20 years of innovation was the theme of this year’s in-cosmetics. As usual the marketing trends were a major attraction and Imogen Matthews was there to hear what we should be looking out for and doing
The past couple of years have been tough for industry and consumers, but the latest data from research companies Kline and Euromonitor suggest that we may have turned the corner. Anna Ibbotson, industry manager, Kline, used the US as a case study to show the impact of recessions over the past 40 years and their lasting legacy within the beauty markets. Tracking long-term sales data, she showed how skin care sales have managed to achieve growth, even when the US personal care market was growing at a rate lower than GDP. “Skin care is the winner and the only category to show growth during the recession, averaging 4%. However, this compares to only 1% growth for hair care and a decline for fragrance,” she pointed out. Kline’s theory is that the C&T industry has been shielded from the full impact of recessions by the increasing number of women entering the workforce. Working women tend to have more money available for discretionary spending as well as needing to buy beauty products to look good at work.
Irina Barbalova, industry manager C&T, Euromonitor, provided detail on the winners and losers in this current recession, citing China, India and Indonesia as accounting for 28% of growth in 2010. She talked about changes in consumer behaviour. “Even before the recession, there was a return to home comforts. Consumers are looking to make more investment than indulgent purchases,” she maintained. However, Euromonitor has also seen consumers tighten their belts and they are not afraid to buy into budget beauty brands, such as Primark, TK Maxx, Superdrug and Aldi. “Promotional giveaways are an unstoppable force and consumers take discounts for granted,” she added. In the future, consumers will become more thoughtful in their purchasing decisions, while all eyes will be on developing markets, in particular China. “By 2017, China will overtake the US, but spending patterns will be quite different,” predicted Barbalova, explaining how China’s culture of saving has so far held back sales growth.
Hinako Sugioka, senior consultant, Mintel Beauty Innovation, talked about how the recession has influenced consumer attitudes towards the kind of products people buy. For example, instead of going to the spa, they are spending more time at home indulging in skin treatments with unique textures or high-tech functions, making them feel special and luxurious. This is part of what Mintel describes as the “transformer” trend, where consumers expect products to have more than one function, either to save money or time. It is also about experimentation with different textures, morphing textures that change from one state to another and a DIY approach to products which are mixed prior to use. “It is a reaction to the recession and a way to appeal to consumers who want to enjoy their ‘beauty time’, as some might get bored with usual patterns of everyday routine or seek escape,” explained Sugioka.
Social media is one of those buzz terms bandied around to describe how to communicate with consumers online. Richard Stacy was quick to point out that many people misunderstand what social media is about. “It is not about having a Facebook or Twitter strategy,” he said firmly. “It’s about listening and coalescing conversations that are going to inform you on everything you need to know.” Most cosmetic companies have yet to understand how to do social media, according to Stacy, who gave examples of companies such as L’Oréal, P&G and Unilever, showing how their current efforts are, at best, disjointed. “The principles of social media are simple. You need to use conversation, content and community,” he explained. He believes that conversations should be about what people want to speak to you about in places and spaces where they want to be. Brands should develop a content hub to co-ordinate their Facebook, Linkedin, Twitter, You Tube, Flickr and Slideshare activity.
"It’s about listening and coalescing conversations that are going to inform you on everything you need to know"
Google Insight for Search is a new tool designed to help companies make sense of the vast amount of information available on the internet. Gianni Pulli, industry leader FMCG, cosmetics, luxury & health, Google France, explained how it can be used to compare search patterns across regions, categories and to monitor consumers’ interests. He described it as having a “focus group on a large scale”. Using Google Insight for Search, he used YSL Parisienne’s recent Kate Moss commercial to show consumer interest by country, by age group and even their level of attention.
According to Frost & Sullivan, the global personal care market was valued at $328bn in 2009 with annual growth of between 5-6% growth. Leonidas Dokos, industry analyst, Frost & Sullivan, focused on nutricosmetics, the smallest sector worth $2.1bn. “Nutricosmetics and cosmeceuticals are growing at a faster rate than nutraceuticals and cosmetics and toiletries, suggesting an increasing overlap between the two primary market sectors,” he explained. Nutricosmetics is defined as the “beauty from within” concept and is gaining traction because of the hybrid effect of both nutrition and cosmetics in a single ingestible food fortification or supplement. Opportunities within the ageing baby boomer group are apparent if manufacturers can provide scientific data about the properties of their products. “Manufacturers have begun to respond to market demand by providing ample proof of the benefits of nutricosmetic ingredients,” explained Dokos, stating that future success will depend on educating consumers, establishing scientific credibility, the need to maintain a favourable sensory profile and ensuring reliable supply.
