08.21.06
The International Top 30
Companies Get Going on Going Green
If executives at U.S. companies think that they’ve got regulatory headaches, they should have a word with their European brethren. Many of the issues and controversies surrounding our industry—chemophobia, recyclability and renewable resources, among others—got their start in Europe. And more green initiatives—both good and bad—are on their way. For instance, while European manufacturers have been warning about the implications of REACH (Registration, Evaluation and Authorization of CHemicals), it has only been during the past year or so that U.S. companies have heeded their warning and started taking a hard look at the issue. Good thing, because most observers expect the first wave of REACH initiatives to come into play in Spring 2007.
Beyond regulatory mandates, marketers are doing their part by reducing their energy use, rolling out more environmentally-friendly products and even buying into the notion of green—witness L’Oréal’s $1.1 billion acquisition of The Body Shop.
But environmental initiatives are only part of the story when it comes to the news and issues surrounding the leading players in the household and personal products industry. Marketers are scrambling to reduce costs, enter new markets and delight consumers with new products that didn’t seem possible only a few short years ago. To find out more about all their efforts, be sure to read our International Top 30.
This is the 17th edition of Happi’s International Top 30, our annual look at the sales and marketing activities of the leading household and personal products companies with corporate headquarters outside the U.S. For the 17th year in a row Unilever tops our list, while L’Oréal is a distant second. Rounding out the top 10 are Henkel, Reckitt Benckiser, Kao, Shiseido, Beiersdorf, LVMH, Lion and GlaxoSmithKline.
As always, keep in mind that we rank companies based on sales of household and personal products. At the same time, remember that all companies were ranked based on figures converted to U.S. dollars using the average exchange rate for that company’s fiscal year. We hope you enjoy this edition of The International Top 30. As always, we welcome your comments and suggestions.
The International Top 30
| 1. Unilever | United Kingdom | $21.8 billion |
| 2. L'Oréal | France | $18.1 billion |
| 3. Henkel | Germany | $8.3 billion |
| 4. Reckitt Benckiser | United Kingdom | $7.0 billion |
| 5. Kao | Japan | $6.9 billion |
| 6. Shiseido | Japan | $5.9 billion |
| 7. Beiersdorf | Germany | $5.0 billion |
| 8. LVMH | France | $2.8 billion |
| 9. Lion | Japan | $2.1 billion |
| 10. GlaxoSmithKline | United Kingdom | $1.7 billion |
| 11. Yves Rocher | France | $1.6 billion |
| 12. Kosé | Japan | $1.5 billion |
| 13. Amore Pacific | Korea | $1.3 billion |
| 14. Chanel | France | $1.2 billion |
| 14. Clarins | France | $1.2 billion |
| 14. Puig | Spain | $1.2 billion |
| 17. LG | Korea | $948 million |
| 18. Natura | Brazil | $942 million |
| 19. Pola | Tokyo | $941 million |
| 20. PZ Cussons | United Kingdom | $896 million |
| 21. Body Shop | United Kingdom | $874 million |
| 22. Oriflame | Belgium | $858 million |
| 23. Pierre Fabre | France | $815 million |
| 24. YSL Beauté | The Netherlands | $763 million |
| 25. Colomer | Spain | $600 million |
| 26. The Bolton Group | The Netherlands | $585 million |
| 27. Sunstar | Japan | $575 million |
| 28. Menard | Japan | $548 million |
| 29. Mandom | Japan | $424 million |
| 30. Noevir | Japan | $325 million |
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United Kingdom
www.unilever.com
Sales: $21.8 billion
Sales: $21.8 billion for home and personal care. Corporate sales: $49.4 billion. Net income: $4.9 billion.
Key Personnel: Patrick Cescau, group chief executive; Kees van der Graaf, president, Europe; Ralph Kugler, president, home and personal care; Rudy Markham, chief financial officer.
Major Products: Personal care—Axe/Lynx, Rexona/Sure and Degree deodorants; Dove, Caress, Lux and Lever 2000 soaps; Pond’s and Vaseline skin care products; Organics, Salon Selectives, SunSilk, Suave and ThermaSilk hair care products; Close-Up and Signal oral care products. Household—Ala, All, Omo and Wisk laundry detergents; Comfort and Snuggle fabric softeners; Domestos, Cif, DiverseyLever.
New Products: Personal Care—Dove Cool Moisture, Rexona Teens; Home Care—All Small & Mighty, All Cleans & Softens.
Comments: Unilever continues to streamline operations. At the close of 2005, nearly 80% of its turnover was managed through “One Unilever” organizations. By the end of this year, the company expects to deliver $871 million in savings and as much as $1.2 billion in 2007. The reorganization has already helped sales growth, as corporate sales were up 3% in 2005 after being flat in 2004.
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Sunsilk, one of the world’s biggest hair care brands, debuted in North America in June after generating global sales of more than $1.2 billion a year. In fact, Sunsilk is the No. 1 brand in Asia, Latin America and the Middle East. “We view North America as a big opportunity to continue the Sunsilk success story,” said Esther Lem, vice president, North American hair care, Unilever. “Our learnings from around the globe, coupled with our deep insight into women in the U.S., allow us to offer unique solutions to address the hair problems of American women. Sunsilk is a fresh, new way to deal with hair.” Sunsilk includes eight customized collections—shampoos, conditioners and 24/7 Cremes—specially formulated to resolve common and bothersome hair problems. Two of the eight collections are specially designed for Hispanic hair. |
At the regional level, sales in developing and emerging markets continues to grow. The company notes that these countries will account for 90% of the world’s population by 2010. For the first time, sales in developing and emerging markets exceeded sales in Western Europe. But as important as D&E markets may be, Unilever hasn’t lost focus on Europe and North America.
In 2005, Unilever managed to grow its U.S. business 3.2% behind gains in home and personal care sales. As one might expect, gains in deodorant and personal wash sales helped in a big way as Axe posted double-digit growth, and consumer demand for Dove and Rexona remained strong.
But much work remains to be done in Europe as weakness in the UK led to a decline in home and personal care sales. Still there were a few successes, as the introduction of a new gel-layered detergent tablet helped make Skip the fastest-growing HPC brand in France.
In Asia and Africa, sales were up 6.9%, driven by the launch of new Lux and Pond’s products. During the year, the company launched Dove in Indonesia, a Sunsilk summer range in southeast Asia and a new variant for Lux Super Rich in China. The home care unit was busy too, with a new version of Surf in Indonesia and Omo for sensitive skin in Turkey. In South Africa, Unilever relaunched Vaseline with new formulas and packaging and rolled out the country’s first mass market male lotion: Vaseline for Men.
Although Unilever management is determined to cut costs, one thing remains the same—Unilever will maintain its dual corporate headquarters arrangement.
For the first quarter of 2006, corporate sales rose 8.6% to $11.8 billion, helped along by a 6.3% favorable gain in currency. At the close of the first quarter, Patrick Cescau, group chief executive, noted that the company is on track to sustain top line growth and improve margins. Although demand in Europe remains sluggish, there were signs of improvement. Meanwhile demand in developing and emerging markets remained robust.
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France
www.loreal.com
Sales: $18.1 billion
Sales: $18.1 billion. Net income: $2.4 billion.
Key Personnel: Lindsay Owen-Jones, chairman; Jean-Pierre Meyers, vice chairman; Jean-Paul Agon, chief executive officer; Béatrice Dautresme, executive vice president, corporate communications and external affairs; Christian Mulliez, executive vice president, administration and finance; Marcel Lafforgue, executive vice president, production and technology; Geoff Skingsley, executive vice president, human resources; Jean-François Grollier, executive vice president, research and development; Alain Evrard, managing director, Africa; Marc Menesquen, managing director, luxury products division; Patrick Rabain, president, consumer products; Jean-Jacques Lebel, president, professional products; Laurent Attal, president and chief executive officer, L’Oréal USA.
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L’Oréal has done a good job bringing the Garnier brand to the U.S. |
New Products: The Body Shop (acquisition). Professional—VolumeActive, Majirel colorants, ColorSmart. Consumer—RevitaLift Double Lifting skin care, Elséve Nutri-Gloss hair care and Volume Shocking mascara. Active Cosmetics—Aminexil SP94 hair loss treatment.
