Building: What Consumers Want from Green Brands Presented By: - PowerPoint PPT Presentation

Green Beauty Brand Building: What Consumers Want from Green Brands Presented By: Jennifer Stansbury Co-Founder, Managing Partner

The Benchmarking Company is a bi-coastal beauty and personal care consumer research firm with a proven track record in cosmetics, skincare, beauty devices, body care, hair care, nail care, fragrance and wellness/personal care. Laser focused on providing: • Quantitative research • Qualitative research • In-home beauty and personal care product testing Benefits: • Proof of efficacy • Sell-in • Sell-through • Consumer insights • Validation • Risk mitigation U n d e r s t a n d i n g t h e b e a u t y c o n s u m e r i s w h a t w e d o .

TBC Conducts Research For Top Brands

TBC Conducts Research For Top Brands

Past PinkReports

2018 PinkReport The New Age of Naturals July 2018

Snapshot of the Natural & Organic Cosmetics Market • The global organic and personal care market is expected to reach USD $25+ billion by 2025* • Natural & Organic skincare sales expected to increase 10% between 2016 and 2025* • Driving growth in this market is fueled by consumer concern with impacts of chemicals on their skin and in their bodies. • Natural and organic brands grew 7% in 2016 as compared to traditional cosmetic offerings at 2% growth for the same time period.** • In 2017, natural beauty grew 16% over previous year.*** *Grand View Research Report, Nov. 2016 ** Kline & Company, 2016 ***Nielsen Wellness Track, 2018

Topline Findings Because We Know Data Informs Decisions • Clear misperceptions regarding natural/organic TBC’s Stats classifications ▪ More than a decade serving • Growth fueled by health major brands and Indie concerns darlings in the beauty and personal care industry ▪ Captured more than 2.5 • Natural outpaces organic million consumer opinions ▪ Vetted beauty and personal • Efficacy still rules care panels of 120k+ (male and female) ▪ Tested more than 700 unique • Natural/organic buyer cares products about ingredient transparency ▪ Members of CEW, ICMAD, BIW, PCPC • Natural/organic buyer has ethical expectations of the brand

Who Is the Natural and Organic Beauty Product Consumer? She seeks the truth • 91% believe it is important that the brand lists all of its product ingredients clearly on its website She is principled • 81% believe it is important that the brand does not test on animals She is socially aware • 72% believe it is important to the brand pays a living wage to all employees • 71% believe it is important for the brand to be socially and environmentally responsible She is concerned for the health of our environment • 76% believe it is important the brand is “green” and eco -friendly *females who indicated they buy natural/organic beauty

The Natural & Organics Beauty Buyer 62% 100% Have been using natural and/or organic of all age groups are beauty products for represented among the natural & organic less than 6 years buying consumer. The 30-39 year old is the largest age group 70% purchasing natural and organic beauty Purchase products. natural/organic products at least every other time they shop 84% Are willing to spend 100% more on a natural beauty product and of all socio-economic 81% are willing to groups are spend more on an represented among organic beauty product the natural & organic buying consumer *females who indicated they buy natural/organic beauty

What She Expects from Natural & Organic Beauty Products • Results • Proof of efficacy • Safer and healthier for her body and her family • Manufactured in an environmentally responsible manner

Organic vs. Natural , Do Consumers Understand the Difference? 2008 2018 30 49 51 70 Know the difference Do not know the difference Know the difference Do not know the difference Does it matter? 50/50 then and now.

Shattering the Myths Naturals & Organics* True or False? A beauty or cosmetic product must be comprised of 100% organic ingredients to be considered or labeled “Organic.” 36% said False FALSE For a beauty product to be labeled organic, it must be certified by the USDA. 63% said True TRUE Cosmetics made with “organic” ingredients are safer for consumers than those made with ingredients from other sources. 56% said True FALSE A beauty product can be labeled as “natural” and contain up to 30% synthetic ingredients. 54% said True There are governmental guidelines for labeling a product “natural.” 31% said False FALSE Natural or organic products are NOT tested on animals. 37% said False FALSE *females who indicated they buy natural/organic beauty

That Was Then, This is Now Naturals & Organics Rise in # of Consumers Purchasing Natural/Organic Beauty Products Over Past 10 Years 80 68 70 60 49 50 40 30 20 10 0 Percentage of female consumers who purchased natural/organic beauty products 2018 2007

