Natural Organic Personal Care - US - March 2008

Table of Contents

• Scope and Themes
• What you need to know
• Definition
• Data sources
• Sales data
• Consumer survey data
• Abbreviations and terms
• Abbreviations
• Terms
• Executive Summary
• Expansion into FDM to drive future growth
• Skin care slows while other segments fly
• Certification is important to product differentiation
• Leading brands struggle to keep pace in fragmented market
• Retailers play a critical role in supply chain
• Women and Hispanic are core purchasers
• Older consumers are also likely targets
• Spending in facial skin care is highest
• Simple product claims many work better for mainstream
• Recession looms but natural/organic sales have yet to falter
• Market Size and Forecast
• Key points
• Natural/organic personal care maintains steady high growth
• FDM penetration will greatly boost sales reach
  • Figure 1: Total sales of natural/organic personal care at natural grocery stores and FDM, 2005-09
  • Figure 2: Total sales of natural/organic personal care at natural grocery stores and FDM at inflation adjusted prices, 2005-09
• Competitive Context
• Mainstream brands add natural ingredients to compete
• Certification needed to create point of differentiation
• Distribution is key competitive advantage
• Industry consolidation likely as demand increases
• Natural grocery stores to remain critical
• New launches
  • Figure 3: Number of new "all natural" products launched, by manufacturer, 2003-08
• Segment Performance
• Key points
• Sales growth in nearly all segments outpaces conventional personal care
• Growth of largest segment is the smallest
  • Figure 4: Sales of natural/organic personal care at natural grocery stores, by segment, 2005-09
  • Figure 5: Sales of natural/organic personal care at natural grocery stores, by segment, 2005 and 2007
• Segment Performance--Skin Care
• Skin care growth slows in 2007
  • Figure 6: Graph: Sales of natural/organic skin care at natural grocery stores, by subcategory, 2007
  • Figure 7: Sales of natural/organic skin care at natural grocery stores, 2005-09
• Segment Performance--Soap and Bath Products
• Soap and bath segment driven by liquid soaps
  • Figure 8: Graph: Sales of natural/organic soap and bath products at natural grocery stores, by subcategory, 2007
  • Figure 9: Sales of natural/organic soap and bath products at natural grocery stores, 2005-09
• Segment Performance--Hair Care
• Hair care is fastest growing segment
  • Figure 10: Graph: Sales of natural/organic hair care at natural grocery stores, by subcategory, 2007
  • Figure 11: Sales of natural/organic hair care at natural grocery stores, 2005-09
• Segment Performance--Oral Care
• Oral care growth led by toothbrushes and breath fresheners
  • Figure 12: Graph: Sales of natural/organic oral care at natural grocery stores, by subcategory, 2007
  • Figure 13: Sales of natural/organic oral care at natural grocery stores, 2005-09
• Segment Performance--Other
• "Other" segment driven by deodorants and body oils
  • Figure 14: Graph: Sales of other natural/organic personal care at natural grocery stores, by subcategory, 2007
  • Figure 15: Sales of natural/organic deodorants at natural grocery stores, 2005-09
• Retail Channels
• Key points
• FDM sales contribution still ramping up
  • Figure 16: U.S. sales* of selected natural/organic personal care brands at natural grocery stores and FDM, 2007
• FDM still most common place to purchase "natural" personal care
  • Figure 17: Place of purchase of natural/organic personal care products, February 2008
• Mass merchandiser and drug store share likely to increase
• Mass retailers partnering to offer exclusive natural/organic brands
• Specialty stores and home shopping
  • Figure 18: Natural/organic purchases in specialty stores and home shopping channels, February 2008
• Market Drivers
• Personal care part of larger organic movement
• Baby Boomers are strong source of demand
  • Figure 19: U.S. population and projections and usage of any kind of facial skincare, by age, 2002-12
• Looming economic recession may cut consumer spending
  • Figure 20: Reaction to rising gas prices, by gender, November 2007
• Leading Companies
• Market is increasingly competitive as leading companies struggle to keep pace
  • Figure 21: Brand sales of natural/organic personal care* at natural grocery stores in the U.S., 2005 and 2007
• Hain Celestial
• Brand Share--Skin Care
• Brand gainers during 2005-07
• Brand losers
  • Figure 22: Brand sales of natural/organic skin care at natural grocery stores in the U.S., 2005 & 2007
• Brand Share--Soap and Bath Products
• Brand gainers
• Brand losers
  • Figure 23: Brand sales of natural/organic soap and bath products at natural grocery stores in the U.S., 2005 & 2007
• Brand Share--Hair Care
• Brand gainers
• Brand losers