Comments: Corporate sales rose 6.5% last year and net income surged 37%.
But the big news out of France during the past 12 months wasn’t about sales results. No, the big news has been the $1.17 billion acquisition of The Body Shop and the retirement of long-time CEO Lindsay Owen-Jones.
Of course, sales do matter and once again, L’Oréal didn’t disappoint in 2005. By region, sales in western Europe rose a scant 0.1% to nearly $8.5 billion. But company executives were pleased with the way sales rose late in the year, as consumers went for “high value-added” products such as RevitaLift Double Lifting skin care and Elséve Nutri-Gloss hair care.
North America gained 6.4% to $5.0 billion buoyed by strong growth within the Garnier unit, particularly the Fructis line. Makeup sales were up due to several successful new product launches, and Redken provided a lift in the professional hair color category.
Sales in the rest of the world rose 12.6% to $4.5 billion. The gains were attributed to China and Indonesia, but the company noted that a distribution problem hurt results in South Korea.
Helped along by an 8.5% gain in the fourth quarter, sales in the professional products division rose 6.1% to $2.5 billion. The company credited the successful launch of the Kérastase Réflection range.
Consumer product division sales rose 4.6% to $9.3 billion. Strong results within the Garnier franchise were due to the UltraLift skin care range and Nutrisse hair colorants. L’Oréal Paris and Maybelline both recorded good gains too.
Within the luxury products segment, sales rose 2.7% to $4.4 billion. Lancôme’s sales were up, thanks to the success of Platinéum skin care and L’Extrême mascara. Within the fragrance sector, Armani Code provided a lift.
The demand for effective skin care products helped sales of active cosmetics jump 13.5% to $1.2 billion. Consumers picked up products such as LiftActiv Pro anti-wrinkle firmness skin care and Redermic, a new anti-aging product from LaRoche-Posay.
“In 2005, L’Oréal's growth once again clearly outperformed the world market, thanks to the powerful appeal of its brands and the success of its new high-value-added products,” said Sir Owen Jones. “Growth was driven by good performance in North America and new breakthroughs in emerging markets, while the rates of increase were more modest in Western Europe. Growth in sales combined with strict cost control has enabled us once again to improve profitability and achieve double-digit earnings growth. We are confident about the outlook for 2006 in view of the faster growth in Western Europe at the end of last year and the strong international momentum.”
Sir Owen-Jones proved prophetic as a big rebound in Western Europe helped first-half sales reach nearly $9.6 billion.
“The increase of our sales up to the end of June is very encouraging and confirms the clear upturn in the group’s growth, particularly in western Europe,” said Jean-Paul Agnon, who succeeded Mr. Owen-Jones as CEO. “Furthermore, high growth rates have been recorded in the new markets, such as Latin America and eastern Europe. The major launch programs and promotional activities scheduled for the second half-year should enable us to maintain this momentum. All these factors mean that we are very confident about the outlook for the 2006 results.”
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Germany
www.henkel.com
$8.3 bilion
Sales: $8.3 billion for laundry and home care products and cosmetics and toiletries. Corporate sales: $14.9 billion. Net income: $959 million.
Key Personnel: Prof. Dr. Ulrich Lehner, chairman of the management board; Dr. Lothar Steinebach, executive vice president, finance; Kasper Rorsted, executive vice president, human resources, purchasing, information technologies, infrastructure services; Dr. Friedrich Stara, executive vice president, laundry & home care; Hans Van Bylen, executive vice president, cosmetics/toiletries.
Major Products: Laundry and home care—Persil, Weiber Reise, Henko, Dixan, Spee and Fakt heavy duty detergents; Vernel, Perwoll and Few fabric softeners; Sil, Saptil, Wipp and Cid special detergents; Spee laundry and cleaning products; Pril and Pril balsam hand dishwashing liquids; Somat automatic dishwashing detergent; Dor cleansers; Ata scouring powders; Sofix, Sapur, Maga Sidlin and Bidd household cleaning detergents. Cosmetics and toiletries—Kaloderma and Bac toiletries; Fa deodorants, foam bath, shower gel, body lotion and soap; Action, City Man and Poly hair care; Schwarzkopf cosmetics, body care and hair care; Schauma, Drei Wetter Taf and Gliss hair care, Dep, L.A. Looks and ARL hair care, Dial personal cleansers.
New Products: Bref multi-degreaser, Persil Freshness by Silan, Pril Power Spray, Sil Oxi Perfect 2, WC Frisch Fresh Surfer, BC Bonacure hairtherapy, Diadermine Wrinkle Expert 3D, Fa Yogurt, got2b, Poly Color Retoucher, Taft Lycra Flex, Theramed Perfect Whitening Pen. Acquisitions—Right Guard, Soft & Dri and Dry Idea antiperspirants and deodorants.
Comments: At Henkel, the focus remains on North America and the emerging markets of Eastern Europe, Africa and the Middle East, Asia-Pacific and Latin America. Last year, sales attributable to North America reached 23%, due in part to the acqusition of Dial and ARL. Now, with several P&G AP/deo brands in its lineup (see box, p. 80), North American sales should account for an even larger portion of Henkel’s sales.
Corporate sales jumped 13% last year. Laundry and home care sales increased 13% to nearly $5.1 billion, while cosmetics and toiletries sales rose more than 6% to $3.2 billion.
By region, sales in Europe, Africa and the Middle East increased 5.7% to $9.3 billion, with Germany providing a lift to sales. In North America, sales surged nearly 37% to $3.4 billion, due to the previously-noted acquisitions. Sales in Latin America were up more than 21% to $711 million and sales in Asia-Pacific rose more than 20% to $1.1 billion. The South Korean insecticide business acquired from Clorox provided a big boost.
According to Henkel’s estimates, the global laundry and home care market rose 2% in 2005, after declining a bit in 2004. The company certainly participated in the rebound, with sales increasing 13%. Acquisitions accounted for 9.2% of the gain, organic growth added 3% and foreign exchange less than 1%. The markets in Eastern Europe, particularly Russia, provided a lift, as consumers moved to more complex formulas.
Sales of cosmetics and toiletries rose 6.2% to $3.2 billion. Acquisitions accounted for 4.1% of the gain; organic growth, 1.3% and foreign exchange, 0.8%. The increase is well-ahead of the 2% gain posted by the global cosmetics and toiletries market, according to Henkel. Demand was robust in eastern Europe, Asia and Latin America. The company’s colorant portfolio was strengthened through the introduction of Poly Color Revital Farbcreme, which is especially formulated for older hair. In the body care segment, Fa was relaunched in Europe and Dial shower gels were expanded in North America. Skin care sales were up due to the popularity of Diadermine. Oral care sales also rose on the strength of Theramed sales in Germany.
For the first quarter of 2006, corporate sales rose 11.4% to $3.6 billion. Sales of laundry and home care products rose 5.4% to $1.2 billion. Cosmetics and toiletries sales were up even more, gaining 8.1% to $772 million.
“We have made a successful start to the new fiscal year. We are particularly pleased with our strong organic sales growth, to which all our business sectors have contributed,” said Ulrich Lehner, chairman of the management board of Henkel KGaA. “The launch of numerous innovative products supported by targeted advertising measures has been successful. In regional terms, the growth drivers were once again Eastern Europe, Latin America and Asia-Pacific.”
R&D expenditures rose to nearly $390 million, to a share of 2.7% of sales. In its annual report, Henkel management noted that the company is working on achieving superior bleaching and cleaning performance, investigating cellular regulation of hair and skin in order to identify potential actives and using nanotechnology to create toothpastes that repair sensitive teeth.
4. Reckitt Benckiser
United Kingdom
www.reckittbenckiser.com
Sales: $7 billion
Sales: $7 billion for household and personal care products. Corporate sales: $7.6 billion. Net income: $1.2 billion.
