Summary of our market study

The global organic cosmetics market is a growing segment within the broader cosmetics industry, distinguished by products that avoid potentially harmful chemicals like parabens and phthalates in favor of natural and certified organic ingredients. Despite experiencing an 8% decline in value in 2020 with a market size of over €213 billion due to the COVID-19 pandemic, the organic sector is experiencing robust growth, driven by increasing consumer awareness about the harmful effects of chemical products and a demand shift toward natural and organic options. Revenues for the cosmetic and beauty industry in the USA reached USD 49.2 billion in 2020, with the US organic products market size reaching 40.6 billion in the same year. The organic cosmetic industry globally was valued at USD 36.3 billion in 2019 and is projected to grow at a CAGR of 4.7% from 2018 to 2027, potentially reaching USD 54.5 billion. Demand for these products is propelled by various consumer segments, including health-conscious, environment-conscious, and risk-conscious individuals avoiding specific substances like sulfates and parabens. Millennials, representing a significant consumer base, exhibit a preference for green products, accelerating market growth. The US remains the largest consumer of organic products, although its position in organic production is relatively lower, suggesting an opportunity for market entry by new producers. The distribution of organic cosmetics is shifting, with conventional retailers capturing a larger share of the organic market and e-commerce showing substantial growth, predicted to account for 48% of the beauty and personal care market in the US by 2023. Regulations vary, with different certifications and labels, such as USDA Organic and NSF "Made with Organic," defining standards for organic content in products..Title: The Green Wave: Surge in Demand for Organic Cosmetics in the American Market Recent years have witnessed a seismic shift in American consumer behavior, with a resolute pivot towards green beauty products glittering at the vanguard of the cosmetics market. The burgeoning awareness of health and environmental repercussions associated with chemical-laden cosmetics has catalyzed a robust surge in demand for organic alternatives. This impetus has led to the organic cosmetics market in the United States flourishing, with its value nestling comfortably between $40 and $45 billion in recent times. The American beauty enthusiast's proclivity for organic makeup and skincare is not just a fleeting trend but a steadfast part of their lifestyle. On average, each woman in the United States is likely to spend between $200 and $400 thousand on makeup over her lifetime. This staggering investment reflects the burgeoning appetite for beauty products that aren't merely skin-deep in their appeal but resonate with a deeper ethos of wellness and sustainability. In tune with this trend, a significant majority of American women are now scrupulously analyzing ingredient labels before beauty purchases, with those reading labels increasing from less than 55% to over 60% in a two-year span. These discerning consumers are especially cautious of ingredients like sulfates, parabens, and synthetic fragrances, which are increasingly being perceived as persona non grata in the landscape of beauty products. The proclivity for organic cosmetics showcases a demographic bias, with millennials, comprising a robust group of over 70 million individuals, leading the charge. It is estimated that approximately 60% of this age group would willingly loosen their purse strings for eco-friendly products, cementing their role as the bulwark of the organic cosmetics market in the United States. While skin and hair care loom large as the centerpiece of organic beauty consumption, accounting for over 65% of the market, the organic beauty industry is not resting on its laurels. Anti-aging products bubble up as a burgeoning niche, appealing primarily to a more mature demographic on the lookout for the elixir of youth in nature's lap. Another pivotal factor reshaping the market is the transformation of distribution channels. Traditional brick-and-mortar stores continue to dominate with over 50% market share, while e-commerce burgeons with a predicted upsurge to nearly 50% market penetration in the near future. The metamorphosis of shopping habits is palpable, with online purchases by consumers in their twenties and thirties accounting for more than half of their total buys. The American regulation.### Key Contenders: Navigating the Competitive Landscape of Organic Cosmetics The organic cosmetics industry is not just a vibrant landscape but also a battleground where well-established players with deep roots in consumer goods engage in a strategic tug-of-war for market dominance. These titans boast formidable distribution networks that span the globe, and the fierce competition between them is characterized by a relentless pursuit of innovation, strategic acquisitions, and beneficial partnerships. By investing in research and development, these companies endeavor to create innovative products that will capture a greater market share. L'Oréal stands as one of the giants in the organic sector. As a leading beauty company with a wide array of brands under its umbrella, L’Oréal has been making strides into the organic market, focusing on sustainable beauty and green formulations to meet consumer demand. The Organic Trade Association plays a different but critical role in the field, acting as an umbrella for over 9,500 organic businesses across the United States. Its influence is substantial, advocating for organic trade to benefit the environment, farmers, the public, and the economy. In the realm of online retail, major e-commerce platforms have been game-changers, reshaping how organic cosmetics are marketed, sold, and distributed. Notable companies leveraging this trend are those that have established robust e-commerce presences, offering direct-to-consumer sales through their websites or through third-party platforms. For instance, beauty brands with a strong e-commerce strategy appeal to consumers seeking the authenticity and exclusivity of organic products. The U.S. Department of Agriculture (USDA) also emerges as a pivotal figure in the market, providing the essential certifications that confer organic status on products and ingredients. Its National Organic Program (NOP) sets the standards for production, handling, processing, and labeling of organic products. The USDA Organic Certification is a seal of approval that assures consumers of a product’s organic integrity. Furthermore, companies like Seqens are exploring innovative technologies such as blockchain to enhance traceability and instill consumer confidence. By enabling a transparent supply chain from ingredient sourcing to finished product delivery, they are addressing the growing consumer demand for accountability and sustainability. While these institutions and corporations are a mere snapshot of the organic cosmetics sector, they are illustrative of the market's dynamics. The ebb and flow of the competitive tides in organic cosmetics is influenced by consumer behaviors, regulatory frameworks, technological advancements, and the overarching pursuit of natural and sustainable beauty solutions.
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Summary and extracts

