The natural beauty sector in the US is booming. Research company SPINS said the market for natural and organic cosmetics clocked up turnover of 1.9bn USD for the 52 weeks ending September 2016, an increase of 11.8%.
And although organic products only account for a small share of the overall US personal care market - which grew 1.9% to 36.6bn USD last year - natural cosmetics are growing much faster than the market average.
Kora Lazarski, a consultant in innovation and strategy for the US natural products industry with Outbound Labs, and formerly the Senior Strategic Alliance Manager at SPINS, says:
"2016 was a great year for the organic and natural beauty market in the US. Distribution picked up in conventional mass retailers and drugstore chains, getting these products in the hands of more mainstream shoppers than ever before. There were also new trade shows and collaborations across independent blogs, e-commerce platforms, and other social media. This has really boosted the discoverability and perceived sophistication of natural products."
One of the main retail channels for natural and organic beauty in the US are groceries, a category which includes retail giants like Walmart or Target but also health food stores and organic supermarket retailers such as Whole Foods. In fact, large scale retailers like Target have helped to drive the success of the natural beauty market, Lazarski notes.
"Target has been a great champion for the organic and natural beauty sector over the last few years. Up until recently, finding unique brands at major US retail chains was a bit of a challenge. This has led many shoppers to turn to the Internet for what’s new and exciting in natural cosmetics. Target seems to have realized this, and moved to curate great, exclusive selections of rising new star brands like S.W. Basics or Fig + Yarrow. There are now natural and organic brands at Target that can’t even be found at many natural retailers. I think this really highlights their efforts in this arena."
Other important retail channels are department stores with international brand boutiques, independent stores (including retail boutiques and social media-driven online stores like blogger platforms) but also beauty salons and e-commerce sites.
Although pioneer organic brands like Dr. Bronner's and JASÖN - which were both launched in the 1950s - and Burt's Bees (from the 1980s) as well as more recent arrivals like Yes to and Acure still register steady sales, a new generation of organic beauty brands has arrived to further boost the US naturals market.
Young brands like 100% Pure, Mother Dirt or S.W. Basics have a higher functionality and more innovative ingredients than the classic organic beauty labels. With a strong lifestyle angle these new organic brands are positioned as niche labels rather than mass market. And several of these new brands started out in online retail.
Lazarski confirms: "One of the most important trends in the US organic beauty market at the moment is that the flow of getting an innovative, new product to market is changing. Rather than following the path of organic categories like foods or beverages - which usually start locally, get picked up by a natural retailer, sell online, and then grow into mass retailers – we now see e-commerce reversing this process. Today, a great new product might launch on social media and Amazon first and then get picked up by Target or Walgreens, without ever having been sold in a natural retailer."
Leaving it out
A major driving force in the US natural beauty market last year were clean label claims (also called "avoider claims") According to SPINS, "paraben-free", "SLS-free", "non-GMO" and "fair trade" were amongst the fast-growing label claims in the last year, in addition to classics like "organic" or "vegan".
A comparatively new but fast-growing label claim is the "B-Corp certification". B-Corporations are commercial businesses that act like non-profit companies, adhering to strict standards of accountability, transparency and sustainability. At the moment B-Corp is primarily a US development although European companies are now also exploring this standard.
What the future holds
According to SPINS there are several key developments, which are slated to drive the US personal care market (including the naturals sector) over the next few years. One of these influences are Nutraceuticals in vitamins, supplements and beverages.
"The commitment to increasing the active ingredient content in products is very promising, and we’re seeing a lot of new products and salons cropping up who use mostly simple, food-grade ingredients", Lazarski states. "Conversely, foods, beverages, and supplements have been getting into the beauty and wellness space, so I think we will be seeing much more beauty-from-within in the coming years."
Another significant trend is Korean beauty, which is continuing to influence the conventional and natural C&T market in the US.
Lazarski comments: "For a long time we’ve seen different variations and scents of the same product types, but with the recent surge of Korean beauty products there are entirely new classes of products to explore and reinvent, like gel eye patches, lip masks, oil cleansers and essences."
"Active Beauty" is another key influence: these are personal care products that emphasise the convenience aspect - deodorant wipes, for example, or sweat-proof or odour-neutralising products. The hair care sector is seeing some major "speed-it-up" developments: dry shampoos and "UnWashes"/"CoWashes" (washing the hair with tenside free products or conditioners instead of conventional shampoos) have been amongst the biggest market trends of the last few years.
"An intriguing trend in the natural hair care sector are products designed to minimize product use overall", Lazarski says. "There are hair cleaners which extend the life of your shampoos and cut out the need for conditioners altogether, like Beautiful Nutrition’s Lemon Hair Rinse, Mother Dirt's Shampoo or the products of Hair Story."
Another major trend is Localisation (focusing on regional products and ingredients) while ethnic-positioned products - such as skin care, hair care or makeup for Latin, African or Asian consumers - will also continue to grow.
And the concept of "Business as a mission" - fair trade and community projects or social business brands - is yet another significant development which will influence the C&T sector in the US.
Lazarski comments: "The organic beauty market is poised to grow in the coming years thanks to several coalescing forces. There has been an increase in acquisitions and funding activity for natural beauty brands, similar to what natural food and beverages have been seeing over the last 5-10 years. Together with the increase in mainstream distribution, this development is supporting the continued market growth in volume. Using products with clean and sustainable ingredients has become commonplace as US shoppers have become more educated in their understanding of what goes into their products. And this in turn will open more doors for new organic producers to gain market share."