"Greening" of Personal Care - Kline & Company

THE “GREENING” OF PERSONAL CARE: 

SEPARATING PERCEPTION FROM REALITY 

A Presentation to: 

April 15, 2008 

www.KlineGroup.com 

© 2008 Kline & Company

Agenda 

Overview of Kline & Company 

Key Drivers for Natural/Green Personal Care 

What Does Natural/Green Mean? 

Green Personal Care Ingredients 

Outlook 

© 2008 Kline & Company 

1

Agenda 





Outlook 


2

Kline & Company is a leading management consulting and market research 

firm with domain expertise across the personal care value chain. 

Kline 

Management 

Consulting 

Working with individual 

clients to resolve tough 

issues and help 

implement solutions 

Managed flow of 

people, ideas and 

data 


Kline Market 

Research 

Generating information 

and insights for multiple 

clients through 

syndicated research 

3

Kline Management Consulting combines industry expertise with world 

class service delivery. 

Consulting Services 

Strategy 

Technology 

Manufacturing & 

Supply Chain 

Customer 

Relationships 

Energy 

Kline 

Management 

Consulting 

Industry Practices 

Chemicals 

& Materials 


Life 

Sciences 

Consumer 

Products 

4

Our personal care domain expertise covers the whole value chain 

RAW 

MATERIALS 

� Antimicrobials 

� Conditioning polymers 

� Emollients 

� Hair fixative polymers 

� Rheology control 

agents 

� Skin whitening agents 

� Specialty actives 

� Specialty delivery 

systems 

� Specialty surfactants 

� UV absorbers 

FINISHED 

GOODS 

� Fragrances 

� Hair care 

� Makeup 

� Nail care 

� Oral care 

� Skin care 

� Toiletries 


RETAIL 

OUTLETS 

� Department stores 

� Direct sales 

� Drug outlets 

� Food stores 

� Mass merchandisers 

� Pharmacies/ 

perfumeries 

� Salons 

� Spas/beauty institutes 

� Specialty stores 

5

We Serve Clients Around The Globe 

We can handle local research engagements or global assignments 

� Global Headquarters 

– Little Falls, NJ 

� Kline Europe 

– Brussels, Belgium 

– Oxford, United Kingdom 

– Prague, Czech Republic 

– Milan, Italy 

� Kline Asia 

– Shanghai, China 

– Tokyo, Japan 

– New Delhi, India 

– Dubai, UAE 

� Kline Latin America 

– São Paulo, Brazil 


6

Agenda 





Outlook 


7

Fashion 

Ingredients 

Functionality 

Evolution of personal care industry 

Competitive 

landscape 

Pigments, dyes, natural oils, “soaps” Surfactants, uv absorbers, polymers, antimicrobials 

Natural Synthetic 

Decoration 


Performance 

Natural/green 

Emergence of leading brand owners 

8

Key growth drivers for natural personal care 

9 

Widespread 

concern about 

toxic ingredients 

Consumer 

awareness 

Greater supply 

of natural 

ingredients 


Media hype 

celebrities/ 

politicians 

Marketers 

staking 

a claim 

9

The environment is increasingly part of our conscience. 

10 


10

Major marketers are taking notice via key acquisitions. 

11 

� Kiehl’s (2000) 

� The Body Shop (2006) 

� Sanoflore (2006) 

� Tom’s of Maine (2006) 

) � Aveda (1997) 

) 


� Bumble and bumble (2000) 

� Darphin (2003) 

� Ojon (2007) 

� Burt’s Bees (2007) 

11

Agenda 





Outlook 


12

Today, natural personal care products represent a small, high-growth 

segment of the overall global personal care market. 

Personal Care Sales by Sector Growth 

Natural, 2% 

$180 billion manufacturers’ sales level 

Natural 

Overall 

market 


0 5 10 15 

13

In a recently published market research report, Kline assessed 26 “natural” 

cosmetic and toiletry brands with sales ranging from $2 million to > $500 

million. 

