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Natural and Organic Personal Care Products - US - March 2009

This report explores the natural and organic personal care category and includes insights on how this category can continue to grow despite ongoing competition from lower-priced traditional personal care, economic recession and consumer confusion with industry standards and definitions. Topics include:

  • Detailed exploration of the distinct opportunities within food, drug and mass merchandiser retail in contrast to natural supermarket channels
  • Expectations for growth for 2009 and beyond
  • How leading players managed (or didn’t manage) to grow business in 2008
  • How natural and organic standards will impact consumers
  • How the downturn in the economy is altering purchasing, and what companies can do to innovate in response
  • How Tom’s of Maine and Burt’s Bees have successfully managed acquisitions by traditional suppliers
  • How FDM outlets are promoting natural/organic personal care to compete with NGS
  • How purchase rationales differ between natural and traditional personal care products

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Sales data
            • Consumer survey data
              • Abbreviations and terms
                • Abbreviations
                  • Terms
                  • Executive Summary

                    • The bottom line
                      • Top three barriers to increased natural and organic personal care usage
                        • Retail channel sales and growth
                          • Factors that negatively impact sales growth
                            • Natural supermarket brand sales performance
                              • FDMx brand sales performance
                                • Share changing rapidly at natural grocery stores
                                  • Crowded market: 3,000 new products in 2008
                                    • Pricing and spend
                                      • Median spend of $80 per year
                                        • Half of December 2008 respondents buying more in spite of recession
                                        • Insights and Opportunities

                                          • Growing NOPC sales among NOPC buyers
                                            • Figure 1: Buying habits with traditional vs. natural/organic personal care, by segment, December 2008
                                          • Stressing functionality and trial
                                            • Standards benefit NOPC lines, harm phonies
                                              • Narrative-based marketing
                                                • Ingredient origin as marketing
                                                  • Cause marketing effective in tough economic times
                                                    • Keeping premiums low or eradicating them
                                                      • Figure 2: Personal finances, by age, December 2008
                                                      • Figure 3: Personal finances, by gender, December 2008
                                                    • The call for private label
                                                      • Cross-promotions for skincare
                                                        • Keeping baby safe
                                                        • Inspire Insights

                                                            • Watch that carbon footprint
                                                              • Messaging: packaging, sampling, co-operative efforts, and greenfluentials
                                                                • The solution is packaging
                                                                  • The solution is greenfluentials
                                                                    • The solution is co-operative efforts
                                                                      • The solution is sampling
                                                                      • Market Size and Forecast

                                                                        • Key points
                                                                          • Natural/organic personal care to fare better than traditional care
                                                                              • Figure 4: U.S. sales of natural and organic personal care products in FDMx and natural supermarkets, in current dollars, 2006-10
                                                                              • Figure 5: U.S. sales of natural and organic personal care products in FDMx and natural supermarkets, at inflation-adjusted prices, 2006-10
                                                                          • Competitive Context

                                                                            • Lack of standards favors natural phonies
                                                                              • Case study in mostly natural positioning: Tarte Health Couture’s Vitamin-infused Lipstick
                                                                                • Natural “phonies” account for $168 million in FDMx sales
                                                                                    • Figure 6: Products with deceptive natural/organic positionings
                                                                                  • Education and encouragement equals conversion
                                                                                  • Segment Performance

                                                                                        • Figure 7: Sales of personal care products at natural grocery stores and FDMx, by segment, 2006 and 2008
                                                                                    • Segment Performance—Facial Skincare

                                                                                      • Total sales
                                                                                        • Figure 8: U.S. sales of facial care products at natural grocery stores and FDMx, 2006 and 2008
                                                                                      • Sales at FDMx
                                                                                        • Figure 9: U.S. sales of facial skincare in FDMx, traditional vs. NOPC, 2006-08
                                                                                      • Sales at NGS
                                                                                        • Figure 10: U.S. sales of facial care products at natural grocery stores, 2006 and 2008
                                                                                    • Segment Performance—Body Skincare

