11-13 December 2017 Dubai Convention & Exhibition Centre

Blogs


Middle-Eastern Promise for Natural Cosmetics



The major drivers of market growth are rising consumer demand for 'chemically-clean' cosmetics and expanding distribution. Consumers are buying natural & organic products as they become concerned about synthetic ingredients in cosmetics and toiletries. Product penetration is expanding in pharmacies, beauty retailers and department stores.

High growth rates are partly because the market is growing from a small base. Although the region has a sizeable consumer market, adoption rates are low because of low consumer awareness about natural cosmetics and limited distribution. European and American brands are largely capitalising on high market growth rates because of the absence of Middle-Eastern brands. Although the number of indigenous brands is increasing, none have built a regional presence.

Organic Monitor projects high growth rates to continue in the coming years. Market winners are expected to be brands who can expand distribution, whilst differentiating their products from existing natural products and 'pseudo-naturals'.


This first-ever report on the Middle-Eastern market for natural & organic cosmetics covers the following product categories:
Natural & organic skin care products
Natural & organic oral care products
Natural & organic hair care products
Natural & organic cosmetics
Other natural & organic personal care products

Market information includes market size, growth projections, market drivers & restraints, supply chain, pricing analysis, consumer behaviour and sales channel breakdown. Market shares and profiles are given of the leading brands, retailers and distributors.

Category : Natural cosmetics

 2017-02-16

Globalisation of the Organic Food Industry

Rise of the Multinationals

The organic food industry is becoming global in that large Multinational Corporations (MNCs) like Heinz, Danone, and PepsiCo are wielding increasing influence. Most of these companies have entered the organic food industry via the acquisition route or by investing in dedicated organic companies.

The recent announcement that Dean Foods, America’s largest dairy company, is to acquire Horizon Organic, the leading organic food company in the USA, epitomises the growing power of the MNCs in the industry.

Convergence of Consumer Demand

Another facet of globalisation is convergence of consumer demand and this is also becoming increasingly evident in the organic food industry. Although consumers buy organic products for a range of reasons that vary according to geographic region, culture and socio-economic factors, there is becoming some commonality in consumer behaviour.

A picture of a global organic consumer is emerging, who typically has the following attributes:

  • Location - lives in urban areas, usually in a big city
  • Buyer Behaviour - discerning towards food & drink purchases, considering factors like quality, provenance and production methods
  • Demographics – typically well-educated and of middle-high social class
  • Purchasing Power –belongs to a medium to high-income household, which gives them the purchasing power to pay a premium for organic products

The latter attribute is very important and it is why demand for organic products is largely confined to the industrialised world.

Inhibiting Factors

Two trends are dampening the rate of globalisation of the organic food industry. The growing importance of regional markets is causing an increasing number of consumers to shun organic products with high air miles. There will always be a need for imported organic fresh produce because of seasonality and product variety however the transportation distance is becoming increasingly scrutinised during the buying process.

Secondly, a growing number of countries are introducing national standards for organic food production, which are being perceived as protectionism measures by some producers. For instance, the implementation of the Japanese Agricultural Regulations (JAS) in 2001 caused the vast majority of imported organic products to lose their organic status as they did not meet the new standards.

The differences between organic standards make it difficult for many organic food growers to market their products at the global level. For example, an Indian grower of organic tea has to meet the organic standards of the EU, USA, and Japan in order to export to these regions.

Role of Trading Blocks

The formation of trading blocks is having a positive and negative effect on the organic food industry becoming global. Greater integration of regional markets is facilitating trade between member countries however it is also making the trading block more fortified against non-member countries.

The entry of 10 new members to the EU in 2004 will give organic farmers in Central & Eastern Europe access to a US $12 billion market. It will also extend market opportunities to Western European organic food producers. At the same time there will be fewer opportunities for non-European organic food growers with Western European countries expected to replace Asian organic herbs & spices and North American organic cereals & grains with those from the new member countries.

Conclusion

In conclusion, globalisation of the organic food industry is to continue. The speed of globalisation is however to be at a slower rate than other sectors of the food industry, especially as differences continue in terms of organic standards and consumers prefer ‘to think local rather than act global’ when buying organic products.

http://www.organicmonitor.com

Category : Organic food industry

 2017-02-15