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Beauty Business Insight Alert Archive

Have a look at some of our recent alerts. These give broad coverage of the industry - if you want something more specific create your own here.

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April 04, 2017, to April 11, 2017

Mary Kay Appoints Lucy Gildea As Chief Scientific Officer

Mary Kay Inc. said it has appointed Lucy Gildea as the company’s chief scientific officer. Assigned to the beauty brand’s global headquarters in Addison, Texas, Gildea will manage Mary Kay’s Global Research and Development operations. Her responsibilities include overseeing the development of new products and expanding the company’s lineup of patents.

L'Oreal Professionnel Pakistan Enlists Hareem Farooq As Brand Ambassador

L’Oreal Professionnel Pakistan has named actress Hareem Farooq as the company’s brand ambassador in the country. Farooq was included in the brand’s It Looks 2016 global campaign. She will also be one of the brand’s spokespersons for the 2017 campaign.

L'Oreal Plans Review Of Media Account

L’Oreal is reportedly planning to review its media account. With an annual budget of $26.2 million, according to Nielsen, the account is currently managed by Carat after winning it in 2013. L’Oreal is holding initial talks with several media agencies regarding media planning and buying.

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March 28, 2017, to April 04, 2017

FEATURE: Where Now For Unilever? We Lay Out Our Thoughts And Suggested Response To The Humbling Kraft Heinz Bid

The unexpected and deeply unwelcome Kraft Heinz takeover bid shook  Unilever* to its core. Analysts and commentators expected 3G to use Kraft Heinz as a vehicle for further acquisitions in the food space as it pushed to aggressively cut costs across larger businesses, but Unilever was thought to be above the fray.  In a tacit admission of past failure, Unilever convened a hurried review of ways to boost its valuation and in coming days or weeks we’ll see what this holds. Meanwhile, we have clarified our own thinking about how Unilever should move forward as a vibrant independent company that quickly surfaces its underlying value. You can read a summary of our analysis here and contact us if you want further details.
*Disclosure: Unilever is a client of ours, as are most of the companies we list as acquisition targets. Also, our newsletters are read by recipients at all companies mentioned in this piece.

Chanel Launches Instagram Campaign For Coco Mademoiselle Fragrance Brand

French beauty brand Chanel launched a marketing campaign on social media site Instagram for its Coco Mademoiselle brand of fragrances. As part of the campaign, Chanel's official Instagram account shared an image with three different ad photographs. Followers need to click on the tags to unveil the full images and see the different aspects of the brand.

Shiseido Deploys Humanoid Robots At Kakegawa Factory's Assembly Lines

Shiseido Company, Limited, has started deploying industrial robots to the assembly lines of makeup products at its factory in Kakegawa, Japan. Currently on a pilot-program basis, the deployment of robots started in March 2017 and features teams involving a human worker and two humanoid robots each. According to the company, the humanoid robots will focus on procedures that are hard to automate with existing machines and industrial robots, while their human partner will take charge of inspecting minor defects and assuring quality.

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March 14, 2017, to March 28, 2017

Unilever Continues Review Of Operations To Find Ways To Boost Shareholder Returns

Responding to what CEO Paul Polman called the “near-death” experience of Kraft Heinz’s recent failed takeover bid, Unilever is thoroughly reviewing operations to see where it can boost shareholder returns. The company is requiring division heads in all of its businesses – from ice cream to shampoo and deodorants – to to conduct the reviews. It is unlikely the company will untangle its food, home, and personal care businesses, but it could make medium-sized acquisitions  One area of concern is actually a strength: its low debt balance. The small amount of debt gave Kraft Heinz a strategy for financing the acquisition. Unilever could cut costs more deeply in low-growth businesses to boost profit. And it may sell its Flora margarine unit to Kraft Heinz.

Ulta Beauty Offers Growth Opportunities For Personal Care And Beauty Brands

Beauty retailer Ulta Beauty is expanding, with sales and profits growing despite the slowdown in the overall brick-and-mortar retail market. In the last quarter of 2016, the company saw its profits grow 16.6 percent compared with the same period in the previous year, and double-digit same-store sales growth for eight consecutive years. Personal and beauty care brands can benefit from investing in the retailer, especially its omnichannel platform. Also, brands should collaborate with Ulta's editorial and social media operations.

Avon SVP General Counsel Benjamin Retires

Avon Products, Inc., said Jeff Benjamin, Senior Vice President, General Counsel, and Chief Ethics & Compliance Officer, is retiring from the company. Benjamin joined Avon in 2012, following a 40-year career, 37 of which were spent at Novartis. He will remain with the company until his successor is named.

