L’Oréal USA Signs Agreement To Acquire Carol’s Daughter

Posted: October 20, 2014

L’Oréal USA announced the signing of a definitive agreement to acquire Carol's Daughter. Following a multi-channel distribution model, Carol's Daughter offers a comprehensive range of products that are available at specialty beauty stores, mass retailers, on HSN, through e-commerce and at Carol's Daughter branded stores in New York City. For the 12 months ending September 30, 2014, Carol's Daughter had net sales of $27 million.

"Carol's Daughter possesses an expertise in the multi-cultural consumer segment, a rapidly expanding market that represents an important growth opportunity in the beauty industry," said Frederic Roze, president and CEO, L’Oréal USA. "This acquisition will enable L’Oréal USA to build a new dedicated multi-cultural beauty division as part of our consumer products business and strengthen the company's position in this dynamic market."

Carol's Daughter will continue to operate out of its New York City headquarters under the brand's current leadership team. The acquisition, according to the company, further enhances L’Oréal USA's roster of American brands, which includes Maybelline NY, Kiehl's, Essie, Urban Decay, Clarisonic and NYX.

"I have worked hard for the past 21 years nurturing my brand and am thrilled that we will have a new home with L’Oréal USA," said Lisa Price, founder and president of Carol's Daughter. "L’Oréal has a proven track record of helping established companies achieve their full potential while staying true to the core of the brand and they have an understanding of the future of multi-cultural beauty. I could not be more proud to begin this next chapter of the Carol's Daughter brand with them. I know that my mother (Carol) is smiling as well."

Headquartered in New York City, Carol's Daughter is an American multi-cultural beauty brand with a pioneering heritage in the natural beauty movement. Created by in 1993, the brand caters to a diverse, rapidly growing market and has established a loyal consumer following across the country.

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Promising Ethnic Beauty Market Gives Way to Intensified Competition

Posted: October 17, 2014

The multicultural beauty products market continues to outpace the growth of the overall market for cosmetics and toiletries, posting a 3.7% increase in 2014, reports Kline Company in its soon-to-be-published Multicultural Beauty and Grooming Products: U.S. Market Analysis and Opportunities.

Rapidly growing ethnic populations have given way to intensified competition, with multicultural beauty marketers breaking boundaries between general and multicultural beauty. According to Kline, on one end, there are brands such as Carol’s Daughter that are positioning away from being an exclusive ethnic brand to now also target a broader audience, regardless of ethnicity. This holds particularly true in the natural personal care segment, where popular ethnic hair brand Shea Moisture, as an example, is now rebranding to become suitable for all consumers.

“This widening approach helps move multicultural brands beyond the ethnic section of the beauty aisle to sit side-by-side nationally advertised brands,” says Donna Barson, senior associate at Kline’s Consumer Products practice. “However, this audience expansion needs to be done without alienating long-time consumers who might feel deserted if they feel like their brand no longer speaks exclusively to them.”

Concurrently, mainstream brands continue to develop tactics to capture a growing percentage of the ethnic personal care market. While mainstream brands like Revlon, Lancôme and Cover Girl have long reached ethnic consumers via the creative use of spokesmodels and targeted advertising, the approach for many brands has become even more savvy and genuine. Some brands, including Estée Lauder and Shiseido, use beauty advisors who speak the language of the local ethnic community (whether it is Mandarin, Vietnamese or Spanish, as examples) to create a greater connection with these consumers. Some also launch products targeting certain ethnic groups in the United States that are simultaneously released in that group’s country of origin.

Beyond the movement of mainstream companies into the multicultural space opening possibilities of more MA in the coming years, it will also be beneficial for consumers as they will be provided with a wider array of products targeting their needs. Smaller multicultural companies will also need to innovate in order to gain sales and create a niche for themselves or position themselves for a potential acquisition. In addition, the competition coming from the general market is also blurring the lines and challenging multicultural marketers.



