SoapWire | Newswire for the Natural Personal Care Products Industry

Natural Products Sales Top $42 Billion in 2003

BOULDER, Colo.--(SOAPWIRE via BUSINESS WIRE)--June 28, 2004--American shoppers spent more than $42.8 billion on natural and organic products in 2003, according to research published in the 23rd Annual Market Overview in the June issue of The Natural Foods Merchandiser.

The Natural Foods Merchandiser (www.naturalfoodsmerchandiser.com) is the leading trade magazine serving the natural and organic products industry and is read by more than 15,000 retailers, industry leaders and trend watchers each month.

As mainstream attention focused in 2003 on the many connections between diet and health, natural products sales increased 8.1 percent across all sales channels, including supermarkets, mass marketers, direct marketers and the Internet. Sales of organic products rose 19 percent in natural products stores in 2003.

Consumers expanded their organic and naturals purchases beyond the kitchen in 2003. Some of the healthiest gains were in organic personal care, up 81 percent, and organic pet products, up 31 percent. Organic fresh meat and seafood posted 51 percent gains in sales. Nutrition bars, now a billion-dollar category in naturals stores, rose 25 percent. Sales of specialty supplements, a category that includes such strong sellers as glucosamine and essential fatty acids, rose 13 percent in naturals stores last year.

In 2003, consumers were deluged by news reports that questioned the safety of their food or the wisdom of conventional American eating habits. "When stories hit about mad cow disease or trans fats, people look to natural and organic products for alternatives," said the publication's editor, Marty Traynor Spencer. "We saw gains in every channel of trade, from small independent vitamin and health food stores to the largest supermarket chains." Natural products sales rose 7.8 percent to more than $13.7 billion at supermarkets, discounters, drugstores and other mass market retailers.

Additional statistics and facts about one of the nation's fastest-growing consumer segments may be found in The Natural Foods Merchandiser's Market Overview. The Overview provides the most comprehensive and current data on retail sales of natural and organic foods, personal care products and supplements.

The Market Overview is produced jointly by The Natural Foods Merchandiser and its San Diego-based sister publication, Nutrition Business Journal, a leading source of market research and strategic business information for manufacturers and suppliers in the nutrition industry.

For more information about the data in The Natural Foods Merchandiser's Market Overview, call Editor Marty Traynor Spencer at (303) 998-9352. For information about research methodology, call Nutrition Business Journal Research Director Patrick Rea at (619) 295-7685, ext. 21. Please consider us your resource on the natural/organic industry.

About New Hope Natural Media

New Hope Natural Media publishes The Natural Foods Merchandiser and Nutrition Business Journal as well as The Natural Grocery Buyer, Delicious Living, and Functional Foods & Nutraceuticals. New Hope also produces the two largest natural and organic products trade shows in the United States: Natural Products Expo East in Washington, D.C., Oct. 14-17, 2004, and Natural Products Expo West in Anaheim, Calif., March 17-20, 2005. For more information, visit www.newhope.com.

New Hope is a division of Penton Media, Inc., a leading diversified business media company that produces market-focused magazines, Web sites, trade shows, and conferences. For more information, visit www.penton.com.

Contact:
The Natural Foods Merchandiser
Ms. Marty Traynor Spencer, editor, 303-998-9352
mtraynor@newhope.com

Source: New Hope Natural Media

Organic Sales Continue to Grow, As Do Venues for Organic Products

O'Mama Report> Sales of U.S. organic food and non-food items grew by approximately 20 percent during 2003 to reach $10.8 billion, according to The Organic Trade Association's 2004 Manufacturer Survey. Survey results showed sales of organic foods were approximately $10.38 billion in 2003, up 20.4 percent from 2002. Meanwhile, "non-food" organic products, such as personal care products, nutritional supplements, organic fiber, household cleaners, flowers and pet food, grew by 19.8 percent, to reach $440 million in sales.

Developments in the Natural Hair Care Market

The $4.6 billion U.S. natural personal care market (NBJ) continues to grow at double-digit rates. Driven by the health and wellness trend, this area is by far the fastest growing area of personal care. According to San Francisco, CA-based Spence Information Services (SPINS), the hair care segment of the natural personal care market is growing at a rate of 17% annually and represents 15% of natural personal care total sales, compared with 37% for skin care.

Everyone uses hair care products of some kind. The category includes shampoos, conditioners, hair colorants, styling products, straighteners, treatments, and others. Product developers and marketers must closely eye the consumer for valuable clues guiding the positioning and development of a particular brand.

Ethnic Markets

Ethnic consumers afford marketers with an excellent opportunity to position products toward specified targets. For example, many African American consumers, specifically women, tend to want products that straighten the hair so it can become more manageable. Many Hispanics tend to desire thicker, curlier hair, and Asian hair tends to be resistant to styling because it retains moisture and is thick and straight. Products that are positioned to meet these needs and that speak to the consumer segment in a customized manner tend to do very well. Botanicals suppliers are a major player in this area, as many “exotic” botanical ingredients provide the benefits consumers are looking for.

Men’s Hair Care

It is no secret that men use personal care products. What has eluded most natural products companies is the fact that very few products in the marketplace are positioned toward the male consumer. This affords a tremendous opportunity for both suppliers and manufacturers to design and market products that meet the needs of men. Of course, men use everyday products like shampoo and conditioners. It doesn’t take much, other than a more male-oriented, muskier fragrance and marketing communications that speak specifically to men, to exploit opportunity in this area. Natural products that address hair loss will obviously enjoy great favor in the marketplace as well.