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February 28, 2017, to March 14, 2017

Fragrance Brands Are Recruiting Influencers For Digital Ad Campaigns

Some fragrance brands are expanding their partnerships with social media influencers, including YouTube vloggers. For example, Coty invited influencers to the launch event of Marc Jacobs' Divine Decadent scent. Brands are moving away from their previous business model of launching campaigns featuring celebrities.

Revlon Partners With Amazon To Launch Marketing Campaign

Beauty brand Revlon Inc. has partnered with online retailer Amazon to launch “the Love Project” marketing campaign. As part of the partnership deal, Amazon will put the Revlon brand on 10 million shipping boxes. To launch the campaign, the company introduced on February 23, 2017, a music video highlighting different forms of love.

Unilever Eyes Changes To Executive Pay System To Encourage Loyalty, Entrepreneurship

Unilever announced plans to revise its pay structure for the company's executives and directors that would encourage them to see themselves as owners of the business. Once approved by the shareholders at the company's annual general meetings in April 2017, the proposed revisions would be effective for three years. According to the company, the changes would focus more on “long-term employee share ownership and personal commitment.”

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February 21, 2017, to February 28, 2017

SkinCeuticals Launches H.A. Intensifier Anti-Aging Skin Serum

SkinCeuticals announced the launch of H.A. Intensifier, a corrective hyaluronic acid serum designed to deal with signs of aging caused by the decline and degradation of natural hyaluronic acid in skin. H.A. Intensifier comes with 10 percent concentration of Proxylane, a proprietary ingredient, created to help support hyaluronic acid levels and improve skin firmness by maintaining the strength of the skin’s matrix. It also comes with 2.0 percent Dipotassium Glycyrrhizate and 0.2 percent Purple Rice Extract, the company says help maintain the skin’s hyaluronic acid content.

South Korean Beauty Brands Eye Faster Expansion In Middle East Markets

South Korean cosmetics brands are speeding up their expansion efforts in Middle Eastern markets. LG Household & Health Care Ltd.’s The Face Shop brand said it will launch its business operations in Qatar and Kuwait in 2017. AmorePacific Corp. partnered with Kuwait-based retailer Alshaya Group to launch its first Etude House store in Dubai by the second half of 2017. China’s adoption of hostile measures against Korean beauty brands, following South Korea’s deployment of a U.S. missile defense system in the country, is one of factors driving companies to seek other markets.

Elizabeth Arden Plans To Launch Skincare Products For Travel Retail Market

Elizabeth Arden plans to launch the Advanced Ceramide Capsules Replenish & Restore for Face skincare product at the coming IAADFS Duty Free Show of the Americas. Featuring the company’s upgraded Ceramide Youth Restoring Face Serum, the product will be an exclusive for the travel retail market. Also, the brand plans to launch in autumn 2017 the Advanced Ceramide Capsules Replenish & Restore for Eyes Trio and Advanced Ceramide Daily Youth Restoring Face Serum/Eye Serum combo pack.

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February 14, 2017, to February 21, 2017

Estée Lauder, Victoria Beckham Expand Partnership With Reprise Of Cosmetics Collection

Following their successful collaboration in September that saw the complete limited edition make-up collection sell out rapidly, beauty giant Estée Lauder and Victoria Beckham are to create another cosmetics capsule but with more stockkeeping units and wider distribution. Jane Hertzmark Hudis, group president at Estée Lauder Cos. Inc., said the second capsule contains 30 SKUs, or double the SKUs originally released. Also, production will triple with distribution rising to 1,200 doors, from 450 doors last year. The products will be on sale in-store and online at Selfridges, Harrods, Harvey Nichols, Brown Thomas, the Victoria Beckham store on Dover Street, Fenwick Newcastle (in-store only), esteelauder.co.uk and Net-a-porter’s U.K. site. Prices for the collection range from $30 for a nude-matte lip pencil, $45 for the eyeshadows and $95 for Morning Aura Illuminating Crème. Hudis said Lauder is going “much deeper and more powerful” in its partnership with Beckham.

Trian Reveals $3.5 Billion Stake In Procter & Gamble; Will Seek Stronger Revenue And Lower Costs

Activist investor Trian Fund Management LP revealed its $3.5 billion stake in Procter & Gamble Co. Described as the investment fund’s largest ever stake in a company, Trian Fund’s position is expected to lead to a presence in the consumer goods company’s board of directors. Although P&G sold 41 of its brands to Coty Inc. for $12.5 billion, the company remains an industry giant valued at $225 billion. Trian Fund is likely to demand for improved revenues and lower operating costs to improve P&G’s shareholder value.

