04.29.09
P&G Parts with Johnson Products
Ethnic hair care line sold to a company with plans to reinvigorate the brand.
By Joanna Cosgrove
Online Editor
Procter & Gamble recently sold it African-American hair care product company, Johnson Products Company, to newly-formed RCJP Acquisition, Inc., an independent entity comprised of Los Angeles-based private equity firms Rustic Canyon/Fontis Partners, LP and St. Cloud Capital LLC, along with an African-American management team of industry veterans.
Though terms of the transaction were not disclosed, the company will operate as Johnson Products Company and will be led by husband and wife team Eric Brown and Renee Cottrell-Brown, both of whom have extensive experience in the ethnic hair care arena, having both held senior executive positions with the Pro-Line International, Inc. subsidiary of Alberto-Culver Company.
|
Eric Brown and Renee Cottrell-Brown with the RCJP collection. |
Mr. Brown said the transaction involved a handful of product brands; however the two pillar brands acquired in the transaction were Gentle Treatment and Ultra Sheen, the brands under which there are 30 hair care products.
“They have a great deal of brand equity based on our information and testing,” he said.Those will be the ones that we start to build with.”
Gaining Traction in a Tricky Market
Founded in 1954 by George Ellis Johnson Sr., Johnson Products, has been a mainstay brand for more than a half-century in the African-American community. In 1971, the company became the first minority-run enterprise to be listed on the New York Stock Exchange.
The company’s products have been supported by leading food, drug and mass retailers as well as beauty and barber suppliers for more than 50 years but prior to pulling the trigger on the acquisition, Mr. Brown and his staff tested the brand opportunity from a consumer standpoint, because they were concerned that the brands might be perceived as “old and tired.”
“The information we got back was just the opposite: that this was something that was very vibrant from a name recognition [standpoint], it has a lot of trust built into the name,” said Mr. Brown. “From a historical perspective it also touches an emotional chord within the African-American community.”
From a brand building point of view, Johnson Products won’t have to think about freshening up the brand with new packaging since P&G launched new colorful packaging just prior to the acquisition.
“We had the opportunity to look at it prior to the launch and although we didn’t have a say in it, we’re very excited by the outcome,” he said. “So far it’s been very well received, both by the buyers and the consumers.”
Mr. Brown said they plan to use the newly packaged products as a stimulus to move forward and develop new product formulations that don’t currently exist in their product portfolio—which is a great goal considering the market segment’s bottom line has declined in recent years.
Mr. Brown however, sees the current African-American hair care market from two different perspectives.
“If you look at just the economic numbers, it would suggest that the category is relatively flat…without a whole lot of growth built into it,” he said. “On the surface, someone might say that our job at Johnson is to steal someone else’s share. I can see how people might look at it that way but behind the numbers is a tremendous opportunity because there are some unmet consumer needs that can be translated into new products, new formulations and innovation.
“If you look at it from an overall opportunity standpoint, sure, during this economic time our consumers are being a little more picky as to where they’re spending their dollar,” he continued. “The African-American consumer in terms of hair care though, there’s an innate need, because of the structure of the hair, must use certain products in order to have style and to maintain the hair. Our consumer hasn’t gone away.”
He contended that his company has a vibrant consumer base, but admitted that his consumers are very choosy because they haven’t found exactly what they’re looking for. “It’s our job to put products out there that meet their expectations and those unmet needs,” he surmised.
Some of those unmet needs, according to Mr. Johnson, boil down the company’s ability to reach its diverse consumer base.
“We’re in a fad and fashion industry where styles change,” he said. “There’s always experimentation in terms of new styles, new ways to achieve that style and new ways to prolong those styles. As we look at the younger generation and how they express themselves I think there’s significant opportunity to go after that market.
“We as marketers have to be better in tune to where that younger generation is getting its information,” he added. “Traditionally it was television, radio and print. We’ve got other opportunities out there now other than those traditional ways. Once we’re able to reach the consumer, then we have the opportunity to convince them and move them into trial.”
In terms of actual hair needs, the African American consumer is still looking for products that help prevent breakage, help hair to maintain styles and add flexibility, Mr. Brown said. “Those attributes have been out there for a long time and different marketers have gone after them in different ways. I don’t think we’ve come up with the perfect solution—not suggesting that we have it but the formulation landscape has changed so much over the years and it’s important for us to be able to translate hair care needs of our customers into product.”
Mr. Brown is banking that experience will make that goal a reality. The new Johnson Products management helmed by Mr. Brown team brings more than 55 years of experience to the fledgling company. Mr. Brown was most recently president of Pro-Line International, which has been part of Alberto-Culver Company since 2000. In January 2004, Mr. Brown moved into a corporate position with Alberto-Culver as vice president global business development, where he was instrumental in consummating global licensing, distribution, acquisition and divesture opportunities for many of Alberto-Culver’s global brands.
Mr. Brown’s wife, Mrs. Cottrell-Brown, the company’s executive vice president formerly operated a marketing consulting firm which provided marketing services to startups and small-to-medium growth companies that market multi-cultural personal care products. Prior to that, she had a 25-year career with Pro-Line Corporation and Pro-Line International, most recently as global vice president of retail marketing, where she helped launch some of the industry’s most successful ethnic hair care brands, including the Soft & Beautiful, Comb-Thru and Just-For-Me product lines.
The couple is flanked by Kacy Rozelle and Marshall Geller of St. Cloud Capital, along with Daniel Villanueva and Gabrielle Greene of Rustic Canyon/Fontis Partners, who will join the Johnson Products’ board of directors.
The new Johnson Products company is headquartered in Los Angeles, with offices in Dallas. The company has annualized sales of more than $23 million and its products are currently sold throughout the U.S.