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China Losing Out in Expanding Asian Natural Cosmetics Market

Posted: October 17, 2014

China is losing market share in the Asian natural and organic cosmetics market, according to Organic Monitor research that finds Chinese market growth rates are declining because of certain testing methods and formulation challenges. 

The Asian natural cosmetics market is expanding by about 15% per year. Growing consumer awareness of health and wellness issues is boosting demand for organic and natural products. Few Chinese companies, however, are producing natural and organic cosmetics because of formulation and ingredient issues. There is low availability of certified organic ingredients and natural extracts, which are mainly imported into China. Further, offers Organic Monitor, Chinese formulators and product developers lack technical expertise in replacing synthetic ingredients with naturals in cosmetic formulations.

While the Chinese market for naturals has declined, markets such as India, Thailand and Singapore grow. Interestingly, Hong Kong is a Chinese anomaly, with a number of leading international natural and organic cosmetic brands maintaining a strong presence in Hong Kong while more than 20 new brands launched annually in Hong Kong. Further, Hong Kong may have the highest concentration of green cosmetic retailers in the world. Apivita, Jasmin Skincare, Aveda, Neal’s Yard Remedies, Jurlique, Melvita and Comvita are among the international brands with concept stores in Hong Kong.



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Digital Shopping Moves to Epicenter Brand Distribution Strategies

Posted: October 16, 2014

The beauty retailing landscape is constantly in flux, Kline recently posted in a blog. The consumer’s path to purchase is not always clear, as offline and online shopping are more intertwined than ever before.

Alternate shopping channels and sub-channels, once touted by many in the beauty industry as being “negligible” or “insignificant,” have emerged as “essential” for the growth of brands. Digital shopping has moved from the peripheral to the epicenter of a brand’s distribution strategy. The formula for a winning marketing approach can be created based on the awareness of the beauty retailing mix and what is appropriate for a particular product or category.

Follow your customers wherever they are, Kline states. Technology is a driving force that is changing the face of beauty retailing, and retailers are no longer bound by a particular channel. Instead, most view themselves omni-channel in order to reach out to the largest possible audience made up of smaller sub-demographics.

Specialty stores are an important critical space to purchase beauty products for many consumers. Many of these venues are havens for new product launches. This channel now demonstrates the second highest growth at 5.4% in 2013, boosted by growth coming from apparel specialty stores, which have posted an 18% CAGR since 2007.

TV shopping has established itself as a credible outlet, with infomercials growing at a CAGR of +11% since 2007 and home shopping networks growing by over 18%, increasing its market share from 5% to almost 9% since 2007. Mobile and online shopping have become even more important. The growth of purchasing via smartphones, personal computers and tablets helps grow the e-commerce area, and Internet sales have posted a 26% CAGR since 2007.


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Lauder to Acquire Le Labo

Posted: October 15, 2014

The Estée Lauder Companies announced that it has signed a definitive agreement to acquire Le Labo, the high-end fragrance and sensory lifestyle brand with a distinct French heritage and an emphasis on fine craftsmanship and personalization in its products and services. Terms of the deal were not disclosed. The acquisition is expected to close in November 2014.

Founded in 2006 by fragrance industry veterans Fabrice Penot and Eddie Roschi, Le Labo provides a selective assortment of fragrance and sensory lifestyle products in minimalistic retail environments—including the brand’s freestanding stores in New York, London, Paris, Los Angeles, San Francisco, Tokyo and Hong Kong, as well as select prestige department stores in global flagship cities and the brand’s website. Le Labo has offices in New York and London.

According to the companies, the brand has built a loyal following based on its high-quality products and unique retail experiences, which emphasize exceptional service, personalized products and exclusivity. Its current product offerings include fragrances, body care products and candles, as well as limited-edition “City Exclusive” scents available only in certain boutiques by region.

“Le Labo is the perfect complement to our portfolio of prestige beauty brands,” said Fabrizio Freda, president and CEO, The Estée Lauder Companies Inc. “Fabrice and Eddie have built a beautiful, incredibly unique brand with a focus on craftsmanship, personalization and high-touch services. We look forward to collaborating closely with them to continue building on their extraordinary success with discerning global consumers.”

