Beauty Players to Benefit from Small Independent Entities Managing Their Green Brands

Increasing consumer awareness has led to a proliferation of natural/organic products in the beauty and personal care market as manufacturers of all sizes jump on the bandwagon with product offerings claiming to be based on natural ingredients. However, it is the smaller manufacturers that tend to enjoy greater credibility as consumers appear to be suspicious of mass manufactured natural/organic products and overall corporate commitment to nature. The question is how can larger companies increase their competitiveness in a market inclined towards smaller manufacturers?

Increasing drive to include natural/organic products


Smaller players enjoy greater credibility

Although larger companies are actively seeking opportunities in the natural/organic space, it primarily remains the domain of smaller players such as Yes To, Lush and L’Occitane, which are in general experiencing above industry growth rates. L’Occitane’s CAGR of over 24% between 2004 and 2009 in its primary Asian market compares to an industry average of 7%. Similarly, Lush, which specialises in bath and shower, posted a 6% CAGR between 2004 and 2009, compared to a little over 5.5% for the global bath and shower market. This is because consumers appear to be more sceptical about mass produced natural/organic products, thus favouring smaller brands. For example, The Body Shop saw its share of the global beauty and personal care market fall from 0.5% in 2006 to 0.4% in 2008 and 2009 due to its association with L’Oréal.

Develop smaller autonomous entities to compete with smaller players



Larger companies are at a disadvantage as consumers question their product authenticity and green credentials. Larger companies have over the years developed sustainability programmes to help improve their green credentials as well as support their green offerings, but this alone may not be enough. They need to consider creating smaller entities with full autonomy and maintain a distance from them.