CBI MARKET SURVEY:

THE MARKET FOR NATURAL INGREDIENTS FOR COSMETICS IN BELGIUM

CBI MARKET SURVEY

The market for natural ingredients for cosmetics in Belgium

Publication date: October, 2009

Introduction
This CBI market survey gives exporters in developing countries information on some main
developments in the natural ingredients for cosmetics market in Belgium. The information is
complementary to the information provided in the CBI market survey ‘The natural ingredients
for cosmetics market in the EU’, which covers the EU in general. That survey also contains an
overview and explanation of the selected products dealt with, some general remarks on the
statistics used, as well as information on other available documents for this sector. It can be
downloaded from http://www.cbi.eu/marketinfo.

1 Market description: industrial demand and production

There is a general lack of information on the industrial demand for natural ingredients, as well
as for general ingredient needs of the cosmetics industry. Therefore, sections on industrial
demand will first discuss cosmetics consumption and natural cosmetics consumption, followed
by a discussion on (natural) cosmetics production. The consumption and production of organic
cosmetics will also be discussed. This discussion provides indicators for developments in, and
the size of, industrial demand for natural ingredients for cosmetics.

Furthermore, where available, information on the market for specific ingredients is included.
Qualitative data on organic ingredients for use in (organic) cosmetics have become
increasingly important in many EU markets and are included if relevant. These ingredients
have been certified according to organic standards, in contrast to natural ingredients which are
not necessarily certified. Please refer to Appendix 1 of the EU survey for more specific
information.

Industrial demand

Cosmetics consumption and production

According to the European Cosmetic, Toiletry and Perfumery Association (Colipa), the Belgian
market for cosmetics was the eighth largest in the EU and represented a share of 2.7% in
2008. The value of the cosmetics market was € 1.8 billion. Per capita consumption in 2008 was
€ 162, which was higher than the EU average of € 115 (Colipa, 2009). The Belgian market for
cosmetics is growing slowly. Between 2007 and 2008, consumption of cosmetics increased by
3.5% annually.

Table 1.1 Belgian market for cosmetics and toiletries per product group in 2008 at
retail sales prices (RSP), in million €, share and change 2008/2007 in %
Market value 2008/2007 Market share
Product group
(€ million) change (%) (%)
Fragrances/ 355 7.9% 20%
Perfumes
Decorative cosmetics 204 -1.0% 11%
Skin care 420 -0.7% 23%
Hair care 522 4.6% 29%
Toiletries 314 5.7% 17%
Total 1,815 3.5% 100%
Source: Colipa, 2009

As shown in table 1.1, hair care is the largest product group in Belgium. Fragrances and
perfumes achieved the highest growth in 2008. The market for fragrances and perfumes, hair
care and toiletries, increased by 7.9%, 4.6% and 5.7%, respectively, compared to 2007.
Decorative cosmetics and skin care experienced a slight decrease of 1.0% and 0.7%,

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 CBI MARKET SURVEY:
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respectively. While toiletries had a negative trend in previous years because of the saturation
of the market, the situation has recently improved. The focus on skin care products for men in
Belgium started to materialise as of 2006 and was an important market driver, especially in
2007 and, to a lesser degree, in 2008.

In Belgium there is an increasing demand for purpose-specific products. Decorative cosmetics,

toiletries and perfumes are segmented according to age and gender so that they can meet
demand from a particular group of consumers. In the product group of decorative cosmetics,
mineral-based products are increasingly popular. There is an emerging preference for ethical
and natural products. However, up until 2008 the consumer base for ethical and natural
cosmetic, toiletry and perfumery products was fairly small (Colipa, 2009).

Industrial demand is largely determined by the production of cosmetics in the country. The
leading cosmetic companies in the Belgian market are multinationals. Local production is
limited. According to Eurostat data, production of cosmetics in Belgium amounted to € 281
million in 2007. This represents a 16% average annual growth since 2003 (Eurostat, 2009).

According to Euromonitor, a large market research company, L’Oréal Groupe was in 2008 still
the absolute leader in an environment where local subsidiaries are multiple. Other major actors
include Beiersdorf NV SA, which is the main competitor of the L’Oréal Groupe, apart from
Procter & Gamble Benelux SA NV and Unilever Belgium NV, which are present mainly in
toiletries (Euromonitor, 2009).

