Formulating, Packaging, and Marketing of Natural Cosmetic Products

Nava Dayan, Lambros Kromidas

• Publisher: Wiley
• Year: 2011
• ISBN:
  9781118056790
• Edition: 1
• Topic: Physical Sciences
• Subtopic: Industrial & Technical Chemistry

Balanced coverage of natural cosmetics, and what it really means to be "green"

The use of natural ingredients and functional botanical compounds in cosmetic products is on the rise. According to industry estimates, sales of natural personal care products have exceeded $7 billion in recent years. Nonetheless, many misconceptions about natural products—for instance, what "green" and "organic" really mean—continue to exist within the industry. Formulating, Packaging, and Marketing of Natural Cosmetic Products addresses this confusion head-on, exploring and detailing the sources, processing, safety, efficacy, stability, and formulation aspects of natural compounds in cosmetic and personal care products.

Designed to provide industry professionals and natural product development experts with the essential perspective and market information needed to develop truly "green" cosmetics, the book covers timely issues like biodegradable packaging and the potential microbial risks they present, the use of Nuclear Magnetic Resonance (NMR) to identify biomarkers, and chromatographic methods of analyzing natural products. A must-read for industry insiders, Formulating, Packaging, and Marketing of Natural Cosmetic Products provides the reader with basic tools and concepts to develop naturally derived formulas.

Part I

Market and Trends

Chapter 1

The Natural Personal Care Market

Darrin C. Duber-Smith^1,2

¹Green Marketing, Inc., Denver, CO

²Metropolitan State College of Denver, Denver, CO

1.1 History's “Natural” Progression

“Natural” and “certified organic.” For many years, the very words were enough to make a cynical cosmetic chemist scoff and furrow a marketer's brow. Are natural cosmetics a passing fad or an established long-term trend? Can natural cosmetic ingredients ever be as effective as their synthetic counterparts? Will governments ever define the term natural? Will “mainstream” companies ever properly address this opportunity? Well, the jury is in. After two decades, the natural and organic personal care industry continues to grow at double-digit rates, barring the recessionary dip in 2008 and 2009 where rates dropped into the high single digits, and larger cosmetic companies have finally figured out that high growth rates and return on investment for shareholders go hand in hand. Thus, formulating with natural and organic ingredients has moved from a novelty to an imperative for many cosmetic companies.

The origin of the natural and organic products industry, with its roots in healthy foods and beverages, can be traced as far back as the beginning of the last century in recognition of the efforts of the famous health enthusiast Will Kellogg and a handful of early pioneering companies such as lozenge maker Thayer's and vitamin provider KAL. These early visionaries can at least be partially credited with the initial commercialization of natural products on a large scale. However, decades of “better living through chemistry” resulted in the development of tens of thousands of effective, synthetic ingredients that could be easily standardized and manufactured on a large scale. Food and personal care companies were the major beneficiaries of such technological advancements, and consumers appreciated the proliferation of effective product options. Natural products were to take a back seat, at least temporarily.

A peppering of small food and nutritional supplement companies dominated the niche's natural products landscape, as few people were willing to compromise on effectiveness, taste, price, convenience, and other variables, very much preferring the widely available synthetic offerings. The zeitgeist of the 1960s illustrated by books such as Rachel Carson's environmental bombshell, Silent Spring, along with the civil rights movement, helped fuel an increasing consumer demand for effective products that were healthier for people and better for the environment. At that time, natural personal care represented only a small handful of these businesses and the concept of organic agriculture was in its infancy.

A result of this “hippie”-inspired movement was the proliferation of the natural channel, a loose network of independent “health food” stores found in every region of the country, and an important step in getting natural products into the hands of the consumers who needed them. Poorly capitalized entrepreneurs struggled to make effective products for this growing consumer segment, but at least now they had a place to sell them. Most of these stores sold bulk grains and whatever brands they could get their hands on. Personal care items were limited to a variety of salves and balms, but nothing close to the range of sophisticated product offerings we see as of this printing.

The 1970s and 1980s saw huge increases at every stage of the value chain. Since demand for all products and services is ultimately derived from the end user, retailers required more and increasingly effective branded products and manufacturers required the ingredients to produce them. The loose network of suppliers, manufacturers, and intermediaries was transforming into a sophisticated supply chain. More importantly, people were starting to prosper, and early entrepreneurs cashed out their investments to start second-generation firms. Personal care became a bona fide section of the store with the emergence of “supernatural” retailers such as Wild Oats Markets, Whole Foods Markets, Fresh Fields, Bread and Circus, Boney's, Trader Joe's, and dozens of others. Recognized brands such as Aveda and the Body Shop, companies that have traditionally used some natural ingredients, were what passed for natural products in the mainstream channels during that time.