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Bart Becht |
Major Products: Fabric care—Vanish, Spray ‘n Wash, Resolve, Napisan and Oxyclean fabric treatments; Woolite garment care; Calgon water softener, Quanto and Flor fabric softener; Dosia laundry detergent. Surface care—Lysol, Sagrotan and Pine-O-Cleen disinfectants; Harpic and Lysol lavatory; Veja and St. Marc all-purpose; Easy-Off, Mop & Glo, Brasso, Lime-A-Way, Destop, Cillit; Poliflor, Old English, O’Cedar and Mr. Sheen polishes and waxes. Dishwashing—Calgonit, Finish, Electrasol and Jet Dry. Home care—Air Wick air care, d-Con, Mortein, Shieldtox, Target, Rodasol, Pif Paf and Tiga Roda pest control; Nugget and Cherry Blossom shoe care; Health and personal care—Detol antiseptics, Veet depilatories, Kukident and Steradent denture care.
New Products: Airwick Freshmatic, Cillit/Easy-Off Bam, Finish 4in1, Vanish Oxi Action Max.
Comments: Corporate sales rose 8% last year, while household and personal care sales increased 6%. The company said growth was strong in all regions, driven by several successful new product launches. In Europe, which accounted for 51% of sales, revenue rose 4%. In fabric care, Vanish with Vanish Oxi Action Max and Vanish Dual Power provided a boost. In surface care, Cillit Bang provided a lift and in automatic dishwashing, growth was due to Finish/Calgonit 4in1. Home care sales and health & personal care sales were up as well.
In North America, which accounted for 31% of sales, net revenue rose 5%. Sales of fabric care were up on the strength of Spray ‘n Wash Dual Power Fabric Treatment and Resolve Dual Power carpet cleaner. Surface care sales increased due to the growth of Lysol disinfectant spray and the launch of Easy-Off Bam. Automatic dishwashing sales were up on increased sales of Electrasol with Jet Dry Action. In personal care, strong Veet depilatory sales provided a lift.
Developing markets accounted for 18% of sales and there was strong growth in all categories. Pest control sales were up sharply following the launch of Mortein Power Booster coils.
By product category, fabric care sales rose 2%. Surface care sales increased 9%. Dishwashing sales increased 6%. Home care sales rose 8% and health and personal care sales increased 9%.
On Feb. 1, 2006, Reckitt Benckiser completed the acquisition of Boots Healthcare International. The purchase gives the company three power brands: including Clearasil, Nurfen and Strepsils.
“We are excited at getting ownership of BHI,” said Mr. Becht. “It will give us a platform for additional growth at very attractive margins. BHI brings three new power brands whose distribution can be substantially expanded over time. In 2006, our major focus for this business will be on successful integration and extracting the promised synergies while gradually preparing the business for growth.”
For the first quarter of 2006, revenues jumped 18%, but net income fell due to the BHI acquisition. The company credited the increase on strong sales of products such as Vanish Oxi Action Crystal White, Cillit Bang Stain and Drain and Airwick Freshmatic.
“Reckitt Benckiser made a strong start to 2006 with underlying growth on the base business of 6% and a better than expected contribution from BHI in its first two months,” said Bart Becht, the company’s chief executive officer. “The integration of BHI is proceeding on plan and we are increasingly confident of delivering the promised synergy targets.”
5. Kao
Japan
www.kao.com
Sales: $6.9 billion
Sales: $6.9 billion for personal care, household care and personal hygiene products. Corporate sales: $8.6 billion. Net income: $629 million for the year ended March 31, 2006.
Key Personnel: Takuya Goto, chairman; Motoki Ozaki, president and chief executive officer; Toshio Hoshino, senior executive vice president; Takuo Goto, executive vice president, senior vice president, global production and engineering; Hiroshi Kanda, executive vice president, president, global consumer products; Norihiko Takagi, executive vice president, president, international business—consumer products; Shunichi Nakagawa, executive vice president, vice president, legal & compliance—global vice president, global corporate communications; Masato Hirota, president, global prestige cosmetics; Toshiharu Numata, president, global R&D; Toshio Takayama, chairman, Kanebo Cosmetics; Shigeru Koshiba, president, global fabric and home care; Michitaka Sawada, vice president, global research and development (feminine and baby care); Masumi Natsusaka, president, global personal care (skin care and hair care); William J. Gentner, president and chief executive officer, Kao Brands.
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Kao keeps building its Ban franchise. |
New Products: Kanebo cosmetics (acqusition).
Comments: Corporate sales rose 3.7%. Sales of consumer products rose 2%. More specifically, personal care sales rose 4%, fabric and home care sales were up 1.4%, but feminine care and baby care sales declined 6.9%. Meanwhile, sales of prestige cosmetics jumped 8.9%.
But of course, these results don’t include results for Kanebo Cosmetics, which Kao acquired late in the fiscal year. When the next fiscal year ends on March 31, 2007, company executives expect corporate sales to jump nearly 25% due primarily to the Kanebo acquisition. In fact, prestige cosmetics sales are expected to surge 240% to $2.5 billion. In contrast, personal care sales are expected to gain just 2.2%, fabric and home care sales will rise 2.3% and feminine care, baby care and other segments will grow 1.2%.
Clearly, Kao is counting on Kanebo to drive growth in 2006. The Kanebo brand has a strong presence in Japanese prestige and mass channels and together with Kao’s existing cosmetics portfolio, company executives are confident that they can offer Japanese retailers some comprehensive merchandising proposals, while at the same time accelerate global expansion of the cosmetics business.
In other sectors, Kao is committed to expanding its functional food and non-pharmaceutical health products with the introduction of the Enova cooking oil in North America and the continued success of Healthya Water sports drink.
6. Shiseido
Japan
www.shiseido.co.jp
Sales: $5.9 billion
Sales: $5.9 billion. Net income: $127 million for the year ended March 31, 2006.
Key Personnel: Shinzo Maeda, president and chief executive officer; Yasuhiko Harada, executive corporate officer; Tadakatsu Saito, corporate senior executive officer, chief area managing officer of China, chairman of Shiseido China; Yoshimaru Kumano, corporate executive officer, global R&D; Tamio Inaba, corporate officer, business strategy and marketing of cosmetics; Kohei Mori, corporate executive officer, information system planning and logistics; Masayuki Ishimaru, corporate officer, general manager of sales department and specialty stores; Toshiro Nagaya, corporate officer, production; Kiyoshi Nakamura, corporate officer, technical affairs; Kazuko Ohya, corporate officer, general manager, corporate culture; Kazutoshi Satake, corporate officer, domestic non-Shiseido brand business; Kazuo Tokubo, corporate officer, R&D strategy, patent and basic research; Takemasa Yamanaka, corporate officer, healthcare and frontier science, general manager of healthcare and president of Shiseido Pharmaceutical and Shiseido Beauty Foods; Yutaka Yamanouchi, corporate officer and president, Shiseido Amenity Goods; and Toshio Yoneyama, corporate officer, product development and software development.
Major Products: Skin care, color cosmetics, sun care, fragrances, hair care and toiletries sold under the Shiseido, Carita, Za, Zotos, 5S and Beaute International brands.
New Products: Tsubaki hair care, Kuyura soap and Sengan Senka facial cleanser. To be launched: Elixir Superieur skin care and Integrate makeup.
Comments: Sales rose nearly 5% last year and the company reported a modest net income after posting a loss in 2004. By sector, cosmetics, which accounted for nearly 80% of sales, rose 5.6%. Domestic cosmetic sales were up 2.2%, but international sales surged 13.3%. Sales of toiletries (9.1% of sales) were up just 1.1%. Professional product sales (5.2%) rose 7.9%. Pharmaceuticals (1.8%) sales rose 3%. Sales of health and beauty foods (1.9%) fell less than 1%.
Domestic cosmetic sales received a boost from the reworking of brand strategy, while the gain in overseas sales came from a substantial increase in China.
In domestic toiletries, Shiseido focused on shampoos and conditioners, body soaps and facial cleansers. In addition the launch of the hair care megabrand Tsubaki, Shiseido also rolled out Kuyura soap and Sengan Senka facial cleanser.
By region, sales in Japan increased less than 2%. Sales in the Americas rose 6.8%, while European sales rose 7.3%. The gain in Europe was attributed to solid fragrance sales. But the best regional performance was turned in by Asia/Oceania. There, sales jumped more than 22%, led by big gains in China.