  • Figure 24: Brand sales of natural/organic hair care at natural grocery stores in the U.S., 2005 & 2007
• Brand Share--Oral Care
• Brand gainers
• Brand losers
  • Figure 25: Brand sales of natural/organic oral care at natural grocery stores in the U.S., 2005 & 2007
• Brand Qualities
• Smaller brands more viable in less crowded categories
  • Figure 26: Number of smaller natural/organic personal care brands and their revenue share, 2005 and 2007
• Innovation and Innovators
  • Figure 27: Relevant product claims launched, 2003-07
• New aromas in all categories
• Expanded product claims
• Products for baby
• New product innovations
• Burt' s Bees
• Premium lip care
• Advertising and Promotion
• Natural/organic brands grow despite negligible advertising
  • Figure 28: Media advertising costs and sales at Hain Celestial, 2005-07
• Success of nascent brands hang on retailer level marketing
• Websites get the story out
• Usage
• Incidence of purchase
  • Figure 29: Purchase of various categories of personal care, by gender, February 2008
  • Figure 30: Purchase of various categories of personal care, by age, February 2008
• Volume of purchase
  • Figure 31: Volume of natural/organic personal care purchase, by gender, February 2008
  • Figure 32: Volume of natural/organic personal care purchase, by age, February 2008
• Amount spent on natural/organic personal care
  • Figure 33: Amount spent on natural/organic personal care in past six months, February 2008
  • Figure 34: Amount spent on natural/organic personal care in past six months, by age, February 2008
  • Figure 35: Amount spent on natural/organic personal care in past six months, by household income, February 2008
• Frequency of Use
• Types of facial skin care
  • Figure 36: Frequency of use of facial skin care products, by gender, February 2008
  • Figure 37: Frequency of use of facial skin care products, by age, February 2008
• Body skin care
  • Figure 38: Frequency of use of body skin care products, by gender, February 2008
  • Figure 39: Frequency of use of body skin care products, by age, February 2008
• Brands
• Popularity of brands
  • Figure 40: Popularity of personal care brands, February 2008
  • Figure 41: Popularity of personal care brands, by gender, February 2008
  • Figure 42: Popularity of personal care brands, by age, February 2008
  • Figure 43: Popularity of personal care brands, by household income, February 2008
• Attitudes and Motivations
• Importance of specific natural/organic ingredients
  • Figure 44: Lack of awareness of specific natural/organic ingredients, February 2008
  • Figure 45: Relative importance of specific natural/organic ingredients, by gender, February 2008
  • Figure 46: Relative importance of specific natural/organic ingredients, by age, February 2008
• Race and Ethnicity
  • Figure 47: Purchase of various categories of personal care, by race/ethnicity, February 2008
  • Figure 48: Volume of natural/organic personal care purchase, by race/ethnicity, February 2008
  • Figure 49: Amount spent on natural/organic personal care in past six months, by race/ethnicity, February 2008
  • Figure 50: Frequency of use of facial skin care products, by race/ethnicity, February 2008
  • Figure 51: Frequency of use of body skin care products, by race/ethnicity, February 2008
  • Figure 52: Popularity of personal care brands, by race/ethnicity, February 2008
  • Figure 53: Relative importance of specific natural/organic ingredients, by race/ethnicity, February 2008
  • Figure 54: Place of purchase of natural/organic hair care products, by race/ethnicity, February 2008
  • Figure 55: Natural/organic purchases in specialty stores and home shopping channels, by race/ethnicity, February 2008
• Appendix: Other Useful Consumer Tables
  • Figure 69: Purchase of various categories of personal care, by household income, February 2008
  • Figure 70: Frequency of natural/organic personal care purchase, by household income, February 2008
  • Figure 71: Frequency of use of facial skin care products, by household income, February 2008
  • Figure 72: Frequency of use of body skin care products, by household income, February 2008
  • Figure 73: Place of purchase of natural/organic hair care products, by gender, February 2008
  • Figure 74: Place of purchase of natural/organic hair care products, by age, February 2008
  • Figure 75: Place of purchase of natural/organic hair care products, by household income, February 2008
  • Figure 76: Natural/organic purchases in specialty stores and home shopping channels, by gender, February 2008
  • Figure 77: Natural/organic purchases in specialty stores and home shopping channels, by age, February 2008
  • Figure 78: Natural/organic purchases in specialty stores and home shopping channels, by household income, February 2008
• Appendix: Trade Associations