SOURCE: Packaged Facts

Packaged Facts

November 29, 2011 10:06 ET

$8.5 Billion Natural HBC Market Resists Recession

NEW YORK, NY--(Marketwire - Nov 29, 2011) - Natural health and beauty care (HBC) product sales through all U.S. retail channels will reach $8.5 billion in 2011, according to Natural and Organic Personal Care Products in the U.S., a just-released Packaged Facts report. The total increase since 2005 has been $3.7 billion, for a compound annual growth rate (CAGR) of 10% over the six-year period.

The skincare category within the overall natural HBC market grew 11% in 2011. A return to double-digit sales growth reflects the ongoing strength of natural skincare products in the U.S. marketplace, and consumers' continued faith in the functional and remedial possibilities of these products: protection from weather and pollution, reduction of wrinkles and other signs of aging, even relief of stress by pampering the skin.

Haircare was the fastest-growing category within the market in 2005-2011. Haircare's retail dollar sales climbed 86% over the six-year period to reach $2.1 billion. Sales growth patterns for natural haircare, nonetheless, varied significantly from year to year, according to Natural and Organic Personal Care Products in the U.S. Traditionally, haircare brands are the most vulnerable to commoditization, whether in the natural or the conventional product arenas. What helps natural/organic haircare brands to defy this ongoing pressure is the extraordinary consumer faith in the natural/organic products. A second powerful category driver is many HBC marketers' attention to haircare products as a growth strategy, a trend that has been evident since 2007. In the natural HBC realm, one example is Now Foods' extension of its namesake brand of supplements into fruit or herb-infused shampoo.

Natural makeup, valued at $455.0 million at retail in 2011, is a relatively smaller product category, and has posted very respectable but less stellar growth rates since 2005. Yet by any industry-wide yardstick natural makeup is another strong performer, despite the difficulties that marketers face in obtaining sell-through in brick-and-mortar stores for selections of hundreds of eye shadow, lipcolor, or nail polish shades. Makeup packaging are also a hurdle, for they typically cost more than the products they contain -- as also do the slick countertop or freestanding fixtures that marketers must often supply. Natural/organic makeup is also sometimes held back by consumer worries that its effects are not as dependable as mainstream makeup, nor as elegant. As of 2011, nonetheless, well-performing natural/organic makeup products brands like Aveda, Bare Escentuals, Dr. Hauschka, and Tarte are streaming their way to retailers' shelves.

Natural HBC sales are unlikely to "find their level" soon, according to David Sprinkle, publisher of Packaged Facts, such that this thriving market will start to behave conventionally, struggling to post dollar increases that keep ahead of inflation rates. Natural/organic skincare, haircare, and makeup products will continue to be excellent performers as Americans seek to stay or become healthy, equate health and fitness with an attractive appearance, and keep the faith about the special efficacy and desirability of natural and organic personal care products.

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