The Natural Ingredients for Cosmetics market in Europe

European market for natural ingredients for cosmetics What’s new on the European market Consumption Segments Imports and exports Where is the market? European market for natural ingredients for cosmetics CBI - Ministry of Foreign Affairs

CBI - Ministry of Foreign Affairs European Consumption Most consumer products are produced in Europe Strong natural cosmetics industry Large and increasing demand for natural ingredients So what does this all lead to? Increasing demand for ingredients! New Ingredients! Exotic Ingredients! But difficult to register new ones as will explain this afternoon. CBI - Ministry of Foreign Affairs

Cosmetics Major cosmetics markets in 2013 € 29 bn. € 72 bn. € 18 bn. US remains very important, but growth markets especially in Brazil, Asia and Africa Extra-EU exports of € 16 bn. Source: Cosmetics Europe, 2014, ABIHPEC 2013 CBI - Ministry of Foreign Affairs

CBI - Ministry of Foreign Affairs Extra-European exports of cosmetics and toiletries, share of total (€ 16 billion) Source: Cosmetics Europe, 2014 CBI - Ministry of Foreign Affairs

CBI - Ministry of Foreign Affairs European market for cosmetic products, share of total € 72 billion in 2013 Source: Cosmetics Europe, 2014 CBI - Ministry of Foreign Affairs

Growth markets for cosmetics in Europe, 2012/2013 4%+ 2% - 4% 1% - 2% 0% - 1% -2% - 0% > -2% Source: Cosmetics Europe, 2014 CBI - Ministry of Foreign Affairs

European market for cosmetic products, Per capita consumption in € European average increased from € 124 in 2011 to € 128 in 2013. Source: Cosmetics Europe, 2014 CBI - Ministry of Foreign Affairs

CBI - Ministry of Foreign Affairs Natural Cosmetics High growth market Asia (13%), Europe (9%), and USA (8%) Also during crisis! 2014: sales € 4.5 bn. in Western Europe, € 4.1 bn. in USA, € 10.6 bn. in Asia 2017: expected market share 4%. Up to 10% in USA, Germany and Switzerland Cosmeceuticals – Cross-over sector worth € 3.6 billion The key worldwide markets include Western Europe, the USA, the Asia-Pacific Region, Brazil and Russia. Natural skin care products have the highest market share of all product categories, whilst colour cosmetics and deodorants have the lowest share.  Hair and skin care are particularly fast-growing markets for natural ingredients. CBI - Ministry of Foreign Affairs

Segments within the European cosmetics market Most important segments for: Essential oils  fragrances & perfumes Vegetable oils  hair care and skin care Botanicals  skin care Source: Cosmetics Europe, 2014 CBI - Ministry of Foreign Affairs

CBI - Ministry of Foreign Affairs Top 5 markets in Europe Toiletries Skin care Hair care Fragrances & perfumes Decorative cosmetics These markets are the top 5 for all categories! The segments are categorised in order of importance in respective country Source: Cosmetics Europe, 2014 CBI - Ministry of Foreign Affairs

Translation into ingredients Examples of natural ingredients used Functional Ingredients Emollients Vegetable oils, fats and butters Thickeners Gums, waxes, resins, hydrocolloids Humectants Honey Exfoliants Seed powders, nut shell powders, powdered seaweed Fragrance Essential oils, aromatic plant (extracts) Colours Only permitted (natural) colorants (Cosmetics Directive) Surfactants Soapnut, quillaia bark, vegetable oils etc. Active Ingredients   Very broad range of properties Plant extracts with traditionally reported properties such as anti-micobiol, anti-oxidant, anti-inflammatory, astringency, cooling, conditioning, toning, deodorising etc. CBI - Ministry of Foreign Affairs

EU imports of essential oils, in € million Top 3 France € 283 million Germany € 226 million United Kingdom € 201 million 1 2 2 1 1 8.8 South Africa Peru Colombia 3 7.8 3 South Africa: € 8.8 million; top 3 account for 80% Peru: € 7.8 million; top 3 account for 99% Colombia: € 15 thousand; top 3 account for 98% 0.02 Source: Eurostat, 2015 CBI - Ministry of Foreign Affairs

EU imports of specialty vegetable oils, in € million Top 3 France € 138 million Netherlands € 89 million Belgium € 82 million 3 1 2 3 4.1 South Africa Peru Colombia 1 1 2 6.8 2 South Africa: € 4.1 million; top 3 account for 90% Peru: € 6.8 million; top 3 account for 94% Colombia: € 14 thousand; top 2 account for 89% 0.01 Source: Eurostat, 2015 CBI - Ministry of Foreign Affairs

EU imports of extracts, in € million Top 3 Germany € 124 million France € 98 million Italy € 57 million 3 1 3 1.7 South Africa Peru Colombia 2 2 0.4 1 South Africa: € 1.7 million; top 3 account for 94% Peru: € 420 thousand; top 3 account for 67% Colombia: € 9 thousand; top 2 account for 97% 0.01 2 1 Source: Eurostat, 2015 CBI - Ministry of Foreign Affairs

CBI - Ministry of Foreign Affairs EU imports of MAPs EU28 € 659 million Top 3 Germany € 201 million France € 78 million Italy € 62 million 1 1 2 2 3.8 South Africa Peru Colombia 2 4.8 South Africa: € 3.8 million; top 3 account for 87% Peru: € 4.8 million; top 3 account for 80% Colombia: € 2.1 million; top 2 account for 99% 3 1 2.1 3 Source: Eurostat, 2015 CBI - Ministry of Foreign Affairs

Where is the market in Europe? Who buys you NIs? Leading cosmetics manufacturers in Europe? Unilever Beiersdorf L’Oréal L’oreal: 40 production plants worldwide 15% outcoursed to contract manufacturers Where are purchasing decisions taken? Direct contact with suppliers? Chanel CBI - Ministry of Foreign Affairs

Cosmetic SMEs in Europe? Top 10 countries: Italy 673 France 588 Spain 403 Germany 401 Poland 349 United Kingdom 310 Sweden 180 Switzerland 150 Czech Republic 124 Hungary Total number of SMEs in Europe: 4,077 Do these buy direct? Source: Cosmetics Europe, 2014 CBI - Ministry of Foreign Affairs

Leading cosmetics manufacturers and traders in Europe? Or more specialised players? Regional focus? Natural? Certification? Ingredient categories? For all: Where? Who? What? How? IMCD Symrise CRODA BASF Solvay Worlee Sederma Martin Bauer Naturex Lonza Gattefossé Indena CBI - Ministry of Foreign Affairs

European organic markets Northern Europe Developed & stable market Sustainability: requirement from industry & consumers Large organic market share: High consumer purchasing power Eastern Europe Promising market High growth rates Low consumer purchasing power and awareness Southern Europe Developed organic production Developing market High growth rates CBI - Ministry of Foreign Affairs

European Fairtrade markets Northern Europe High growth rates Sustainability: requirements from industry and consumers High consumer purchasing power UK and Switzerland largest markets for Fairtrade in Europe Southern and Eastern Europe Low development and awareness Promising markets? CBI - Ministry of Foreign Affairs