Retail: The ‘organic’ gold rush

In the absence of labelling laws, it is difficult to ascertain if products are purely organic. It then becomes more of a positioning platform to market natural skincare products.

A slew of organic skincare brands have joined the ‘wellness’ bandwagon with a focus on mid-premium offerings for India

Tapping into the growing number of health-conscious consumers, organic-only beauty brands in India such as Organic Harvest, Divine Organics, Just Herbs and so on are witnessing a steady uptake.

According to a recently released RedSeer report, the current organic skin care market is pegged at $125 million, growing at 25% y-o-y to reach $315 million by 2022. “While the herbal category as a whole is expected to grow at 8-10%, the mid-premium segment is expected to grow at a higher rate of 14-16%,” says Vithika Mishra, engagement manager, RedSeer Consulting. Besides individual consumers, there is a demand from the spa and tourism market as well.

“The personal care space has mostly been defined by three terms — ayurveda, wellness and organic. From a marketing standpoint, ayurveda is more of a mass play. On the other hand, organic has emerged as an alternative to ayurveda with a more premium positioning,” says Ankur Bisen, SVP, retail and consumer products division, Technopak. However, in the absence of labelling laws, it is difficult to ascertain if products are purely organic. It then becomes more of a positioning platform to market natural skincare products.

Turning green

There’s no denying that Patanjali brought ayurveda and herbal back in fashion. Soon, more players joined the bandwagon. According to Vinita Jain, chairman, Biotique, “Consumers are looking for potent yet healthy products with natural healing properties.”

Nykaa has seen a 50% increase in demand for natural beauty products across metros, tier I and II cities in the last one year. “We recently launched ‘nature inspired’ products such as soaps and essential oils, which have cold-pressed ingredients,” says Reena Chhabra, CEO, FSN Brands,

Scaling in this category can be seen with companies like Forest Essentials and Shahnaz Husain. “Starting in 2002, when natural and organic were not even a thing in India, Forest Essentials has managed to expand to 50 outlets in 15 cities apart from tying up with 220 hotels including Taj and Four Seasons to provide toiletries,” notes Mishra.

The newbies

Clearly, the beauty space is turning green. Arush Chopra, CEO, Just Herbs, says there is mistrust among consumers when it comes to big brands in the skincare space (due to their preservative-laden products). The brand which has three standalone stores in Hyderabad, Chandigarh and Ludhiana also sells online. It positions itself along with the likes of Kama and Forest Essentials but is more competitively priced.

Another digital-first brand, Organic Harvest positions itself among the likes of Olay and Neutrogena. Its founder Rahul Agarwal says that the biggest challenge is to educate consumers about organic. “We prefer one-on-one communication with consumers at our stores,” he says. The brand sells through 500 stores, and online portals.

Divine Organics, launched in January this year, has a mid-premium positioning. It expects consumers to switch over from existing FMCG brands towards organic brands in the near future. “Most brands just carry the organic nomenclature. There is a need for certified brands to build consumer confidence in the category,” says Gautam Dhar, CEO, Divine Organics.

With growing competition, perhaps brands need to go beyond organic only, and play on the wellness theme. “Not all consumers relate to organic but they are more aware about wellness,” opines Bisen.

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