Procter & Gamble’s acquisition of HDS Cosmetics Lab Inc. may signal a new chapter in the anti-aging category. While a purchase price was not disclosed, sources say P&G paid as much as $90 million for the company, which markets DDF skin care products. Why would P&G pay nearly four times sales for a skin care company, especially when it already owns such well-known brands as Olay and SK-II? Because P&G is trying to capture a segment of the skin care market it doesn’t already own. Olay appeals to mass market shoppers, while SK-II is preferred by women who shop in prestige channels.
With price points between Olay and SK-II, DDF can become an important part of P&G’s global skin care strategy. For example, a DDF moisturizer retails in Sephora and Nordstrom for $40-80. The line is also available in more than 2,000 spas and medi-spas around the world. In contrast, SK-II moisturizers sell for $80 and up at prestige counters in Bloomindale’s and Saks Fifth Avenue. Of course, Olay costs less than $20 and can be found in mass markets everywhere.
It just goes to show you the premium that multinationals such as P&G are putting on the skin care category. With this move, you can bet that more deals in the “dermatologist” category are sure to follow.
In recent years, the number of personal care ingredients on the market has soared. In fact, Happi columnist and industry expert Navin Geria notes that the number of new cosmetic ingredients has more than doubled in the past 12 years—from 6,200 in 1994 to 13,500 in 2006 (see Cosmeceutical Corner on our site).
While our annual Buyer’s Guide doesn’t contain quite so many ingredients, it remains an excellent source of information for formulators of household and personal care products.
Also this month, associate editor LaToyah Burke looks at the latest advances in oral care. Cosmetic chemists searching for new hair care formulas can find help on creating economy and premium shampoos, as well as new ideas in hair conditioners.