                                                                                      • Total sales
                                                                                        • Figure 11: U.S. sales of body skincare products at natural grocery stores and FDMx, 2006 and 2008
                                                                                      • Sales at FDMx
                                                                                        • Figure 12: U.S. sales of body skincare in FDMx, traditional vs. NOPC, 2006-08
                                                                                      • Sales at NGS
                                                                                        • Figure 13: U.S. sales of body skincare products at natural grocery stores, 2006 and 2008
                                                                                    • Segment Performance—Soap and Bath Products

                                                                                      • Total sales
                                                                                        • Figure 14: Sales of soap and bath products at natural grocery stores and FDMx, 2006 and 2008
                                                                                      • FDMx sales
                                                                                        • Figure 15: U.S. sales of soap and bath products in FDMx, traditional vs. NOPC, 2006-08
                                                                                      • NGS sales
                                                                                        • Figure 16: U.S. sales of soap and bath products at natural grocery stores, 2006 and 2008
                                                                                    • Segment Performance—Haircare

                                                                                      • Total sales
                                                                                        • Figure 17: Sales of haircare products at natural grocery stores and FDMx, 2006 and 2008
                                                                                      • Sales at FDMx
                                                                                        • Figure 18: U.S. sales of haircare in FDMx, traditional vs. NOPC, 2006-08
                                                                                      • Sales at NGS
                                                                                        • Figure 19: U.S. sales of haircare at natural grocery stores, 2006 and 2008
                                                                                    • Segment Performance—Oral Care

                                                                                      • Total sales
                                                                                        • Figure 20: Sales of oral care products at natural grocery stores and FDMx, 2006 and 2008
                                                                                      • Sales at FDMx
                                                                                        • Figure 21: U.S. sales of oral care in FDMx, traditional vs. NOPC, 2006-08
                                                                                      • Sales at NGS
                                                                                        • Figure 22: U.S. sales of oral care at natural grocery stores, 2006 and 2008
                                                                                    • Segment Performance—Baby Personal Care

                                                                                      • Total sales
                                                                                        • Figure 23: Sales of baby personal care products at natural grocery stores and FDMx, 2006 and 2008
                                                                                      • Sales at FDMx
                                                                                        • Figure 24: U.S. sales of baby personal care in FDMx, traditional vs. NOPC, 2006-08
                                                                                      • Sales at NGS
                                                                                          • Figure 25: U.S. sales of baby personal care at natural grocery stores, 2006 and 2008
                                                                                      • Segment Performance—Deodorants

                                                                                        • Total sales
                                                                                          • Figure 26: Sales of deodorants at natural grocery stores and FDMx, 2006 and 2008
                                                                                        • Sales at FDMx
                                                                                          • Figure 27: U.S. sales of deodorants in FDMx, traditional vs. NOPC, 2006-08
                                                                                        • Sales at NGS
                                                                                          • Figure 28: U.S. sales of deodorants at natural grocery stores, 2006 and 2008
                                                                                      • Retail Channels

                                                                                        • Key points
                                                                                          • Shifts in market sales between the channels will mellow…
                                                                                            • …unless FDMx outlets revamp their NOPC mix and strategies
                                                                                                • Figure 29: U.S. sales of NOPC, FDMx vs. NGS, at current prices, 2006-08
                                                                                              • Wal-Mart leads
                                                                                                • Figure 30: Place of purchase for personal care products, December 2008
                                                                                              • Differences between buyers by channel
                                                                                                • Figure 31: Attitudes toward NOPC, by channel shopped, December 2008
                                                                                                • Figure 32: Average spend on NOPC in last six months, by channel shopped, December 2008
                                                                                              • Differences between buyers by store
                                                                                                • Figure 33: Attitudes toward NOPC, by store shopped, December 2008
                                                                                                • Figure 34: Attitudes toward NOPC, by store shopped, December 2008
                                                                                            • Retail Distribution—FDMx

                                                                                              • Key points
                                                                                                • Natural/organic personal care items remain nearly invisible in FDMx
                                                                                                  • Figure 35: U.S. sales of NOPC in FDMx, 2006-08
                                                                                              • Retail Distribution—NGS

                                                                                                • Key points
                                                                                                  • NGS see 2009 as a question mark
                                                                                                  • Retail Distribution—internet

