Fairtrade products are gaining popularity in the cosmetics industry as companies increasingly look at ethical sourcing and social responsibility.
New research by Organic Monitor (www.organicmonitor.com) finds the early adopters are natural & organic cosmetic companies. A large number are implementing faitrade sourcing policies, with some launching certified fairtrade products. Most product launches have been in the French market, which now has the largest number of cosmetic products with the internationally-recognised Fair Trade mark.
The fairtrade concept is becoming popular as it involves ethical sourcing of cosmetic ingredients. It encourages sustainability and guarantees growers in developing countries get a fair price. Although the Body Shop has been the pioneer in ethical sourcing with its Community Trade programme, the company is losing out to newcomers. A number of natural & organic cosmetic companies are setting up fairtrade grower projects in Africa, Asia and Latin America. Some are growing endangered plant species and investing in social community projects.
In its new Strategic Insights report, Organic Monitor evaluates the business potential of Fairtrade Cosmetics & Ingredients, giving details of standards, certification and market potential. The study predicts adoption rates to rise as natural & organic cosmetic products become mainstream and as more certified fairtrade ingredients become available. A major restraint to market growth is the limited number of certified fairtrade ingredients.
The ‘mainstreaming’ of the natural & organic cosmetics market, which involves products crossing over from specialist to mainstream retail channels, is also encouraging fairtrade practices. Pioneers like Weleda are investing in fairtrade projects to guarantee supply of organic ingredients and to encourage sustainability. The entry of large cosmetic companies and leading retailers is straining supply of natural & organic cosmetic ingredients. Corporate social responsibility is also coming to the forefront as brands compete for limited shelf-space in retailers.
Preliminary research from Organic Monitor shows that the European Market for Natural & Organic Cosmetics is expected to break the US $2 billion barrier for the first time this year. High market growth rates are occurring across Europe as consumers increasingly demand ‘chemically-clean’ and ecological cosmetics. Mainstreaming is leading to new product launches in supermarkets, hypermarkets, discount stores, drugstores and department stores.
Many new products are aimed at ecological and health-conscious consumers, positioned as ‘free-from’ and organic. Fairtrade is catching on as it enables cosmetic products to be marketed on ethical values, attracting consumers concerned about social inequality and sustainability. With a growing number of natural & organic cosmetic companies adopting fairtrade practices, Organic Monitor predicts some convergence between standards. A number of organic certification agencies are already integrating fairtrade practices into their standards. Such convergence will enable cosmetic companies to bridge the gap between green and ethical products. The market share of fairtrade cosmetics is expected to rise as this happens.
1. #7021-92 Strategic Insights: The Potential of Fairtrade Cosmetics & Ingredients (Sep’08)
More information on http://www.organicmonitor.com/702192.htm
2. #1002-60 The European Market for Natural & Organic Cosmetics (Dec’08)
More information on http://www.organicmonitor.com/100260.htm
About Organic Monitor
Organic Monitor is a specialist business research & consulting company that specialises on the global organic & related product industries. Since its formation in 2001, Organic Monitor has been providing a range of business services to operators in high-growth ethical industries. Our business services include market research publications, business & technical consulting and seminars & workshops. Visit us at www.organicmonitor.com
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