1 Market overview

1.1 Definition and scope of the study

The organic cosmetics market represents a sub segment of the larger market for cosmetics. A cosmetic includes any substance used to clean, moisture or alter a person’s skin, hair, nails or teeth.

Cosmetics can be distinguished in two categories:

  • Beauty products: e.g. make-up, perfume, skin cream
  • Care products: e.g. shampoo, soap, deodorant

Organic personal care and cosmetic products do not contain chemicals such as parabens, phthalates, aluminum salts and petrochemicals, which are potentially harmful to an individual’s health. There is a legal treatment or distinction between the terms ‘organic’, ‘natural’ or ‘bio’ in the United States, as we will discuss further on. Nevertheless, for a cosmetic to be considered organic, it has to contain at least 95% of the ingredients certified as organic. Public opinion tends to identify them as those products containing ingredients derived from nature and not processed.

The global cosmetics market was worth over €213 billion in 2020 which, however, represented an 8% decrease in value with respect to 2019 mainly due to the effect of the COVID-19 pandemic.

The US market for cosmetics has grown substantially during recent years, with both production and exports experiencing a percentage increase in the last decade. The revenues of the broader cosmetic and beauty industry in the USA reached a value of USD 49.2 billions in 2020.

More specifically, the organic sector is blossoming, with increasing awareness regarding harmful effects of chemical products on the human body. This expansion comes both from demand, with consumers leaning towards natural and biological, and through suppliers, with companies offering each time more possibility of natural products, expanding from alimentation to personal care. Overall, the size of the organic products market in the US reached 40.6 billion in 2020.

 

1.2 The Global Outlook

The cosmetics market as a whole

The global cosmetics market can be defined a supply-led market mainly driven by innovation and in which new ideas are rewarded by customers.

The global cosmetics market was worth over €*** billion in **** as presented in the L'Oréal annual report. As it is visible from ...

1.3 The US Market

From a value of USD **.* billions in ****, the revenues of the cosmetic and beauty industry in the USA reached a value of USD **.* billions in **** peaking in **** (***). The market thus grew at a CAGR of *.**% in the past ten years. 

Revenues of the cosmetic and beauty industry US, ****-**** in billion ...

1.4 International Trade

UN Comtrade provides data on production outcomes. For the category “cosmetics, beauty, make up, skin care preparation, manicure or pedicure preparation ****” in **** exports in the United States amounted to approximately USD *.* billions while imports totaled USD *.* billions.

Imports, Exports and Coverage Rate for cosmetic and toilet preparations US, ****-****, in billion ...