Aromatherapy/Fragrance

Smart product developers know that it is very difficult to have a successful product that does not have a fragrance of some kind. Therefore formulating with natural fragrances is a necessity. Aromatherapy ingredients and other natural fragrances, made from pure essential oils and flower essences, are a major part of the hair care experience from the consumer’s perspective. It is a word with which the majority of people are familiar, and a more “functional fragrance” can be a major value-added benefit and point of differentiation for the marketer.

Personal Care Integration

Personal care companies have been integrating product lines for quite some time. Retailer Bath and Body Works offers both types of products in a variety of different applications. The company has also recently launched several lines of products containing natural and organic ingredients and with commensurate natural positioning, including a variety of on-site and home spa treatments. Dudley Products, Kernersville, NC) launched True Indulgence, a line of natural-based skin and hair care products. Tom’s of Maine, a maker of oral care products, introduced a line of moisturizing shampoos. Recently acquired Jason Natural Cosmetics offers hair, skin and oral care products to its loyal customer base. From these few examples, it looks likely that personal care segments will continue to become more integrated.

Related Articles :
The Rise of Natural Personal Care (April 02, 2004)
The Market for Natural Household Products (May 03, 2004)
The Meaning of Natural (May 21, 2004)

Darrin C. Duber-Smith, MS, MBA, is president of Green Marketing, a Colorado-based strategic planning consultancy 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 Success@GreenMarketing.net

Duber-Smith, Darrin C.. "Developments in the Natural Hair Care Market" NPIcenter 22 06. 2004. 25 06. 2004 [http://www.npicenter.com/newscontrol/templates/tArticles.asp?articleid=551&zoneid=27]

Male Grooming Habits Key Driver of Growth in Personal Care Products, Says ACNielsen

Older Populations Demanding Anti-Aging Solutions
Products Designed for Convenience Have Global Appeal

New York, NY - June 22, 2004 -- An increased interest in appearance, hygiene and grooming on the part of today’s males has contributed to the growth in Personal Care categories around the world, according to a study released today by ACNielsen.

ACNielsen's – 'What’s Hot Around the Globe: Insights on Growth in Personal Care' – analyzed retail purchases in 56 countries across nearly 60 categories and found many examples of this trend. For instance, the sales value of Shower Gels, one of the fastest growing personal care categories worldwide, grew by 7% in 2003, primarily on the strength of sales in male-oriented products.

"Women aren't the only ones focused on personal grooming," said ACNielsen's managing director of global services Jane Perrin. "In many of the countries we studied, the growth in personal care categories was impacted by the introduction of new male-orientated products. The so-called 'metrosexual' phenomenon is definitely having an impact."

Coined by writer Mark Simpson, the term "metrosexual" refers to "an urban male with a strong aesthetic sense who spends a great deal of time and money on his appearance and lifestyle."

In the UK, for example, the shower gel category as a whole grew by only 4 per cent last year, but the male segment grew by 18 per cent. Two other categories - deodorants, and razors & blades - are also benefiting from men's newfound attention to appearance.

According to ACNielsen, the deodorants category grew by 5 per cent overall, with 35 of the 50 countries studied reporting increases. Sales of male-orientated products were said to have grown twice as fast as those of female-orientated products.

Palm Oil Refiners Expanding Capacities

Palm oil processors are increasing capacity in Europe and the US as global demand for palm oil products increases. Full Article>>

Philippines Eyes Export Revenue From Virgin Coconut Oil

Nikkei English News via NewsEdge Corporation : Manila, June 2 (Dow Jones) - Amid a growing global consumer preference for organic products, the Philippines is hoping to generate higher export revenue from exports of virgin coconut oil, Philippine Coconut Authority administrator Danilo Coronacion said Wednesday.

Coronacion said virgin coconut oil exports are priced considerably higher, at around $8 a kilogram or $8,000 a metric ton against a crude coconut oil price of around $680/ton, FOB basis.

With annual world demand for coconut oil estimated around 240,000 tons, the Philippines can generate an export revenue of $1.9 billion, said Coronacion.

He said the global organic food market alone was estimated to be worth $23 billion in 2002, as consumers worldwide have shown growing preference for healthy, natural and environmentally friendly products.

The prospects of higher export revenue have prompted the PCA to encourage local farmers to venture into virgin coconut oil production, mainly through an information campaign, Coronacion said.

However, he said local production of the commodity is only enough to supply domestic requirements of around 20 tons a month, adding that current export volumes are minimal.

Virgin coconut oil is extracted directly from the fruit without going through a heat process and thus retains its natural properties.

Export markets for the commodity include the United States, Europe, Japan, China, Australia, Canada and Singapore, Coronacion said.

Virgin coconut oil, used as a dietary supplement in some countries, including the Philippines, is believed to have healing components against certain diseases, including diabetes, epilepsy and viral and bacterial infections.

Sandique-Carlos, Rhea. " Philippines eyes export revenue from virgin coconut oil." Nikkei English News. 06 03. 2004. NewsEdge Corporation . [http://www.soyatech.com/bluebook/news/viewarticle.ldml?a=20040603-7]

The Meaning of Natural

Continuing on the series of "Natural Personal Care" Darrin C. Duber-Smith releases his third article in the series.