Top Reasons She Purchases Natural/Organic Products Reasons For Purchasing Natural/Organic Natural/organic products are healthy for my body 73% I feel better about purchasing natural/organic 55% They're good for the environment 40% I don't want chemicals on my skin 36% I believe they work just as well as synthetic products, but 36% healthier Natural/organic ingredients have stronger healing/soothing 35% qualities My family/children's health 31% I don't have adverse reactions to natural/organic products 30% I believe synthic ingredients cause diseases such as cancer 24% 0% 10% 20% 30% 40% 50% 60% 70% 80% Percent

Beauty & Personal Care Products Top Considerations in Her Purchase Decision Practical Aspects Price Shelf Life 63% 79% 80% Ethical & Environmental Considerations Does not test on animals Uses Renewable Ingredients 75% 49% Health Plant Derived BPA Free Paraben Free 50% 70% 57% *females who indicated they buy natural/organic beauty

Beauty & Personal Care Products What’s Important to Her Effective Positive reviews Accessibility Affordable & claims 95% 81% 80% 86% *females who indicated they buy natural/organic beauty

Beauty & Personal Care Products You have 3 seconds of her attention She’s looking for key information on your products’ labels. % of women who look for the following when making a purchasing decision. Expected results or benefits (i e firmer skin, 77% fewer blemishes, clump-free lashes, etc ) List of ingredients 70% Messages saying who the product is intended for 63% (i e for all skin types, for fine hair, etc ) Usage instructions 61% Free of chemicals thought to be hazardous to 59% health Product size (i e 1 7oz , 120mL, etc ) 58% Animal Cruelty free symbol 56% Consumer claims (i e 95% of women agreed 44% they saw fewer lines and wrinkles after one… 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% *females who indicated they buy natural/organic beauty

Natural Products She Buys 48% 57% Skincare 61% 65% 54% 58% Household cleaning products 57% 36% 39% 53% Bath & Body 52% 58% 35% 42% Haircare 41% 48% 33% 41% Cosmetics 42% 43% 23% 25% Sunscreen 27% 22% 9% 19% Child/baby care (i e lotions, diaper cream, etc) 32% 16% 9% 16% Fragrance 15% 16% 9% 12% Clothing 12% 11% 0% 10% 20% 30% 40% 50% 60% 70% Boomers Gen X Millennials Gen Z

Organic Products She Buys 68% 72% Produce 64% 51% 48% 55% Dairy/Eggs 51% 45% 35% 43% Meat 41% 31% 24% 33% Skincare 36% 45% 18% 29% Bath & Body 29% 36% 25% 26% Household cleaning products 25% 19% 17% 24% Haircare 22% 32% 15% 22% Cosmetics 22% 28% 12% 15% Sunscreen 15% 17% 4% 12% Child/baby care (i e lotions, diaper cream, etc) 21% 9% 4% 8% Fragrance 6% 7% 4% 5% Clothing 5% 5% 0% 10% 20% 30% 40% 50% 60% 70% 80% Boomers Gen X Millennials Gen Z

Where 52% Buyers Shop Organic & Natural 47% Beauty or Personal Care 43% 33% 10 years ago? 1.) Superstores and beauty specialty stores (34% tied); 2.) Internet (in general) 25%; 3.) Drugstore (24%); 4.) Natural Foods store (17%)

Natural & Organic Beauty Product Spend* % of Natural/Organic Buyers willing to spend more on Natural/Organic Beauty Products 26% 74% Yes No 68% of NON-regular buyers of natural/organic beauty or personal care buyers are willing to spend more.

Ingredients Matter Consumers list specific ingredients that appeal to them when purchasing a natural or organic product Aloe Vera 80% Vitamin C 71% Vitamin E 71% Argan Oil 68% Coconut Oil/Essence 67% Lavender 67% Tea Tree Oil 66% Honey 65% Avocado Oil 64% Green Tea 63% *females who indicated they buy natural/organic beauty

Opportunity for Natural & Organic Brands • Demonstrate efficacy through claims, reviews • Help define industry standards for “natural” • Educate your consumer • Innovate natural/organic versions of what she/he already uses • Be responsible – ethically, socially & environmentally

For more information, contact: The Benchmarking Company 11710 Plaza America Drive Suite 2000 Reston, VA 20190 Office: 703-871-5300 x102 Jennifer Stansbury Co-founder, Managing Partner jenn@benchmarkingcompany.com