Just The Facts: Natural and Safe Beauty Brands Outperforming Traditional Competitors
16/06/2017 by The Red Tree
BeautyMatter was born from Founder Kelly Kovack’s desire to provide a fresh voice to a beauty industry hungry for more content from her perspective, and through her lens. BeautyMatter aim to fill the void, connect the dots, and provide an informed, analytical, and compelling point of view. Exploring limits and blurring boundaries, they offer highly curated news and original content by thought leaders and beauty insiders.
Kelly Kovack writes:
Being driven by consumer awareness about health and wellness, the “natural” beauty movement is officially no longer a fringe part of the industry; in fact, it’s driving category growth in prestige skin care. The category has morphed into “clean” beauty due to the lack of legal definition around natural and organic and given that even non-synthetic ingredients found in nature can be harmful.
The facts on the billion-dollar safe beauty category according to Fast Company:
- The organic and natural beauty market is expected to reach $13.2 billion by 2018.
- Brands with a natural and/or botanically derived clinical orientation now represent the largest combined share of prestige skin care sales. Last year, they accounted for all gains in the category.
- Naturals have grown by 7% in the US, compared to a 2% rise in the overall beauty market in 2015.
- Kline & Company predicts the synthetic cosmetics sector will decline in the next two years, while the natural skin care segment will grow.
- Sephora has their “Naturals” landing page showcasing hundreds of products.
- Nordstrom is opening dedicated natural beauty sections in 46 doors.
- Target announced plans to expands its natural beauty selection, thanks to a double-digit percentage lift in sales last year.
- CVS recently promised to remove chemical ingredients such as parabens and phthalates from approximately 600 of its in-house brands’ personal care products.
- Birchbox saw between 10%-50% growth in the overall category over the last year, driven by more customers trying and sticking with the natural brands.
- At Sephora natural skin care is growing fast. Growth in terms of searches is almost eight times higher and popular keywords include “organic,” “paraben-free,” and “vegan.”
- Last year Ulta launched its own line of natural products.
- Ulta natural buyers spend 80% more in total beauty than the average customer.
- Kaen Grant of NPD Group identifies younger millennials (18-25) who are concerned primarily with environmental impact and an older generation (40 and up) focused on health benefits as two demographics that make up the strongest part of the clean beauty base.
For now, nimble indie brands have a competitive edge, but traditional brands are not sitting idly by—but cleaning up product formulations for large brands will not happen quickly. In the meantime, we’ll continue to see strategics acquire brands that embody the clean beauty ethos.
Karen Grant, global beauty industry analyst for the market research firm NPD Group, isn’t sure the natural movement will catch on with the majority of Americans who don’t have the means to spend $40 on blush. Still, she isn’t ready to say it’s a passing fad. “It’s still early, still a bit niche,” she says. “But I don’t think this is something that will disappear. It’s a way of life.”
Read the full article in Fast Company.
Photography: @chuttersnap via Unsplashed
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Any company entering The Beauty Accelerator™ competition must be based and registered in the UK.
The scheme by which investment into the winning brand will be made is the Seed Enterprise Investment Scheme (SEIS). You must be eligible for SEIS to enter The Beauty Accelerator but you do not need to be registered for SEIS. You can be in the process of applying for SEIS and receiving Advanced Assurance from HMRC, which is free of charge to obtain and certifies to investors that the criteria necessary to qualify for SEIS have been met by the company at the time of the application. You do however need to be SEIS registered at the point of investment.Click here For further information about SEIS
As is the case with all equity investments, the winning brand must be willing to provide equity stakes for both SFC Capital and The Red Tree. In addition, the winning brand might be required to pay a monthly fee for the duration of the 12 month period of assistance from The Red Tree. The size of the equity stakes for both SFC Capital and The Red Tree are unknown at this stage and will be based on the valuation of the business at the time of investment. The value of the monthly fee to The Red Tree will be determined by the scope of work required by The Red Tree and will be agreed in consultation with the winning brand. The equity stake, monthly fee and scope of work will be discussed in further detail with short listed brands during the interview stage.
Brands that applied for The Beauty Accelerator™ 2022 can apply for The Beauty Accelerator™ 2024.
Applicant brands should ideally have proof of concept – the business should ideally be in operation with at least one product currently retailing on the market, an existing website in operation and a number of months of trading.
Under exceptional circumstances, brands that are at concept stage will be considered.
There should be a team in place or a willingness to take on a co-founder at an early stage.
A business plan must be in place and submitted as part of your application to demonstrate the revenue that can be delivered.
The business should not be valued at more than £1,000,000.
All R&D should be completed as funds invested will only be used for marketing and commercial activity.
If you are short listed, you must be available to attend the virtual shortlist interview. It is likely that short listed brands will be required to attend more than one virtual interview.
If you are a Finalist, you must be able to attend The Beauty Accelerator™ Final, either virtually or in-person.
You cannot apply for or already be in the process of applying for another accelerator or incubator during the period December 2023 to December 2024.
If you are selected as a finalist, and if you go on to win The Beauty Accelerator™, you must agree to exposure of you and your brand through The Red Tree’s, SFC Capital’s and Freeths online and social channels and a possible marketing campaign.
Confirmation of the winning brand is subject to SEIS eligibility confirmation, agreement on equity stake and The Red Tree fee, and completion of due diligence.
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