In the recently concluded fiscal year, Shiseido completed the first year of its three-year restructuring plan. According to company executives, Shiseido largely exceeded the original forecast and expects further reforms this year and next year will increase both growth and profitability.
Chief among these new initiatives is the integration of the cosmetics and toiletries businesses.
“Since assuming the post of president and CEO, I have continuously declared that I am ‘prepared to break down the company and rebuild,’ in addressing these reforms. This fiscal year, I will finally carry this out,” insisted Shinzo Maeda, the company’s president
As a result, Shiseido’s cosmetics, toiletries and other segments have been reworked into domestic cosmetics, overseas cosmetics and others. With a new structure in place, the company is now revamping its brand strategy, accelerating expansion in China and other growth markets, while reforming sales operations by creating channel-specific sales teams that match customer purchasing behavior. The pillar of the brand strategy is to create “mega line” brands such as Maquillage and Uno cosmetics.
The company has launched two new businesses as well: healthcare and frontier science. The healthcare business provides foods and over-the-counter drugs to meet beauty- and health-promotion needs of a broad range of customers. The frontier science business provides medical-use drugs, raw materials developed from cosmetic ingredients, cosmetic dermatology treatments and other products to doctors and research institutes.
Sales in China grew more than 30% last year. In November, Shiseido expanded its China Research Center, making it 10 times larger than the previous facility.
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Germany
www.beiersdorf.com
Sales: $5 billion
Sales: $5 billion (estimated) for cosmetics and toiletries. Corporate sales: $5.9 billion. Net income: $417 million.
Key Personnel: Thomas-Bernd Quaas, chairman, executive board, strategic corporate development, corporate communication, corporate auditing; Peter Kleinschmidt, executive board member, human resources, administration, environmental protection; Pieter Nota, executive board member, brand marketing, research and development and sales; Markus Pinger, executive board member, supply chain, procurement, production, logistics and quality management.
Major Products: Cosmetics and toiletries marketed under 10 brands—Futuro, Eucerin, La Prairie, Estoplast/Hansaplast, Nivea, Atrix, Juvena, Labello, Florena and 8x4.
New Products: La Prairie Silver Rain fragrance, Nivea Visage Sensitive Balance, Nivea Hair Care Color Shine, Nivea Deo Pure.
Comments: Corporate sales rose nearly 5% last year, while consumer product sales increased a little more than 5%. By region, Europe accounted for 73.2% of corporate sales; the Americas, 14.4% and Africa, Asia and Australia, 12.4%. But the company noted that gains in the Americas were primarily due to good sales in Latin America and a strong showing by La Prairie in the U.S.
Although tough economic conditions in Europe put a drag on sales gains, the region still posted a 3% rise in sales. In Western Europe, excluding Germany, sales rose 2.6%, helped along by gains in Spain. Sales in Germany were up less than 1%, but demand for Nivea for Men was strong. Eastern European sales jumped more than 12%, led by big gains in Russia and Poland. North American sales rose 3.2%. Nearly all countries in the region recorded growth, with the exception of Mexico, where company executives blamed the impact of hurricane damage on market growth.
Several Beiersdorf brands put in a good showing in many parts of the world. Nivea sales rose in all regions, led by good performances from Nivea for Men, Nivea Deo and Nivea Hair Care Styling. Eucerin’s sales jumped more than 10%, helped along by the relaunch of Eucerin Sensitive Skin. In the high-end cosmetics segment, La Prairie sales jumped 11.2% on the strength of the Silver Rain fragrance launch.
For the first quarter of 2006, corporate sales rose 8.7% to $1.5 billion. Consumer sales were up 8% to $1.3 billion. Nivea sales rose 7.1%, driven primarily by Nivea Beaute, Nivea Hair Care Styling and Nivea for Men. Eucerin and La Prairie also generated above-average growth rates.
On July 19, Beiersdorf announced it is considering selling Hirtler, its wholly-owned subsidiary in Heitersheim. The company produces high-quality soap for Beiersdorf and third-party suppliers.
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France
www.lvmh.com
Sales: $2.8 billion
Sales: $2.8 billion for cosmetics and toiletries. Corporate sales; $17.3 billion. Net income: $3.4 billion.
Key Personnel: Bernard Arnault, chairman and chief executive officer; Antonio Belloni, group managing director.
Major Products: Fragrances and cosmetics sold under such brands as Christian Dior, Guerlain, Givenchy, Kenzo, Benefit, Fresh and Makeup Forever.
New Products: Miss Dior Chérie, Dior Homme and SummerbyKenzo fragrances, KissKiss lipstick, Capture Totale skin care and makeup and Orchidée Impériale skin care.
Comments: Corporate sales increased 11% and net income increased 16%.
Perfumes and cosmetics posted organic revenue growth of 7%. Revenue rose for all brands and especially for Parfums Christian Dior, due to the successful launch of Miss Dior Chérie and Dior Homme. Furthermore, skin care and makeup lines reported strong sales across all brands, while on the regional level, Asian countries posted the strongest growth.
For the first quarter of 2006, corporate sales jumped 15% to $4.3 billion and perfume and cosmetics sales surged 18% to $718 million. Leading the way was the extraordinary success of the Capture Totale skin care range and its makeup lines. In perfumes, existing products continue to grow well and contributed to the strong revenue growth. Guerlain’s new Orchidée Impériale skin care product was well received and revenue of Parfums Givenchy was driven by ‘vintage’ expressions of its Organza, Amarige and Very Irresistible lines. BeneFit Cosmetics recorded another period of double-digit revenue growth.
9. Lion
Japan
www.lion.com
Sales: $2.1 billion
Sales: $2.1 billion for household and personal care products. Corporate sales: $3 billion. Net income: $49 million.
Key Personnel: Sadayoshi Fujishige, president.
Major Products: Oral care (including toothpaste, toothbrush, mouthwash, breath freshener and dental needs), beauty care (shampoo, conditioner, styling products, hair restorer, men’s cosmetics, soap, body soap, skin care, antiperspirant and deodorant), fabric care (laundry detergent, bleach, fabric softener), home care (household cleaner, deodorizers, air fresheners, dishwashing detergent and kitchen-related products).
New Products: Clinica Toothpaste for Caries Risk Control, Clinica Toothbrush Shokubutsu-Monotari Herb Blend Shampoo, Shokubutsu-Monogatarii Herb Blend Conditioner, Shokubutsu-monogatari Herb Blend Body Wash, Liquid Heyaboshi Top Laundry detergent, Kaori to Deodorant no Soflan fabric softener, Heyaboshi Soflan fabric softener and Charmy Liv Mild dishwashing detergents.
Comments: Sales of home products rose 3% last year but results were hurt by rising crude oil prices and declining retail prices. Specifically, the household product market in Japan encountered bleak business conditions amidst price-cutting of laundry detergents and fabric softeners by retailers. Still, Lion strengthened its domestic home products business with the introduction of differentiated products while utilizing strategic marketing investment in principal products to pursue its aim of creating No.1 brands with ¥10 billion in sales. Outside Japan, Lion is focused on reinforcing its business foundation by streamlining sales systems and advertising core brands, in preparation for developing the home products business in Korea that was acquired at the end of the previous fiscal year.
Within oral care, Dentor Systema is Lion’s comprehensive brand for gum disease prevention. To expand Dentor Systema’s success, the company introduced a mouthwash and interdental products with innovative technology. A new Clinica Kid’s series, which proposed a new cavity prevention lifestyle for parents and children, enjoyed favorable toothpaste, toothbrush and dental rinse sales. In the toothpaste business, Lion launched an improved Clinica Toothpaste for Caries Risk Control that promotes re-mineralization of teeth and introduced a new flavor of Prime Stain Off that restores teeth to their original whiteness and sparkle. Despite these moves, the overall sales of toothpaste were stagnant due to severe market competition. Within the toothbrush segment, Dentor Systema recorded a strong performance due to its clear, appealing message of gum disease prevention. During the year, Lion upgraded the Clinica toothbrush for more effective brushing behind teeth and better access to rear teeth, places where plaque can easily build up. Sales of mouthwash were up from the previous year, owing to the launch of Dentor Systema Dental Rinse which is said to penetrate deep inside biofilm to kill bacteria.
