Special Interview

Multinationals flex naturals muscle

By Katie Bird

- Last updated on GMT

Related tags: Cosmetics, Organic food

The increasing participation of multinationals in the natural and
organic cosmetics sector, and the current lack of legislation, may
be marginalising the smaller companies who have been operating in
the sector for many years, according to Amarjit Sahota, the
director of Organic Monitor.

A recent report from the market research company says that worldwide sales of natural and organic products are approaching $7 billion, with predictions that the market will reach $10 billion by the end of the decade. CosmeticsDesign spoke to Amarjit Sahota to discuss the challenges the growing industry may face. Organic Monitor cites the mainstreaming of natural and organic cosmetics as one of the main drivers of growth in the sector. Many of the big players in the personal care industry are investing in the market, either acquiring brands with a green feel or releasing their own natural or organic lines. Sahota explains that, in addition, the lack of clear regulation allows many companies to make spurious claims for their products, meaning that there is no 'level playing field' for natural and organic cosmetic companies. "Companies like Jason Natural who have been producing 'pure natural' cosmetics for over 40 years are now competing with new entrants that are launching products with very low levels of natural ingredients. These new products are sometimes supported by the very large marketing budgets of multinationals. There is a concern that these new entrants might marginalise authentic and traditional manufacturers of natural cosmetics as they target the same customer base with inferior products"​ he said. ​ The lack of a clear definition for natural products has allowed companies that do not produce pure natural products to benefit from the marketing opportunities that the natural trend may present. "Since there is no legal definition, and there is high consumer demand for natural and organic products, many companies have 'jumped on the bandwagon' and introduced products that are positioned as natural and organic. Unfortunately, many of these products may contain very small amount of natural or organic ingredients, or synthetic chemicals that are not present in pure natural products." ​The proliferation of pseudo-natural products may cause consumers to 'switch off altogether' as they cannot distinguish the legitimate products from the maze of products on retailer shelves, he said. It is for this reason that Organic Monitor has chosen a tighter definition than most other market research companies, for the natural and organic market. Sahota explained that organic cosmetics are relatively easy to define - cosmetics that contain organic ingredients - but that defining natural cosmetics is much more complex. "We define natural cosmetics as 'pure natural' products, for example those cosmetics that contain natural ingredients or plant extracts and contain minimal amounts of synthetic chemicals like pthalates and parabens." ​This definition excludes brands such as Palmolive Naturals, and Herbal Essences, as, although they contain natural ingredients, they also contain synthetic chemicals not found in 'pure natural' products, Sahota explained. "Our narrow definition leads to a large difference in market size with other research companies",​ he said, adding that they consider their definition to be an 'industry-insiders definition' that the leading natural cosmetics companies largely agree with. "Although our company is not a natural cosmetics manufacturer, our definition has helped many producers identify and distinguish between legitimate and pseudo brands of natural cosmetics"​ he said. The industry in general needs to tighten its definition of natural cosmetics, according to Sahota, who feels that the introduction of a universally agreed definition would help consumers and industry alike. "If industry agreed standards could be introduced, it would provide protection to legitimate producers of natural and organic cosmetic producers"​ he explained. Sahota draws comparisons between the natural and organic cosmetics sector and the organic food industry, explaining that "the food industry benefited immensely when private and national standards of organic agriculture and production were introduced in the 1990s.""The standards have made it clear to consumers on what organic products are; they have also given clear guidelines to companies who are looking at organic production methods."​ Likewise Sahota calls for similar initiatives in the cosmetics industry that would develop the industry and strengthen consumer demand. In particular, Sahota applauds the work of the European certification bodies, including Ecocert, Soil Association and BIDH, underlining their attempts to harmonise their respective systems. The collaboration plans to introduce the natural and organic standards in June 2008 which would represent the first step in introducing European wide standards, he said. Regarding globally accepted standards for natural and organic products, Sahota says it is in theory necessary for the industry but in practice extremely difficult and time consuming to implement. "It has taken many years for leading organisations in Europe to come to some kind of agreement. It will take many years for other regions like North America and Asia to develop similar standards. The challenge is then the harmonisation of these standards." ​ Instead Sahota says he would like to see the introduction of compatible standards in Europe and North America in the next few years, as this would give the industry a significant boost. "Only then could a global standard become a commercial reality"​ he said. www.organicmonitor.com

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