14 

� Alba � Dr. Hauschka 

� Aubrey Organics � Lavera 

� Arbonne � L’Occitane 

� Avalon Natural Products � Lush 

� Aveda (Estee Lauder) � Nature’s Gate 

� Burt’s Bees � Organix 

� Care by Stella McCartney � Primavera 

� Jason Natural Products � Pangea Organics 

� John Masters Organics � The Body Shop (L’Oreal) 

� Jurlique � Tom’s of Maine (Colgate-Palmolive) 

� Kiss My Face � Sanoflore (L'Oreal) 

� Kneipp � Weleda 

� Korres Natural Products � Zia Natural 


14

Contained within each brand’s overall profile, is an ingredient analysis and 

assessment. 

15 

� First, a cross-section of products were selected from each of the 26 brands 

that were profiled in our report 

� Where possible, like product categories were chosen across all brands 

� Each brand’s profile contains the brand’s ingredient analysis and assessment 

as well as its overall “natural” rating 

− 

Sustainability was not part of the assessment 

� The ingredient assessment was performed by a member of our specialty 

chemicals practice who also developed our 10 point rating system 


15

Kline’s 10 point rating system . . . 

16 

Rating Criteria 

1 Majority of or all ingredients are synthetic; comparable to 

competitive products which are not marketed as “natural”; 

virtually no naturals or botanicals 

2 Rely on performance ingredients from the full range of 

synthetic raw materials as major ingredients; also use natural 

ingredients, often as minor ingredients 

3 Similar to 2 rating but greater emphasis on natural ingredients 

and ethics of supply chain 

(Continued) 


16

Kline’s 10 point rating system . . . (Continued) 

17 


4 Like 1-3, uses a number of non-naturals such as silicones, 

synthetic polymers, SLS, ethoxylates, alpha-olefins or other 

non-conforming ingredients but high proportion of natural and 

botanical ingredients 

5 Higher proportion of natural ingredients than 1-4, but also 

uses some less desirable ingredients such as silicones and 

polysorbates 

6 Leans strongly towards use of botanical extracts but also uses 

some non-naturals ingredients such as ethoxylates or 

chemical derivatives 

7 Minor use of non-natural ingredients such as UV filters, 

emulsifiers, surfactants 

(Continued) 


17



18 


8 High use of natural ingredients, limited use of non-naturals 

such as chemical UV filters when few natural alternatives to 

synthetic technology 

9 Uses a high proportion of natural ingredients or derivatives 

which are made using acceptable physical or chemical 

processing. In addition to avoiding harsh surfactants, opts for 

the mildest and most environmentally friendly alternatives. 

10 Many of the botanical extracts are from organically farmed 

sources. Minor ingredients also considered natural. 


18

The most common ingredients that are avoided in natural products are the 

following . . . 

19 

� Parabens—preservatives 

� Propylene glycol—moisturizing agents 

� Petrolatum—gives emollient properties 

� Synthetic oils (mineral oils, isohexadecane, 

etc.) 

� Organic sunscreens 

� Silicones 

� Harsh surfactants—sodium lauryl sulfate 


19

20 

We found that of the 26 brand profiled in our report, the degree of 

“naturalness” ran a broad spectrum 

Nature-inspired. 

