The Natural Cosmetics Conference took place this Tuesday and Wednesday here in Berlin. It’s the third year that I’ve attended the event and, as always, it was very worthwhile. Interesting people, good keynote speakers and well-chosen discussion topics, not to mention a very nice venue!
This year the Branchenkongress had a strong sociodemographic focus; the first day especially revolved around demographics and market research, trends and consumer behaviour – exactly my areas of interest so I took lots of notes. Here’s a brief review (find out all about LOR!):
The conference kicked off with an overview of the German organic C&T market which was in excellent shape in 2012/2013: a projected market volume of 950m Euro for 2013 with double-digit growth rates, certified organic cosmetics actually grew more than near-natural brands – a very good development.
Retail channels: the drug store chains were able to increase their market share – DM with its own label certified Alverde brand and Rossmann with Alterra (both chains also retail Lavera, Weleda and some Santé products), traditional organic stores: stagnated; pharmacies: very little growth; perfumeries/speciality stores: a slender increase; hypermarkets and large supermarkets were the winners; online retail/e-commerce also registered good growth.
Greenwashing is a bigger problem than ever – no real surprise there! – but what is interesting is that consumer demands have changed. The character of a brand is becoming more important, certified organic is not sufficient to push a brand ahead any more; consumer want brands to be organic AND to have a (demonstrable!) social conscience. Therefore authenticity is becoming essential for companies. And yes, sustainable consumption is still a major trend with German consumers but we are slowly moving from the LOHAS (Lifestyle of Health & Sustainability) mindset to the LOR philosophy (Lifestyle of Resilience).
Now, this was the first that I heard about LOR and interestingly enough this term doesn’t have a German oder English Wikipedia entry yet (as of 26/09/13), although I found the concept discussed on several trend research websites, for example here: www.trend-update.de. Basically LOR is still a lifestyle of sustainable consumption; buy organic and regional and so on but the LOR approach recognises that sometimes it is not possible to be 100% LOHAS – because it is too expensive, too exhausting or simply not an option at the time. Apparently LORs are also fed up with the term “sustainability” since it has become such a marketing term and pops up absolutely bloody everywhere. Sounds familiar to me. I think I’m definitely LOR!
So, a LOR-adherent does his or her best to live ecologically aware, buy organic, recycle, take public transport and so on, but with a pragmatic approach. If the LOHAS lifestyle isn’t possible or practical, he or she acts non-LOHAS – trusting that life and nature is resilient, recognising that life is chaotic and basically hoping for the best. The great thing about LOR is that it doesn’t have the arrogance inherent in the LOHAS approach – the “I’m SO much more ecological than you so I am a better person” mindset. I like LOR. It’s a lot more relaxing than hard-core LOHAS.
Having said that LOHAS is still a major trend amongst German consumers. And the LOHAS have been essential in driving the organic C&T market forward. Market research institute GfK’s Division Manager of Strategic Marketing, Wolfgang Adlwarth, outlined the major trends in LOHAS consumer behaviour and its influence on the organic C&T market – loads of facts and figures, very interesting.
In Germany the willingness to buy is very high compared to other European markets – good news for manufacturers. Consumers are increasingly paying attention to quality and this applies even to younger demographics. And although these consumers might live internationally (have Facebook friends in different countries, consume their media/entertainment online, hang out in global social media structures and so on) the regional aspect of a company or brand – heritage and values – are becoming more important. Live globally, consume locally, and so on.
The Keynote speaker of the first day was Wolf Lotter, a very well-known author and publicist – he’s really Austrian but lives and works in Hamburg. He’s one of the founders of Brand Eins magazine (one of my favourite publications) and held a great Keynote which touched on many of the trends that were discussed earlier that day:
The industrial society we’ve been living in for the last century is turning into a knowledge society: people are developing a desire for trust and authenticity; modern society is dominated by discussions about values, ethics and identity; the consumer culture is returning to objective things rather than abstract concepts, wanting things that can be touched, brands with regional roots rule the roost; there is a crisis of trust not just in politics but also between consumer and manufacturer/retailer (vide the complaints culture).
Lotter also talked about the age of “child-like consumers” and this is a concept I recently came across in a publication on global trends – the child-like consumer wants everything in a million colours and with lots of choice, demands constant entertainment, has a minimal attention span and wants everything right now and ideally for free. Definitely embodies some people I know!
Jens Lönnecker from market research institute Rheingold in Cologne spoke about the “schizophrenic customer” who buys organic AND conventional, uses public transport BUT also travels by plane – quite LOR-like really. The modern consumer is on a quest for meaning, looking for values in objects and brands – authenticity again! – tends to overspiritualise “nature” or “mother nature” and lives a lifestyle of sensuality in which organic consumption is a key factor – after all, buying organic products reassures us that we are doing something good for the universe; it lightens our conscience.
In organic C&T (and this applies to other FMCG categories, too) it is crucial for brands to offer consumers authentic significance, something that is meaningful – a sustainable/ethical brand personality goes a long way with modern consumers. Which for most organic C&T brands in Germany shouldn’t be too difficult.
Strict ideological corsets or dogmatic approaches, however, are not wanted; we want to live sustainably but not too ascetically. Sensuality and luxury are also important – “schizophrenia” again! – as is convenience; packaging and design must be aesthetically pleasing, with nice textures and fragrances; all presented at the POS is an attractive manner -> the child-like consumer again.
And the POS experience is very important indeed, where and how a brand is presented to the consumer can make or break a manufacturer. It follows that the right retail channel is crucial for organic C&T brands – for example, organic products retailed in reformhäuser or organic supermarkets are believable (instant organic credentials!), as are pleasant drug store environments like the stores of the DM chain. Douglas perfumeries, on the other hand, with their focus on conventional mainstream products and hectic, glossy environment are not. Discounters have a very similar problem, by the way, since their stripped-down, cheapo atmosphere doesn’t really match the character and demands of organic brands.
The next session that afternoon was a panel discussion about the organic consumer – how informed are these consumers really and what challenges does this pose for beauty brands and manufacturers? Is it easier generate brand awareness and increase market share with online or offline/POS activities? And of course: what is the best way for companies to reach today’s consumers? It was a lively discussion without any really revolutionary insights, but it was interesting to hear from the different panel experts: an organic beauty blogger (my friend Julia from Beautyjagd!), a distributor specialising in high-end spa brands, a trade B2b health foods/consumer journalist and an ecotrophologist/journalist who runs an organic food watch blog.
And finally, an overview of the US and Asian organic C&T markets – I’m fascinated by Asian cosmetics and the Asian FMCG markets so I enjoyed this presentation; again, there were no super surprising new insights for me (my travels in East Asia and South East Asia over the past ten years seem to have paid off….!)
The second day of the conference dealt with more practical topics, POS and marketing, ingredients, brands and retail concepts. Unfortunately I had to miss the afternoon sessions since I have several deadlines this weekend but I’m glad I was able to attend all the presentations on the first day – a very worthwhile conference altogether; congratulations to the organisers Messe Nürnberg and Naturkosmetik Verlag publishing company. The next Natural Cosmetics Conference will take place in Berlin on 7th and 8th November 2014.