NATURALS BY THE NUMBERS: KLINE’S PERSPECTIVE

The global naturals market is booming as product innovation and efficacy continue to attract new consumers. Valued at more than $39 billion worldwide, according to our recently published Natural Personal Care 2019: Global Series, the fast-growing market is characterized by active naturals and sustainability initiatives, with natural products accounting for 36% of the conventional cosmetics and toiletries market.

Despite these advancements, regulations and clear definitions for “clean” and “natural” are lacking in all major global markets, preventing stronger growth of truly natural products, which advance 9.1%—slightly slower than nature-inspired products. This is largely due to countries such as China, where the growth of the truly natural segment is flat in a market dominated by nature-inspired brands.

But how can one gauge the value of a brand’s naturalness? Is it the retailers they are in, the certifications they hold, or the sales growth? With so many ways to measure this undefined beauty term, greenwashing remains rampant throughout the industry despite the rise of sustainability and transparency. To combat this, Kline tracks the ingredients cocktail of key products, a vital factor in determining if the product is truly natural or natural-inspired.

The rating system also takes into account “safe synthetics” to better track the rise of the clean beauty movement. A majority of the brands marketed as clean score a 2 or 3, making them nature-infused.

The highest-rated brands, by contrast, are often positioned as natural or organic, focusing on ingredient stories. In 2019, U.S. brands Cannuka, Tata Harper, True Botanicals, and Schmidt’s received the highest score.  Most of them also grew prominently as indie brands, with only Schmidt’s being acquired in late 2017.

While early in the decade, brands often dropped in the rating system post-acquisition, recent years have found brands maintaining or even rising on our proprietary rating scale. Authenticity and product consistency remain important for brands in the natural movement. Many indie brands have maintained a steady score or even raised it. Few brands have dropped in the natural rating score, except for leading greenwashing brands that have become even more lax in product formulations.

There are many reasons for natural brands to increase their natural rating score, but retail is perhaps the most important. Leading stores Sephora and Credo Beauty often make headlines with annual updates to their excluded ingredients lists, leaving some brands to reformulate products to meet the new “clean beauty” standards.

The newest retailer to enter the natural beauty space is Ulta. In June, Ulta entered a partnership with clean beauty retailer Credo, bringing eight highly clean beauty brands into the store. In addition to the partnership, Ulta also launched the “Conscious Beauty” program in July. It focuses on five key pillars of the clean beauty movement: clean ingredients, cruelty-free, vegan, sustainable packaging, and positive impact. The additional aspects of the natural movement are expected to make waves in the market, as other retailers are expected to follow suit by updating ingredient and certification standards.

Looking forward, natural products will only continue to rise in prominence. Growth for the market is expected to be 6% through 2024. Despite an anticipated slowdown due to COVID-19, the health crisis has more consumers focused on wellness and ingredient safety than ever to stay as safe and healthy as possible.

Growth during the forecast period is expected to be driven by the expansion of natural brands into new categories such as oral care, hair care, and body care. Conventional marketers and retailers will also make moves to better cater to consumers looking for safer options. Retailers will continue to elevate their standards to develop greater trust from consumers as conventional brands launch naturally positioned product line expansions.

Our Natural Personal Care Global Series report paints a clear picture of the fastest-growing natural personal care brands in the United States, Brazil, China, and Europe markets with details on sales by product category, distribution model, and marketing activity. It also provides rankings on select brands’ degrees of naturalness using our unique Proprietary Naturalness Rating System. If you are interested in learning more about our report or receiving a complimentary assessment of your brand’s naturalness score, please contact Karen.Doskow@klinegroup.com.

You can also request your free access to our recently held Natural Beauty Around the Globe webinar.

ABOUT KLINE

Kline & Company is a leading international consulting and market research firm that helps clients find a clear path to success for more than 60 years. Our firm serves to provide accurate, reliable insights to meet the needs of organizations in the consumer products industry and other key industries.