• by Sarah Mahoney  @mahoney_sarah, August 29, 2007

Natural/organic products have been one of the hottest growth categories in personal care in recent years, and a new study predicts that the market will reach $10.2 billion in sales by 2012.

Packaged Facts reports that the explosive growth in the category, which it says grew from $2 billion to $6.1 billion between 2002 and 2006, has been fueled by Baby Boomers' determination to beat aging without chemicals. Many of the natural products fall into the cosmeceutical category and promise to improve the appearance of skin, teeth and hair.

Haircare and oral care products have been the fastest-growing segments, says Cathy Minkler, associate editor at Packaged Facts, gaining 15% in an annual compounded rate in the 2002-06 period. Color cosmetics are next, with a 13% growth rate, followed by skin care, with a 10% growth rate in that time period.

The biggest changes in the industry, she says, have been conceptual differences. "More mainstream products have been trying to position themselves as more natural, while the more natural lines have been trying to position themselves as more effective."

Despite their popularity, Minkler points out that it's still a struggle for natural marketers, particularly in cosmetics. "A new line of lipstick generally requires dozens of hues," she says, "and that translates to a lot of shelf space, which isn't easy for them to get."

Retailers have also strengthened their natural/organic products infrastructure, Packaged Facts reports, with many of these products crossing over into mass and prestige markets. What's more, they also sell well through such direct channels as the Internet, catalogs and infomercials.

"More and more consumers are self-doctoring, either for treatment of specific medical conditions or for preventive maintenance," the report says. "As a result, America has become increasingly aware of ingredients' cosmeceutical value. The natural health and beauty care market stands to profit from its danger-free stance."

What's more, the Natural Marketing Institute says the category will continue to benefit from the continual merging of natural, organic, eco and luxury products.

By its measures, the natural personal care market grew 15% in 2005, while the overall U.S. cosmetics and toiletries market grew by just 3.5%. Its research has found that more than half of all consumers want personal care products made with natural or premium ingredients, and 44% are looking for organic ingredients.