Overseas, demand for the Systema series grew significantly in Thailand. Elsewhere, Lion expanded its selection of toothpastes and toothbrushes in China, resulting in a sales gain of 11%.
Within the beauty care category, Lion introduced Kireikirei gargle, which is highly effective in sterilization. The launch, coupled with existing hand soaps and body washes, is part of Lion’s strategy to develop a brand that promotes hygienic lifestyles. In other personal care categories, sales of shampoos and conditioners rose significantly due to the launch of Shokubutsu-Monogatari Herb Blend Shampoo and Shokubutsu-Monogatari Herb Blend Conditioner, along with the popularity of Soft-in-One moisturizing shampoo with seaweed extract. However, sales of hand soaps were sluggish due to intensifying market competition.
In the field of body washes, Lion introduced new products Shokubutsu-Monogatari Herb Blend Body Wash and Kireikirei Medicated Body Wash that contains sanitizing, deodorizing ingredients to prevent body odor and the smell of sweat.
Within the household products business, Lion made steady progress in restructuring its sales network for greater profitability. Despite the emphasis on cost-cutting, Lion still improved its mainstay laundry detergents, including Top, which breaks down sebaceous stains from body oils and Heyaboshi Top, which controls unpleasant odors. Lion also enhanced the effectiveness of Acron, a delicate fabric wash that prevents clothes from losing their style and fit. Finally the company introduced new Liquid Heyaboshi Top.
Despite the company’s efforts, overall sales of laundry detergents declined from the previous fiscal year against the backdrop of intensifying competition. Sales of bleaches increased, owing to the steady performance of Temanashi Bright and the development of Super Temanashi Bright which contains powerful stain-removing additives. Lion introduced the new fabric softeners Kaori to Deodorant no Soflan with superlative odor protection and Heyaboshi Soflan which controls the cause of musty smells. As a result, sales of fabric softeners recorded strong year-on-year growth. Overseas sales expanded overall to levels twice those of the previous fiscal year. This result can be attributed to the strong performance of laundry detergent Top in Singapore, soaring demand for the new hang-to-dry indoor type laundry detergent Pao in Thailand, and quality enhancement of Beat, a laundry detergent sold in South Korea.
For the first quarter of 2006, corporate sales were essentially flat at $560 million. Yet, Lion reported a net loss of $23 million. The company blamed the flat sales results on higher crude oil prices, intense competition in the laundry care sector. The loss was due to costs associated with an aggressive capital investment plan to nurture brands.
10. GlaxoSmithKline
United Kingdom
www.gsk.com
Sales: $1.7 billion
Sales: $1.7 billion for oral care products. Corporate sales: $39.3 billion. Net income: $8.7 billion.
Key Personnel: Jean-Pierre Garnier, chief executive officer and John Clarke, president, consumer healthcare.
Major Products: Toothpaste and mouthwash—Aquafresh, Dr. Best, Macleans, Odol, Odol Med 3, Polident, Polygrip, Sensodyne; Denture care—Polident, Polygrip and Corega.
Comments: Sales of oral care products rose 2% last year. Sales of Sensodyne were up 12%, while sales of denture care brands Polident, Poligrip and Corega, rose 6%. These gains helped offset lower sales of other toothpaste products.
For the first quarter of 2006, oral care sales rose 7% to $424 million with growth in all regions. Sales of Sensodyne jumped 21%, while sales of Aquafresh, GSK’s largest oral care brand, were flat at $128 million.
11. Yves Rocher
France
www.yvesrocher.com
Sales: $1.6 billion
Sales: $1.6 billion for cosmetics and toiletries. Corporate sales: $1.9 billion.
Key Personnel: Yves Rocher, founder and chairman; Bris Rocher, owner and managing director; Jacques Rocher, owner and managing director; Frank Botti, chief executive officer, Yves Rocher North America.
Marketing Director: Anne Kayser.
Major Products: Skin care, cosmetics and fine fragance.
New Products: Serum Vegetal Corrective Intervention, Bronze Nature, Aloe Vera Essential and Spa Energie Vegetale with oligo elements. To be launched: Secrets d’Essences Voile d’Ambee (September) and Ginseg Actif (October).
Comments: Corporate sales rose about 5% last year.
12. Kosé
Japan
www.kose.co.jp
Sales: $1.5 billion
Sales: $1.5 billion. Net income: $88 million for the year ended March 31, 2006.
Key Personnel: Reijiro Kobayashi, chairman; Yasukiyo Kobayashi, president; Kazutoshi Kobayashi, executive vice president; Shinji Nishina, executive director.
Major Products: Skin care, cosmetics and toiletries.
New Products: Cosmetics—Cosme Decorte White Science, Prédia Spa des Grands, Beauté de Kosé Classure and Astalution. Cosmetaries—Fasio mascara, Softymo cleansing series, Salon Style hair care and Coen Rich Q10 hand cream.
Comments: Sales rose 4.6% and net income was up 6.1%. By product category, cosmetics accounted for 73.6% of sales, followed by cosmetaries, 24.3% and other, 2.1%. Sales of high-value-added brands were strong. Also contributing to sales growth were strong performances by Infinity, a drugstore brand, and Albion skin care products, which are sold in department stores. As a result, cosmetics sales exceeded the company’s plan for the fiscal year. International sales soared 17.8%, due to a successful advertising campaign featuring a local popular actress in China, Hong Kong and Taiwan, and the introduction of Beauté de Kosé, a high-prestige brand sold through leading department stores. Looking ahead, Kosé executives predict that Japan’s economic recovery will continue and demand for cosmetics will continue to stage a recovery. However, the company foresees new challenges posed by factors such as the instability of the cost of crude oil and increasing global competition among companies. To meet these challenges, the company is strengthening its marketing activities, entering new sales channels and expanding into new business segments. For example, in the cosmetics business, a business unit has been established for the core Cosme Decorte brand. In the cosmetaries business, Kosé plans to start a new business by using products bearing brands licensed from overseas companies. Outside Japan, Kosé will continue to work on raising sales by positioning China, Taiwan and Korea as the core markets. Helped along by reforms in supply chain management, Kosé expects sales to rise 4.5% during the year ending March 31, 2007.
13. Amore Pacific
Korea
www.amore.co.kr
Sales: $1.3 billion
Sales: $1.3 billion. Net income: $162 million.
Key Personnel: Kyung-Bae Suh, president and chief executive officer.
Major Products: Skin care and makeup—Laneige, Iope, Mamonde, Innis-free, Hera, Lirikos. Fragrances—Lolita Lempika, Castel Bajac, Espoir.
New Products: Laneige Sliding Pact makeup, Heratlier makeup, Mamonde Total Solution and Cover Solution skin care, Iope Magic Effecter skin whitener.
Comments: Cosmetic sales rose 6% last year as the company successfully rolled out enhanced product lines in the premium sector and revamped its distribution network. International sales jumped more than 15% and the company now operates more than 200 sales counters around the world. The mass beauty division reported an 8.5% gain in sales, primarily the result of brand consolidation. These gains came during a year when the Korean cosmetics market was beginning to reawaken after slumping since 2002. While sales in specialty stores continued to decline in 2005, the market received a big boost from department stores and door-to-door sales.
In December, AmorePacific launched the Innisfree Herb Station, its first stand-alone beauty store. It represents the brand’s unique “naturalism lifestyle,” and stocks more than 650 various products employing herbal ingredients from Provence, from skin care products to makeup, body care, hair care and men’s grooming. The company has high hopes for the beauty store concept—hoping to add 100 stores by the end of 2006.
According to AmorePacific, Innisfree has been gaining in popularity since its launch in January 2000 as Korea’s first natural cosmetics brand. It is based on natural herbal ingredients and features environmentally-friendly packaging.
This year, AmorePacific management is focused on several initiatives. They include:
• Accelerate global expansion, especially in Asia;
• Create customer value by responding to the consumer’s needs faster than ever;
• Reduce costs to improve profitability in every channel; and
• Expand Six Sigma activities into regional headquarters and subsidiaries.