Estee Lauder Introduces Double Wear Long-Wear Makeup Removal Wipes

Estee Lauder announced the Double Wear Long-Wear Makeup Removal Wipes makeup remover to the global travel retail market. According to the company, the wipes remove impurities and long-wearing and waterproof makeup. They come with scents of jasmine and muguet blended with bergamot, rose, rich violet, amber, and musk.

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January 24, 2017, to February 14, 2017

British Ad Agency To Handle All Of Walgreens Boots Communications

The WPP communications services group will develop multiple marketing and communications for Walgreen Boots Alliance’s retail and wholesale businesses, and its health and beauty brands. WPP will provide traditional and digital advertising, media management, promotion and relationship marketing, and media relations. The group, which is based in London, U.K., will open hub offices in Chicago, London and New York to support Walgreens Boots Alliance and businesses including Walgreens, Boots and Alliance Healthcare businesses. 

Middle-Class Consumers Driving Growth In China's Beauty Market, Report Shows

China's middle class, composed of more than 100 million families, is driving growth in the country's beauty care market, according to Kantar Worldpanel. Data from the market research firm revealed middle-class consumers have more confidence about the future and, hence, are more likely to buy more and purchase big brands. They use the internet to find product information and are more ready to try new products and adopt new trends. Also, middle-class consumers accounted for more than half of the incremental sales in various categories of the beauty market.

L'Oreal Eyes Bigger Spending On Digital Marketing

Beauty brand L’Oreal plans to increase its spending on digital marketing, according to the company’s chief digital officer, Lubomira Rochet. Digital spending accounted for 30 percent of the company’s total media spending in the first half of 2016 and is forecast to rise in 2017, Rochet said. Rochet also said that the company is adopting a marketing strategy based on the idea that consumers are influenced by a range of ways.

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January 17, 2017, to January 24, 2017

LVMH Pushing To Make Its Operations More Sustainable

Even luxury brands are concerned about moving toward more sustainable production processes and LVMH has made significant progress. It has a corporate framework, LIFE (LVMH Initiatives for the Environment), that address nine environmental challenges. Its assessment takes a full life cycle perspective and each brand’s strategic plan now folds in a LIFE plan that includes five year actions and targets. One of the more innovative elements centers on the company’s carbon reduction strategy. It requires all of its brand houses to spend €15/ton carbon emitted on abatement or related research efforts. In the first year of the program the company invested some €6 million behind this effort. LVMH is communicating its sustainable credentials through using a distinctive symbol a “Butterfly Mark,” which is a first in the luxury industry.

More South Korean Men Wear Make-Up, Boosting Male Beauty Market

Sales of men’s skincare products in South Korea rose more than 80 percent in the past five years. Driven by the country’s weakening economy and competitive job market, the men’s cosmetics segment now accounts for 10 percent of South Korea’s $10 billion beauty market. Toners, lotions, and BB creams are some of the favorite skincare products of male consumers, who are increasingly convinced that putting on makeup helps improve their self-confidence and, consequently, their chances of landing a job or finding a new partner.

Kao Likely To See 10-Percent Profit Boost In 2016, Analysts Say

Kao is expected to have raised its group operating profit 10 percent to approximately 190 billion yen, or $1.66 billion, in 2016. Earlier, the company has projected operating profit to reach 184 billion yen for the year, with sales expected to have reached about 1.55 trillion yen. Sales were driven by the growing number of households in the country.

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January 10, 2017, to January 17, 2017

Unilever's Premium Skincare Play Could Improve Margins And Valuation

Industry analysts Trefis believes that Unilever’s move into premium skincare, through a number of acquisitions, will help the company improve its EBITDA margins from a relatively low 18 percent to something closer to those generated by industry rivals. Trefis says that Unilever’s margins have been held down by relatively high marketing costs as a percentage of revenues; a reliance on mass, low-margin products; and increasing costs of raw materials, exacerbated by the impact of Brexit on sterling. A higher-margin, more premium-oriented portfolio will help address some of the pressures, supported by expected growth in the premium skin care segment and Unilever’s attack on costs from adoption of Zero Based Budgeting. Trefis believes Unilever could push up EBITDA margins to around 25 percent within a few years and the company’s valuation could improve by over 20 percent.

