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Europe: Investors Targeting
Natural
Cosmetics Market
This year, 2007, is likely to be a big year for the European natural
cosmetics industry with a surge in investment activity
envisaged.
Investment is expected to pour into natural cosmetic companies from
various sources. Private investors, private equity firms, venture
capital firms and large cosmetic companies are all looking to invest in
natural & organic cosmetic companies. |
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The natural &
organic sector is seen by some as the future of the cosmetics
industry, whilst others are attracted to the high margins.
Mergers and acquisitions have already had a major impact on leading
natural cosmetic companies. Neal’s Yard Remedies has opened two new
London stores since it was acquired by a private investor just over
a year ago. The British chain of natural cosmetics is poised to have
over 30 outlets in the coming years. After integrating Sanoflore
into its Active Cosmetics division, L’Oreal plans to launch the
brand in the international arena. For the first time, an organic
cosmetics brand will be introduced in mainstream retailers on an
international scale.
Investment in non-European companies is also flowing into Europe.
The Australian company Jurlique is looking to expand in Europe since
it was acquired by JH Partners last year. The private equity firm
aims to make Jurlique the leading
Australian brand of natural cosmetics in the international market.
Organic food retailers and mainstream retailers are also pumping
capital into natural cosmetic brands and products. Organic food
supermarkets, drugstores and even discounters in Germany have
already launched natural cosmetics under their private labels.
Retailers in other European countries are following suit. The launch
of bnatural this month has given Tesco the
distinct honour of becoming the first British mainstream retailer
with Soil Association-certified private label cosmetic products.
Organic food companies are also not sitting
quietly. Leading organic food brands like Duchy Originals and
Alnatura have already developed natural & organic cosmetic product
ranges. Hain Celestial, the world’s largest organic food
company, is likely to have most impact on the European market since
its acquisition of Avalon Natural Products last month.
Hain Celestial already owns the Jason Natural brand, which is highly
successful in the UK market. Hain Celestial is likely to build
synergy between these brands and expand distribution into mainland
Europe. An acquisition of one or more European natural cosmetic
companies is possibly on the cards. The American company has
deployed a similar strategy with non-dairy products and vegetarian
foods. It acquired a number of leading brands in North America and
Europe and consolidated them to develop marketing & distribution
synergies.
Hain
Celestial acquisitions are putting it in direct competition with
large cosmetic companies like L’Oreal and Estee Lauder. L’Oreal
plans to make Sanoflore into a mega organic brand, following the
footsteps of Aveda. Aveda institutes have been set up across the
globe since the organic cosmetics brand was bought by Estee Lauder
in the late 1990s.
Investment in the natural & organic cosmetics industry is en vogue,
however finding suitable partners remains the major challenge. Large
cosmetic companies are looking at mergers & acquisitions as a market
entry route, organic food companies & retailers are investing to
develop new products for existing customers, whereas the financial
community is investing for financial returns.
Whatever the motives for investing, the pace of change in this
dynamic market makes sitting on the fence no longer a strategic
option.
For more details on investment, merger & acquisition activity in the
natural cosmetics industry, please
complete
an enquiry form
and request more details on 'M&A in Natural Cosmetics Industry'
Related Report:
#1001-60 The European Market for Natural Cosmetics
Posted: February 7th 2007
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