Now that long-term consumer demand for natural products has been firmly established, personal care products positioned as ‘natural’ have become increasingly available in a variety of channels, well beyond availability in the traditional “natural products” stores. For many, this is a good thing. Since most consumers will never set foot in a natural products store, it follows that the only way to reach them is to expand into different channels, such as mass, specialty, direct, etc. However, others see this channel expansion as a hotbed for conflict, from issues such as the lower prices at Wal-Mart to whether or not certain products are truly ‘natural’ and can be ethically marketed as such.

A Natural Issue

This leads us to what is perhaps the #1 issue facing the natural personal care industry – What Does Natural Mean? As you probably know, there is no legal definition anywhere, so marketers both have and use full creative license in terms of positioning their products. The inevitable result is that many products positioned as natural are not really very natural. In these cases, they may contain a few natural ingredients, but most of these ingredients are synthetically derived. Several brands come to mind, and you likely know who they are.

The bottom line is that the word “natural” means something to consumers, and this alone justifies its use for positioning. Marketing 101 teaches us that successful marketers develop products in response to or in anticipation of a market need; they no longer develop products and then attempt to find a market for them. Therefore consumers are always the most important variable in any marketing equation.

In the personal care world, the word “natural” can differentiate a product that is healthier for the body, better for the environment, and safer around children and pets, from a product that is none of those things. It is critical though, not to confuse the consumer. Some natural brands, like Aveda, have chosen not to use the word “natural” in any of their marketing communications, and I do not recommend this course of action. Aveda has chosen to de-emphasize the fact that the consumer does place some meaning on the word.

A Definition for Natural

Remember, there is no legislation, but I feel that if the product contains more than 70% natural ingredients (borrowed slightly from the U.S. organic food regulations), a marketer can position it as natural without fear of an ethical breach. If a product contains any less than 70% (a fairly arbitrary number, but you get the idea!), then the marketer can notate the ingredients as natural, but calling the product “Nature’s Essence” will confuse the marketplace and misrepresent the product. Acts of “dusting,” adding a non-functional amount of a natural ingredient in order to justify a claim, and “green washing,” the positioning of a product as natural when it is not, are prevalent in the mainstream channels, but not in the natural channels.

Perhaps a better way to view the natural concept is in the form of a continuum. Draw a straight line. Put points at the end of each line. You now have a continuum. Above the left point write the word “synthetic.” Above the right point write the word natural. Any product marketed as natural should be on the upper right 30% of the continuum. The idea is that very few products will appear exactly on that “natural” end point.

Most truly natural brands are found in traditional health food stores and natural supermarkets. These retailers have long been the gatekeepers of what is natural and what is not, and this is still the best way of discerning which is which. The mass and specialty channels will eventually be more discerning, but for now it is a bastion of green washing, dusting, and products that belong on the left side of our continuum.

A Call to Action

It would be helpful if natural products industry members were to agree upon a broad, working definition of “natural,” so that we could begin to self-regulate and perhaps affect channels outside of the natural products industry. For mainstream product developers, they should simply begin using more natural ingredients. Consumers understand the “natural” concept, and marketers do have a responsibility to their shareholders to provide a return. Since we have been experiencing 20% annual growth rates in natural personal care and mainstream cosmetics growth rates have been fairly stagnant for years, marketing natural products seems to be a good way to provide this return.

Related Articles :

The Rise of Natural Personal Care (April 02, 2004)

The Market for Natural Household Products (May 03, 2004)

Darrin C. Duber-Smith, MS, MBA, is president of Green Marketing, a Colorado-based strategic planning consultancy 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 Success@GreenMarketing.net

Duber-Smith, Darrin C.. "The Meaning of Natural" NPIcenter 21 05. 2004. 21 05. 2004 [http://www.npicenter.com/newscontrol/templates/tArticles.asp?articleid=513&zoneid=14]

New Markets Emerging for India's Coconut Products

INDIA BUSINESS INSIGHT, 5/14 /NewsEdge Corporation/-- India produces around 12.82 billion nuts per annum in 1.89 million hectare.

The Indian coconut industry is highly underdeveloped considering its immense potential. Most of the nuts grown in the country are used in raw form or as tender coconuts. Around 40 percent is converted into copra for oil extraction. The toiletry sector uses nearly 50 percent of the oil, while the remaining 38-40 percent is used as edible oil. Full Article>>

Understanding the Male Cosmetics Market

In contemporary societies, cultural practices, food preferences, clothing, cosmetics, beauty products, and makeup constitute essential tools of social distinction. Beyond their initial and official purpose, they contribute to reaffirming social structures and individual hierarchies. Full Article>>

Source: E-BEAUTY NEWS

Vitamins, Natural Actives Lead U.S. Market Growth for C&T Specialty Raw Materials

United States 2004 predicts that demand for active ingredients, including vitamins, botanical extracts, and polysaccharides, will grow by more than 5% annually over the next five years, reaching 6.6 million lb by 2008. This more than doubles the average annual growth rate forecast by Kline for the C&T specialty raw materials market as a whole.The convergence of these two trends has resulted in dramatic increases in demand over the past ten years for active ingredients like vitamin E acetate, grape seed extract, soy isoflavones, and polyphenols from green tea. These naturally derived materials act as antioxidants, skin conditioners, and moisturizers. Other naturally sourced actives used in skin care and hair care products include chitosan (derived from shrimp shells), phycopolysaccharides (derived from seaweed), and beta-glucans (extracted from yeast or fungi).Vitamin E exemplifies this evolution in the use of natural actives in C&T products. Until recently, it was added to niche products for "enrichment" and "nourishing" claims. Now vitamin E is included in products across the anti- aging spectrum for its powerful antioxidant functionality, and it is also used in hair care products.

