0

Green light: Cosmetic companies are benefiting from green consumerism trends

Revenue among cosmetic, perfume and toiletries manufacturers in Australia is expected to reach its highest level in a decade, with revenue growing by 3.5% in 2016-17. Strong export growth, largely driven by a growing Asian middle class, has helped manufacturers recover from a revenue contraction in 2011-12. Organic and natural cosmetic manufacturers have driven export growth, with Australian manufacturers gaining a reputation for high-quality, environmentally friendly products. Many manufacturers have used social media platforms to reach millennial consumers. Eco-friendly cosmetics that target environmentally conscious millennial consumers have driven domestic growth among cosmetic manufacturers. Many industry products are being reformulated to meet the rise in green consumerism. This strategy has proved successful for companies that focus on eco-friendly and cruelty-free cosmetic products, while companies that heavily rely on imports will likely struggle to capitalise on the popularity of eco-friendly products.

Unilever Australia (Holdings) Proprietary Limited, a foreign-owned consumer goods company with personal care brands that include Dove and Rexona, has the largest share in the cosmetics manufacturing market. In 2016-17, its market share is expected to total 18.1% of total revenue for cosmetics, perfume and toiletries manufacturers. Unilever has underperformed relative to the wider industry due to its limited Australian manufacturing operations and strong reliance on imports from its international manufacturing facilities. Unilever’s industry-specific revenue grew by 1.2% in 2015, significantly lower than the industry’s average revenue growth.

Natures Organics Pty Ltd is an Australian-owned natural consumer goods company with products that have an eco-friendly image and brands including Organic Care and Earth Choice. Natures Organics focuses on using natural ingredients as alternatives to artificial preservatives such as parabens. Natures Organics’ product range addresses increased demand for natural and organic certified products among millennial consumers and an increasingly environmentally conscious Asian middle class. In 2016, Natures Organics launched a digital campaign with social media influencers to reach the millennial customer base. Celeste Rochelle, a lifestyle blogger, and Dan Churchill, chef and co-host of ABC’s Surfing The Menu, have a combined Instagram following of approximately 121 thousand people. Natures Organics have benefited from this following to promote the benefits of their natural and environmentally products. The focus on eco-friendly products has proven successful for the company, with its total revenue growing by 6.9% for 2015-16, positioned slightly higher than the industry’s revenue growth of 5.2% during the same year.

Imports play a strong role in the Australian cosmetics, perfume and toiletries manufacturing industry, with major players such as Unilever relying heavily on imported products. Exports will likely continue to drive growth in the industry. Although baby boomers form a significant portion of cosmetic consumers, some manufacturers have capitalised on green consumerism trends by targeting environmentally conscious millennials. While Unilever has a strong global presence and market share, Natures Organics has shown that focusing on green consumerism to meet growing demand for environmentally friendly products is a positive growth strategy for cosmetics, perfume and toiletries manufacturers.

For a downloadable PDF of this article, please click here.

Related companies:

Natures Organics Pty Ltd

Unilever Australia (Holdings) Proprietary Limited

Comments are closed.