“The Estée Lauder Companies is the ideal home for us and for our brand,” said Le Labo co-founders Fabrice Penot and Eddie Roschi. “We founded Le Labo with the guiding principle that the soul of a fragrance comes from the intention with which it is created and the attention with which it is prepared. The Estée Lauder Companies not only understands and respects the core elements of our business, but also has the resources to help us continue to grow into a more fully expressed sensory lifestyle brand. The company has a strong track record of growing and nurturing prestige entrepreneurial brands, and we love that they are so supportive of and committed to our vision.”

Le Labo will be overseen by John Demsey, The Estée Lauder Companies’ group president, responsible for Estée Lauder, M·A·C, Tom Ford, Prescriptives, Bobbi Brown, Jo Malone, La Mer, Bumble and Bumble, Smashbox and Aramis Designer Fragrances.

Related Topics: Acquisitions (Marketers)



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Opportunities in the Vietnamese Cosmetics Market: Q&A with Le Chau Giang

Posted: October 13, 2014

Q: When did Vietnam become a major player in the cosmetics market?
A: I personally think that Vietnam is not yet a major player in the cosmetics market. It is an emerging market with huge potential that has been experiencing impressive growth; growing at a rate of 30% per annum for the past few years, so there is definitely an opportunity for Vietnam to become a major player within Asia.

Q: How do the skin needs of Vietnamese women differ from the rest of the ASEAN market?
A: When people think of Vietnam, they often think of one market. In fact, the market is very fragmented, not only due to huge differences in income but also because of cultural heritage. The established international brands are able to provide products at a range of price points serving the larger market as a whole, whereas domestic brands have a great potential to meet specific needs of consumers.

Q: How does climate/environment play a part in those needs?
A: From north to south, Vietnam is a long country; therefore, it has a range of different climates. The north has four seasons, whereas the south experiences tropical weather that is hot and humid. Consumers in the north generally purchase far more hydrating moisturizers to combat the effects of colder weather, whereas matte products are generally favored in tropical areas, where complexions tend to be oily.

Q: What are some attributes of skin care products that Vietnamese women look for? Are there specific product forms or textures that they like?
A: Like everywhere, women in Vietnam want to look younger and prettier. However, a common challenge that the cosmetic industry faces in most emerging markets including Vietnam is consumers wanting quick efficacy.

Q: How is the market for natural personal care products in Vietnam?
A: The market for natural personal care products in Vietnam is on the rise. Vietnam has an abundance of natural ingredients, such as essential oils and lemongrass, both of which are popular with both Western consumers and domestic consumers.

Q: What are some interesting innovations to come out of the area? Who came up with these innovations?
A: The market is more of a follower than an innovator. However, Vietnam is home to a number of herbal and natural ingredients favored by both Vietnamese and Western consumers, so I do expect to see both foreign companies operating within Vietnam and domestic manufacturers using these ingredients as inspiration for innovation.

Q: What is the regulatory market like in Vietnam? How does that help/hinder the cosmetics industry?
A: Vietnam has implemented the ASEAN Cosmetics Directive and this has made life for the cosmetic industry much easier. While a reduction in tariffs is financially beneficial, technical obstacles being removed also benefits the cosmetic industry, resulting in more collaboration between companies in member states.

Q: Where are some growth opportunities in the Vietnamese skin care market. What do you see on the horizon in this market?
A: The market is still under-developed, so opportunities are present in all segments. More than half of Vietnam’s 90 million people are aged 30 and below, and this demographic tends to favor more sophisticated products and brand names. This will result in local manufacturers spending more money on the research and development of new skin care products, as they look to use their more comprehensive domestic knowledge to gain an advantage over global manufacturers.



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Growth Forecasted for Color Cosmetics in Portugal

Posted: October 14, 2014

The color cosmetics market in Portugal is forecasted to see growth in upcoming years, despite a decreased spending capacity due to the difficult economy and increasing taxation. According to a report by Euromonitor International, the country's color cosmetics market is expected to see a CAGR of 2% at constant 2013 prices over the forecast period.

