European Sales of Natural Cosmetics to Reach 1 Billion Euro?
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A new research by Organic Monitor finds that European revenues have been increasing by over 20 % a year. One major reason is the stronger consumer demand; another one is the availability of natural and organic cosmetics in European retailers.
The fastest growing markets in Europe are Germany and France. The French market started to show a high growth in 2005; the sales have been booming in Germany for several years. Drugstores, organic food retailers and discounters have been starting to launch private label products. On the German market, natural cosmetics are the most widely available and most competitively priced.
The new report “The European Market for Natural Cosmetics” finds the German and Italian markets to be the largest in Europe with almost 70 % of revenues. Natural cosmetics in Germany comprise over 4 % of the total cosmetic sales, the market share is forecast to approach 10 % by 2012. A high market share can also be found in Austria and Switzerland.
Over 400 European companies are involved in the production, most of them small producers. The Swiss company Weleda is the leading producer in Europe with a strong market position in almost every European country. High growth rates are attracting new entrants, including large cosmetic companies launching natural and organic products.
A major barrier to the market growth is seen in the fact that there are no national and EU regulations. Legitimate products are competing against conventional cosmetics marketed as natural because of the content of some natural ingredients. Consumers are unable to differentiate between products that are certified by BDIH and the Soil Association.
A critical success factor is product positioning, especially as these products come in direct competition with conventional brands in supermarkets, department stores and drugstores. According to the report author, the market winners will be the companies that can successfully differentiate their products from competing ones – natural and conventional.
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