Vitamin C has also seen more widespread use as an antioxidant in skin care products. The problem of its instability in the presence of oxygen has been addressed by companies like BASF and DSM with the introduction of derivative forms such as sodium ascorbyl phosphate. Novel encapsulation technologies have also been developed to preserve the activity of the compound until it reaches the skin.

Even though the novelty appeal of using vitamins has been exploited by C&T marketers for many years, consumption is still increasing, especially since synthetic grades of materials like vitamin E are now favorably priced. Some formulators are using a mixture of natural and synthetic vitamin E forms, rather than 100% natural forms, when "natural vitamin E" is claimed on the label.

Vitamin E exemplifies this evolution in the use of natural actives in C&T products. Until recently, it was added to niche products for "enrichment" and "nourishing" claims. Now vitamin E is included in products across the anti- aging spectrum for its powerful antioxidant functionality, and it is also used in hair care products.

Vitamin C has also seen more widespread use as an antioxidant in skin care products. The problem of its instability in the presence of oxygen has been addressed by companies like BASF and DSM with the introduction of derivative forms such as sodium ascorbyl phosphate. Novel encapsulation technologies have also been developed to preserve the activity of the compound until it reaches the skin.

Even though the novelty appeal of using vitamins has been exploited by C&T marketers for many years, consumption is still increasing, especially since synthetic grades of materials like vitamin E are now favorably priced. Some formulators are using a mixture of natural and synthetic vitamin E forms, rather than 100% natural forms, when "natural vitamin E" is claimed on the label.

Natural/synthetic blends are expected to expand the range of naturally derived actives and extend the anti-aging trend well into the future. New controlled delivery systems designed to stabilize compounds that are not useable under normal formulation conditions should also provide C&T manufacturers with many more options to meet the ever-present demand for more effective and versatile active ingredients.

Source: PR Newswire

The Market for Natural Household Products

Following up on the series of "Natural Personal Care", Darrin C. Duber-Smith of Green Marketing (a Colorado-based strategic planning firm offering marketing planning and marketing plan implementation to natural products companies) continues with his second article in the series found here

Duber-Smith, Darrin C.. "The Market for Natural Household Products" NPIcenter 30 04. 2004. 30 04. 2004

A Green Machine; the Growing Demand for Natural Products

Natural products are sprouting up in every corner of the personal care category.

In personal care, everything's coming up natural. The green market grows year-on-year, according to data from the Nutrition Business Journal (NBJ), San Diego. According to the publication, U.S. natural personal care sales reached $4.1 billion in 2002, representing 10% growth over 2001.

With natural product sales as a whole garnering $36.4 billion in 2002, personal care represented a significant chunk of the green market, which also includes food, produce and supplements.

"The natural personal care category is enjoying healthy growth, fueled by consumer demand that is attracting attention not only from core natural product manufacturers, but from mainstream cosmetic companies as well," said Patrick Rea, research director, NBJ.

"While the mainstream cosmetic and personal care product market is growing at a sluggish, low single-digit pace, the natural personal care market has become a beacon of light ... Full Article>>

Henson, Melanie. "A Green Machine." Happi 01. 2004: 57-66.

Exciting Weather Market Ahead; This Year’s Supply of Vegetable Oils

[dmg world media (uk) Ltd] The weather is going to be key to this year’s supply of vegetable oils as world stocks are low and can be wiped out by a crop failure in any one producing location, the MDEX Annual Palm and Lauric Oils Conference and Exhibition heard in March.

“This year, the safety margin is only one million tonne,” Dorab Mistry of Godrej International told the conference in Kuala Lumpur, Malaysia, which attracted a record 1,300 visitors from 41 countries.

Oil production was expected to expand by about 5M tonne and world consumption by 4M tonne.

“However, production growth is very much dependant on good to normal weather in every part of the world,” Mistry warned.

He predicted that prices would stay bullish up to April, after which South American soyabean oil would exert its usual seasonal pressure on prices. However, this pressure could be short-lived.

“The period from July to October could be very interesting if the demand engines of China, India, Pakistan and Bangladesh begin to crank in unison.”

Strong demand could easily absorb additional production.

However, normal rainfall from November onwards could give big crops and lead to a decline in prices in the last quarter of the year.

Teen Boys' Primping Products Debut

Star Tribune>> The teenage American boy, it seems, is the new darling of the health and beauty industry. Just last month, three former Procter & Gamble employees launched a new line of grooming products aimed at boys ages 9 to 16. Industry experts estimate the grooming market for the nation's 22 million teen and "tween" boys is worth $2.1 billion a year, and growing.

All this goes to show what parents and sisters have long suspected: Boys, despite appearances, care about how they look. In fact, their biggest concern is their appearance, according to Teen Research Unlimited (TRU), an Illinois-based marketing research firm that specializes in teenagers. Men, as a group, are spending more time in front of mirrors than before, too, contributing to a culture in which teenage boys can openly embrace primping.

"Twenty years ago, if you spent a great deal of time or attention as a boy on grooming, you would possibly be opening yourself up to any number of aspersions on your masculinity. That's really not something you see anymore," said Rob Callender, TRU's senior trends manager. Media images of clean-shaven men with smooth skin, groomed eyebrows and highlighted hair also influence appearance-conscious youth.
Full Article>>

Enter the World of Ayurvedic Cosmetics

E-Beauty News>> A science of life shrouded in the mists of time

Ayurvedic and Ayurveda are made up from two Sanskrit words: Ayu and Veda. Ayu means life and Veda means knowledge or science. Life according to Ayurveda is a combination of senses, mind, body and soul. Ayurveda is not only limited to bodily or physical symptoms but also encompasses spiritual, mental and social well-being. Harmony between nature and human beings is also central in this holistic health system. Ayurveda aims at preventing disease and enhancing health, longevity and vitality.