                                                                                                    • One in four NOPC users buy personal care online
                                                                                                      • Figure 36: Internet purchase of personal care, by household income, December 2008
                                                                                                      • Figure 37: Internet purchase of personal care, by gender, December 2008
                                                                                                      • Figure 38: Internet purchase of personal care, by age, December 2008
                                                                                                      • Figure 39: Personal care attitudes among internet buyers, December 2008
                                                                                                  • Market Drivers

                                                                                                    • Chaos and confusion central obstacles to growth
                                                                                                      • Figure 40: Organic and natural seals personal care product labels
                                                                                                      • Figure 41: Obstacles to growth among current NOPC users and non-users, December 2008
                                                                                                    • Tom’s of Maine: case study in consumer attributes that drive sales
                                                                                                      • Majority of current NOPC buyers spending more, in spite of recession
                                                                                                        • Figure 42: Buying habits vs. a year ago, December 2008
                                                                                                      • The role of children
                                                                                                        • Figure 43: Buying habits vs. a year ago, by presence of children, December 2008
                                                                                                    • Leading Companies

                                                                                                      • Managing the crossover to FDMx
                                                                                                        • Figure 44: U.S. sales of top natural manufacturers in FDMx, 2007 and 2008
                                                                                                      • Category leader list at NGS may undergo facelift by 2010
                                                                                                        • Figure 45: Selected brand sales and market share of NOPC in the U.S. at natural grocery stores, 2006 and 2008
                                                                                                    • Brand Share—Facial Skincare

                                                                                                        • Burt’s and Hain carry 82% of sales at FDMx
                                                                                                          • Figure 46: U.S. sales of top natural facial skincare brands in FDMx, 2007 and 2008
                                                                                                        • Winners and losers at NGS
                                                                                                          • Dr. Hauschka and MyChelle each pick up a point of share
                                                                                                            • Hain brands lose nearly 5 percentage points of share at NGS
                                                                                                              • Figure 47: U.S. brand sales of facial skincare at natural grocery stores, 2006 and 2008
                                                                                                          • Brand Share—Body Skincare

                                                                                                              • Burt’s and Hain carry 78% of sales at FDMx
                                                                                                                • Figure 48: U.S. sales of top natural brands in body skincare in FDMx, 2007 and 2008
                                                                                                              • Brand gainers during 2006-08
                                                                                                                • FDMx leaders losing share at NGS
                                                                                                                  • Figure 49: U.S. brand sales of body skincare in the U.S. at natural grocery stores, 2006 and 2008
                                                                                                              • Brand Share—Soap and Bath Products

                                                                                                                  • Soap and bath atypically fragmented at FDMx
                                                                                                                    • Figure 50: U.S. sales of top natural brands in soap and bath products in FDMx, 2007 and 2008
                                                                                                                  • Dr. Bronner’s and South of France gain at NGS from 2006-08
                                                                                                                    • Hain drops 3 percentage points of share at NGS
                                                                                                                      • Figure 51: U.S. brand sales of soap and bath products at natural grocery stores, 2006 and 2008
                                                                                                                  • Brand Share—Haircare

                                                                                                                      • Namasté and Hain carry half of sales at FDMx
                                                                                                                        • Figure 52: U.S. sales of top natural brands in haircare in FDMx, 2007 and 2008
                                                                                                                      • Most growth at NGS seen in “other” brands
                                                                                                                        • Gains made by “other” brands taken from Hain and Nature’s Gate
                                                                                                                          • Figure 53: U.S. brand sales of baby haircare at natural grocery stores, 2006 and 2008
                                                                                                                      • Brand Share—Oral Care

                                                                                                                          • Tom’s dominates at FDMx
                                                                                                                            • Figure 54: U.S. sales of top natural brands in oral care in FDMx, 2007 and 2008
                                                                                                                          • Brand gainers during 2006-08
                                                                                                                            • Brand losers
                                                                                                                              • Figure 55: U.S. brand sales of oral care at natural grocery stores, 2006 and 2008
                                                                                                                          • Brand Share—Deodorants

