June 25, 2007
Natural… or Not Natural; That’s the Question
By Laura Klepacki, special to GMDC
What does a natural or organic label on a beauty product mean anyway?
International market research firm Datamonitor recently addressed that sticky question. It determined there is no easy answer. Not yet, that is.
After evaluating products around the globe, researchers came to the conclusion that there are three sets of definitions now in use.
There are manufacturers that adopt a “Broad” definition wherein natural ingredients comprise 10 percent or less of the product formula; the removal of artificial ingredients is negligible and an adoption of ethical business practices (that is, ecologically-friendly) is not essential.
For those falling under its “Narrow” definition, products contain more than 10 percent natural ingredients, with significant removal of artificial ingredients. There is some evidence of ecological business practices.
The final category, “Organic” is the most stringent, whereby the inclusion of natural ingredients and removal of artificial elements are officially regulated. And there is notable adoption of ethical business practices. This smallest of segments refers to products that carry a third party stamp. For instance, in the U.S. manufacturers can seek an official organic label through a USDA certification program. Bio-Inspect is a third-party certifier in Europe.
It’s no surprise that the “broad” definition is the one most widely embraced. That is not just in the U.S., but additionally in Europe, Japan and Australia, the global regions currently leading in the marketing of “natural” personal care products.
In most markets, brand manufacturers can use the word natural and organic freely, using only their conscience as a guide. But that could be changing.
Earlier this year, the Washington, D.C.-based Cosmetic, Toiletry and Fragrance Association (CTFA) announced it had forged an agreement with trade associations in Europe, Canada and Japan, to work together to harmonize global regulations.
The joint effort of these groups goes far beyond the natural/organic issue, but is seeking across the board uniformity so that what is acceptable in one market will also be acceptable in another.
“Consumers want safe products that are available and consistently regulated across the globe and companies need predictable regulatory regimes in order to maintain product innovation,” declared Pamela G. Bailey, CTFA president and chief executive officer.
Europe has been leading the way, followed by the State of California, in pursuing more stringent ingredients requirements for beauty products. A consolidated movement to globalize regulations could make it easier for manufacturers operating in multiple markets. It would prevent formulating a range of products to meet varying market demands.
Those brands with third-party stamps are the minority. So how are retailers, and subsequently their customer – the consumer – to know now how “natural” a natural product really is?
Discussion Questions: Are definitions necessary for the use of natural or organic? How important are standard definitions of natural and organic to the growth of these types of products in health and beauty care categories? Is it feasible at this point to create global definitions that can be enforced?
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Cosmetic shoppers learn what’s “natural” from 3 sources: the brands, the media, and their friends. Brands that promote their purity often articulate what is and isn’t in the ingredients as well as how the products are tested (animal cruelty-free). Articles in Vogue, Seventeen, newspapers, and other publications (often written and subsidized by brands) communicate very well and often quote celebrity endorsements, too. Word of mouth is often stimulated by brand promotion (directly or via subsidized media). It’s unlikely that one single “natural” standard will be adopted because brands and governments don’t have to cooperate with each other. A proliferation of competing standards is much more likely.
Standard definitions in this area would serve the same purpose as in any other area: consumers can have more confidence in what they are purchasing. Will it happen? Not any time soon.
Great article, Laura.
Actually I would also prefer to see more ingredient deck regulations on existing cosmetic products.
There are literally thousands of ingredients in cosmetics products today that have never been tested by any governmental body.
From a consumer protection standpoint, these ingredients pose more of a potential safety hazard than the emerging organic make-up trends.
When I was at the FMI in Chicago in May, I thought the use of the words “organic” and “natural” were being loosely used for meat and produce. There was even organic candy, and when I asked how could that be possible it was explained as a “process” the was used to make the confections. Give me a break. Now HBC products. We are all so gullible we’ll believe anything. The government really needs to step in and start figuring out what the real definition of organic is and regulate it, so when they want our children to be more healthy we can actually give them products that help towards that end.
40 years ago, one of my jobs was to scan the US Federal Register everyday. What I learned was that the reason we have such a massive regulatory body is because one business is trying to get an advantage over another business, and is urging the government into the fray, on their own behalf. This is true whether the issue is “natural” vs. what? Store clinics vs. doctors, or whatever. It’s all the same issue: how can we enlist the forces of government to get our own views expressed as the law of the land?
Beauty products in general are the evolution of snake oil. They have always been very generous in their claims. If you want to make them regulated drugs then have at it, but otherwise the “virtually” world will continue to exist. “Like organic,” “organically,” “naturally,” “pure,” and 1000 other non regulated descriptions will be placed on products promising something that cannot be delivered. As long as there are wanting to be young and beautiful, these products will continue to sell. The buyers will never know the difference.
The importance of health and wellness and all aspects (fresh, organic, natural) is increasing in importance. Our research shows that 50% of grocery shoppers say that someone else would think that health and wellness is very important to them, just by looking at what they have in their shopping cart.
Mainstream manufacturers are getting on the organic bandwagon which clearly will trigger a tipping point (if it hasn’t already occurred). Under such conditions, it would be a disservice to consumers if there were not standards set for the use of these terms. A precedent is that the government set standards for the use of “lite” (if I recall) which is probably a less prevalent consideration at this point.
Are standards for natural and organic needed? Yes. Will there be global standards? No. Mark is right, the issue isn’t one that’s likely to attract enough global time or attention.
