837 ECM 0909 Iceland:Layout 1
837 ECM 0909 Iceland:Layout 1
18/8/09
13:02
Page 837
ICELAND COUNTRY REPORT
COMING IN FROM THE COLD A sparsely populated and geographically isolated country, Iceland made news the world over in 2008 because of its collapsing finances. Despite this, its mature cosmetics industry has proved strong during the turmoil and is now looking to the future. Nadia Di Martino reports Iceland factfile Capital: Reykjavik Population: 300,000 (approx) ● Currency: Icelandic Krona ● Language: Icelandic ● Size of country: 103,001 km2 ●
Photo: Pure Icelandic Ltd
●
This year Icelandic company Purity Herbs celebrates 15 years of being in business
From 2003 to 2008 the C&T sector in Iceland has reported an overall growth of 27.5% according to recent industry calculations. In 2008 the C&T market was worth around $84.6m and the per capita retail expenditure on cosmetics stood at around $279 per head, per year. Premium cosmetics (including premium facial make-up, eye make-up, lip and nail products) and hair care represented the most profitable sectors of the Icelandic C&T industry followed by colour cosmetics, skin care and fragrance in that order. In 2008, fragrance was the most dynamic segment, recording a growth of 10.4% on 2007. Colour cosmetics meanwhile jumped by 9.3% followed by the 9.5% growth of premium cosmetics and 7.9% for skin care. These results are certainly uplifting to hear bearing in mind that just last year Iceland was so financially vulnerable as a country that it had to apply to the International Monetary Fund (IMF) for emergency financial aid – the first western country to do so since 1976. Back to nature With a small population of around 300,000 inhabitants, Iceland is traditionally known for its affluence and high standards of living. However in 2008 the credit crunch hit the country dramatically and circumstances suddenly changed exposing Iceland’s vulnerable economy to the disbelieving eyes of the world. According to The Economist, Iceland’s finances still remain in a shocking state: “The budget
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deficit is running at 13% of GDP and public debt is well over 100%. The Icelandic Krona has lost half its value against the Euro since January 2008.” Interestingly the recent crisis has pushed Icelanders back to their roots. It has stimulated growing concern about the country’s natural resources since they are likely to represent the key to recovery moving forwards. A debate has also emerged about how these almost untouched resources should be used ethically in beauty products while at the same time respecting the land, which is dear to Icelanders. Meanwhile the global rise in ethical consumerism has propelled the demand for natural beauty products here too. This, alongside the desire to buy more local products to keep the economy afloat, has in turn meant that several Icelandic manufacturers who have traditionally used natural ingredients have in fact partly taken advantage of the economic chaos of the last year. On the other hand, as a result of the crisis some multinationals have stopped trading in Iceland altogether, including some of the giants that used to dominate the market. The few local C&T companies in the market are trying to keep hold of a positive and realistic image of their particular sector. Ása Brynjólfsdóttir, director of research & development at Blue Lagoon, a company that manufactures skin care products and spa treatments says: “The sector isn’t very big overall and there aren’t many Icelandic cosmetics brands September 2009 ECM 837
18/8/09
13:02
Page 837
ICELAND COUNTRY REPORT
COMING IN FROM THE COLD A sparsely populated and geographically isolated country, Iceland made news the world over in 2008 because of its collapsing finances. Despite this, its mature cosmetics industry has proved strong during the turmoil and is now looking to the future. Nadia Di Martino reports Iceland factfile Capital: Reykjavik Population: 300,000 (approx) ● Currency: Icelandic Krona ● Language: Icelandic ● Size of country: 103,001 km2 ●
Photo: Pure Icelandic Ltd
●
This year Icelandic company Purity Herbs celebrates 15 years of being in business
From 2003 to 2008 the C&T sector in Iceland has reported an overall growth of 27.5% according to recent industry calculations. In 2008 the C&T market was worth around $84.6m and the per capita retail expenditure on cosmetics stood at around $279 per head, per year. Premium cosmetics (including premium facial make-up, eye make-up, lip and nail products) and hair care represented the most profitable sectors of the Icelandic C&T industry followed by colour cosmetics, skin care and fragrance in that order. In 2008, fragrance was the most dynamic segment, recording a growth of 10.4% on 2007. Colour cosmetics meanwhile jumped by 9.3% followed by the 9.5% growth of premium cosmetics and 7.9% for skin care. These results are certainly uplifting to hear bearing in mind that just last year Iceland was so financially vulnerable as a country that it had to apply to the International Monetary Fund (IMF) for emergency financial aid – the first western country to do so since 1976. Back to nature With a small population of around 300,000 inhabitants, Iceland is traditionally known for its affluence and high standards of living. However in 2008 the credit crunch hit the country dramatically and circumstances suddenly changed exposing Iceland’s vulnerable economy to the disbelieving eyes of the world. According to The Economist, Iceland’s finances still remain in a shocking state: “The budget
Simplifyle 16
deficit is running at 13% of GDP and public debt is well over 100%. The Icelandic Krona has lost half its value against the Euro since January 2008.” Interestingly the recent crisis has pushed Icelanders back to their roots. It has stimulated growing concern about the country’s natural resources since they are likely to represent the key to recovery moving forwards. A debate has also emerged about how these almost untouched resources should be used ethically in beauty products while at the same time respecting the land, which is dear to Icelanders. Meanwhile the global rise in ethical consumerism has propelled the demand for natural beauty products here too. This, alongside the desire to buy more local products to keep the economy afloat, has in turn meant that several Icelandic manufacturers who have traditionally used natural ingredients have in fact partly taken advantage of the economic chaos of the last year. On the other hand, as a result of the crisis some multinationals have stopped trading in Iceland altogether, including some of the giants that used to dominate the market. The few local C&T companies in the market are trying to keep hold of a positive and realistic image of their particular sector. Ása Brynjólfsdóttir, director of research & development at Blue Lagoon, a company that manufactures skin care products and spa treatments says: “The sector isn’t very big overall and there aren’t many Icelandic cosmetics brands September 2009 ECM 837