Several internet resources give extensive definitions and information about this traditional Indian medicine, see in particular the excellent pages of the Karolinska Institute: www.mic.ki.se/India.html

Ayurveda origins are shrouded in the mists of time, probably more than five thousand years ago in India. The oldest Ayurvedic written references are found in the Vedas, the oldest known written records in Indo-European languages (around 3000 BC). In the 6th century BC, Ayurveda spread to Tibet, China, Mongolia, Korea and Sri Lanka, carried by monks travelling to those lands. People from many countries also visited Indian ayurvedic schools to learn about this medicine and the religious scriptures it sprang from. Learned Greeks, Romans, Egyptians, Afghans, Persians and others travelled to learn the complete wisdom and bring it back to their own countries.

Although not much of it survives in original form, Ayurveda has a huge influence on many Asiatic spiritualities and mindsets regarding the body and spiritual health. Its effects can be seen both in Buddhism and Taoism.

Ayurveda is recognised by the World Health Organization as a traditional health science, and is currently used by 70-80% of the Indian population.

Many consider that the roots of recently developed alternative therapies such as aromatherapy, homeopathy and naturopathy originate from the art of Ayurveda. In any case, in the wake of the growing search for natural remedies in western countries, Ayurveda is becoming increasingly popular and ayurvedic cosmetics are gaining ground in the market.

>> Ayurvedic cosmetic formulations

Of course, ayurvedic cosmetology is not mentioned as such in the Vedas. But ayurvedic principles regarding the relationship between human beings and nature form the basis of generally recognised principles which ayurvedic cosmetic formulations must comply with:

- pure and natural ingredients from vegetable sources

- pure herbs and/or herbal extracts

- pure essential oils

- use of recognised traditional ayurvedic plants

- highest quality control standards

- no artificial preservatives

- no artificial fragrances

- no artificial colours

- no artificial ingredients in general

- no alcohol

- no mineral oil

- no pesticide

- no chemical handling

- no animal ingredients

- no testing on animals

- environment friendly packaging

There are many similarities with organic cosmetics, with one important difference: to date there is no official certifying body. Loss in consumer confidence and general credibility caused by abusive ayurvedic claims, are certainly the main threats that may hinder the development of ayurvedic products in general and cosmetics in particular. Full Article>>

"Enter the World of Ayurvedic Cosmetics." Newsletter N. 90. 15 04. 2004. Beauty-on-line - Sogecos. 16 04. 2004 [http://www.beauty-on-line.com/ebn/newsletter.asp?eid=90]

Palm Oil to Have a Better Year in 2004

BERNAMA THE MALAYSIAN NATIONAL NEWS AGENCY via NewsEdge Corporation : KUALA LUMPUR, April 8 (Bernama) -- Palm oil will see a friendly and bullish market scenario in 2004 with prices expected to hold at between RM1,800 to RM2,000 per tonne, Golden Hope Plantations Bhd chief executive Sabri Ahmad said. Full Article >>

Cosmeceuticals Sales Soared 77% in 2003

Reported within their latest press release, North Castle Partners, LLC, stated "Cosmeceuticals, a relatively new segment that straddles the cosmetic and medical sectors, is the fastest growing category in the personal care industry. According to NPD Group, traditional skin care sales in department stores grew six per cent while sales of cosmeceuticals brands soared by 77 per cent in 2003. Datamonitor projects future overall growth of the cosmeceutical category to be in excess of 20% per year."

About North Castle Partners

North Castle Partners, LLC, is the leading private equity firm focused exclusively on the Healthy Living & Aging marketplace. To date, it has invested more than $800 million of equity in over 40 companies that have been consolidated into nine industry-leading platforms: fitness clubs; active lifestyle nutrition; healthy beverages; day spas; complementary and alternative medicine; vitamins, minerals and supplements; natural personal care; adventure and luxury travel; and behavioral health services. www.NorthCastlePartners.com.

"North Castle Partners Acquires Controlling Interest in HDS Cosmetics Lab, a Leading Maker of Cosmeceutical Skin Care Products." NPIcenter 08 04. 2004. 12 04. 2004 [http://www.npicenter.com/index.asp?action=NBViewDoc&DocumentID=5930]

The Rise of Natural Personal Care

By, Darrin C. Duber-Smith, MS, MBA

Do you remember the days of tremendously high annual natural product growth rates? In those early times, the natural products value chain had trouble making the products quickly enough to address the rising tide of demand that lasted over a decade! Are these growth rates gone forever? Is there nowhere for you to turn to meet your lofty ROI expectations and satisfy your stakeholders?

It is true that consumer demand for nutritional supplements, functional foods, and a variety of healthy and natural meal and snack alternatives promised to fuel the industry for decades – or so it seemed. Now these areas show signs of maturation as consumer demand has slowed and oversupply has plagued the marketplace, in addition to a variety of other issues.

Today, much of the opportunity for growth in the natural world is found in products that consumers use on their skin, in their hair, on their teeth, and in the everyday household products they use. This is good news for the supply side, since ingredient manufacturers, in their strategic marketing planning processes, must look at several industries simultaneously --nutritional supplements, food and beverage, OTC/pharmaceutical, and personal care/household products-- so that they can maximize their ingredient applications and thus sales. Until recently, many industry analysts have overlooked this last category due mainly to its small size relative to other natural segments. All of this is now changing!

