With nary a flaw on its pricey face, natural beauty care is almost ready for its first big close-up.
The category has long been the darling of specialty retailers like Wild Oats Markets, Whole Foods Market and numerous independent natural retailers. But mainstream supermarkets incorporating health and wellness products are starting to look beyond grocery, and have their eye fixed firmly on this debutante.
The appeal isn't difficult to grasp. The "Whole Body" and "Holistic Health" departments are often centrally located in supernatural retail stores and are stocked with an array of brands claiming to offer a healthier or more earth-friendly alternative to anything customers could find at a department store. Meanwhile, brands such as Burt's Bees - which enjoyed sales of $100 million in 2005 - are demonstrating real mainstream potential.
"Our customers are aware that what they put inside their bodies can significantly impact their long-term quality of life. They also realize that their skin is their largest organ, so what they put on their skin can also help to enhance health and wellness over the long term," said Roxanne Brodheim, category manager for natural body care products at Boulder, Colo.-based Wild Oats.
There are several groups of consumers interested in this category, and the age range demonstrates the growing allure of such products. Brodheim said natural HBC and cosmetics shoppers at her stores include college-age women just becoming familiar with natural products; new moms who want to do the best for her children; the educated, mature woman seeking to minimize the exposure to harmful ingredients; and others.
The total size of the natural HBC and cosmetics category is hard to judge, since estimates vary wildly, ranging from a few hundred million dollars up to $5 billion in 2005 sales according to a recent report by the Natural Marketing Institute. These variations are largely due to significant, ongoing disagreements within the industry over how the terms "natural" or "organic" can be used when referring to ingredients that have often undergone significant processing.
For now, however, retailers should be aware that consumers who shop this category are generally paying a premium to avoid a handful of common cosmetic additives, most notably phthalates - synthetic plasticizers which are used in conventional nail polish, fragrances, hairspray and other products - and parabens, artificial preservatives that extend the shelf life of many cosmetics and HBC items.
Several small scientific studies have linked phthalates and parabens to reproductive disorders and certain cancers, leading the European Union to pass recent laws banning the use of some of these chemicals and requiring additional industry-funded testing on others. Here in the United States, similarly, California last year passed a law requiring cosmetics companies to provide the state with a list of their products that contain ingredients - including several phthalates - identified by the state as causing cancer or birth defects.
Parabens and phthalates are certainly far from being household names in the United States, and industry groups, such as the Cosmetic, Toiletry and Fragrance Association, told WH that these chemicals have not been shown to pose any danger at the low, low levels in which they are present in consumer products.
Still, those same suspicions and environmental concerns that have led many consumers to adopt natural and organic foods are beginning to lead them toward other categories with an all-natural message. And consumer advocacy groups, such as the Campaign for Safe Cosmetics, say that these chemicals pose an aggregate threat, even when individual products contain only a miniscule dose.
"What these companies always say is that their products contain 'only a little bit of phthalates or only a little bit of parabens,'" said Susan Whalen, associate executive director for the Massachusetts Breast Cancer Coalition and spokeswoman for CSC. "But if I'm getting a little bit from a nail polish and a little bit from my cleaning products and a little bit from my shampoo, and all of that is accumulating in my body, then that's too much."
The CSC has spent the past two years trying to get major cosmetics companies to sign what it calls "The Compact for Safe Cosmetics." It's essentially a pledge to follow the stricter ingredient standards established in Europe and remove potential carcinogens from all of their products worldwide. The issue drew coverage last year in several major news outlets including The Wall Street Journal, New York Times, Los Angeles Times and San Francisco Chronicle.
A buzz is certainly growing, although news coverage of this sort is most likely to sway customers who are already converts to organic and natural food brands, or customers who for any reason begin to attribute rashes, allergies or other skin conditions to their use of regular cosmetics.
"It has been rumbling a little bit below the surface," noted Jim Wisner, president of the Wisner Marketing Group, a Libertyville, Ill-based consulting firm. "[CSC] is not a large, well-formed advocacy group. They haven't garnered the kind of publicity that groups like PETA have."
Still, Wisner said that the category has significant potential in the supermarket channel, given recent trends.
"The opportunity for natural cosmetics and all-natural beauty care and personal care products has grown quite dramatically," he said. "If you look at brands like Burt's Bees, Kiss My Face and others, we've seen those go from products that had a small loyal following in health food stores that have now become mainstream brands. I suspect that this is going to continue."
As these all-natural companies continue to grow, Wisner anticipates that prices will become more competitive with conventional brands, and major companies may begin to either develop their own all-natural product lines, or acquire smaller upstarts.
For now, the products are still a premium-priced alternative within an already expensive category, which may pose a merchandising challenge for many stores. Rick Moller, category director of natural and organic for St. Augustine, Fla.-based distributor Tree of Life, noted that many all-natural cosmetics and HBC brands have adopted a very upscale, boutique image in recent years, but said that they could still find an audience of loyal customers in some supermarkets.
"[Cosmetics and HBC] are a low-profit area in many stores," he said. "You would want to be sure a store had the right demographic, but I think a 4-foot set could work well in a lot of HBC aisles. If you have customers that are predisposed toward natural and organic products, why not?"
Supermarkets with an adequate number of shoppers predisposed to natural and organic food purchases find it's easier to expand into the beauty section. In many cases, simply raising the awareness of nonfoods products is enough to kickstart sales.
Stacey Antine, founder and chief executive officer of HealthBarn USA, a firm that develops nutritional educational programs for children and families, recently led a series of events at a Whole Foods unit in New Jersey, where the focus was on the relationship between diet and the skin.
"I use the analogy of a plant," she said. "I ask the groups, would you give this plant a soda? Of course, they say 'no.' Would you feed the plant fast food? And they say 'no.' Then why would you feed your body bad food or any of these artificial products?"
After a discussion of diet, including several recipe demos, Antine transitions to a presentation on all-natural beauty care products by showing attendees how to make their own cleansing facial mask using plain yogurt, peaches and honey.
"It really communicates that, if it's safe to eat, then it's safe to put on your face; and if it's safe to put anything on your face, it should be safe to eat," she said.
Use natural/organic food sales to gauge the viability of expanding into HBC.
Check premium-product sales in conventional HBC to determine which categories might support natural/organic additions.
Screen "all-natural" products to avoid phthalates and parabens. Many consumers of this category are label-readers.
Woman are the majority purchasers of natural/organic HBC, but remember they often buy for children and men, too. Include selections for the latter groups.