As the adage goes, you are what you eat. But are consumers also now accountable for what they put on their faces?

Many seem to think so and are turning away from cleansers containing parabens, formaldehyde-releasing preservatives, harsh surfactants and other ingredients that sound like they came straight out of Dr. Jekyll’s lab. Instead, they are finding comfort in chemical-free, natural or organic facial care products.

Although the $6-billion facial care industry has been slow to go green, the process is finally beginning. And contract manufacturers find themselves in the unique position of behaving like, well, brand owners — well suited to developing store programs with retailers and advising brand owners on how to navigate relationships in the organic industry.

“The last 15 years, the industry has talked about consumers using natural and organic facial care, but customers just weren’t there,” says Paul Lieber, president and head chemist of Royal Labs Natural Cosmetics Inc., based in Johns Island, S.C. “We still have a long way to go but many are getting in now.”

Lieber notes that his company is fielding more phone calls from interested major players in the facial care industry, whether it’s lip balm or face wash. Natural and organic products grew 19 percent last year to reach $178 million in sales at conventional retail and natural supermarkets, according to SPINS, a Schaumburg, Ill.-based market research and consulting firm for the natural products industry (SPINSScan Natural & SPINScan Conventional, powered by Nielsen, 52 weeks ending 5/17/08).

Many of its niche markets — free-trade, local and sustainable products — actually are broad enough to be well connected in consumers’ minds. According to The Hartman Group, the Bellevue, Wash.-based consumer insights and consulting firm, 93 percent of American consumers say they want to live sustainably but struggle with how to do so. Yet, they are beginning to recognize the power of the debit card, saying their purchases have a greater impact on society than their votes (about 30 percent). Sustainability done right can mean big business with like-minded consumers.



“Consumer desire for free trade, sustainability, etc., is pretty early, but gaining so much momentum due to Internet, magazine and television reporting,” says Joe Borkovic, director of Organic Trader Canada-USA, based in Cowichan Bay Village, British Columbia.

“It’s a pretty common denominator for everyone to want to live healthy and not add toxins to their life,” he says. “If they can change their shampoo, for example, and benefit their hair, help local farmers and use recyclable packaging, why wouldn’t they want to use that better-quality product?”

The younger generation (20s and 30s) is definitely pushing the green trend, notes Lieber. Most twentysomethings share in the Whole Foods Market mindset to support local, organic farmers, fair trade and sustainability, while trying to avoid products even remotely perceived to be bad for them. Younger mothers, in particular, are looking for green baby care products for their little ones. However, consumers 40 and up are still mainly interested in anti-aging and relaxation products.

“If we’re talking about dollar-store customers, then no they are not interested in sustainable facial care products,” says Lieber. “But spa customers, yes. Mid-range to upper-range customers, yes.”

More Than Skin Deep

While they may be moving to green products, shoppers — and brand owners — still can be confused over what exactly constitutes organic or natural facial care because no official standards exist. Due to this ambiguity in the marketplace, quality-assurance inspectors and natural and organic companies alike have proposed guidelines of their own.

Ann Arbor, Mich.-based NSF International, for one, launched its NSF Draft Standard 305: Organic Personal Care Products for public comment in March. Its draft is the first to address U.S. national standards for organic personal care products’ labeling and marketing requirements. The independent food, water and consumer goods certifier drafted the standards to assist companies that would like to make organic label and marketing claims, while meeting the standard’s strict organic ingredient specifications. Currently, personal care product companies have had to work within the limitations of the United States Department of Agriculture’s (USDA) National Organic Program standards, which were written specifically for food.

This spring, the beauty and personal care industry, led by 30 companies such as Estee Lauder’s Aveda, Earth Mama Angel Baby, Nature’s Baby, Perfect Organics and Suki, proposed its own Organic and Sustainable Industry Standards (OASIS). To be considered organic, products will have to contain 85 percent certified-organic ingredients, compared to Europe’s ECOCERT standard, which requires 10 percent organic content.

Some organic consumer groups are upset, however, that the OASIS proposal allows for products to still contain hydrogenated and sulfated cleansing ingredients made from conventional agricultural material (grown with synthetic fertilizers, herbicides and pesticides) and preserved with synthetic petrochemical preservatives.

“What is the organic standard?” says Borkovic. “There really isn’t one. That’s where marketing — or greenwashing — can play tricks. It’s not responsible and a great way to lose customers, because they will leave a company if they find out their ‘organic’ product really isn’t healthy.”

It's Not Easy Being Green

This winter, Whole Foods Market itself created a new Premium Body Care standard and labeling seal of approval for its natural personal care products, to help consumers find body care products that contain the most natural and high-quality ingredients.

The Austin, Texas-based retailer’s seal of approval will identify products that meet the Premium Body Care standard, which do not contain ingredients such as parabens, polypropylene and polyethylene glycols, sodium lauryl sulfates and sodium laureth sulfates.

Since March, Minneapolis-based Target has expanded its natural and organic beauty care section to include nine lines of organic and natural personal care products, and is toughening its standards to only carry natural and organic products without synthetic ingredients such as parabens, phthalates and sodium lauryl sulfates. Natural and organic facial care products also can be found these days at other mainstream retailers such as Bed, Bath & Beyond, Nordstrom, CVS, Wal-Mart and Walgreens.

It’s clear that if brands want to sell their products through a Whole Foods or Target, they will need to keep these new higher standards in mind during the initial stages of product development, so they don’t include prohibited ingredients. Or, they will spend a lot more time and money reformulating their product.

“Places like Whole Foods, which is a $6-billion corporation and the 25th largest grocery chain, are no longer mom and pop stores,” Lieber says. “They have the power to tell you what you can and can’t do.”

He notes that most brand owners are not well versed in the marketplace’s various organic regulations in the marketplace. “Contract manufacturers like us can steer them in the right direction and make a product that can be marketed accurately afterward,” Lieber says.

According to Borkovic, although many companies are interested in entering the organic and natural market, it’s harder for smaller companies without the proper marketing and business infrastructure to actually go to market.

“The big challenge for them is they like the idea of organics but don’t have the business background to know what market to go into,” he says. “Small and medium-sized producers, because they are more flexible, can easily slip into organic product marketing. Organics is not just about business and marketing though; it’s more about sustainability and relationships.”

As contract manufacturers educate the facial care industry, Thomas E. Nichols, president of Pretika Corp., Laguna Hills, Calif., notes, “Contract manufacturers are becoming brand companies, leveraging their expertise in developing store programs for major retailers. And brand companies are extending their planogram expertise with the major retailers by offering private label programs.”

Organic facial care is still in its early stages, and interested companies have time to get on board and be rewarded financially.

“We’re hoping the trend catches on,” Borkovic says. “We call it the ‘wildfire of value.’” br>