Nutrition Business Journal reports that the natural personal care industry is currently at US$4.6 billion in the United States, representing almost 15% of the overall health and beauty market. The last time the Canadian market was measured, in 2001, it stood at US$365 million. Several sources over the past few years have estimated annual growth rates in the U.S. at between 10-20%. This is again good news for suppliers who are tired of lackluster growth within the more mature natural products segments and can position their ingredients toward personal care as well as manufacturers and marketers who wish to offer branded products in the broadening channels of distribution. More>>

Darrin C. Duber-Smith, MS, MBA, is president of Green Marketing, a Colorado-based strategic planning consultancy 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 Success@GreenMarketing.net

Duber-Smith, Darrin C.. "The Rise of Natural Personal Care." NPIcenter 02 04. 2004. 02 04. 2004 <http://www.npicenter.com>.

Overview of the Malaysian Oil Palm Industry

Datuk Dr. Yusof Basiron, General Director of the Malaysian Palm Oil Board reports..

"The Malaysian oil palm industry in 2003 flourished under the tight world oils and fats supply situation. The higher growth of world demand over that of production has resulted in an increase in export demand and prices for all Malaysian oil palm products.

The production of crude palm oil (CPO) in 2003 increased markedly by 12.1% or 1.4 million tonnes to 13.35 million tonnes from 11.91 million tonnes in 2002. The production of crude palm kernel oil also rose substantially by 11.6% to 1.64 million tonnes from 1.47 million tonnes the previous year. The increase was mainly attributed to the expansion in matured planted area, favourable weather conditions and rainfall distribution as well as constant sunshine throughout the year. The pollination and formation of oil palm fruits were excellent. Thus, the fresh fruit bunches yield per hectare increased by 5.7% to 18.99 tonnes from 17.97 tonnes last year. However, the oil extraction rate (OER) fell to 19.75% in 2003 from 19.91% last year.

The total export of oil palm products, constituting palm oil, palm kernel oil, palm kernel cake, oleochemicals and finished products increased substantially by 14.2% or 2.09 million tonnes to 16.78 million tonnes in 2003 from 14.69 million tonnes in 2002. The increase in total export value was much more impressive, soaring by 33.1% or RM6.50 billion to RM26.15 billion compared to RM19.64 billion in 2002. The favourable growth in exports was due to the tight world oils and fats supplies, higher growth in export demand and depleting world stock levels which resulted in higher prices of oils and fats including oil palm products.

Exports of palm oil increased by 12.5% or 1.36 million tonnes to 12.25 million tonnes from 10.89 tonnes in 2002. China P.R not only remained as the biggest market but also achieved the highest market growth with exports accelerating by 38.4% or 0.71 million tonnes to 2.55 million tonnes (20.8% of total palm oil exports) from 1.84 million tonnes in 2002. The European Union came in second accounting for 1.69 million tonnes (13.2% growth and 13.8% share). India was third with 1.59 million tonnes (but 5.0% reduction in growth and 13.0% share) followed by Pakistan with 1.10 million tonnes (1.3% growth and 9.0% share).

The second major product exported in 2003 (in terms of value) was oleochemicals which increased by 22.4% or 0.28 million tonnes to 1.55 million tonnes from 1.27 million tonnes in 2002. The major oleochemicals exported were Fatty Acids (0.71 million tonnes or 45.5% of oleochemicals exports), Fatty Alcohol (0.28 million tonnes or 18.2%), Methylester (0.19 million tonnes or 12.4%), Glycerine (0.18 million tonnes or 11.9%) and Soap Noodles (0.18 million tonnes).

The major market for oleochemicals were the European Union (0.50 million tonnes or 38% share and up by 21.7%), China PR (0.21 million tonnes or 13.4% and up by 34.7%), USA (0.19 million tonnes or 12.6% but down by 5.1%) and Japan (0.16 million tonnes or 10.6% and up by 15.3%).

The end of the year stock level of palm oil was 2.5% higher at 1.17 million tonnes compared to 1.14 million tonnes last year. The higher end December stock was due to the unprecedented surge in the month’s production, while export remained lower as normal during this month.

The average prices of oil palm products strengthened in 2003 driven mainly by robust export demand, draw down in stock levels, sharp rise in soyabean oil prices and continued tightness in global oils and fats supplies. The average CPO price increased by 13.2% or RM180 to RM1,544 as against RM1,363 the previous year. The lowest and highest monthly average price were recorded in August and November at RM1,398 and RM1,866 respectively. The highest daily price was RM1,950 in late October while the lowest was RM1,372 in mid-August. Subsequently the average export price for RBD palm oil rose by RM259 or 19.2% to RM1,613; RBD palm olein up by RM247 or 17.1% to RM1,695; and RBD palm stearin increased by RM124 or 9.8% to RM1,399. For plantation companies and smallholders, 2003 had been a remunerative year as the average price of FFB at 1% OER increased by 18.4% or RM2.43 to RM15.62/tonne from RM13.19/tonne the previous year.

The world oilseed and seed oil production in 2004 are expected to respond pronouncedly to the high price situation in 2003. However for palm oil, due to its cyclical nature, the production growth in 2004 is expected to be smaller. Coupled with a sharp reduction in world oils and fats ending stocks last year, the supply situation in 2004 is anticipated to remain tight.