Heavy use of 

synthetics 

� � 

� � � � 

� � � � � � � � � 

� � � � � � � � � � 

Some use of 

non-naturals 


� 

Organic, 

and green 

20

Agenda 





Outlook 


21

% Of total 

Personal care ingredients are an $8-10 billion industry, of which ~ 30% are 

green 

50 

45 

40 

35 

30 

25 

20 

15 

10 

5 

0 

Ingredient Market 

Commodities Fine chemicals Specialties 

Undifferentiated 

% Of total 


Ingredient market: Green vs Non-green 

breakdown 

100 

80 

60 

40 

20 

0 

Green 

22

Selected ingredient segments and leading products 

Surfactants Emollients Emulsifiers 

Fatty alcohol 

sulfates 

Fatty alcohol 

ether sulfates 

Mineral oil Fatty acidd and 

derivatives 

Hair-fixative 

polymers 

Synthetic oils Sorbitan esters Acrylic 

polymers 

Anti-microbials Rheology 

control agents 


Solvents/carrier 

s 

Conditioning 

polymers 

Cosmetic 

actives 

Vinyl polymers Parabens Cellulosics Ethanol Silicones Vitamins 

Phenoxyrthanol Silicas Propylene 

glycol 

Alkanolamides PEG esters Polyesters Ureas Bentonites Guar 

derivatives 

Betaines Esters Fatty 

acid/alcohol 

ethoxylates 

Sarcosinates Lanolin Ethoxylated 

glyceryl esters 

Isethionates Natural oils Ethoxylated 

sorbitan esters 

Polyurethanes Hydantoins Starch 

derivatives 

Taurates Lecithin Carragennan 

Sulfosuccinates Sucrose esters Guar 

Alkyl 

polyglucosides 

Amine oxides 

Quats 

Polyquats Botanical 

extracts 

Protein 

hydrolysates 

Hyaluronic acid 

Beta-glucans 

Copolymers Pyrithiones Xanthan gum Isoflavones 

Alginates Synthetic 

peptides 

Acrylic 

polymers 

23

24 

What makes natural personal care an attractive market to ingredient companies? 

Ability to 

differentiate and 

extract value 

Growing 

consumer 

eco-awareness 

Marketing 

appeal of 

certification 

seal 


Business 

opportunities 

in growing 

market 

Corporate 

social 

conscience 

24

Natural versus green 

� There is a realization amongst brand owners that the natural concept can not be 

applied across all personal categories and retail channels 

− Natural may not be better for the environment and local economies. Further, 

other factors arise when an ingredient is harvested from fragile environments 

� For leave-on skin care, a natural formulation can provide a satisfactory level of 

performance for the consumer, but for many other personal care categories, 

natural ingredients have performance limitations 


25

Kline’s guideline definition of a ‘green’ ingredient 

� Ingredients are from a plant or renewable source 

� Some chemical modification acceptable (e.g. hydrolysis, hydrogenation, esterification) 

� But some chemical modifications are unacceptable (e.g. ethoxylation) 

� Minerals and inorganic materials acceptable 

� Ingredients made by fermentation using plant raw materials acceptable 

� Organically farmed plant sources not essential 

� Animal products are not excluded e.g. silk and milk proteins, beeswax 

� Excludes: 

− Synthetic ingredients 

− Petrochemical derivatives and synthetic solvents 

� Preservation considered to a minor extent as preservatives such a small part of 

formulation 

� No account made of: 

− Biodegradability 

− 

− 

− 

Farming ethics 

Genetic engineering of plant source material 

Purification methods for natural oils 

Based on this definition, we can look more closely at selected personal care ingredient product 

categories to see how they contribute to the “greeness” of a finished product 


26

Hair Fixatives 


27

Hair fixative polymers are used singly or combined to provide the 

optimal compromise in terms of price and performance 

Sample Formulation Hair Gel 

PVP/VA 12% 

Additives ~1% 

Aqua to 100% 

Sample Formulation Hair Spray 

Amphomer 5% 

Alcohol 66% 

Propane/butane 25% 

Other 4% 

Aqua to 100% 

Sample Formulation Hair Gel Strong Hold 

VP/methacrylamide/vinyl imidazole 

copolymer 

* Based on ‘as sold’ basis 

10% 

PVP 1% 

Other ~4% 

Aqua 85% 


� Hair fixative polymers give hair styling 

products their high level of functionality and 

performance 

� Formulations are fairly simple consisting of 

mainly of the resin/fixative polymer(s) in a 

carrier 

� Sprays contain a high proportion of alcohol 

and aerosols are propellant based 

28

Hair fixative polymer choice is based on several parameters 

Decreasing order of importance 

� Styling performance required 

� Film flexibility 

� Product type (gel, spray, pomade, etc) 