1.5 COVID-19 Impact

The measures of social distancing and lockdowns imposed in the US and in other countries have severely impacted the cosmetics market. Besides the shock in supply, the virus has also possibly impacted demand. This is because shopping for cosmetics may not be considered first priority in the middle of a pandemic. ...

2 Demand Analysis

2.1 Demand Drivers

The American woman spends on average US$ *** thousand on makeup during her lifetime [***]. Moreover, in ****, **% of women in the US claimed to purchase makeup products once every month, and **% more than once every month. Although it is a consolidated market, it is not immune to transformations, such as the growing demand ...

2.2 Product Demand by Category

Biological or organic products are more expensive than traditional products, since they are associated with a perception of higher quality, given the higher cost of natural ingredients which changes year-on-year, the uncontrollable environmental factors, and the manufacturing process that is more labor-intensive if compared to its generic counterparts. 

Given the pre ...

2.3 Geographic Distribution of Demand

To better understand the geographic distribution of demand for organic cosmetics products, in the absence of exhaustive statistics on the precise market, it is still useful to look at the expenditures of US citizens of different regions on personal care products and services. Doing so, we will be able to assess ...

2.4 Demand Gap

Although most women seem to be satisfied by the selection of natural beauty products available at the retailers shelves or in their online sites, it seems like the supply has not yet met the demand when it comes to variety and selection range.

In fact, in ****, **% of American women claimed to ...

2.5 A greater Overlap between the Beauty and the Wellness Industry is demanded

According to the already mentioned survey conducted by the Global Web Index, a relevant trend in demand for organic cosmetics products can be found in an increasing desire of consumers for a greater overlap between the beauty and the wellness industry. 

The respondents to the survey, namely, beauty buyers in the ...

3 Market structure

3.1 Organization and dynamics of the market

The global biological sector has been developing at a fast pace. In fact, in ****, the world had *.* million organic producers, a growth of *,***% since **** [***].

The Organic Trade Association represents more than *,*** organic business in ** States. Although the country is the biggest market of organic consumption, it isn’t even in the ...

3.2 Transformation of the distribution channels

Considering the whole distribution of cosmetics in the US, we can highlight that store-based retailing (***), while only *% are beauty speciality stores. Normal retailers, which include supermarkets and mass merchandisers, hold, together, ** % of the market. Finally, e-commerce hold ** % of the market as distribution channels, highlighting the importance of the online channels for ...

3.3 E commerce: a double digit yearly growth

The online retail segment has shown an outstanding performance  globally within the personal and beauty care market. Indeed, although ecommerce penetration has only increased slightly in recent years, the beauty and personal care online share is predicted to surge to **% in the United States by **** [***].

Purchasing habits are drastically adapting to ...

3.4 Competitive Environment and Main Players

As mentioned before, the cosmetics market in general is indeed highly competitive, and this can be seen when analyzing the revenues of the ** leading cosmetics brands worldwide, none of which makes up more than **% of the global market for cosmetics which in **** was equal to USD***.* billion.

Sales of the main ...

3.5 Mergers and Acquisitions

Between **** and **** L'Oréal acquired * pure players of the natural cosmetics market thus making a clear move towards making its offer portfolio more and more organic [***]. 

On * August **** L'Oréal announced the signing of an agreement to acquire the German company Logocos Naturkosmetik AG, a pioneer in natural cosmetics with brands ...

4 Analysis of the offer

4.1 Ingredients

According to COSMOS - the international non-profit bio standards organization - organic cosmetics contain five categories of ingredients:

Water Mineral ingredients Agro-ingredients physically transformed Agro-ingredients chemically transformed Other ingredients

Agro-ingredient: “any substance of plant, animal or microbial origin derived from agriculture, aquaculture or harvesting”. [***]

Every category of ingredient has to respect ...

4.2 Pricing Composition

Organic cosmetics are known to be considered a premium product with respect to regular cosmetics, and this is certainly true in terms of their prices. However, the latter can be justified by looking at the costs which must be incurred in when producing these products [***]:

Shelf Life: Organic products generally have ...

