In the UK last year sales of certified organic personal care products fell by 27% according to a report just issued by the Soil Association. This is a huge reversal on a sector that has seen astonishing growth in recent years. Have consumers fallen out of love with organic products?
One possible explanation is that organic products are seen as a luxury and with a recession in full swing people are switching from expensive brands to cheaper ones. That certainly makes sense, and someone who sells organic products was making that point to me on Twitter shortly after I tweeted the report. But if I have learned anything about the way the market works it is that logic is rarely a good explanation. Yes if you are short of money or worried that you might soon be short of money it makes sense to avoid expensive items if there is a lower cost alternative. But does this mean that people rationally scale back their expenditure across the board? Hardly.
In fact when it come to high end personal care the so-called ‘lipstick effect’ often comes into play. People can no longer afford a holiday, a new car or a fridge. But a lipstick is not a big ticket purchase. You can console yourself for not having the stuff you really wanted by splashing out on a small affordable treat. And some sectors are simply recession proof. When it comes to health people carry on spending regardless, for obvious reasons. Surely organic personal care products ought to benefit from both of these effects. They are both affordable and healthy after all.
The other reaction I got on Twitter was a certain amount of schadenfreude from people who aren’t great fans of the organic sector. One went so far as to say ‘brilliant’. Its not hard to see why some people in the business might find the misfortunes of the brown rice and sandals brigades satisfying. There is a tendency for some people in the organic movement to be a bit sanctimonious, which is annoying at the best of times and doubly so when they seem to be trading successfully on it.
But leaving aside the views of people who have skin in the game, what is really going on here. I have already blogged about the feeling I am getting that the natural products market is changing. (http://colinsbeautypages.co.uk/is-the-natural-cosmetic-market-really-growing/). I have a feeling that a lot of people have tried natural and organic products and have decided that they don’t really do anything that justifies the price premium. People certainly like the idea of natural. Natural sounds good. It sounds safe. Why not give it a try? But what actually do natural products do that mass market consumer products don’t? Not a lot really. My feeling is that people aren’t looking at the organic products and thinking, I’d really like that but I just can’t afford it. I think they are simply not motivated to repurchase.
I don’t think that many organic consumers had a road to Damascus conversion, threw out all the contents of their bathroom cabinets and switched to organic brands. And equally I don’t think that the natural is good story has lost its appeal either. I still think that all other things being equal most people would select something they think is natural over something they perceive as synthetic. In my opinion the real problem is the products. They just aren’t really all that good.
Here is the original report.