� Trade class 

� Lack of flakiness 

� Water-proofability 

� Low/no odor 

� Ease of processing 


29

Less than 1% of the hair fixative polymers used today are green 

Monomer Product 

Vinyl PVP 

PVP/VA 

Esters of PVM/MA 

VA/crotonates/vinyl neodecanoate copolymer 

Acrylic Acrylates/octylacrylamide copolymer 

Polyurethane MDI, TDI 

Polyester Terephthalic acid 

Acrylates/C1-2 succinates/hydroxyacrylates copolymer 

Acrylic acid/ethylacrylate/N-tert.-butylacrylamide 

terpolymer 

AMP-acrylates/allyl methacrylate copolymer 

Acrylamide sodium/acryloyldimethyl laurate acrylic acid 

copolymer 

Biopolymer Dehydroxanthan gum 

Starch Modified corn starch 


Green, 1% 

30

How can hair fixative polymers be natural or green? 

31 

Natural: No hair-fixatives directly derived from natural sources in commercial use 

Green: 

Modified corn starch 

Dehydroxanthan gum 

Greenwashing: Reducing VOC levels in US hair styling products 


31

Surfactants 


32

Several surfactants are combined to find the optimal compromise in 

terms of price and performance 

Sample Formulation Shampoo 

Ammonium lauryl sulfate 30%* 

Ammonium laureth sulfate 10% 

Cocamidopropyl betaine 4% 

Cocamide MEA 1% 

Other 50% 

Aqua to 100% 

Sample Formulation 

2-in-1 Conditioning Shampoo 

Sodium laureth sulfate 25% 

Sodium lauryl sulfate 15% 

Lauryl glucoside 4% 

Cocamidopropyl betaine 3% 

Coco-glucoside 1% 

Other 52% 

Aqua to 100% 

* Based on ‘as sold’ basis 


� Foaming wash products typically contain a 

high proportion of surfactant, typically 

~15% by weight 

� Generally, a number of surfactants are 

included 

− Commodity surfactants 

− Co-surfactant 

� Formulation often contains a foam booster 

or stabilizer e.g. ethanolamines 

� Foam characteristics are central to 

consumer perception of performance 

� Surfactant accounts for a high % of 

formulation; rinse off applications are a lot 

more cost sensitive 

� If surfactants are not green, the shampoo 

can not be green because the surfactants 

are present in such a high % of the 

formulation 

33

Surfactant choice is based on several parameters 


� Price 

� Foaming characteristics 

� Irritability properties 

� Compatibility with other ingredients 

� After-feel on the skin 

� Ease of processing 

� Product positioning (economy shampoo) 

� Channel to market 

� “Greenness” 


34

Between 5% and 10% of surfactants commonly used in rinse-off 

products are green 

Segment Commodity Specialty 

Anionic Alkyl ether sulphates Acyl isethionates 

Alkyl sulphates Sarcosinates 

Alpha olefin sulphonates Ether carboxylates 

Sodium laureth sulphate Sulfosuccinates 

Taurates 

Amphoteric - Betaines 

Sultaines 

Amphoteric acetates 

Nonionic Alkanolamides Amine oxides 

Cationic - Quats 

Alkyl polyglucosides 


Green, 5% to 10% 

35

How can surfactants be natural or green? 

Established 

chemistries 

Newly 

introduced 

chemistries 

36 

Natural: No surfactants directly derived from natural sources in commercial use 

Green: APGs are well-established but account for a small proportion of the total 

market. These are based on renewable sources, glucosidation chemistry, 

biodegradable, meet Ecocert requirements 

Green: Acylated proteins e.g. sodium cocoyl glutamate 

Other sugar derivatives e.g. pentosides 


36

Can surfactants be greenwashed? 