Many business organizations use words to market their products that are “not quite” accurate. We have come to call this “hype.” Our data suggests that more than 78% of all products and services have no significant consumer-centric differentiation from competing products and services; if your product or service isn’t significantly different from your competition, the only thing you can do is use words to try to make it SEEM different. This is a losing game, obviously, because when consumers find out your promises are not quite true, they will switch brands–and then to yet another one that over-promises! This is one of the most prominent problems in the business world, and may account for over 85% of all financial problems business organizations have, when you count all related problems this causes.
Brands that use words such as “organic” and “natural” that are in the 10%-or-less category will be found out. This is the wonder of the internet world. These brands have only a limited time before this smokescreen will no longer work for them; it is better to create a more profitable product-marketing combination now, before government forces you to.
To understand what is “organic”
One must become truly pedantic.
Achieving ecological balance
Requires materials with no valance.
But for products used for health/beauty
What we perceive “best” gets our booty.
The practice in this area may very likely follow what happened in the environmental area years ago. First, the principal regulatory body, the FTC, will look to the industry to self-regulate. Recognizing this, industry groups such as the CFTA start efforts to develop uniform labeling. Europe traditionally has been ahead of the US in these efforts, and California usually is the lead state in the US. However, in the past, industries did not do a good job of self-regulating, leading to stricter controls over environmental claims. The same probably will happen with respect to claims such as “natural” (as happened with “organic”). Right now, consumers are left in the hands of the marketers who may show less discretion and candor than we would prefer.
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Cosmetic shoppers learn what’s “natural” from 3 sources: the brands, the media, and their friends. Brands that promote their purity often articulate what is and isn’t in the ingredients as well as how the products are tested (animal cruelty-free). Articles in Vogue, Seventeen, newspapers, and other publications (often written and subsidized by brands) communicate very well and often quote celebrity endorsements, too. Word of mouth is often stimulated by brand promotion (directly or via subsidized media). It’s unlikely that one single “natural” standard will be adopted because brands and governments don’t have to cooperate with each other. A proliferation of competing standards is much more likely.
Standard definitions in this area would serve the same purpose as in any other area: consumers can have more confidence in what they are purchasing. Will it happen? Not any time soon.
Great article, Laura.
Actually I would also prefer to see more ingredient deck regulations on existing cosmetic products.
There are literally thousands of ingredients in cosmetics products today that have never been tested by any governmental body.
From a consumer protection standpoint, these ingredients pose more of a potential safety hazard than the emerging organic make-up trends.
When I was at the FMI in Chicago in May, I thought the use of the words “organic” and “natural” were being loosely used for meat and produce. There was even organic candy, and when I asked how could that be possible it was explained as a “process” the was used to make the confections. Give me a break. Now HBC products. We are all so gullible we’ll believe anything. The government really needs to step in and start figuring out what the real definition of organic is and regulate it, so when they want our children to be more healthy we can actually give them products that help towards that end.
40 years ago, one of my jobs was to scan the US Federal Register everyday. What I learned was that the reason we have such a massive regulatory body is because one business is trying to get an advantage over another business, and is urging the government into the fray, on their own behalf. This is true whether the issue is “natural” vs. what? Store clinics vs. doctors, or whatever. It’s all the same issue: how can we enlist the forces of government to get our own views expressed as the law of the land?
Beauty products in general are the evolution of snake oil. They have always been very generous in their claims. If you want to make them regulated drugs then have at it, but otherwise the “virtually” world will continue to exist. “Like organic,” “organically,” “naturally,” “pure,” and 1000 other non regulated descriptions will be placed on products promising something that cannot be delivered. As long as there are wanting to be young and beautiful, these products will continue to sell. The buyers will never know the difference.
The importance of health and wellness and all aspects (fresh, organic, natural) is increasing in importance. Our research shows that 50% of grocery shoppers say that someone else would think that health and wellness is very important to them, just by looking at what they have in their shopping cart.
Mainstream manufacturers are getting on the organic bandwagon which clearly will trigger a tipping point (if it hasn’t already occurred). Under such conditions, it would be a disservice to consumers if there were not standards set for the use of these terms. A precedent is that the government set standards for the use of “lite” (if I recall) which is probably a less prevalent consideration at this point.
Are standards for natural and organic needed? Yes. Will there be global standards? No. Mark is right, the issue isn’t one that’s likely to attract enough global time or attention.
Many business organizations use words to market their products that are “not quite” accurate. We have come to call this “hype.” Our data suggests that more than 78% of all products and services have no significant consumer-centric differentiation from competing products and services; if your product or service isn’t significantly different from your competition, the only thing you can do is use words to try to make it SEEM different. This is a losing game, obviously, because when consumers find out your promises are not quite true, they will switch brands–and then to yet another one that over-promises! This is one of the most prominent problems in the business world, and may account for over 85% of all financial problems business organizations have, when you count all related problems this causes.
Brands that use words such as “organic” and “natural” that are in the 10%-or-less category will be found out. This is the wonder of the internet world. These brands have only a limited time before this smokescreen will no longer work for them; it is better to create a more profitable product-marketing combination now, before government forces you to.
To understand what is “organic”
One must become truly pedantic.
Achieving ecological balance
Requires materials with no valance.
But for products used for health/beauty
What we perceive “best” gets our booty.
The practice in this area may very likely follow what happened in the environmental area years ago. First, the principal regulatory body, the FTC, will look to the industry to self-regulate. Recognizing this, industry groups such as the CFTA start efforts to develop uniform labeling. Europe traditionally has been ahead of the US in these efforts, and California usually is the lead state in the US. However, in the past, industries did not do a good job of self-regulating, leading to stricter controls over environmental claims. The same probably will happen with respect to claims such as “natural” (as happened with “organic”). Right now, consumers are left in the hands of the marketers who may show less discretion and candor than we would prefer.