New growth phase for sustainable cosmetics thanks to Amazon’s entry
This insight comes from Ecovia Intelligence, a research, consulting & training company specialising in consumer goods trends.
The firm suggests that distribution will now shift towards online retailing and home delivery schemes for organic and sustainable products.
Insight from the firm
“Sustainable foods and natural cosmetics were initially introduced in health & natural food retailers, with distribution expanding to the mass market in the last two decades,” explains the company.
“Mainstream retailers now comprise most organic food sales in almost all leading country markets. Every large food retailer in North America and Europe is now marketing organic foods under their private labels.
“The next spurt of growth is envisaged to come from mobile apps linked to delivery services.”
European market: a special case
Ecovia Intelligence suggests that Amazon’s model will have a particular impact on organic and sustainable products retailing in the US, but will face a trickier challenge in Europe.
The firm explains that In Europe, unlike in North America, “the organic food & natural cosmetic markets are highly fragmented, with large retailers having the most successful private labels.
“Whilst there are over 20 chains of organic food shops in Europe, none have a regional presence. Amazon would have to acquire and integrate several retail chains if it is to have a similar impact in Europe.”
With the ubiquitous use of mobile devices and growing influence of millennials, the next growth phase for sustainable products is likely to be with online retailing, predicts the firm.
“The question is how will brands compete in the digital marketplace? Whole Foods Market is already showing signs of moving away from small producers, as it focuses on private labels and high volume items.
“The future maybe digital, however will it be sustainable for small producers?”