How Modern Consumers Now Demand Natural Products

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As a result of increased knowledge about wellness and increased environmental awareness, many modern consumers demand greater transparency in the products they buy. People are becoming increasingly interested in learning where their products come from and what ingredients they contain. AmonAvis.fr, a review site in France, shows how people daily search and are curious to know how food companies get their supplies.

The food industry has become more straightforward due to this lifestyle shift, with non-GMO varieties and additive-free products introduced to the market. Baby care, personal care, household products, and cosmetics are among the high-growth natural consumer product categories that have adapted their offerings to meet this new generation of customers’ needs. Check out Naturalia if you need help understanding more about the requirements of this new generation of consumers.

The Natural Trend in Personal Care

According to a study by global consulting and research firm Kline & Company, an increasing number of consumers are willing to pay a premium for natural or “perceived to be natural” products. Furthermore, according to Kline, the “natural” trend is the most important in the personal care industry. According to Kline, the natural personal care market in the United States grew at its fastest rate in the last five years in 2018. The trend-driven natural and organic personal care industry are expected to be worth $25.1 million in 2025, according to a report released by Grand View Research in 2019.

Jessica Alba’s privately held Honest Co. is an example of a consumer goods company founded to create environmentally friendly products and has snatched market share from industry leaders. Honest Co.’s mission is to “redefine the family brand” by offering a wide range of safe, eco-friendly, and affordable baby, beauty, and household products.

Honest Co. received funding from L Catterton, a private equity firm that invests in health and wellness brands. It’s worth their $200 million minority stake in the company. In the spring of 2019, Honest Co. expanded internationally, with locations in Germany, France, Spain, Italy, the Netherlands, and Australia. In 2016, the company’s revenue was $300 million, and in 2017, it was reported to have increased by 34%.

More traditional personal care product manufacturers have suffered as a result of these niche players’ success. Companies like L’Oréal, The Body Shop, and Estée Lauder have introduced new organic product lines in recent years.

Natural Product Trend Drives Industry Acquisitions

Even if they have been slow to adapt, traditional, large-cap consumer goods companies have noticed the demand for natural products. Larger companies have been forced to either acquire their smaller competitors or create their natural divisions due to the industry’s rapid growth of niche companies and startups. It’s rare to come across a natural products company with annual revenue of more than $200 million that hasn’t been acquired or isn’t considering strategic alternatives.

In 2016, Unilever paid between $600 million and $700 million for Seventh Generation, a Vermont-based green household product company. In 2017, Unilever showed its commitment to sustainability by introducing Dove Men+Care Elements, a new “nature-inspired” product line for men under the Dove brand. This line of men’s grooming products uses natural ingredients like sage, charcoal, and sandalwood.

Major Consumer Brands Launch Natural Product Lines

The vast majority of major consumer brands have found success with natural product lines. For the quarter ending September 30, 2019, Clorox Co. reported double-digit sales growth for its eco-friendly personal care line Burt’s Bees. Colgate-Palmolive Co. said its Tom’s of Maine business was doing well during its most recent quarterly earnings call on January 31, 2020.

In 2016, Tide Purclean, Proctor & Gamble’s first natural detergent, was launched. Since then, the company’s naturals portfolio has expanded. In 2019, it purchased This Is L., a company that makes natural feminine hygiene products.

A New Generation of Consumers

The trend of introducing products with a shorter ingredient list and greater transparency is likely to continue for more extensive, traditional companies and new, niche competitors who want to cater to this growing consumer base.