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Natural and Organic Products Are Blooming

Sep 17, 2008
People are beginning to take an interest in the environment and are also becoming more aware of the chemicals they put in/on their own bodies. The sales of natural and organic products are on the rise, despite the global dip in economy. Although in the US food, fuel and utility prices are on the up, people seem to find a little extra money to treat themselves to products which they can be assured are chemical free.

According to a report from the Chicago research firm Mintel, Last year in the US sales of natural and organic products rose by 12.5 percent, (taking into account inflation) to $465 million and are predicted to rise again this year to $513 million despite the depressed US economy.

The Natural Products Association has estimated that the natural cosmetic industry is expanding five times faster than the regular cosmetic industry. Daniel Fabricant, a spokesman for the trade group feels that the industry is booming because of two main reasons; a recent awakening to the importance of being eco-friendly and a desire among consumers for healthy products free of synthetic ingredients.

The interest in natural cosmetics seems to stem from the high popularity of organic food in recent years, now you can practically have an all organic lifestyle, with products such as organic clothes and furniture alongside organic food and cosmetics. The Organic Trade Association estimates that US sales of organic food and drink will reach nearly $23 billion this year, up from $20 billion in 2007, a dramatic increase from the $1 billion in 1990.

Although last year three-quarters off organic products came from natural grocery stores and pharmacies, large cosmetic brands have noticed the market for natural cosmetics and are introducing them into their shops and lines. Despite the economic drops, people still need to buy necessities such as soap and shampoo so why not buy natural ones. Natural items pose as something different or a little treat.

Scott Potter is the managing partner of private equity firm San Francisco Equity Partners. The company has recently made a $14 million investment in the brand, 'Yes To Carrots'; an Israel based company, producing hair and skin products containing beta-carotene, who have seen their sales double since there debut in the States last year. Potter sees natural cosmetics as the "poster child for consumers trading up," believing that consumers "can't afford the vacation or BMW, but can spend a couple more bucks to buy something to make them feel good."

The industry is still trying to devise guidelines to stipulate what exactly makes a product natural. Earlier this year, the Natural Products Association created a certification program, giving products a seal of approval if they meet certain criteria.

Big companies are recognizing the money to be made from natural products and are snapping up organic brands. "It's no secret that the organic, natural space is becoming huge and raising awareness with consumers," Potter says.

Analysts believe that the industry is still providing opportunity as consumers continue to turn to organic products. Organic products are no longer seen as things used only by hippies and pregnant women, people are not only appreciating the benefits of organic food but are becoming aware of the importance of organic and natural products; it seems that this is an industry set to escalate.
About the Author
Hannah Walker is a writer for www.scinboutique.com
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