                                                                                                                              • Tom’s and Hain carry 93% at FDMx
                                                                                                                                • Figure 56: U.S. sales of top natural deodorant brands in FDMx, 2007 and 2008
                                                                                                                              • Front runner Tom’s makes gains on the back of Hain’s losses at NGS
                                                                                                                                  • Figure 57: U.S. brand sales of deodorant at natural grocery stores, 2006 and 2008
                                                                                                                              • Brand Share—Baby Personal Care

                                                                                                                                  • Honky Tots picks up 5 percentage points of share in one year at FDMx
                                                                                                                                    • Figure 58: U.S. sales of top natural brands in baby personal care in FDMx, 2007 and 2008
                                                                                                                                  • Emerging brands up 6 percentage points at NGS from 2006-08
                                                                                                                                    • Burt’s and Hain losing share at NGS
                                                                                                                                      • Figure 59: U.S. brand sales of baby personal care at natural grocery stores, 2006 and 2008
                                                                                                                                  • Brand Qualities and Brand Marketing

                                                                                                                                    • Speaking to two audiences
                                                                                                                                      • The Hain Celestial Group
                                                                                                                                        • Zia Natural Skincare
                                                                                                                                          • Jason Natural Cosmetics
                                                                                                                                            • Tom’s of Maine
                                                                                                                                              • Burt’s Bees
                                                                                                                                                  • Figure 60: Burt’s Bees television ad, December 2007
                                                                                                                                                • Simple, short, recognizable ingredient list a staple of premium positioning
                                                                                                                                                  • Figure 61: Natural/organic product comparisons, body lotions, with natural supermarket sales and growth
                                                                                                                                              • Innovation and Innovators

                                                                                                                                                • New product launches and all-natural/organic claims
                                                                                                                                                  • Figure 62: Number of natural/organic personal care products added to GNPD in 2008
                                                                                                                                                • All-natural product launches grow 530% from 2007-08
                                                                                                                                                  • Figure 63: Total variants added to GNPD with all-natural claims, Q3 2007-Q3 2008
                                                                                                                                                  • Figure 64: Total variants added to GNPD with all-natural claims, by segment, Q3 2007 AND Q4 2007
                                                                                                                                                  • Figure 65: Total variants added to GNPD with all-natural claims, by segment, Q1 2008-Q3 2008
                                                                                                                                                • Organic product launches grew 77% from Q3 2007-Q3 2008
                                                                                                                                                  • Figure 66: Total variants added to GNPD with organic claims, Q3 2007-Q3 2008
                                                                                                                                                  • Figure 67: Total variants added to GNPD with organic claims, by segment, Q3 2007 AND Q4 2007
                                                                                                                                                  • Figure 68: Total variants added to GNPD with organic claims, by segment, Q1 2008-Q3 2008
                                                                                                                                                • New product releases not necessarily following the money
                                                                                                                                                    • Figure 69: Segment sales and growth compared to new product releases, by segment, 2006 and 2008
                                                                                                                                                  • Naturally positioned versus truly natural
                                                                                                                                                    • New products by segment
                                                                                                                                                      • Facial skincare
                                                                                                                                                        • Body skincare new items
                                                                                                                                                          • Haircare new items
                                                                                                                                                            • Baby personal care
                                                                                                                                                              • Oral care
                                                                                                                                                                • Soap and bath new items
                                                                                                                                                                • Usage

                                                                                                                                                                  • Trial
                                                                                                                                                                    • Figure 70: Trial of natural/organic personal care products, by age, December 2008
                                                                                                                                                                    • Figure 71: Trial of natural/organic personal care products, by HH income and presence of children, December 2008
                                                                                                                                                                  • Men as likely to have tried NOPC as women, but women buy the products for them
                                                                                                                                                                    • Figure 72: Trial of natural/organic personal care products, by gender, December 2008
                                                                                                                                                                    • Figure 73: Purchase of any personal care products, by gender, December 2008
                                                                                                                                                                  • Trial vs. usage
                                                                                                                                                                    • Figure 74: Trial vs. current usage, by gender, age, HH income and presence of children, December 2008
                                                                                                                                                                • Obstacles to Growth by Demographic

