Hothouse for naturals

The French natural cosmetics market is growing at a significantly faster rate than the rest of the country’s C&T market, as David Hayhurst reports from Paris

The French natural cosmetics market is growing at a significantly faster rate than the rest of the country’s C&T market, as David Hayhurst reports from Paris

Building on its long held global reputation for quality natural ingredients, France has now emerged as the second biggest natural and organic cosmetics market in Europe after Germany. A January 2012 report by international consultant Deloitte, Produits de beauté: une croissance durable?, calculated an average 2005-09 growth rate of 25%. This compared to only 4% growth for the mainstream French personal care product market.

The company valued the 2011 French natural cosmetics market at €350m (2% of the 2010 total cosmetics market), declaring it a dynamic but still niche sector. It predicts its 2015 value will reach €500m with the 2011-15 annual growth rate averaging 12%. If correct, the natural sector would then amount to 3.3% of the total national cosmetics market. The growth predictions are “huge compared to the rest of the C&T market in France,” said Deloitte head of strategy consulting Stéphane Blanchard.

According to the report, French industry leaders are likely to continue acquiring smaller independents, as in the case of L’Oréal’s 2006 takeover of the aromatherapy specialist brand Sanoflore and Clarins’ gradual buyout of natural cosmetics company Kibio.

Other majors, such as Yves Rocher and Garnier, have recently launched natural cosmetics lines globally.

“If you look at big players, they have to find growth in new markets and niches. The natural and organic cosmetics market is a good niche for them,” Blanchard commented.

The report’s findings provided Deloitte with three big surprises. “In terms of market segmentation, the bulk of the business is going to be driven by ‘light green’ consumers [those newer to the organic market], as opposed to historically environmentally conscious ‘dark green’ consumers, which is something very different from what we thought initially,” said Blanchard.

Secondly, the bulk of consumer purchases “tended to have a very egocentric attitude”: customers tended to care about their own health more than having wider consideration for ecological concerns in general.

The third surprise concerned how deeply skeptical and confused consumers were regarding product certification. “The labelling processes for organic cosmetics are very difficult to understand. The labels are numerous and have different specifications and constraints. Customers are lost when choosing between ‘bio’ (the common French term for ‘organic’) and ‘natural’ and many are quite suspicious. This is something that must be overcome,” Blanchard explained.

The COSMOS standards for organic and natural products will replace national schemes such as France’s Cosmebio standards in December 2014

The launch of the COSMOS certification standard for European natural and organic products in February 2011 and its adoption by the industry can do nothing but help. It is an ambitious effort to harmonise currently very diverse standards and will hopefully help to lessen consumer suspicions. The process is being overseen by Europe’s five largest natural cosmetics certification bodies: the Soil Association (UK), Ecocert (France), Cosmebio (France), BDiH (Germany) and AIAB/ICEA (Italy). Its criteria includes ingredient origins and total product composition, storage and packaging, environmental management, inspection, labelling and quality control.

“We decided to harmonise initially at the European level and also to take the opportunity to increase minimum [content] standards,” said Cosmebio development director Betty Santonnat.

Under the new COSMOS standard, national schemes currently run by the founding members will cease in December 2014. To receive ‘COSMOS Organic’ certification, 95% of a product’s ingredients and 20% of the entire product must be deemed organic.

It is not clear how the French cosmetics sector will comply with this. While some leading French natural cosmetics makers have been lauded for the quality of their R&D efforts, especially in terms of minimising soil contamination and ensuring product ingredient sustainability, they are very tight lipped about their work and good practice. “When [manufacturers] find something good, except for what they want to publicise in their product lines, the rest they’ll keep secret,” Santonnat said.

As for the commercial future of this sub-sector, Santonnat also thinks that future M&A activity is likely to be more gradual than in the recent past, meaning that smaller producers may be left to sink or swim independently. “France is a very competitive market and is quite saturated. I would say that entering as a new brand today would not be easy,” although some buyouts of the smallest players might be expected.

That said, some of the more established natural cosmetics firms have managed to leverage their green credentials to good effect, particularly in high growth overseas markets in Asia and elsewhere. L’Occitane en Provence for example has expanded rapidly in the Asia Pacific region and sales in Japan, Hong Kong, China and Taiwan accounted for nearly 42% of 2011’s total turnover.

Elsewhere in the sub-sector, Nuxe is seeking to exploit its excellence in cosmetics science R&D for market advantage. “We currently hold 32 patents [for exclusive plant extracts]. That is huge for an independent cosmetics company,” said Nuxe international public relations manager Charlotte Levesque. Nuxe’s Bio Beauté line of organic skin care, make-up, sunscreens, hair care and fragrances is currently second in market share in sales at pharmacies and parapharmacies. Within a month of its June 2012 launch in France, Nuxellence Jeunesse was the best selling anti-ageing lotion in the pharmacy/parapharmacy market.

Pharmacies and parapharmacies now account for 40% of the total national C&T market, with natural and organic products finding such outlets particularly profitable. In addition, while it is still very much a niche market, subscription-based e-commerce beauty box concepts, some of which deal exclusively in natural cosmetics and toiletries, are also showing strong signs of growth in France.

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