The second day of trends presentations focused on the evolving natural/organic trend and how beauty companies are starting to look at the environmental impact of manufacture. Fanny Fagot-Coste, research consultant, Organic Monitor, talked about sustainability and CSR and how it should not be separated from business strategy. She described how the rise of ethical consumerism, pressure for the beauty industry to “clean up” from the media and NGOs, is gaining importance along with the issue of biodiversity and sustainable packaging. Fagot-Coste provided examples of more environmentally friendly packaging alternatives, biopolymers, wood and bamboo.
Companies are also starting to consider fair and beneficial business practices, such as fairtrade, in order to treat suppliers more ethically.
With so many labels denoting natural and organic formulations, Fagot-Coste stated how CSR can be a feel-good PR tool and an opportunity to showcase a company’s uniqueness. “Social media is a good way for opening an honest dialogue [about CSR] with consumers,” she said. The key challenges facing brands are that consumers think that companies cannot really be sustainable and they do not want to pay more for a sustainable product. “Sustainability does not offer a new way for differentiation, but should be seen as a must-have,” she said.
Cosmetics brand Lush does not have a separate CSR department, although CSR is at the heart of the company’s ethical strategy. “We are in the business of saving the planet and happen to be quite good at cosmetics,” said Sarah McCartney, head of brand development, Lush, explaining that the company practises “integrated ethics” which go beyond how the products are manufactured. Lush is well known for its campaigning approach and also supports wildlife by buying organic ingredients, minimises packaging and buys from suppliers as soon as they stop animal testing.
Lush said that it was in the business of saving the planet
Fairtrade is a relatively new idea in cosmetics, but gaining ground as brands start to apply for the Fairtrade mark to use on their products. Isabelle Bluche, Max Havelaar, France, explained the benefits of fairtrade to producers, who can be sure of a more secure and sustainable existence, and consumers. Recent research has shown that 31% of the public expect the Fairtrade mark to be introduced on cosmetics. Currently, 21 cosmetic brands carry the logo on products containing Fairtrade ingredients, including shea, cocoa butter, sesame seed oil, brazil nut oil, honey and sugar, amongst others.
The Year of Biodiversity 2010 was the theme discussed by a panel of experts, moderated by Eduardo Escobedo, economic affairs office, UNCTAD. He began by saying that biodiversity is now an important issue on the international agenda and that October 2010 is the date slated for the EU to incorporate it into its policies. Odile Gauthier, director of biodiversity for the French government, talked about European targets to halt the erosion of biodiversity and how this has led to governments including the issue in their policies. “What is now needed is to strengthen that action and extend it to private sector players,” she affirmed.
Biodiversity is not a new issue for L’Oréal, which has been evaluating its impact on all raw materials for the past 20 years, explained Carole Peille, manager of raw materials and sustainable development, L’Oréal. “It involves having an in-depth knowledge of the local situation,” she pointed out. The L’Oréal group, which includes The Body Shop and Kiehl’s, sources 40% of its materials from natural ecology.
Brazilian company Natura has been involved in sourcing ingredients from biodiversity over the past ten years. “The goal should be to promote biodiversity first and then to aim for organic/natural certification,” said Marcos Vaz, director of sustainability, Natura, pointing out that certification gives consumers peace of mind about the products they purchase.
Rik Kutsch Lojenga, executive director, UEBT (The Union for Ethical BioTrade), quoted research showing that consumer awareness for biodiversity is increasing dramatically, from 26% in 2009, rising to 60% in 2010. However, there is still confusion amongst consumers as to what the term biodiversity means.
Nica Lewis, head consultant, Beauty Innovation, Mintel, gave a lively presentation on new garden-based ingredients which are appearing in cosmetic products. “In season” ingredients include a range of vegetable extracts and herbs, as well as extracts of carrot and tomato, which are best known as veggie antioxidants. Other ingredients from the vegetable patch include pea extract, broccoli and brussel sprout extract and dill extract. “In addition to antioxidant benefits, green vegetables are proving to have suppleness and elasticising benefits.” Lewis has also seen evidence of fertiliser as an ingredient in cosmetics.
“Nu Naturals” is one of Mintel’s trends for 2010, which takes the natural/organic claim further and focuses on results, efficacy and safety. Mintel is also seeing more products merge free-from claims and eco friendly production methods with high tech synthetic actives.
