Organic and natural cosmetics: The challenges of a market under pressure

The period of high inflation that followed the pandemic, with its trail of delistings from mass retailers and closures of specialist outlets, has turned the organic and natural cosmetics segment upside down. This autumn, the announcement of the end of the Slow Cosmétique label and the decision by La Provençale (L’Oréal) to abandon organic certification for its new launches were two further wake-up calls. And yet, despite tighter budgets and ever more cautious shopping habits, consumers continue to favour products that are perceived to be better for their health.

Diverging trajectories

According to the French market research firm Xerfi, the organic and natural cosmetics market in France is characterised by the divergent evolution of its two components. The research company estimates that sales of natural cosmetics in supermarkets and hypermarkets have increased by 5.4% in volume in 2023. By contrast, sales of organic cosmetics fell by 3.3% over the same period. This discrepancy is mainly due to price differences between the two categories.

"Organic products have an average price index of 120, while natural products are at 86," explains Benoît Samarcq, Research Director at Xerfi Intelligence Stratégique.

Trade-offs in favour of the cheapest option are all the more massive given that the benefits of natural cosmetics seem to be quite similar to those of organic products.

According to a survey carried out by Cosmébio, the association behind one of the main French certifications, organic cosmetics are still often preferred for leave-on products (creams, serums) that remain in contact with the skin for a longer time. By contrast, for rinse-off products (soaps, shampoos), the priority is more on naturalness.

Damien Sineau, President of Cosmébio, also dismisses the idea that organic cosmetics are necessarily more expensive. "There are organic products at all prices," he says.

Organic, a growth driver for pharmacies

Although the distribution of organic and natural cosmetics in France is still dominated by mass retailers (53% of the market by value, according to Xerfi), pharmacies and health and beauty stores (22% of the market) are experiencing the strongest growth rates.

In pharmacies, sales of dermocosmetics have risen by 20% in value between 2019 and 2023. According to Damien Sineau, organic products have played a major role in boosting sales through pharmaceutical advice. For example, the organic brand La Rosée, which has developed almost exclusively in pharmacies and health and beauty stores, recorded 40% growth in 2023!

"Pharmacies are the most dynamic, with a predominance of skincare products," emphasises Mr Samarcq. A success that whets appetites! At the end of 2023, the Melvita (L’Occitane Group) and Respire brands announced their ambition to double their points of sale in pharmacies.

But expectations in this channel are very specific. "In France, 40% of consumers buy cosmetics in pharmacies, where they look for more technical formulas, reassuring products and advice. Suncare and baby products, for example, perform very well in this channel," confirms the President of Cosmébio.

Meanwhile, organic shops, which still account for 25% of sales, have lost ground. Nearly 400 shops have closed since the end of 2023.

Innovation is essential

According to Xerfi, the organic and natural cosmetics market should continue to grow, but at a more moderate pace. "We are a long way from the double-digit growth rates the market has seen in the past," points out Benoît Samarcq. Forecasts point to average annual growth of 5%, which should take the French market to EUR 1.2 billion by 2026 (compared with EUR 1.1 billion in 2024).

For Benoît Samarcq, the segment’s growth will be driven by innovative formulations and by the expansion of the product offering across all distribution channels. This move towards democratisation will have to be accompanied by greater concern for transparency and quality. As naturalness becomes more widespread, it will no longer be enough to convince consumers.

Xerfi also notes that "leading luxury brands are not positioning themselves in the organic segment at all, and very little in the natural segment." While the naturalness of formulations is also making progress at the top end of the market, it is not the only criterion. Brand recognition and technical innovation remain key.

While environmental and health concerns continue to play an increasingly important role in consumer purchasing decisions, a recent Euromonitor report highlights that quality, functionality, and price remain key factors in the context of rising living costs.

In summary, organic and natural cosmetics should continue to grow, supported by favourable underlying trends. However, organic brands are facing trade-offs that are forcing them to be more innovative and to move into new distribution channels, where shelf space is becoming increasingly expensive.

More generally, all brands will need to differentiate themselves in terms of authenticity, quality and efficacy to prevent the market from running out of steam. This challenge is all the more complex as competition intensifies and beauty preferences diversify. Brands that can reconcile ethics, efficacy and accessibility will be ahead of the game.