gained an international following partly because of its green and clean image; the company grows organic ingredients on its Australian farms.
Investment & technical issues were the focus of the final conference session. Mr. Sahota, President of Organic Monitor, stated the natural personal care industry is ripe for consolidation because it has a high concentration of small-medium sized firms. Mergers, acquisitions and investments are expected to lead to a two-tier market that has large companies occupying the first tier. Alexander S. Panos, Managing Director of private equity firm TSG Consumer Partners gave details on how personal care companies can access capital. Prospective companies should have a clear business plan, target profitable customer segments and consistently meet targets, according to Panos. He stated an ideal naturals brand for investment is one that ‘has clinical results, mix of distribution channels and its own customer base’. Ido Leffler, founder of Yes To Carrots, co-presenting with Panos, shared his experiences in seeking and obtaining growth financing. After receiving a capital injection in 2009, the company has followed its success with Yes To Carrots by introducing similar lines for cucumbers and tomatoes and a new baby care range.
Also in the final session, Judi Beerling of Organic Monitor hosted a seminar on the technical hurdles companies face with natural & organic personal care products. Details were given of emulsifier, surfactant and preservative systems for natural & organic cosmetic formulations. A key finding from the seminar was that the efficacy of such products was becoming on par with conventional cosmetics, however natural & organic products were losing out on aesthetics. A preceding paper by Dr. Jack Guth from Botaneco looked at the novel use of oleosomes in personal care applications.
The summit ended with a closing key note that summarized the key discussions over the 3 day event. Katherine DiMatteo, President of IFOAM, highlighted the sentiment, ‘it is increasingly clear that natural & organic beauty companies need to communicate their authenticity and their performance to the people if they are to succeed.’
About the Sustainable Cosmetics Summit
Organized by Organic Monitor, the aim of the Sustainable Cosmetics Summit is to encourage sustainability in the beauty industry by bringing together key stake-holders and debate major sustainability issues in a high-level forum. The proceedings of the North American summit (New York, 25-26th March 2010) are available for a small professional fee.
The summit in pictures http://www.sustainablecosmeticssummit.com/summitpics.htm
The next edition of the Sustainable Cosmetics Summit will take place in Paris on 18-20th October. More information is available from www.sustainablecosmeticssummit.com
For further information on the Sustainable Cosmetics Summit, including more summit pictures, please contact:
Ms. Tina Gill
Marketing Manager, Organic Monitor
Tel: (44) 20 8567 0788
Fax: (44) 20 8567 7164
Email: [email protected]
About Organic Monitor
Organic Monitor is a specialist research & consulting company that focuses on the global organic & related product industries. Since our formation in 2001, we have been providing a range of business services to operators in high-growth ethical & sustainable industries. Our services include market research publications, business & technical consulting, summits, seminars & workshops. Visit us at www.organicmonitor.com