This year, AmorePacific executives expect the market to continue growing in both the premium and mass sectors. The premium sectors will get a boost from the macro economic recovery as well as the growing demand for highly-functional products. In the mass sector, the specialty channel, which has been declining for the past few years, is expected to turn around and stabilize.
14. Chanel
France
www.chanel.com
Sales: $1.2 billion
Sales: $1.2 billion (estimated) for cosmetics, toiletries and fragrances.
Key Personnel: Alain Wertheimer, chairman; Francoise Montenay, chief executive officer; Maureen Chiquet, president and chief operating officer; Christine Dagousset, executive vice president, fragrance and beauté.
Major Products: Skin care, color cosmetics and fragrances for men and women.
New Products: Pureté Idéale skin care, Sublimage Essential Regenerating cream, Pink Lamé eyeshadow, Inimitable mascara.
Comments: While things have been relatively quiet for Chanel during the past year, industry sources note that the company’s small mass market division, Bourjois, has been struggling in the fiercely competitive European color cosmetics sector.
In June, Françoise Montenay was elected president of Comité Colbert, the French luxury goods trade association. Ms. Montenay’s mission is to promote French ideas of luxury in emerging markets such as China and India.
Next spring, actress Keira Knightley will become the new face for the Coco Mademoiselle scent. She will replace Kate Moss, who had been the spokesmodel for Coco Mademoiselle since its debut in 2001.
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France
www.clarins.com
Sales: $1.2 billion
Sales: $1.2 billion. Net income: $120 million.
Key Personnel: Jacques Courtin-Clarins, chairman of the supervisory board; Christian Courtin-Clarins, chairman of the management board; Lionel de Benetti, chief industrial officer; Gerard Delcour, president, Azzaro; Patrick Bizot, president, Clarins; Vera Strübi, president, Thierry Mugler Parfums and Stella Cardente Parfums; Dr. Olivier Courtin-Clarins, managing director, research and development.
Major Products: Skin care, fine fragrance, color cosmetics and sun care products sold under such brand names as Clarins, Thierry Mugler, Azzaro and Stella Cadente.
New Products: Skin Care—Total Body Lift Stubborn Cellulite Control, Extra Firming Day Cream and Extra Firming Night Cream, Liquid Bronze Self-Tanning; Perfumes—Silver Black, par Amour et par Amour toujours, Garden of Stars, Alien, Miss Me; Makeup—In the Mood for Love, True Comfort Foundation SPF 15, Good Vibrations, Mascara Wonder Volume.
Comments: Sales rose about 7% and net income was up more than 11%. By product category, skin care accounted for 50.6% of sales, followed by perfumes, 40.9% and makeup 8.5%. Clarins estimates the global cosmetics market reached $116 billion in 2005, with the selective distribution segment accounting for about 22% of the market. For its part, Clarins estimates its worldwide share of selective markets to be 5.6%, nearly even with its 5.5% share in 2004. Even so, Clarins remains the No. 1 prestige skin care brand in Europe with a 16% share. In the U.S., Clarins is No. 4 in skin care with a 5.1% share. In Asia, Clarins has 6% share.
Last year, beauty sales were essentially flat. But Clarins executives blamed the sluggish performance on destocking by some European retailers. Still, some products turned in good results. For example, the reformulated Extra Firming line was well-received by women over 40. ClarinsMen also reported good sales gains and the line continued to expand. Makeup sales were up 2.7%, driven by sales of foundations.
But the clear winner in the Clarins’ stable was fragrance, where sales soared more than 18% last year. The company credited the addition of two new perfume brands—Clarins and Stella Cadente—as well as the launch of Alien and Silver Black.
By region, Europe represented 59.1% of sales, followed by North America, 25%; Asia, 9.6% and the rest of the world, 6.3%.
Sales in Europe rose just 1.9% due to continued weakness in consumer spending. Among the Big 5, only the UK posted a gain in sales. Good news came out of North America where, despite continued department store consolidation, sales still posted a gain of 10.6%. Growth was strong throughout Asia, where sales were up 21.7%. Sales in the rest of the world rose 19.4%, driven by sustained sales in the Middle East and Latin America.
14. Puig
Spain
www.puig.com
Sales: $1.2 billion
Sales: $1.2 billion.
Key Personnel: Marc Puig, chief executive officer; Manuel Puig, chief development officer; Joan Albiol, president, Puig Beauty; Pilar Trabal, general manager beauty global brands; Maria Lopez Fernandez, marketing director, beauty global brands.
Major Products and Product Managers: Antonio Banderas Seductive Fragrances—Caroline Bourgeois; Mango— Corinne Labadans; Heno de Pravia—Fernando Jonas; Maja: Anna Mancanet; Adolfo Dominguez: Olga Gomez.
New Products: Antonio, Antonio Banderas; Adorably, Mango; Sportman Pro.
Comments: Sales rose a bit in 2005, thanks to the success of the Banderas fragrance franchise. Now the scent is getting even more press with the launch of Antonio, Antonio Banderas, which is described as a musky vanilla fragrance. A portion of the proceeds from the scent goes to Broadway Cares/Equity Fights AIDS, an organization that is close to the heart of actress Melanie Griffith, who happens to be Mr. Banderas’ wife as well. The fragrance has already won a couple of Fifi Awards in Spain.
17. LG Household & Healthcare
Korea
www.lgcare.com
Sales: $948 million
Sales: $948 million. Net income: $70 million.
Key Personnel: Suk Cha, chief executive officer.
Major Products: Household—laundry and dishwash detergent, fabric softener, kitchen cleaners. Personal care—toothpaste, shampoo, soap, baby care, color cosmetics and men’s toiletries.
New Products: Prestance fragrance, Brestle fabric deodorizer, Bamboo Salt Wonsaengbaek toothpaste.
Comments: Sales were relatively flat last year, but net income soared 97%. A year after being named chief executive officer, Procter & Gamble alum Suk Cha has LG thinking like P&G. For example, last year, LG entered into a joint venture with Unicharm to manufacture and market paper products, including diapers and sanitary napkins, in Korea. More recently, the company rolled out Brestle, a fabric deodorizer. Sounds as if Mr. Cha is trying to bring a bit of Cincinnati to Seoul.
In February, LG opened Scent Berry House, a fragrance R&D center located within Seoul National University. Company executives expect to develop it into a world-class center with 30-50 researchers and a library of about 20,000 different scents by 2010. The center is committed to developing functional scents that connect with the consumer in an emotional way.
In March, the company opened Whoo Spa Palace, a premium skin care boutique named after Whoo, a royal court Oriental medicine-based brand sold at department stores and through direct sales. At Whoo Spa Palace, the company plans to use Whoo and Ohui products and provide unique royal court Asian medicine-based premium skin care services.
This year, LG is determined to increase its sales by 10% and increase its operating margin from 7% to 8%. Within the next year or so, company executives expect operating margin to exceed 10%.
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Brazil
www.natura.net
Sales: $942 million
Sales: $942 million. Net income: $164 million.
Key Personnel: Antonio Luiz da Cunha Seabra, co-chairman and founder; Guilherme Peirão Leal, co-chairman; Pedro Luiz Barreiros Passos, co-chairman; Alessandro Carlucci, chief executive officer.
Marketing Director: Eduardo Luppi, executive vice president, innovation.
Major Products and Product Managers: Face, Fragrances and Kids—Renata Eduardo; Body, Shower and Hair—Felipe Braz; Makeup and Strategies—Julia Caminhoto.
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Chronos remains one of Natura’s best-selling skin care lines. |
Comments: Sales rose nearly 30% last year. Although it is the leading player in the Brazilian cosmetics and toiletries market, Natura has set its sights beyond its borders. Last year, the company started operations in Mexico and plans to set up shop in Venezuela this year. If plans hold, the company will continue with a Colombia launch in 2007, according to Mauricio Bellora, the vice president of Latin American operations for the company, in Sao Paulo.