The year 1990 ushered in a new decade of double-digit growth in the food, beverage, functional food, and nutritional supplement segments and saw the beginning of industry consolidation as entrepreneurs implemented their exit strategies and large portfolios of brands were compiled by companies such as the Hain Celestial Group. By the late 1990s, several conferences produced by Natural Business Communications were dedicated to the financial side of the business (as private and public equity players scoped out the opportunity), in addition to a huge proliferation of events all over the world. At that time, the personal care segment, although still dominated by a dozen or so companies generating several million in sales each as well as thousands of crude products made in kitchens and bathtubs, began a sustained growth spurt that continues to this day.

At the end of the first decade in this new century, many of the pioneering brands have been purchased by larger players, as Colgate now owns Tom's of Maine and Clorox owns industry leader Burt's Bees. Organic regulations that were written for food, now for the most part, apply to personal care, although there are still some points of contention. There are no regulations per se regarding use of the word natural in marketing, so there is much liberal use of the term. The practice of “dusting” products with inadequate amounts of active botanicals, for example, is well known. Consumers obviously expect that a product marketed as “natural” contains at least a majority of natural ingredients, but this is often not the case. The question of how to define a natural ingredient is now compounded by how to define and label a natural product, which is supposed to contain some amount of natural ingredients. The industry has come a long way in the decade prior to this writing, and third-party certifications abound causing much confusion in the marketplace.

The remainder of this chapter will be dedicated to providing the reader with an understanding of the current business environment as well as what to expect for the near future in natural cosmetics.

1.2 The Nature of Natural

That the current situation around defining what constitutes a natural cosmetic product is unclear is a gross understatement. Any effort to define what natural really means must begin at the root problem. In the case of a natural personal care product, one must first decide what constitutes a “natural” ingredient. Once that has been accomplished, one can set standards as to what percentage of natural ingredients must be present in a product as well as what types of ingredients must never be included in a natural product for it to be called “natural.”

Would it be helpful if there were such an accepted standard? Unfortunately this is fantasy, as there exist few government regulations in the area of natural ingredients (except for fragrances and a very loose definition of natural in the United States) and therefore a lack of standards for finished products themselves. As we know, in the absence of government regulations, organizations are “supervised” by a patchwork of stakeholder groups including competitors, supply chain members, the media, nongovernment organizations (nonprofit organizations, etc.), customers, shareholders, and others. This is generally a model that leads to corporate improvisation and consumer confusion in the marketplace since terminology is not commonly understood and there are numerous opportunities to engage in ethically questionable behavior with regard to product claims.

In the case of natural personal care, it is my opinion that it should be generally understood that a natural ingredient should be neither synthetically derived nor synthetically processed. This means that a natural ingredient must be “found in nature” and be free of synthetic additives in processing as well as “overprocessing.” Most definitions of natural mention the idea of “minimal processing,” but this is vague. Abuses are numerous in this area as well because of the highly interpretive nature of processing. Add this to the traditional unwillingness by the U.S. Food and Drug Administration and other government bodies to address this growing issue and the result is a proverbial “elephant in the living room.” Nevertheless, there are a growing number of third-party organizations and industry associations that have developed and marketed various models, certifications, and labeling requirements for natural products. Some of these models are more stringent than others, and this is indeed better than nothing at all, but unfortunately none of these programs is consistent with each other and none has emerged as a standard with a high degree of awareness by industry or consumers. With regard to the “natural” distinction, the most promising as of this writing appear to be the Natural Products Association standard in the United States and the much older BDIH European standard for natural, which among others are listed below.

The following general guidelines may be of preference regardless of the labeling certification used. Any certification should involve the following:

1. A stringent definition of what constitutes a natural ingredient.

2. A list of synthetically and naturally derived ingredients that may not be included in a natural product under any circumstance (examples include many of those identified by various government and third-party organizations, such as the European Union and the California Green Chemistry Initiative, as potentially harmful or actually toxic).

3. A labeling standard that recognizes four different levels of a natural product. Water cannot and therefore does not count as ingredient when calculating percentage of the whole numbers since the result would be skewed in favor of a more “natural” product.

a. A “100% natural” product claim would include no synthetic or banned ingredients whatsoever, and only 100% natural ingredients are allowed.

b. A “natural” product would include 95% or higher natural ingredients and none of the banned ingredients. The remaining 5% could be synthetically derived and/or processed but not any as discussed in item 2 above.

c. A “made with natural ingredients” product would contain between 70% and 95% natural ingredients and no banned ingredients.

d. A product that has fewer than 70% natural ingredients would be allowed to emphasize such ingredients denoting them as natural on the label but would not be allowed to make any other natural claim on the primary display panel (unlike the previous three scenarios), and would allow even banned ingredients.

4. A standard that has government oversight (both United States and European Union for a start) as well as enforcement.

It seems logical that any future natural regulation ...

Table of contents

• Cover
• Title Page
• Copyright
• Preface
• Contributors
• Part I: Market and Trends
• Part II: Regulatory Aspects
• Part III: Safety Aspects
• Part IV: Use of Natural Ingredients
• Part V: Analysis of Naturals
• Part VI: Biodegradation
• Color Plates
• Index