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Kline Anticipates Healthy Growth for the Naturals Market in the Face of the
Economic Downturn

-- Study shows mass marketers are riding the natural wave with pseudo-natural products --

LITTLE FALLS, NJ, February 5, 2009 –

The natural personal care market in the United States topped out at just over $2 billion in sales at the manufacturers’ level, up nearly 19% from 2007, according to a newly released study from Kline & Company.

“Consumers’ desire for safer products and their concern for the environment have combined with more mainstream availability of natural products to drive growth in the market,” says Karen Doskow, associate project manager at Kline.

These same forces have also given rise to growth in “pseudo-natural” or “naturally inspired” products that contain natural extracts but rely on synthetic ingredients for their functional performance. The availability of more affordable products with a natural positioning in mass retail channels has made natural personal care more accessible to the average consumer, and these natural-inspired products are experiencing unprecedented growth.

Given the current economic climate, marketers will be assessing whether consumers will be willing to pay a premium for natural and organic products.

“Major marketers are in an excellent position to leverage the naturals proposition that began with the smaller niche players,” says Carrie Mellage, director of Kline’s Consumer Products practice. “Manufacturing economies of scale, a stronger position for negotiating supplier agreements, and well-developed distribution channels will allow master brands like Unilever’s Dove and Colgate-Palmolive’s Softsoap to ride the naturals wave even during lean times.”

The U.S. volume of Kline’s Natural Personal Care 2008: Competitive Brand Assessment and Ingredient Analysis examines 27 so-called natural cosmetic and toiletry brands in the U.S. market and rates them on how natural they truly are. Despite the proliferation of natural claims, Kline’s research shows that truly natural products actually account for just over 40% of the market.

The European volume of the report, profiling 26 brands, reveals that Europe continues to be a robust market for natural personal care products, posting a 15% gain in 2008 on top of a $3 billion sales base. Germany continues to lead the European naturals market, capturing nearly a third of the total market sales. Growth for truly natural brands has significantly outpaced increases for natural-inspired brands, driven by growing distribution and broadening consumer demand.

Kline will present highlights from this study during a web conference on Thursday, February 19, 2009, at 9:00 EST and 15:00 CET.

About Kline
Kline is a worldwide consulting and research firm dedicated to providing the kind of insight and knowledge that helps companies find a clear path to success. The firm has served the management consulting and market research needs of organizations in the chemicals, materials, energy, life sciences, and consumer products industries for nearly 50 years. For more information, visit www.KlineGroup.com.

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