4.3 Supply Trends

Anti-aging

There is an increasing demand for multi-functional cosmetic products such as anti-wrinkle creams. Mature women represent the greatest portion of this trend, as they are waiting for the encounter between technological advances and natural remedies to give its favorable outcomes. [***]

Mono portions

A unique packaging that enables the product to ...

5 Regulation

5.1 Ongoing regulation

There is big confusion over the definition and identification of “organic” or “biological” cosmetics.

Natural cosmetics: contain natural derived extracts and/or natural derived ingredients (***) Organic/Biological cosmetics: contain raw natural ingredients (***) derived from organic farming : they must therefore have a valid certificate attesting their organic nature.

At a global level ...

5.1 American Regulation

In the US, cosmetics are regulated by the Food and Drug Administration (***). Nevertheless, neither of those acts give a definition for the term “organic”.

Moreover, the Agricultural Marketing Service of the U.S. Department of Agriculture (***), which sets the definition for the term organic and provides the certification for agricultural ingredients ...

6 Positioning of the players

6.1 Market segmentation

  • Estée Lauder
  • Unilever
  • Johnson & Johnson
  • L’Erbolario
  • Davines
  • Aveda (Groupe Estée Lauder)
  • Lush
  • Burt's Bees
  • Juice beauty
  • Dr. Bronner's
  • Herbivore Botanicals
  • Well People
  • 100% Pure

List of charts presented in this market study

  • Evolution des taux de croissance du marché global des cosmétiques
  • Répartition du marché mondial des cosmétiques, par zones géographiques
  • Répartition du marché mondial des cosmétiques, par catégorie de produit
  • Valeur du marché des cosmétiques et produits de soins personnels naturels et biologiques
  • Revenus de l'industrie des cosmétiques et de la beauté
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Latest news

Beauty: Estée Lauder cautious about 2024 - 02/05/2024
  • - Acquisition of Tom Ford for $2.3 billion
  • - Double-digit growth in Clinique sales, across all geographic regions
Estée Lauder unable to keep pace with L'Oréal - 20/08/2023
  • Estée Lauder saw sales fall by 10% to $15.9 billion in its offbeat 2022/2023 full year
  • Estée Lauder acquired the Tom Ford brand for $2.3 billion.
Johnson & Johnson values its products at over $40 billion - 25/04/2023
  • Kenvue: new company resulting from the spin-off of Johnson & Johnson's (J & J) hygiene, beauty and consumer health division
  • J & J to own approximately 92% of Kenvue after IPO
  • Kenvue sales (fiscal year ending January 1): nearly $15 billion
  • Kenvue: over 22,000 employees, 25 manufacturing sites, operations in over 165 countries.
Lush mise sur les magasins - 07/03/2023
75 Years of Dr. Bronner's Family Business - 23/02/2023
  • 165 years since the Bronner family began making soap.
  • A bottle or bar of Dr Bronner's Pure-Castile soap sold, on average, every 0.95 seconds last year.
  • Founded in 1948
  • Dr. Bronner has become the country's best-selling natural liquid soap by word of mouth.
  • In 2022, the brand generated approximately $169 million in revenues.
Unilever steps up its ice cream ambitions - 21/11/2022
  • with sales of over 1 billion euros, Magnum is one of the world's leading ice cream companies
  • World leader in ice cream almost everywhere in the world
  • Ice cream is one of Unilever's five strategic categories, along with beauty (Dove, Sunsilk...), hygiene (Rexona, Signal...), home care (Omo, Cif...) and food (Knorr, Maille, Amora...).
  • Ice cream division 6.9 billion euros in sales by 2021
  • 35 brands, including Magnum, Ben & Jerry's, and Wall's, each with over €1 billion in sales, and smaller brands (Cornetto and Viennetta, the American Talenti)
  • Viennetta launched in China
  • ice cream accounts for 15% of the global snacking market.

Companies quoted in this study

This study contains a complete overview of the companies in the market, with the latest figures and news for each company. :

Estée Lauder
Unilever
Johnson & Johnson
L’Erbolario
Davines
Aveda (Groupe Estée Lauder)
Lush
Burt's Bees
Juice beauty
Dr. Bronner's
Herbivore Botanicals
Well People

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