After years of double-digit growth, sales of natural and organic personal care products hit a wall in 2009, succumbing to the perfect storm of a lousy economy, rising commodity prices and category maturation, industry experts say.
“The state of the entire natural channel was recessionary in 2009, and personal care was no exception,” says John Pavlenkov, business consultant for Schaumberg, Ill.-based market research firm SPINS. “This category has been slower than food or vitamins to return to positive growth.”
Consumers spent $282 million on natural and organic personal care products at natural products stores between December 2008 and December 2009, according to SPINS, marking a 0.2 percent decline in sales. Some categories, such as kits and gift packs, fell by more than 17 percent. Meanwhile, at mass-merchandise stores, NOPC sales dipped 0.7 percent to $478.6 million, with some categories—like kits and gift packs—slipping by more than 40 percent, according to SPINS.
The flat NOPC sales in 2009 mirror those across the category. According to New York-based marketing and media firm Nielsen, consumers spent $62 billion on beauty aids at U.S. conventional stores in 2009, up just 0.3 percent. SPINS consultant Beata Pabian attributes 2009’s plunge not only to the lingering recession, but also to the fact that retailers were finally forced to pass on price hikes from manufacturers (who raised prices on many natural products, including body care products, in the wake of rising costs for fuel and raw ingredients). “Retailers were hurting so badly, the only way they could gain back their margin was to raise prices,” she says. And in some cases, that may have scared away consumers.
The weak numbers followed a lucrative 2008. The so-called “lipstick index” (the concept that people will spend money on beauty even in a recession) held up well. In the 52-week period ending in November 2008, sales of NOPC products were up 28.6 percent from the previous year in food, drug and mass markets and up 8.6 percent in the natural channel.
The good news: Last year, thrifty consumers stocked up on do-it-yourself beauty items. Sales of body and massage oils were up 7 percent, and sales of natural hair color products were up 8.3 percent, according to SPINS. “Rather than going to the spa or salon, they are making one at home,” says Pabian.
And concerns about the H1N1 virus pushed up sales of disease-fighting personal care products. At the end of November 2009, with news of H1N1 making headlines, antiseptic sales (including germ-fighting wipes, hand sanitizers and hand gels) were up 12.4 percent over the previous year in the natural channel, according to SPINS.
More good news: SPINS reports that NOPC sales rebounded in late 2009. “Manufacturers and retailers worked hard, and they were able to stop the hemorrhaging,” says Hotchkiss, Colo.-based natural products consultant Lynea Schultz-Ela. For the 12-week period ending in late November 2009, sales were up 2 percent over the previous year. “Trends are headed in the right direction,” says SPINS’ Pavlenkov.
Industry analysts believe the lean economy and the sustainability trend could ultimately be good for purveyors of natural personal care items, driving shoppers to look beyond high-priced department-store products to more affordable and sustainable alternatives. Categories to watch: at-home spa supplies, natural sunscreens and anything produced locally.
Lisa Marshall is a freelance health writer and mother of two young daughters who now spends far too much time poring over ingredient labels in the personal care products aisle.