Industrial demand for natural ingredients

As a large part of the cosmetics products is imported from production facilities elsewhere in the
EU, growing cosmetics consumption does not necessarily lead to higher demand for natural
ingredients in Belgium. Moreover, multinationals account for a large part of Belgian cosmetics
production. These have global sourcing methods, typical for global players in the industry and
therefore sourcing decisions are often taken outside Belgium. However, domestic (natural)
cosmetics companies are also increasingly demanding natural ingredients. According to
industry sources, Belgian cosmetic companies are gradually trying to stimulate the sale of
natural cosmetics based on locally produced ingredients or herbs. Still, it is expected that
natural cosmetics production will continue to rely on foreign imports of natural ingredients.

According to Fediol, the European Industry Federation for the Oil and Proteinmeal Industry, in
the period between 2004 and 2007, apparent industrial demand for vegetable oils increased by
7.2%, an increase larger than the EU average of 11%. In 2007, Belgian’s total industrial
demand amounted to 1070 thousand tonnes.

Table 1.2 Belgian industrial demand for vegetable oils, between 2004 and 2007,
in 1,000 tonnes
Annual
Product 2004 2005 2006 2007
Change %
Groundnut oilI 4 4 15 5 7.6%
Castor oil 1 1 1 2 26%
Coconut, palm kernel 52 53 37 37 -11%
and babassu oil
Palm oil 301 345 387 355 5.6%
Others 508 550 580 671 9.6%
Total oils 866 953 1020 1070 7.2%
Source: Fediol, 2009
IThe use of groundnut oil in cosmetics is decreasing due to its allergic properties.

As it can be seen in table 1.2, between 2004 and 2007 industrial demand for groundnut oil in
Belgium increased by 7.6%. During the review period, industrial demand for castor oil
increased by 26%. During the same period, industrial demand for coconut, palm kernel and
babassu oil decreased by 11% annually. Industrial demand for palm oil increased at a rate of
5.6%. Demand for other vegetable oils increased by 9.6%.

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Please note that only a small part of these oils, mostly in refined form, goes to the cosmetics
industry. Moreover, especially palm oil and palm kernel oil are bulk products, of which only a
small part ends up in cosmetics. Because of these large volumes, they are very difficult
markets for smaller producers to enter.

Information on the industrial demand for other product groups is not available. Considering the
substantial amount of imports of all product groups, we can say that a significant demand
exists, but it is not known which part fulfils the domestic demand.

Trends
2008 was a rather adverse year for cosmetics and toiletries. Belgium was affected by the
economic and financial crisis, leading to lower consumer confidence and consumption during
the second half of 2008.

On the other hand, 2008 was characterized by a remarkably high level of innovation in
cosmetic and toiletry products. The value growth of cosmetic products remained positive in
2008 due to inflation and changes in the size of packaging.

However, convenience was the buzzword during the year. This was exemplified by products
such as body wash/ shower gel and oral hygiene. Despite the positive trend during 2007,
men’s grooming products did not see similar dynamic growth in 2008. In spite of the male
population’s interest in looking better, the market in 2008 was saturated, leading to slower
growth (Euromonitor, 2009).

In 2008 there was a development towards more natural bath and shower products and colour
cosmetics. Despite this emerging preference for ethical and natural cosmetics, toiletries and
perfumery, the consumer base is still small and awareness is limited. However, the players on
the cosmetics markets see this as a prospect for the future (Colipa, 2009).

Further trends on industrial demand can be found in the survey covering the EU.

Production
According to Fediol, Belgian production of vegetable oils amounted to 598 thousand tonnes in
2007. Production increased by 6.5% between 2004 and 2007 (Fediol, 2009). Soya, rape,
linseed and maize germ oil are the main vegetable oils and fats cultivated commercially in
Belgium at present. Only a small fraction of this production, however, is used in cosmetics.

Figures from Belgium for the production of herbs used in cosmetics were not reported by the
EHGA, the European Herb Growers Association recently (EHGA Europam, 2009).

No information on production is available for other product groups, but local production is
expected to be limited.

Trends
Please refer to the EU survey for general trends in production.

Opportunities and threats

- A large part of cosmetic products sold in Belgium originates in other European countries
and/or is produced by multinationals. Even though Belgium has local production, sourcing
decisions for facilities owned by multinationals are usually taken elsewhere. This can
constitute a threat to exporters of natural ingredients for cosmetics, who aim to supply the
Belgian market.
- Due to the economic crisis, consumer confidence decreased negatively, affecting the
cosmetics consumption during 2008.
+/- In Belgium there is an emerging preference for natural and ethical cosmetics, toiletry and
perfumery. In particular, interest in natural bath and shower products and colour cosmetics
increased during 2008. The consumer base for these products is, however, still small and
awareness is limited.

