Solid naturalism – Newspaper Kommersant No. 51 (7496) of 03/27/2023

The structures of the head of the board of directors of the soft drinks manufacturer Chernogolovka Group Alexei Chetvergov invested in the production of cosmetics and household chemicals under the Naturalistyka brand. Russian companies began to show interest in this segment after the introduction by the country’s authorities of a de facto protective duty on the import of such goods from a number of “unfriendly” states. But competition in the market is still high, which makes it difficult for new players to promote their products, experts warn.

As Kommersant discovered, the manufacturer of natural cosmetics and household chemicals under the new Naturalistyka brand is Vision Chain LLC, owned by JSC Healthy Life Principle, whose CEO is the chairman of the board of directors of Chernogolovka, Alexei Chetvergov. One of the vacancies of HLS Principle JSC on the HeadHunter portal indicates that Naturalistyka is a separate line of business for Chernogolovka (produces, in particular, Baikal and Fantola drinks; revenue in 2021 is 13.7 billion rubles). A Kommersant source close to the company says that the new business is a personal project of Mr. Chetvergov.

Naturalistyka CEO Yuri Goryakov told Kommersant that now the assortment includes about 30 items in the “medium plus” price segment, and in the near future a new line of 12-15 products in the middle price segment will appear. He did not disclose the amount of investment in the project.

It follows from the declarations of conformity of the brand that Naturalistyka is produced under contracts at the facilities of other Russian perfume companies. Products are sold on marketplaces, in the L’Etoile and Golden Apple online stores, Kommersant was convinced.

Contract manufacturing and the sale of the first batches online indicate an attempt to test interest in their products with minimal marketing costs, says Petr Bobrovsky, Executive Director of the Association of Manufacturers of Perfumes, Cosmetics, Household Chemicals and Hygiene Products. Yuri Goryakov says that negotiations are now underway on the supply of products to all major retail chains.

Co-founder of NappyClub Roman Kvinikadze connects the emergence of non-core local players in the segment with the introduction of duties on the import of cosmetics and household chemicals from a number of European countries. In December, the Russian government introduced until the end of 2023 a de facto protective duty of 35% for the import of such products from the USA, Canada, Great Britain, Australia, New Zealand and Poland – these countries accounted for 8-15% of the total imports of these products.

In addition, Mr. Kvinikadze adds, a number of Western brands have decided to leave the Russian market themselves, which also freed up a part of the market niche. Previously, such plans, in particular, were announced by Lancome, Redken, Kerastase.

At the same time, even after the departure of some Western brands, competition in the Russian market is still high, emphasizes Mr. Bobrovsky. According to him, many non-core companies are trying to gain a foothold in this market, despite the obvious difficulties in attracting the attention of buyers to the product. According to preliminary estimates by Infoline, the turnover of the cosmetics and perfumery market in the Russian Federation in 2022 decreased by 4-5% year-on-year, to about 800 billion rubles.

Naturalistyka has moved into the natural cosmetics niche, which looks like a coup: according to NielsenIQ, in 2022, almost 60% of shoppers felt better about brands with a focus on sustainability. However, new manufacturers, entering this market, often face serious difficulties, not knowing how to correctly determine the percentage of naturalness of the product, what raw materials are such and how to check its quality, says Ekaterina Brem, Director of Research and Development at Natura Siberica Group.

Also, Mr. Kvinikadze warns, it is natural ingredients that can be a source of allergic reactions, so any such cosmetics and household chemicals should be produced in cooperation with allergists and other specialists. But such research takes time and money.

Alina Savitskaya, Anatoly Kostyrev