                                                                                                                                                                  • Focus on women, 18-34s, over-$50Ks, and parents
                                                                                                                                                                    • Figure 75: Obstacles to growth, by gender and age, December 2008
                                                                                                                                                                    • Figure 76: Obstacles to growth, by household income and presence of children, December 2008
                                                                                                                                                                  • Pricing and availability only relevant if the buyer wants the product in the first place
                                                                                                                                                                    • Figure 77: Attitudes toward price and product availability, by gender and age, December 2008
                                                                                                                                                                • Expenditure on Natural/Organic Personal Care

                                                                                                                                                                  • NOPC carries 40% of spend among those who currently use NOPC
                                                                                                                                                                    • Figure 78: Median annual spend on all personal care and NOPC, December 2008
                                                                                                                                                                  • Men and parents spend more
                                                                                                                                                                    • Figure 79: Bracketed spend on natural/organic personal care products, by gender, December 2008
                                                                                                                                                                    • Figure 80: Spend in last six months on natural/organic personal care, by presence of children, December 2008
                                                                                                                                                                  • Men who do buy NOPC spending more
                                                                                                                                                                    • Figure 81: Buying habits vs. a year ago, by gender, December 2008
                                                                                                                                                                • Attitudes

                                                                                                                                                                      • Figure 82: Attitudes towards personal care products, by age, December 2008
                                                                                                                                                                      • Figure 83: Attitudes towards personal care products, by gender, December 2008
                                                                                                                                                                      • Figure 84: Attitudes towards personal care products, by household income, December 2008
                                                                                                                                                                      • Figure 85: Attitudes towards personal care products, by presence of children, December 2008
                                                                                                                                                                  • Race and Hispanic Origin

                                                                                                                                                                    • Introduction
                                                                                                                                                                      • Trial vs. usage
                                                                                                                                                                        • Figure 86: Any usage of natural/organic personal care products, by race/Hispanic origin, December 2008
                                                                                                                                                                        • Figure 87: Attitudes toward natural and organic personal care, by race/Hispanic origin, December 2008
                                                                                                                                                                      • Expenditure
                                                                                                                                                                        • Figure 88: Buying habits vs. a year ago, by race/Hispanic origin, December 2008
                                                                                                                                                                      • OEL Hispanics mix it up more than whites
                                                                                                                                                                        • Figure 89: Facial care buying habits with traditional vs. NOPC, by race/Hispanic origin, December 2008
                                                                                                                                                                        • Figure 90: Body skincare buying habits with traditional vs. NOPC, by race/Hispanic origin, December 2008
                                                                                                                                                                        • Figure 91: Haircare buying habits with traditional vs. NOPC, by race/Hispanic origin, December 2008
                                                                                                                                                                        • Figure 92: Oral care buying habits with traditional vs. NOPC, by race/Hispanic origin, December 2008
                                                                                                                                                                    • Custom Consumer Groups

                                                                                                                                                                        • Organic produce buyers the highest spenders
                                                                                                                                                                          • Figure 93: Purchasing behavior and spending on personal care products, December 2008
                                                                                                                                                                          • Figure 94: Number of personal care products used daily and weekly, December 2008
                                                                                                                                                                          • Figure 95: Buying habits of natural/organic personal care compared to a year ago, December 2008
                                                                                                                                                                        • Profile of NOPC buyers suggests rapid growth ahead
                                                                                                                                                                            • Figure 96: Attitudes toward personal care, by current use of NOPC, December 2008
                                                                                                                                                                          • A closer look at recession sufferers, promoters, and experimenters
                                                                                                                                                                              • Figure 97: Personal care attitudes, by response category, December 2008
                                                                                                                                                                          • Cluster Analysis