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For more information on opportunities and threats, please refer to chapter 7 of the EU survey.

Useful sources
• For more information on Belgium, please refer to IENICA reports available on
http://www.ienica.net.
• Euromonitor (http://www.euromonitor.com) also provides information on the Belgian
market. Please keep in mind that only summaries are readily available, whereas the reports
themselves come at considerable cost, but do provide company names.
• Furthermore, Belgian trade associations mentioned in section 6 of this survey and the
Belgian Statistical Agency (http://www.statbel.fgov.be) can be a source of information.

2 Trade channels for market entry

In general, the same trade channels apply to Belgium as those mentioned in the survey
covering the EU. The traditional approach of contacting traders, intermediate processing
companies, agents and wholesalers (either with or without processing capacity, dependent on
the product) remains the most effective method. However, some end-industries can also be
approached, as they too import directly from developing countries. This is particularly the case
for specialist niche players, such as natural or organics producers.

As seen above, the leading manufacturers in Belgium are mostly multinationals. All these
multinationals have global sourcing methods typical for global players in the industry.
Furthermore, DETIC offers listings of other cosmetic companies active in the country. Some
interesting domestic natural cosmetics or ingredients companies are: Acos-Visoderm
(http://www.acos-laboratoire.com), a producer of perfumes and skin products and a user of
medicinal plants, and Meyskens R (tel: +32 65 457011) which does seed and vegetable
transformations for perfumes. Another interesting player in the Belgium market is YDS
Chemicals (http://www.yds-chemicals.be), which distributes fine chemistry raw materials for
cosmetics. YDS normally buys its products from companies like Ciba and Rhodia, but also
works with smaller producers.

It is important to notice that different prices and margins apply throughout the various trade
channels.

3 Trade: imports and exports

This section discusses Belgium’s imports and exports of natural ingredients. Please note that
this data can also include natural ingredients which have been refined with the use of
chemicals. Although these are not natural according to the definition used in this survey (see
Appendix 1 of the EU survey) Eurostat does not distinguish them in trade data. Furthermore,
the product groups discussed are also (and in larger quantities) used in other sectors, such as
pharmaceuticals, and especially food.

Imports
Belgium plays an important role in the vegetable oils trade, and is the 4th largest importer for
this product group in the EU. Belgium is a medium-sized importer of the other product groups,
accounting for between 3.3% and 7.0% of total EU imports. The increase in imports of natural
ingredients outpaced the growth in consumption, which can be explained by the fact that
Belgium re-exports a significant amount of the quantities imported.

Belgian imports of natural ingredients for cosmetics consisted of vegetable fats, oils and waxes
(76%), essential oils and oleoresins (4.0%), vegetable saps and extracts (13%), raw plant
material (5.6%) and colouring matter (1.5%). In comparison, these figures for the EU are
59%, 11%, 19%, 7% and 3%, respectively. The relatively high share of vegetable fats and oils
is due to Belgium’s leading role as an entry point for these products.

Imports of vegetable oils and fats increased by 13% annually, amounting to € 509 million /
263 thousand tonnes in 2008. Most of the imported vegetable oils are re-exported to other EU

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countries. Developing countries are increasing in importance and accounted for 21% of
imports. Important suppliers were Indonesia (7.9% of imports), Malaysia (2.9%) and
Argentina (2.4%).

The imports of essential oils amounted to € 27 million / 3 thousand tonnes in 2008, signifying
an annual increase of 5.8% between 2004 and 2008. Only 13% is imported from
developing countries, with Brazil supplying almost half of the total imports coming from
developing countries.

Imports of vegetable saps and extracts amounted to € 88 million / 18 thousand tonnes,

signifying a 7.0% annual increase between 2004 and 2008. Developing countries supply 31%
of this. The main suppliers are the Philippines, India and Madagascar.

Raw plant material was imported with a value of € 38 million / 8 thousand tonnes in 2008,
signifying an increase of 8.4% per year since 2004. Imports from developing countries are
increasing, but still only 21% is imported from developing countries, most importantly from
Morocco and Ghana.

Imports of colouring matter decreased 1.3% annually between 2004 and 2008, amounting to
€ 10 million / 1.9 thousand tonnes in 2008. Developing countries accounted for 18% of the
imports. China, Mexico and Peru are the most important developing country suppliers.

Exports
Belgian exports of natural ingredients are increasing for all product groups. The largest product
group is vegetable oils (70% of total exports of natural ingredients), which are predominately
re-exported. Exports of this product group increased by 12% between 2004 and 2008,
amounting to € 243 million / 197 thousand tonnes, or 9.5% of EU exports.