Natura is already well entrenched in the Southern Cone of South America, with operations in Argentina, Bolivia, Chile and Peru. Within this region it had 36,000 direct sales representatives at the end of 2005, compared with 483,000 in Brazil alone; the total number of sales consultants rose by almost 20% in 2005. Non-Brazilian sales for the company in Latin America were up nearly 39% in 2005, to $38 million. Natura, which commands about 20% of the total Brazilian cosmetics market, invested $13 million for globalization in 2005.
This year, a host of direct sales consultants are expected to be added in Mexico, a key country in Natura’s global push. While the company opened what it calls a flagship store in Paris in April 2005, it has not initiated direct sales in France yet. Sales in Mexico, however, are expected to increase quickly thanks to the August 2005 opening of the company’s Casa Natura exhibition house in Mexico City’s swank Polanco neighborhood, the first of its kind in Latin America outside of Brazil.
“At the Casa Natura, our objective is not sales. Rather, our consultants and consumers can have a Natura experience, drinking a coffee, chatting and building networks, and perhaps having a massage with some of our free samples,” Mr. Bellora told industry consultant and Happi columnist Charles Thurston. “The Distrito Federal (the capital city) is a large area, and we want to expand step by step; we have plans to be present throughout Mexico.” As it expands into new countries, Natura may rework its product mix.
“Today, all the 400 or so products sold throughout Latin America are the same in every country, but in the future there may be some unique products in some countries,” Mr. Bellora said. “Colors in makeup, for example, may be different in Mexico than in Argentina or Brazil; fragrances are another window of opportunity for tailoring products to a specific country market.”
During the past year, Natura introduced more than 150 new products, among which the company highlights Chronos Spilol, an anti-aging cream based on the native Brazilian jambu plant. Improvements to Natura’s soap lines during 2005 included a 100% switch to palm oil from animal oils.
During 2005, Natura sold seven million units, compared with 4.7 million in 2004, through its direct sales network.
19. Pola
Japan
www.pola.co.jp
Sales: $941 million
Sales: $941 million.
Key Personnel: Satoshi Suzuki, president and chief executive officer; Toshihiro Haruna, executive vice president.
Major Products: Skin Care—Apex-i, Creatage Excellen, B.A, Wrinkle Shot, White Shot W, Polissima, Estina Alvita, Kisui, Whitissimo, Day+Day Vitax, Signs Solution. Makeup—B.A., Augha, Southern Call; Body Care—Bodiest, Feel & Heal; Hair Care—Idea Style; Color Cosmetics—Aniak, Order Color Marlet.
New Products: The Make B.A. Summer prestige makeup, Vivoke makeup, Assist One skin care. To be launched: The B.A. Grandluxe anti-aging serum (December).
Comments: Last year, company executives said they were determined to make Pola one of the premier cosmetics brands in the world. One way to reach that lofty goal is through China and Pola has plans to launch 200 stores across China by 2010.
The Pola salons are premium esthetic spas that “represent the best our company has to offer,” according to company officials. The first salon opened in June 2005 in Shanghai, and new stores will be launched elsewhere in China, followed by openings in other Asian markets and North America. The company is also getting set to relaunch its English language website later this year.
20. PZ Cussons
United Kingdom
www.cussons.com
Sales: $896 million
Sales: $896 million for the year ended May 31, 2005.
Key Personnel: Anthony J. Green, chairman; Archibald Graham Calder, deputy chairman; Alex Kanellis, chief executive officer; Chris Davis, director, Africa designate; Richard Shepherd, managing director, Cameroon; Gordon Robinson, managing director, China; Panos Varelas, chief executive, Nigeria; Panos Mouchteros, managing director, Ghana; George Sotiropoulos, managing director, Indonesia; Dimitri Papadimitriou, managing director, Kenya; Stephen Murphy, managing director, Poland; Huw Morris, managing director, Middle East and South Asia; Ilias Grigoris, managing director, Thailand; John Hunt, managing director, Malaysia; Costas Theodorakopoulos, managing director, Nigeria; George Kostianis, managing director, Greece.
Major Products: Personal Care—Imperial Leather, Joy, Foamburst, Carex and Juksja soaps; Cussons Kids toiletries; Sweet Seventeen teen products; Venus crème relaxers; Flourish toothpaste, Robb mentholated rub. Home Care—Morning Fresh liquid dishwash, Elephant, E, Radiant, Tugaris detergents, Duck laundry soap.
Comments: Sales rose more than 5% last year. PZ Cussons has made several significant investments during the past year. In Nigeria,the detergent factory at Ikorodu was expanded by 15% and the soap factory in Aba by 30%. Similarly, the company is expanding production in Indonesia to meet growing demands for baby care products.
On May 31, 2005, Nigel Green retired as chief executive officer. During his 10-year term, Mr. Green led the company through notable growth and significant change.
For the six months ended November 30, 2005, sales increased 11%. In the UK, the relaunch of the Imperial Leather shower range was well-received and the Charles Worthington hair care brand, purchased in 2004, has been expanded with Results for Men and Dream Hair.
During the first half of the year, the company successfully restructured its business in Poland. Sales in Greece were flat. In Africa, sales rose due to the launch of several new products and in Australia, sales were ahead of the previous year due to sales of Trix laundry detergent, which was acquired in mid-2005. Most recently, the company sold the North American rights of Charles Worthington to Beautology.
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United Kingdom
www.thebodyshop.com
Sales: $874 million
Sales: $874 million for the year ended Feb. 28, 2006.
Key Personnel: Adrian Bellamy, executive chairman; Peter Saunders, chief executive officer.
Major Products: Hair and skin care products, fragrances and color cosmetics sold under The Body Shop brand.
Comments: The sale of The Body Shop to L’Oréal earlier this year marks the end of an era in cosmetic retailing. Thirty years ago company founder Anita Roddick thumbed her nose at the corporate world to create her vision of a green business. But now, Mrs. Roddick finds herself a cog in the corporate wheel after selling The Body Shop for more than $1 billion.
The sale came at a time when The Body Shop was beginning to turn things around after several lackluster years. Sales rose 16% last year. By region, sales in the Americas rose 13% to nearly $290 million. Sales got a boost from The Body Shop at Home and e-commerce. At the close of the year, the Americas had 444 company shops—322 of them located in the U.S.
Sales in Asia Pacific surged 34% to nearly $155 million. The good results were attributed to a combination of strong brand positioning, good in-store execution and improving economies in the region. Good performances were reported in Malaysia, Indonesia, Taiwan, Singa- pore, Japan and Hong Kong. There were 605 retail stores in the region at the end of the fiscal year.
Europe, the Middle East and Africa reported a 27% gain in sales to nearly $170 million. Sales in the Middle East jumped 11% and sales in the Nordic region were up 12%. France, too, posted double-digit gains (11%).
In the UK and Republic of Ireland, sales rose 5% to $260 million. Sales were helped along by a 15% gain posted by The Body Shop at Home. There were 305 retail stores in the region at the close of fiscal 2005.
22. Oriflame
Belgium
www.oriflame.com
Sales: $858 million
Sales: $858 million for cosmetics, toiletries, skin care and fragrances. Corporate sales: $953 million. Net income: $112 million.
Key Personnel: Robert af Jochnick, chairman; Magnus Brännström, chief executive officer; Jesper Martinsson, chief operating officer; Kevin Kenny, chief financial officer; Marco Greidinger, global supply director; Inge Heinsius, global marketing director.
Major Products: Cosmetics, fragrances, skin care and toiletries.
New Products: Optimals skin care line, Time Reversing skin care line, Colour Matt Glam lipstick, S8 men’s fragrance and men’s grooming range, and Saga and Lucia women’s fragrances.
Comments: Corporate sales rose more than 14% last year. By product sector, color cosmetics accounted for 28% of sales, followed by fragrances (23%), skin care and toiletries (19%, each) and accessories (10%).
In December, Oriflame sold its UK and Ireland operations to Premier Direct Group, which will continue Oriflame sales operations in these countries. When making the announcement, Oriflame executives noted that the unit had been losing money for years.
For the first quarter of 2006, sales jumped 29% to $281 million. The sales force increased 10% to nearly 1.8 million consultants. The company credited the sales gain to more consultants as well as productivity improvements. During the quarter, the company’s factory in China began production. Later this year, Oriflame, together with Weckerle Group, will begin manufacturing lipsticks in Russia.
