Natural beauty is one of the fastest-growing segments in the beauty industry, driven by consumers seeking wellness, sustainability, and purity. In this article, we explore the state of natural beauty, including trends, growth platforms, consumer insights, and what the future holds.
Consumer Education and Activation
In today's digital age, consumers are more informed than ever before. This has resulted in a rapid transformation of the beauty industry, with consumers actively seeking natural products and integrating them into their routines. This consumer education and activation cycle is happening at a faster rate than seen in the food and beverage industry, making it an exciting time for the natural beauty market. Distribution barriers across retail are lowering, and online marketplaces and local stores are making it easier for consumers to access and purchase natural beauty products.
Market Data and Analysis
We define Beauty by nine core departments, including bath and body, skincare, cosmetics, and more. The sales data from the conventional and natural channels reveals that natural products are outpacing their conventional counterparts by about ten points, with a dollar sales growth of 15%. Although natural products currently hold only an 8% share of the beauty industry, their 15% growth is driving 21% of the overall acceleration in the industry. This indicates a significant contribution of natural beauty to the market, considering its smaller size compared to conventional beauty products.
Categories Driving Growth
Shampoo and conditioner, deodorant, and toothpaste are showing significant growth within the natural beauty industry. The natural hair care category has seen a 2-point rise in $ share over the past two years, reflecting the changing preferences of consumers towards natural alternatives. Deodorant and toothpaste, although relatively smaller in size compared to other categories, are over-contributing to the growth of the natural beauty industry.
Furthermore, continued innovation is expected in these categories as more brands enter the market and high-end beauty retailers introduce natural beauty products.
Macro Trends in Natural Beauty
A beneficial approach to considering growth and innovation is to leverage established and high-performing attributes which can facilitate the creation of brands or new products that promote longevity for the brand/item.
When we are looking at beauty, natural beauty specifically, there are three main macro trends (also referred to as growth platforms) that we are finding:
All About the Acid
Consumers are increasingly knowledgeable about active ingredients like hyaluronic acid and bakuchiol, which are known for their skincare benefits such as hydration, cell regeneration, and collagen production.
Natural alternatives to traditional chemicals are gaining popularity due to their gentler effects on the skin.
Tap into the potency of plants and their naturally occurring properties. Ingredients like aloe vera are being incorporated into natural beauty products for their soothing properties.
Modern consumers are not just concerned about the quality of the products they buy, but also about the way they are produced and their impact on the environment. This is reflected in the increasing popularity of B Corp certifications and "free from" claims. Ultimately, it's all about ensuring that the values and principles of your brand align with those of your consumers.
What’s Next in Natural Beauty?
As the natural beauty industry continues to grow, it is important for brands to stay informed about the latest trends, growth platforms, and consumer insights. By leveraging these insights, brands can create products and experiences that align with consumers' evolving preferences and contribute to the growth of the natural beauty market.