Fashion was the theme of this year’s in-focus feature, sponsored by SPC, which included a round table discussion on how fashion inspires the creative process. Jacques Sebag, coordinator of in-focus, moderated the discussion. “It’s surprising that many cosmetic brands have a fashion label, yet there is no connection. They both deliver true sensorial experience. Our job is to say more about what we can do to link the fashion and beauty worlds,” he said. Pascaline Wilhelm is fashion director for the Premiere Vision event, described by Sebag as the “in-cosmetics for the fashion industry”. She described how when a fabric is created, the visual, touch and handle aspects are all important. “Weavers all around the world create with these three elements in mind. Touch is an essential element of quality and the difference between two products,” she explained.
Giorgio Armani is one of the rare companies to work proactively across fashion and cosmetics when creating new products, working closely with international make-up artists and the international fashion world when doing make-up for shows. Johan Lundin, international marketing director, Giorgio Armani, described the designer’s unique philosophy which is about “from textiles to cosmetics”. For example, Armani invented Micro-Fil, a technology that mills ingredients finely to get different sensorial and visual effects, layering the product on like a dress. Anne Abriat, L’Oréal, discussed how the company always takes into account the emotions when developing new products, such as a new lipstick. “It’s about getting the right colour and texture to reflect the emotion,” she said.
in-focus 2010 compared the use of colour and texture in both the beauty and fashion worlds
Creative trend forecasting agency Carlin International provides fashion predictions to help companies make the right choices when designing new collections. Explaining how each fashion designer had his own personal signature, Maryelle Allemand, senior marketing project manager, Carlin International, cited Coco Chanel’s use of tweed, Jean Paul Gaultier’s iconic sailor stripes and Giorgio Armani’s use of the colour greige. She provided a retrospective of key fashion designers from the 1970s onwards with examples of iconic cosmetic brands from each era. For example, the 1990s were described as the minimalist years when cult products YSL Touche Eclat and Chanel Rouge Noir nail polish were born. “Fashion and beauty have shared stakes in two areas: seduction and dreams, and innovation and surprise,” she said. For example electric blue can be found in both areas as can the trend for nudes and second-skin products.
Cosmetics trend forecasting agency Future-Touch makes predictions only within the area of cosmetics, by taking trends from the international world of fashion and translating them into actual products. “Fashion and cosmetic forecasting is not always synchronised,” stated founder Antoinette van den Berg. “Black is no longer so popular in fashion, but is coming in as a new area in cosmetics, such as black nail polish.” She gave examples of trends predicted by Future-Touch which can now be seen amongst today’s consumers. For example, the use of eyeshadow outside the classical eye area is now used extensively by music stars such as Lady Gaga. Looking forward, van den Berg believes that India will be a big influence on the future of cosmetics. “The future will be a mixture of Indian cosmetic trends and western influences,” she predicted.
Sian Sutherland, founding partner, Mama Mio, wants her brand to be the most recommended skin care brand in the world. She gave seven key rules to help small start-ups succeed. “You actually need three different kinds of INCI list,” she began. “The first is your business INCI list. This is the foundation, the mechanics of the business that enables you to trade.” She stressed the importance of having a business plan, a good team to help with sales, marketing, finance etc, logistics systems so you can distribute your products and good professional advisors. Most important is your brand which needs its own INCI list to ensure success, which needs to be as unique and “ownable” as possible. “It determines how your brand is perceived by women, where it sits in the market and what your brand stands for.”
French research company BEING has run a survey on the usage behaviour of 40-55 year old women and their attitudes towards anti-ageing procedures and cosmetics. Marie-Alix Leroy, beauty consultant, BEING, said that women in this age group are looking for alternatives to traditional anti-ageing skin care that produce more visible results. The two main anti-ageing alternatives are aesthetic medicine and anti-ageing soft medicines. Aesthetic medicine is moving towards a more natural look, with injectables that can deliver small molecules so there is less irritation. These new technologies are also inspiring traditional cosmetic brands seeking to position themselves as a real alternative to aesthetic medicine. Soft medicines run in parallel to traditional skin care and are popular with consumers who have not had success with anti-ageing skin care. “They like them because they are 100% natural and non-aggressive and can be used long-term,” said Leroy. She also looked at trends in Asiatic medicines, including acupuncture to slim down the face and new anti-ageing medicines which take a more holistic and scientific approach towards the causes of ageing, including medical, hormonal and nutritional considerations.