If ever there were a time to be in the nontoxic personal care business it’s now, with ”natural” cosmetics representing the fastest growing segment of the $50 billion cosmetics industry. But in the absence of strict government regulations, which companies truly fit the bill? 

Just call them the Champions.

The Campaign for Safe Cosmetics has released its new report, “Market Shift: The Story of the Compact for Safe Cosmetics,” announcing the 321 companies that earned the Champion superlative by meeting all Compact for Safe Cosmetics requirements, including avoiding ingredients prohibited in other countries; disclosing all ingredients, even those that make up “fragrance;” and submitting products to the Environmental Working Group’s Skin Deep cosmetics database.

“The 321 companies in the Champion category are proving it's possible to be fully transparent about the ingredients in their products. That's huge, and it's where the whole industry needs to go,” said Stacy Malkan, founder of the Campaign for Safe Cosmetics and co-author of the report.

From its inception in 2004 through its last days in 2011, more than 1,500 companies signed the Compact. In addition to the 321 companies that met all requirements, 111 companies, or “Innovators,” made significant progress. Though the campaign officially closed the Compact in August, it will continue its efforts through the new Safe Cosmetics Business Network, which will promote nontoxic cosmetics innovation and growth by connecting manufacturers, consumers, and policymakers in the industry.

Companies can use safer ingredients and disclose all ingredients and still do well for themselves—even in these difficult economic times,” said Mia Davis, organizing director of the Campaign for Safe Cosmetics. “This is a smart move because consumers are increasingly concerned about their health and the safety of product ingredients.”

Natural cosmetics: a recession-proof industry

Nutrition Business Journal estimates that US consumer sales of natural and organic personal care reached $8.2 billion in 2010, a 6 percent increase over 2009, with similar positive results expected for 2011. More good news for the Compact’s Champions: Consumer concern about unsafe ingredients has made natural and organic cosmetics the fastest growing sector of the personal care market, and the “green” personal care sales could soon outperform conventional cosmetics sales, according to market research firm Mintel.

“Consumers are demanding better alternatives, which impacts what companies offer,” said Rebecca S. Gournay, co-founder of New Jersey-based Champion company SEED Body Care. “We have done hundreds of in-store demos, and by the questions that people ask you can see that they are more educated about ingredients.  At first people were asking if the products had parabens; now they are asking about synthetic fragrances.”  

As more manufacturers give these savvy shoppers what they want, suppliers, too, are seeing the perks of entering the natural segment.

“One of the most gratifying things is suppliers realizing that it’s good business to supply safe ingredients,” said Larry Weiss, MD, founder of San Francisco-based soap and hand sanitizer manufacturer CleanWell. “We encourage other companies to do well by doing good. It is an important thing, but it’s also a viable, sustainable business model,” said Weiss.

In just three years in business, Gournay also has noticed an increase in availability of pure, plant-based ingredients, as more manufacturers incorporate them in their products. “Suppliers are going where the growth is. You are seeing more plant-based ingredients available that focus on efficacy and science,” she said.

Beyond consumer and manufacturer demand, other aspects of the natural cosmetics business make it ripe for growth, according to Davis. “Many of these companies are small- and medium-sized independent businesses, which are great job-creators,” she said.