Based on this background, the Malaysian oil palm industry in 2004 is forecast to remain bullish. The production of CPO is projected to increase by 2.3% to 13.66 million tonnes and prices are expected to remain firm this year."

Market Research Report; Cosmetic & Toiletry Chemicals

US demand to approach $7 billion in 2008

US demand for cosmetic and toiletry chemicals is projected to near $7 billion by 2008. Gains will be driven by factors such as the use of active ingredients designed to both enhance appearance and to counter the effects of aging. Growth will also reflect a greater demand for plantderived ingredients and specialty additives offering protection from sun, heat, wind, pollution, smoke and other threats to healthy skin and hair.

Demand in volume terms is projected to record more modest gains through 2008. Advances will be restrained to some extent by the growing popularity of water-based and non-aerosol formulations in skin and hair care products and the use of higher value ingredients that are more effective at lower loadings.

The incorporation of active ingredients -- such as plant acids and enzymes -- into toiletries and cosmetics, as well as their focus in marketing efforts, has become one of the most compelling factors driving growth in the otherwise mature US market. Growth in demand for active ingredients is projected to approach double digits, propelled by strong demand in so-called cosmeceutical skin care products and high value additives such as nanoscale ingredients.

The emergence of products created as a result of nanotechnology is expected to have a substantial effect on the industry. Among the first such products to establish a market presence are polymers used as delivery systems for vitamins and other actives, and inorganic pigments used in sunscreens.

Plant-derived, other natural ingredients find favor with producers and consumers

Organic ingredients are expected to remain an important component of the cosmetic and toiletry chemical market, both in product formulation and reformulation, and in terms of marketing impetus that is so critical to manufacturers looking to retain or expand their respective shares of the market. The fastest growth, approaching or exceeding double-digits annually, is expected for small-volume herbal extracts that have established themselves as safe and effective ingredients in nutraceutical products. However, the high cost of many botanical extracts and issues of quality control and standardization will restrain further gains.

Biotechnology may hold the key to increasing the availability and improving the consistency and quality of plant source materials. However, labeling policies regarding genetically modified materials may affect product preferences, as consumers have generally expressed wariness about such materials.

Ingredient makers seek growth in cosmetics and toiletries market

A key to gaining or retaining market share in the cosmetic and toiletry chemical market is supplying materials used in finished products that compete in growing or traditionally underserved market niches. Among such areas are the ethnic hair and skin care markets, as nonwhite populations are expected to register faster growth through the next decade. Also, the teen segment has above average growth potential, as incomes of teenagers are rising more rapidly than for the population as a whole. More >>

Study coverage
Cosmetic & Toiletry Chemicals, a new Freedonia study, presents historical data plus forecasts to 2008 and 2013 in current US dollars by product, function and market segment. This study also details key regulatory issues, analyzes market share data, and profiles more than 30 industry participants.

The Freedonia Group. "Cosmetic & Toiletry Chemicals." . 02.2004. Global Information, Inc.. 26 03.2004 .

Marketing to Men; a True Market Niche

Marketing to Men
Sara Mason

Men are a true market niche. They are becoming more interested in skin and body care, yet there still is a lot of room for building awareness. “They are interested but not necessarily embracing it yet,” said Lisa Hawkins, executive director of marketing for Aramis, Estée Lauder’s prestige men’s grooming, skin care and fragrance products. In the past, it has been the woman’s job to shop for men. "But that’s changing rapidly as men come to terms with having to look their best to stay in the hunt, professionally and personally,” explained Michelle Probst, founder of the men’s skin care line Mënaji. The market is not only being validated, it is booming.

“Men are spending 51 minutes a day grooming and spending $12 billion to look better—from whitening toothpaste to cosmetic surgery,” said Probst, a makeup artist turned entrepreneur. She explained that men are the fastest growing segment of the cosmetic industry, and now, more then ever, they are purchasing their own personal care items.

The media have been responsible for building that niche. Personal care isn’t something men talk about with their buddies. Education has come from men’s magazines, which are addressing personal care concerns more each year. “It isn’t taboo anymore,” Probst said.

The Web also plays a primary role, according to James Whittall, president and owner of MenEssentials.com. It lends itself to confidentiality and is a source for background information on a product or specific need before making purchasing decisions. The major demographic for Web use is males ages 25–45, the main purchasers of online products. “We married the medium with a key demographic to provide answers to legitimate grooming concerns,” said Whittall. He aims to make information accessible to men, assuming that they are intelligent individuals who only lack knowledge in the area of grooming. “The Web can provide the answers to sensitive questions not being tackled by most resources,” he explained. “We add a touch of irony, self-deprecation and humor to address these issues in an entertaining way. It is unorthodox, and it works.”

While men are not as sophisticated as women in the area of personal care, educating them through the media will help men become more aware of their options and be more comfortable with making changes in their purchases. Full Article >>

Sara. "Mason." Business. 03. 2002. The Cosmetic Site. 23 03. 2004

Metrosexual Revolution

The Motley Fool reports, "Howard Dean might not have invented the word (heck, he subsequently admitted he didn't even know what it meant), but the metrosexual industry sure got a boost when the primal screamer called himself one last October. Metrosexual industry? You mean there's a whole industry? Well, yes. And it's booming.

First coined in 1994 by a British journalist, metrosexuals are allegedly urban, heterosexual men who have the incurable urge to wax, exfoliate, and otherwise pamper their vanity. Or, as the global marketing and advertising agency Euro RSGC termed it: It's a man with "internally referenced masculinity." Uh huh. And now it's front and center on the popular television makeover show Queer Eye for the Straight Guy.