The other product groups are more limited in export value, but are increasing at a rather high
rate. Vegetable saps and extracts grew by 9.4% annually, amounting to € 60 million / 13
thousand tonnes in 2008. Raw plant material exports grew by 12% to € 29 million / 4.2
thousand tonnes. Colouring matter exports were € 7.3 million / 1.5 thousand tonnes. Belgium
plays a very limited role in the export of essential oils and oleoresins (1.1% of total European
exports), with exports amounting to € 6.5 million / 2.1 thousand tonnes. The exports of this
product group achieved an average annual growth of 4.9% in the review period.

Opportunities and threats

+ Increasing imports of vegetable oils, raw plant material and vegetable saps and extracts
offer good opportunities for developing countries.
- However, imports of the other product groups are decreasing or are at steady low levels,
signifying few opportunities for new developing country suppliers to enter the market.
+/- The small share of imports from developing countries can be either a threat or an
opportunity. It indicates a current preference for imports from more developed countries.
However, the market share of developing countries is increasing significantly, although at
varying degrees, for all the product groups and it seems that developing countries still have
a large share to gain. The share of imports of raw plant material and essential oils from
developing countries is undergoing a particularly positive development.

For more information on opportunities and threats, please refer to chapter 7 of the EU survey.

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Useful sources
• EU Expanding Exports Helpdesk

http://exporthelp.europa.eu

go to: trade statistics
• Eurostat – official statistical office of the EU

http://epp.eurostat.ec.europa.eu;

go to ‘themes’ on the left side of the home page

go to ‘external trade’

go to ‘data – full view’

go to ‘external trade - detailed data’
• Understanding Eurostat: Quick guide to easy Comext


http://epp.eurostat.ec.europa.eu/newxtweb/assets/User_guide_Easy_Comext_20090513.pdf

4 Price developments

Regarding prices of ingredients, please refer to the survey covering the EU, as the indications
of prices given there do not differ from those in Belgium. Actual prices are dependent on
negotiation with companies. Interesting sources of price information are in particular the trade
magazine The Public Ledger (http://www.agra-net.com/portal/ search for the link to The Public
Ledger on the left side of the screen) and ITC market news service (MNS)
(http://www.intracen.org).

When exporters negotiate on prices with companies or distributors, it is important to consider

that some final products benefit from discount policies all year long. Especially for perfumes
and related products, many Belgian retailers always reduce the price on the tag by 20% on
average. Because of this policy, some of the big international players such as Sephora or
Douglas decided not to enter the Belgian market, which is an advantage for the leading Belgian
companies (Israeli Embassy in Belgium, 2006).

Exporters need to have detailed production costs/volume price breaks for the ingredients they
supply. This will give them a vital reference point for any negotiations with buyers.

5 Market access requirements

As a manufacturer/supplier in a developing country preparing to access Belgium, you should

be aware of the market access requirements of your trading partners and the Belgian
government.

For information on legislative and non-legislative requirements, go to ‘Search CBI database’ at

http://www.cbi.eu/marketinfo, select natural ingredients for cosmetics and Belgium in the
category search, click on the search button and click on market access requirements.

Detailed information on packaging can be found at the website of ITC on export packaging:
http://www.intracen.org/ep/packaging/packit.htm.

Information on tariffs can be found at http://exporthelp.europa.eu. No quotas apply to the

products included in this survey.

6 Doing business

Information on doing business, like approaching potential business partners, building up a

relationship, drawing up an offer, handling the contract (methods of payment, and terms of
delivery) and cultural differences can be found in CBI’s export manuals ‘Export Planner’, ‘Your
image builder’ and ‘Exporting to the EU’. These can be downloaded from
http://www.cbi.eu/marketinfo - go to search publications. For more information on doing
business in Belgium, visit the following websites:

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• Colipa, the major European trade association of the cosmetics industry, representing 23
national associations and 21 international companies, is based in Brussels
(http://www.colipa.com). The Belgian member organisation of Colipa is DETIC
(http://www.detic.be).
• A major trade fair is Estetika Fall/Spring; Cosmetics & Beauty Product Fair, held in Ghent
(http://www.icc-gent.com).
• An interesting trade magazine for cosmetics and personal care is Estheticienne
(http://www.estheticienne.nl).

This survey was compiled for CBI by ProFound in collaboration with Andrew Jones and Klaus
Duerbeck

Disclaimer CBI market information tools: http://www.cbi.eu/disclaimer

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