by Greg Stephens, vice president, Natural Marketing Institute
Natural and organic personal care is one of the fastest-growing segments of the health and wellness marketplace. Natural Marketing Institute (NMI) shows sales of natural and organic personal care products totaled $10 billion in 2009, representing an 8-percent growth from the previous year. This dynamic growth has continued over the past year, driven in part by the 755 new natural and/or organic personal care products, which according to Mintel, were introduced in the United States since January 2010.
Most of the findings in this article are based on NMI’s LOHAS Consumer Trends Database® (LCTD). Designed in 2002, this database measures and describes the marketplace for LOHAS products/services, the consumers that use them, consumers’ expectations of corporate behavior, and attitudes toward environmental and social issues. Particular attention is paid to consumers’ attitudes, behaviors, psychographics, lifestyle activities, and product/service usage patterns in order to provide readers with the information they need to capitalize on growing sustainability and corporate responsibility initiatives.
The Natural and Organic Personal Care User
NMI has defined the Natural/Organic Personal Care User (N/O PC User) as one who indicates they have purchased at least one natural or organic personal care product* in the past six months. This consumer group comprises 30 percent of the total U.S. adult population (Figure 1-1), and skews toward younger, more educated women.
Approximately one-third of N/O PC Users are LOHAS consumers (Figure 1-2), an opportunistic segment for marketers of natural and organic personal care products. LOHAS consumers represent 19 percent of U.S. adults who consider both personal and planetary health in their product choices. As environmental stewards, they are socially responsible, driven to protect the environment and are avid users of “green" personal care products. More than half of the LOHAS group (53 percent) indicates they purchased at least one N/O PC product in the past six months, significantly more than all other consumer segments.
Naturalites (14 percent of U.S. adults and 16 percent of N/O PC Users) make most purchase decisions based on the benefits to their personal health. This group is also interested in protecting the environment—an interest mostly driven by personal health reasons—and their usage of natural/organic personal care products (37 percent) is second only to that of LOHAS.
Drifters represent 21 percent of both the general population (GP) and N/O PC Users. Motivated by the latest trends, these consumers’ commitment to any issue, including sustainability, is constantly shifting. This group represents an opportunity because the green marketplace is a hot trend to them. Their usage of natural/organic personal care products (30 percent) trails that of naturalites. Since drifters are the youngest segment and one with larger families, they are more likely to have price barriers to green living.
Conventionals and Unconcerneds are far less likely than other segments to have purchased N/O PC products (20 percent and 16 percent, respectively). Conventionals are driven by practicality and frugality rather than pure environmental or health benefits and are not particularly environmentally conscious, while unconcerneds exhibit little to no environmental responsibility.
Drivers of Personal Care Purchases
Given the wide range of product attributes and benefits that consumers consider in their personal care purchase decisions, it is helpful to summarize the overall types of drivers. Conventional product attributes are most important to consumers, including N/O PC users and LOHAS consumers. In fact, N/O PC Users and LOHAS consumers find these benefits more important than the general population. The importance of these conventional attributes, including efficacy and perceived value cannot be understated, and are simply costs of entry into the category. While consumers seem to understand and welcome that natural and organic personal care products provide a safer alternative for their bodies, the product will fail in the long-run if does not perform as well or better than its conventional counterpart.
Environmental/social and ingredient-based attributes are secondary to conventional attributes, and almost equal in importance among the general population. However, true to their nature, LOHAS consumers are significantly more likely than any other consumer group to indicate environmental/social-based attributes are important to them; N/O PC Users are not far behind.
Non-animal testing is the largest issue among environmental and social concerns (as indicated by 39% of the general population). More than one-half of N/O PC Users state this is important when making their purchase decisions, even more important than natural/organic ingredients, indicating this user group, while defined based on natural/organic personal care usage, represents multi-dimensional consumers who are interested in a socially and environmentally well-rounded product.
Biodegradable, earth-friendly and recyclable packaging are the next highest group of environmental attributes in terms of overall importance. The majority of LOHAS consumers indicated these attributes are very important in their purchase of personal care products, significantly more than all other NMI segments. Compared to the general population, N/O PC Users were at least 50 percent more likely to indicate these attributes are very important in their personal care purchase decisions.
The Risk of “Quasi-Natural"
As shown in Figure 1-3, the majority of consumers would decrease or stop their purchases of a brand if they found out contained artificial ingredients even though it was marketed or perceived as “natural." While consumers do show some confusion over organic, they want their “natural" brand to abide by the parameters (no artificial colors, flavors, preservatives).
N/O PC Users show higher likelihood to completely stop buying their favorite brand if they were led to believe the product was “natural" when in fact, it wasn’t. Companies that market products as natural but which still contain some artificial ingredients risk not only losing brand users, but also losing their primary user groups.