                                                                                                                                                                              • Naturalizers
                                                                                                                                                                                • Who they are
                                                                                                                                                                                  • Opportunity
                                                                                                                                                                                    • Skeptics
                                                                                                                                                                                      • Who they are
                                                                                                                                                                                        • Opportunity
                                                                                                                                                                                          • Dispassionates
                                                                                                                                                                                            • Who they are
                                                                                                                                                                                              • Opportunity
                                                                                                                                                                                                • Cluster characteristics
                                                                                                                                                                                                  • Figure 98: Natural personal care clusters, December 2008
                                                                                                                                                                                                  • Figure 99: Personal attributes, by natural personal care clusters, December 2008
                                                                                                                                                                                                  • Figure 100: Attitudes toward new products, by natural personal care clusters, December 2008
                                                                                                                                                                                                  • Figure 101: Attitudes toward NOPC products, by natural personal care clusters, December 2008
                                                                                                                                                                                                • Cluster demographics
                                                                                                                                                                                                  • Figure 102: Natural personal care clusters, by gender, December 2008
                                                                                                                                                                                                  • Figure 103: Natural personal care clusters, by age, December 2008
                                                                                                                                                                                                  • Figure 104: Natural personal care clusters, by HH income, December 2008
                                                                                                                                                                                                  • Figure 105: Natural personal care clusters, by race, December 2008
                                                                                                                                                                                                  • Figure 106: Natural personal care clusters, by Hispanic origin, December 2008
                                                                                                                                                                                                • Cluster methodology
                                                                                                                                                                                                • Appendix: Current State of Natural/Organic Standards

                                                                                                                                                                                                  • Natural and organic standards take further shape
                                                                                                                                                                                                    • Figure 107: Organic and natural seals defining personal care products
                                                                                                                                                                                                  • Defining organic personal care
                                                                                                                                                                                                    • Defining “natural” personal care
                                                                                                                                                                                                    • Appendix: Additional tables: Obstacles to purchase

                                                                                                                                                                                                        • Figure 108: Obstacles to purchasing natural/organic personal care, by race/Hispanic origin, December 2008
                                                                                                                                                                                                        • Figure 109: Obstacles to purchasing natural and organic personal care, by household income, December 2008
                                                                                                                                                                                                    • Appendix: Additional Tables: Place of Purchase by Gender and Presence of Children

                                                                                                                                                                                                        • Figure 110: Purchase place of natural/organic personal care products, by gender, December 2008
                                                                                                                                                                                                        • Figure 111: Purchase place of natural/organic personal care products, by presence of children, December 2008
                                                                                                                                                                                                    • Appendix: Trade Associations

                                                                                                                                                                                                      Companies Covered

                                                                                                                                                                                                      • Burt's Bees Inc.
                                                                                                                                                                                                      • Clorox Company , The
                                                                                                                                                                                                      • Colgate-Palmolive Company
                                                                                                                                                                                                      • Facebook, Inc.
                                                                                                                                                                                                      • FedEx Corporation
                                                                                                                                                                                                      • Food and Drug Administration
                                                                                                                                                                                                      • Frontier Natural Products Co-Op
                                                                                                                                                                                                      • Greenfield Online
                                                                                                                                                                                                      • Herbatint
                                                                                                                                                                                                      • Jergens Naturals
                                                                                                                                                                                                      • L'Oréal USA
                                                                                                                                                                                                      • Levlad Inc.
                                                                                                                                                                                                      • Mary Kay Inc.
                                                                                                                                                                                                      • Natural Products Association
                                                                                                                                                                                                      • North Castle Partners Advertising
                                                                                                                                                                                                      • Organic Consumers Association
                                                                                                                                                                                                      • Organic Trade Association
                                                                                                                                                                                                      • Publix Super Markets
                                                                                                                                                                                                      • Safeway Inc
                                                                                                                                                                                                      • Sephora
                                                                                                                                                                                                      • Snap-on Incorporated
                                                                                                                                                                                                      • Soil Association
                                                                                                                                                                                                      • Target Corporation
                                                                                                                                                                                                      • The Body Shop - Retail Sales
                                                                                                                                                                                                      • The Hain Celestial Group, Inc.
                                                                                                                                                                                                      • The Organic Pharmacy
                                                                                                                                                                                                      • Tom's of Maine
                                                                                                                                                                                                      • Trader Joe's Company Inc
                                                                                                                                                                                                      • U.S. Bureau of Labor Statistics
                                                                                                                                                                                                      • U.S. Department of Agriculture
                                                                                                                                                                                                      • Walmart Stores (USA)
                                                                                                                                                                                                      • Weleda
                                                                                                                                                                                                      • Whole Foods Market Inc
                                                                                                                                                                                                      • Wyeth

                                                                                                                                                                                                      Natural and Organic Personal Care Products - US - March 2009

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