Portuguese consumers demonstrated a continued interest in color cosmetics, considering them a small and affordable luxury to improve their mood. The category is still small in Portugal compared to other European countries, which gives the category room for growth.

The major player in the market is L'Oréal Portugal, which continued to lead color cosmetics in 2013, based on the success of brands such as L'Oréal Paris and Maybelline. The company's main strength lies in its numerous umbrella brands, which cover the entire range of color cosmetic categories, and cater to a wide variety of consumer needs.

The difficult economic context will, to a certain extent, be an opportunity for this category, as women will see color cosmetics as a small and affordable luxury, able to compensate for other consumption frustrations.

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Symrise Opens Vanilla Production in Madagascar

Posted: October 13, 2014

Symrise has opened an extraction facility for sustainable vanilla production in Madagascar. The investment at the Benavony site amounted to about €3 million. With the plant, the company said every step in the processing of vanilla can now be performed locally on the East African island for the first time.

The company has been active in Madagascar, where 80% of the world’s vanilla is grown, since 2005. The 3,500-square-meter facility offers production space for extraction, analysis, quality control and the proper storage of vanilla extracts. The site, which has been completely newly constructed, has a total of 36 hectares of space. In the medium term, Symrise plans to process additional important raw materials there, such as vetiver.



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BYS Cosmetics Takes Runway Speed to Cosmetics Market

Posted: October 13, 2014

According to a report by Business World Online, Australian company BYS Cosmetics has taken a background in fashion and runway trends full speed to the cosmetics market, but with a focus on affordability. BYS Cosmetics founder Ed Aitken explained this approach in a recent interview.

“One of the biggest strengths of BYS is its ability to develop new products and take them to market at an affordable price," he said, noting regular visits to the United States and Europe to scout for new trends. "We also keep in close touch with our network of worldwide distributors so we can tailor specific products for specific markets.”

Like many manufacturers, BYS knows speed to market is essential, so its overseas team works closely with production facilities to develop products that reach BYS stores quickly. Aitken added, "While similar products are available in makeup stores for hundreds of dollars, BYS can come up with a product of similar quality for up to 50% less, thanks to the company’s vast network of suppliers and product developers around the globe."

Before entering cosmetics, the company had years of experience in fashion accessories, which constantly change. It adapted this dynamic to the cosmetics industry, and according to Aitken, has proven it is possible to produce innovative cosmetics without exorbitant price tags. The company boasts more than 1,000 offerings in its portfolio. For just the eyes, more than 100 products are available in 12 categories. For nails, there are currently more than 400 shades. The company also provides mineral makeup without dyes or preservatives.



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L’Oréal Obtains Business License to Market Chinese Episkin

Posted: October 10, 2014

L'Oréal was granted a Chinese business license for Shanghai Episkin Biotechnology Ltd., the company it created to market the Asian version of its reconstructed skin model Episkin.

The Chinese Episkin model is a human epidermis model reconstructed from Asian keratinocytes, produced by the L'Oréal Advanced Research Laboratories in China according to the same strict production standard and quality control criteria as the L'Oréal's Predictive Evaluation Center in Gerland, France. Although the company has researched reconstructing skin and other human tissues for the past 30 years, it started producing reconstructed Asian skin in China in 2008.

Episkin is used to validate the safety of cosmetic products and ingredients without animal testing. The company has been strong in its animal alternative research. It shares its methods and tools and offers training to universities and authorities.

 L'Oréal has collaborated with the Chinese Academy of Inspection and Quarantine and the General Administration of Quality Supervision, Inspection and Quarantine of the People's Republic of China to develop an alternative method for the skin irritation test using the Chinese Episkin model.

In China, L'Oréal Research and Innovation employs 300 people in Pudong. The first buildings of the research center were inaugurated in 2005, with a second instalment in 2010 and a third extension in the works.



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