According to market researchers Mintel Group, mextrosexuals are a worldwide $8 billion-a-year industry, with the U.S. accounting for more than $2.4 billion. Department stores alone sold $86 million worth of male grooming products in the first nine months of 2003, notes NPD Group, and market research firm Kline & Co. says such sales nearly tripled in the last 10 years. Helping men find their feminine side is reaching far into the apparel, cosmetics, self-improvement, and personal-care segments." Full Article >>

Spas; The Leading Outlet for Professional Skin Care Brands

Research from Kline's new study, THE U.S. PROFESSIONAL SKIN CARE MARKET 2003, reports that spas are the leading outlet for professional skin care brands, followed by medical offices, department store, and specialty stores. According to the report, spas have expanded the number of doors in the U.S. by more than 18% per year over the last five years.

Kline's study reports that the spa and salon channel accounts for nearly 65% of the total market for professional products, but that retail stores have actually taken about 8% of these sales from spas since 1998. “Marketers of spa products have largely ridden the wave of new spa openings rather than actively pursuing strategies to grow their brands,” says Contreras. “Considering that sales growth of their products has lagged behind growth of spa locations, there are definitely more possibilities for growth to exploit here.”

Bolstered by the booming spa business and a growing distribution in retail outlets, the U.S. market for professional skin care products has outperformed the market for standard retail skin care products to a significant degree. “The segment has been booming but still has plenty of room for growth,” said Kline’s Lenka Contreras says. “There are low barriers to entry, high consumer demand, and big potential for profit.”

This first-edition report builds on Kline’s annual report of the traditional retail market for cosmetics and toiletries in the United States. This new report covers consumable skin care products sold to professional channels for back-bar and take home use in the United States in 2003. The market is estimated at more than $0.5 billion at the manufacturer level, have grown nearly 10% per year over the last five years. The traditional market for facial treatments has expanded by just 5.4% during the same period.

Other significant insights include:

- Because of the popularity of spas, several cosmetic and toiletry retails chains are considering or testing out day spas near or next to their existing locations.

- Marketers -- large and small, and traditional and professional – are concerned about the threats that the new brands from dermatologists like Fredric Brandt and N.V. Perricone bring to the industry.

- Ironically, the physician-endorsed skin care products have not seen as brisk a business through dermatologists' offices or cosmetic surgery centers.

- Retail sales of men’s skin care products alone have nearly tripled in the last ten years and show no sign of slowing.

The Section on Spas includes an overview of the spa channel with information on number of outlets, historical sales growth, facilities and services provided, competitive landscape, dollar and unit sales of skin care products, customer profile, and outlook to 2008.

The 25 Profiled Brands included: Avance, Aveda, Cellex-C, DDF, Decleor, Dermalogica, Dr. Hauschka, Elemis, Epicuren Discovery, Jurlique, La-Roche-Posay/BioMedic (L’Oreal), MD Forte, MD Formulations, Murad, NV Perricone MD, Naturpathica, NeoStrata Exuviance, Obaji Medical Products, Peter Thomas Roth, Repechage, Skinceuticals, Sothys, Sundari, and Yon-Ka.

Established in 1959, Kline & Company (www.klinegroup.com) is a business consulting and market research firm serving clients worldwide in the cosmetics and toiletries, household cleaning products, and other consumer products sectors.

Spatrade. "." News. 03 02. 2004. SpaTrade. 23 03. 2004

2004 Forecast on Retail Spending

The Bumpy Ride

WSL Strategic Retail reports, "If ever there was a bumpy ride at retail it was this past holiday season -- from the early high the day after Thanksgiving to the depths of mid-December to the run for the posts the week immediately before and the week immediately after Christmas. Retailers really needed their wits (and their intestinal fortitude) about them.

There was much to learn from this past season... beyond the need for endurance training. The final results said a lot about the nature of the economic recovery in this country. For the most part, luxury retailers did better than discounters, evidence that higher income consumers are feeling more confident about their economic lot. And that's good news.

But even more revealing is the fact that lower income shoppers - the bulk of American households - are still very concerned about what 2004 will bring. Thus, they were much more cautious about when, where and how much to spend over the season. When mighty Wal-Mart ends the season with sales results at the low end of its projections, you know how the average shopper is feeling.

That's been clear to us for some time, as we talk to shoppers monthly in How America Shops¨ ...Everyday, and in our soon-to-be published bi-annual How America Shops¨ Macro Trends 2004. While women and men shoppers are feeling somewhat better about the state of the economy, they are very circumspect, very vigilant about what lies ahead. Their spending is discriminating - they will spend only in certain retail channels, at certain retailers and for select categories.

That was evident over the holidays where luxury department stores did well (Nordstrom, Neiman Marcus, Saks Fifth Avenue), mid-level did not (May Co., Kohl's, Sears). Some specialty stores did well (PacSun, Best Buy, Bath & Body Works), others did not (GAP, Abercrombie & Fitch).

The difference between those that did well and those that did not? Innovation, quality, value and credibility defined the winners.

A word of warning: While higher income shoppers are feeling more confident and willing to spend, they, like their lower income counterparts, are still showing signs of caution in their day-to-day spending as indicated in How America Shops¨ ...Everyday. When asked if they were being more careful about spending, two-thirds of shoppers with income $100K+ said, "yes." This compared to 72% of those under $50K. So the bumpy ride is not over by any means.

WSL from the Edge. "The Bumpy Ride." Retail. 01. 2004. WSL Strategic Retail. 23 03. 2004