37 

Greenwashing: 

� Accelerated move away from petrochemical sources of fatty chains towards 

vegetable source which are sustainable and renewable 

� Increasing % solids to decrease transport pollution and fuel consumption e.g. 

betaines (Degussa and Cognis) 

� Introduction of enzymatic production processes 

� Improved production methods to decrease emissions and fuel consumption 


37

Emollients 


38

Several emollients are combined to find the optimal compromise in 

terms of moisturization, price, and elegant skin feel 

Sample Formulation Hand Cream 

Mineral oil 10% 

Oil/wax blend 10% 

Vaseline 2% 

Isopropyl palmitate 7% 

Dimethicone 2% 

Other

Several emollients are combined to find the optimal compromise in 

terms of moisturization, price, and elegant skin feel. 

Sample Formulation Facial Moisturizer 

Esters 5% 

Wheatgerm oil 2% 

Mineral oil 1% 

Other ingredients

Emollient choice is based on several parameters 


� Product type 

� Moisturization level required 

� Sensorial properties/aesthetics 

� Compatibility with other ingredients 

� Presence of UV absorbers 

� Product positioning-’natural’ image? 

� “Greenness” 

� Trade class 


41

55% of emollients commonly used in personal care are green 

Type Commodity Specialty 

Natural Mineral oil Natural oils 

Natural oils Lanolin 

Fatty acids/alcohols Lanolin derivatives 

Squalane 

Shea butter 

Synthetic Synthetic oils Silicones 

Silicones Esters 

Squalane 


Green, 55% 

42

How can emollients be natural or green? 

43 

Natural: Yes, natural oils, butters 

Mineral oil is nature-derived but not considered ‘green’ 

Green: Yes, Esters 

Semi-synthetic, considerable portion of molecules are of vegetable origin 

Esterification chemistry accepted by most certification bodies 

Green: Lanolin 

Not directly derived from animals (sheep fleece) 

Used more widely in pharma market due to traditional rumours regarding 

sensitivity 


43

Global consumption of personal care ingredients 

Decreasing market size 

Fragrance 

Surfactants 

Solvents 

Emollients 

Conditioning Polymers 

Actives 

Humectants 

Rheology Control 

Antimicrobials 

Hair Fixatives 

UV absorbers 

Emulsifiers 


44

Global consumption of personal care ingredients 

Decreasing level of greeness 

Solvents 

Emollients 

Rheology Control 

Actives 

Humectants 

UV absorbers 

Conditioning polymers 

Surfactants 

Hair fixatives 

Antimicrobials 

Fragrance 

Emulsifiers 


45

Agenda 





Outlook 


46

47 

Brand owners 

1 Anita 

2 

3 

4 

5 

Horst Redeberker 

(Aveda founder) 

Roddick 

(The Body Shop 

founder) 

� Being natural goes beyond having natural ingredients 

� Often, there is a compromise on ingredients in order to maximize 

performance 

� Mass retailers will be a high growth channel in the future for natural 

care marketers 

� Asia is a high priority for many marketers 

� Meaningful penetration into this market can best be achieved 

through acquisition 


47

48 

Ingredient suppliers 

1 

2 

3 

4 

5 

� Higher growth opportunities than traditional ingredient segments 

� Many of the high performance personal care ingredient suppliers 

are not currently aligned from a product standpoint with the 

natural trend 

� The big volume ingredients are being sold into low-priced finished 

products and therefore green is a realistic goal; natural is not 

� There is industry uncertainty regarding how natural/green will play 

out. Many suppliers are waiting to see what will happen short term 

� Formulators are driving the natural/green trend; with few 

exceptions, ingredient suppliers are not leading it 


48

49 


Questions 

&Answers 

49

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. 

If you require additional information about the contents of this document or the 

services that Kline provides, please contact: 

Name: Gillian Morris 

Title: Director, Chemicals and Materials 

Phone: +1-973-435-3432 

E-mail: Gillian_Morris @KlineGroup.com 

Kline Global Headquarters 

Kline & Company, Inc. 

Overlook at Great Notch 

150 Clove Road 

Little Falls, NJ 07424-0410 

Phone: +1-973-435-6262 

Fax: +1-973-435-6291 

www.KlineGroup.com 


Americas 

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Middle East 

50

"Greening" of Personal Care - Kline & Company

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