23. Pierre Fabre
France
www.pierre-fabre.com
Sales: $815 million
Sales: $815 for cosmetics. Corporate sales: $1.8 billion.
Major Products: Skin care and hair care products marketed under such brand names as Avéne, Ducray, Pierre Fabre Dermatologie, Klorane, Galénic and Réne Furterer.
New Products: Elgydium whitening toothpaste.
Comments: Corporate sales rose less than 1% last year. Cosmetics account for 45% of the group sales. The company is already well-established in skin care, and now is expanding its presence in oral care with the April launch of two teeth whitening products. Elgydium iWhite combines a whitening active ingredient to an electroluminescent tray, a source of energy thanks to light. The Metatray focuses a concentrated active, light and heat for an even more visible whitening effect, according to the company.
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The Netherlands
www.guccigroup.com
Sales: $763 million
Sales: $763 million.
Key Personnel: François-Henri Pinault, chairman.
Major Products: Fragrances, cosmetics and skin care products. Brands include Yves Saint Laurent, Roger&Gallet, Stella McCartney, Alexander McQueen, Boucheron, Ermenegildo Zegna, Van Cleef & Arpels and Oscar de la Renta.
New Products: My Queen and Z Zegna fragrances.
Comments: Fragrances accounted for 67.1% of sales, cosmetics, 25.9%; skin care products, 6.6% and other, .4%. By region, Europe represented 68.5% of sales, followed by North America, 14.8%; Asia (excluding Japan), 6.2%; Japan, 5.3% and rest of the world, 5.2%.
Cinema, YSL’s women’s fragrance which debuted in late 2004, continued to set sales records in 2005. In fact, the scent has become one of YSL’s best-sellers behind Opium and Paris. However, sales of Oscar de la Renta and Van Cleef & Arpels suffered as a result of distribution problems.
The new year got off to a rocky start, with YSL Beauté sales rising less than 1%. As a result, the company announced a relaunch plan that is designed to improve competitiveness.
25. Colomer
Spain
www.thecolomergroup.com
Sales: $600 million
Sales: $600 million (estimated).
Key Personnel: Carlos Colomer Casellas, chairman; Michael Powell, president, Colomer USA.
Major Products: Professional—Revlon Professional, Intercosmo, MOP, American Crew, D:FI, Creative Nail; Consumer—Natural Honey, Longueras, Fermodyl, Geniol, Lanofil, Fixpray, ZP11; Cosmetics—BioPoint, Burberry (license), ST DuPont (license), Ultima II (license), Gatineau (license), Revlon (license); Multicultural—African Pride, Revlon Realistics, Crème of Nature, Fabu-Laxer, Arosci.
Comments: Colomer is owned by CVC Capital Partners, one of the largest private equity groups in the world. Colomer has a widespread portfolio, with approximately 66% in professional hair care, 15% in ethnic hair care and 10% in professional hair care. Sales are spread across western Europe, the U.S. and Latin America.
26. The Bolton Group
The Netherlands
www.boltongroup.com
Sales: $585 million
Sales: $585 million (estimated) for household and personal products. Corporate sales: $1.2 billion.
Key Personnel: Jo Nissim, president; Freddie Martell, group director; Luigi Castria, group business development manager.
Major Products: Household cleaners, personal care and cosmetics.
Comments: According to industry sources, The Bolton Group has sales of nearly $600 million in Happi’s area of interest. However, nearly half of corporate sales (46%) come from food. Established in 1949, The Bolton Group has operations in Europe, the Middle East, the Americas and Australia.
The company’s Manitoba unit, which includes brands such as Brill and Solitaire, has sales of about $300 million. Manetti-Roberts, a leader in toiletries, has sales of $200 million. Collistar, Bolton’s prestige color cosmetics division, has sales of about $70 million. Finally, Triplex, The Bolton Group’s unit in Greece, is active in household, personal care and food. Italy accounts for 49% of sales, followed by France, 19% and the rest of the world, 9%.
With a large production facility in Firenza, Manetti have strong positions in the mass market in Italy with its Neutro Roberts brand, which holds the No.2 position in the deodorants segment, and has good shares in personal washing (bath, shower, soap, etc), as well. But because so many of Manetti’s products are medium-priced, margin is a problem, as its brands are left to fight it out in the middle of the mass market, with little or no premium positioning.
In January, Bolton’s Manetti & Roberts unit acquired Sanogyl from Unilever. The toothpaste brand is sold in France, in both the mass market and pharmacy channels. According to company executives, this acquisition provides an opportunity for Bolton Solitaire and Rogé Cavaillès to grow in this new market through their respective channels.
Also in January, the Bolton Group opened a new distribution in Zagreb, called Bolton Croatia.
27. Sunstar
Japan
www.sunstar.com
Sales: $575 million
Sales: $575 million (estimated) for the year ended March 31, 2006.
Key Personnel: Hiroo Kaneda, chief executive officer.
Major Products: Oral Care—GUM, Ora2 and Butler brands. Personal care—Tonic body and skin care; Household—Dry Up laundry detergent.
Comments: At press time, Sunstar had still not released sales for the year ended March 31, 2006. The company had been projecting gains of 7%, but if recent history is any indication, the rise in sales will be closer to 3%.
28. Menard
Japan
www.menard.co.jp
Sales: $548 million
Sales: $548 million (estimated) for the year ended March 31, 2006.
Key Personnel: Daisuke Nonogawa, chairman; Junichi Nonogawa, president.
Major Products: Skin care, cosmetics and fragrances.
Comments: With the bulk of its sales coming from Japan, Menard’s sales have been declining a couple of percentage points every year for the past several years. Still, the company ranks among the leading players in the Japanese personal care industry.
29. Mandom
Japan
www.mandom.co.jp
Sales: $424 million
Sales: $424 million for the year ended March 31, 2006.
Key Personnel: Motonobu Nishimura, president and chief executive officer.
Major Products: Men’s toiletries, including brands such as Gatsby and Lúcido. Women’s toiletries, including brands such as Lúcido-L and Símplíty.
New Products: Gatsby—Styling Wax, Ice Deodorant Shower Lotion, Facial Paper, Shower Fresh, Deodorant Powder Spray, W-System Foot Deodorant Spray, Nose Pore Clear Pack; Lucido—Natural Color for Gray Hair; Mandom—Grapefruit Facial Wash/Grapefruit Face Lotion; Lucido-L—Fiber in Clay; Símplíty—Deodorant foot spray.
Comments: Mandom is the leading player in the Japanese men’s grooming category. The company is somewhat of a pioneer, too. Back in 1958, it became the first Japanese cosmetic company to establish a plant outside Japan when it opened a facility in Manila. This year marks the 10th anniversary of the opening of its production plant in Zhongshan City, Guangdong Province, China.
30. Noevir
Japan
www.noevir.co.jp
Sales: $325 million
Sales: $325 million for cosmetics. Corporate sales: $527 million. Net income: $12.4 million, for the year ended Sept. 20, 2005.
Key Personnel: Hiroshi Okura, chief executive officer; Takashi Okura, chief operating officer; Hisashi Okura, vice president.
Marketing Director: Minoru Ito.
Major Products: Skin Care—Noevir 99, Noevir 505, Nov. III, Sana Nameraka Honpo. Color cosmetics—Noevir 5.
New Products: Moisture Repair beauty treatment, Excellent Day Emulsion foundation, Sana Pore Putty makeup base, Blancnew Reset W whitening treatment, Noevir 5 Treatment Emulsion Foundation.
Comments: Cosmetics and toiletries account for slightly more than 60% of Noevir’s annual sales. The company also has a strong presence in nutritional and pharmaceutical products. Among the new products from Noevir is Moisture Repair beauty treatment, which contains rice extract and ceramides to help plump and moisturize the skin. New Excellent Day Emulsion foundation, is billed as a luxurious cream foundation that uses a unique nano-emulsion formula to help hydrate and pamper the skin. Finally, Sana Pore Putty makeup base promises to virtually erases pores, for flawless and longer-lasting makeup application, according to the company.