Amazon Making Progress With Prestige Skin Care, Provides Rich Content To Engage Consumers

Amazon continues to build out its offering across new categories and its Amazon Luxury Beauty store shows it will be a contender in premium segments. The company recently added a page targeted at prestige shoppers - Amazon Professional Skin Care -that provides a range of ‘tools and kits to help you develop a complete daily care regimen.’ Amazon offers simple to use filters (shop by concern, expert advice…) along with videos and educational features that engage consumers. Color cosmetic players have for a while offered rich and engaging content but skin care brands have lagged and Amazon is moving to plug the gap - content on the Amazon page exceeds what is available at retailer websites and many beauty blogs.  It also looks to be winning over large brands that were previously dismissive. Elizabeth Arden recently became an official distributor on Amazon’s Luxury Beauty store, a move that will give the online retailer credibility.

New Skin Nourishment Range From Burt's Bees With Royal Jelly

The Burt’s Bees natural skincare brand is introducing a new Skin Nourishment range for the face, containing vitamins, amino acids, antioxidants, and minerals. The range also contains royal jelly, which is produced by honeybees to feed the queen, and cleanses, hydrates and softens the skin. The products will be available in the natural grocery, drug, gift and specialty store channels as well as select mass retailers, including Target and Walmart.

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December 27, 2016, to January 10, 2017

Premiumization Driving Sales In Many Categories Worldwide

A Nielsen report highlights the strength of the premiumization trend that is driving sales around the world and looks set to continue as powerful underlining shifts play out. Rising income and a desire for exceptional quality (cited by 54% as a factor in premium purchases) and superior performance (46%), are core drivers. Interestingly, Nielsen finds that products with social or environmental benefits have premium potential. Some 42% of global respondents say they’d be very willing to pay a premium for products made with organic or all-natural ingredients, while nearly the same proportion (39%) say they’d pay extra for sustainable or environmentally friendly products.
Premium is well established in many markets – it already accounts for about 25% of dollar sales in both the personal-care category in the U.S. and Southeast Asia and is growing faster than other segments.  In Southeast Asia, for example, the premium segment grew 21% from 2012 to 2014, over double the rate of the mainstream and value tiers (8% and 10%, respectively). Strong and growing levels of consumer acceptance indicate the segment will continue to expand. Nielsen states that over 25% of global respondents say they’ll consider buying premium personal-care product:  hair-care (27%), body-care (26%) and oral-care (26%).
More: we previously looked at prestige strategies in India.

Is The Contrary Consumer Simply Frustrated With Marketers?

The job of marketing is being complicated by contradictory consumer behavior. Consumers say they want a slower life but make quick purchase choices, and that health and wellness is a key priority for them, yet sales of products with unhealthy ingredients are still growing. The author wonders if the consumer is simply cynical of the marketers’ messages, and maybe that’s just a part of a broader feeling of distrust of a range of institutions, including government. Promises are made, and then broken. Trends help create the assumptions on which marketers base their approach to reaching the consumer, but those assumptions are increasingly being questioned. They are too general, unsophisticated and often flawed. There have always been “contrary consumers”, but now there is also a growing band of consumers that don’t like to be told what to do and like.  

Green Beauty Provides Brands With New Opportunities, And Challenges

A blog post from Euromonitor International says that developments in digital social communication allow consumers to get better information on the health impact of beauty product ingredients and also their social and environmental impact. This provides new opportunities for new product formulations, positioning and benefits.’ Green beauty’ has many social and environmental perspectives, but consumer preference for ingredients that are derived naturally is still a key driver. ‘Healthy beauty’ is getting a broader remit, with beauty brands extending into fitness and relaxation. ‘Clean labeling’ is another food and beverage trend with relevance for beauty, and beauty brands are seeking a simpler, more back-to-basics approach: fewer and more natural ingredients. The focus on ingredients also provides opportunities for brands looking to conform to certain religious values, and the demand for halal-certified beauty products has seen steady growth in some markets with affluent Muslim populations. The impact of environmental pollution on skin is opening up opportunities for beauty products that address these concerns, but proving efficacy in this respect remains a challenge for brands. In a broader operational sense, consumers want to know that brands are also serious about corporate and social responsibility, and brands are looking, for example, to develop affordable alternatives for ingredients used in regions where water is scarce. ‘Green beauty’ faces many difficult challenges, but demand will be there for green beauty products that can meet the requirements of the more conscious consumer, but without compromising on performance.
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