L'Oréal buys German vegan beauty brand; beauty and grooming major highlights of P&G's Q4 results; new investment and Chinese expansion for top Italian beauty brands; and CosmoProf owner acquires beauty forum publishing and events.
L'Oréal buys German vegan beauty brand
The global health and wellness market is now worth a massive US$3.7 trillion, reports the Global Wellness Institute. Natural and organic skincare, haircare, makeup and supplements brands have become major acquisition targets for major multinationals, led by Unilever, P&G and L'Oréal. The French giant has acquired Logocos Naturkosmetik, the leading German natural and organic company which makes the Logona and Sante brands.
Founded in 1978, Logocos was a pioneer of the vegan beauty sector and all of its skincare, makeup, haircare and hygiene products are vegan-certified. One of the founding companies of the NATRUE certification, alongside Weleda, Dr Hauschka, Lavera and Primavera, the company achieved net sales of AUD$92.24 million in 2017.
The buyout not only extends L'Oréal's presence in the fast-growing vegan beauty segment, it does so at two distinct price levels. Logona products are sold in premium organic stores and the Sante brand is sold through mass retailers and targeted at younger consumers. Both brands are available in Australia through organic and naturally-oriented websites, including organichaircare.com.au and joipure.com.au
Like Jurlique and Dr Hauschka, Logocos uses its own organically-grown plant extracts and natural actives. L'Oréal has been steadily increasing its reach in vegan beauty. In 2006, the multinational bought Sanoflore, its first ECOCERT certified organic brand, which is a cult favourite with French women. One bottle of Sanoflore Aqua Magnifica Toner sells every two minutes in France. Earlier this year, L'Oréal Professional launched Botanea in Europe, a 100 per cent natural vegan hair dye.
The Logona and Sante brands will become part of L'Oréal's Consumer Products Division and the multinational will springboard international expansion. "Logocos brings to the division two authentic and certified natural brands as well as a unique expertise from a worldwide pioneer of the organic beauty market", says L'Oréal Consumer Products Division president, Alexis Perakis-Valat.
Beauty and grooming major highlights of P&G's Q4 results
P&G's sell-off of over 40 of its beauty and grooming brands and licenses to Coty was the most talked-about financial transaction of the past decade in the global cosmetics industry. But the FMCG titan still owns superbrands such as Pantene, Olay and Gillette and their strength was confirmed in P&G's fourth quarter results. Net sales for the period increased 3 per cent to US$16.5 billion to lift net sales for the fiscal year 2018 to US$66.8 billion.
The beauty division boasted a rise in organic sales of 7 per cent for Q4. Skincare and personal care sales increased by double digits, buoyed by the "disproportionate growth" of the luxury SK-II and Olay skincare brands. Organic sales of haircare increased by single digits. Shave care – as in Gillette – has been battered in recent years by increased competition from start-ups such as the Dollar Shave Club, now owned by Unilever, and suffered a slight decline. P&G is optimistic going forward and projects organic sales growth of 2 to 3 per cent for fiscal 2019.
New investment and Chinese expansion for top Italian beauty brands
Kiko Milano has had an up and down couple of years. The affordable European soul sister of NYX Cosmetics entered the US market in 2014, boasting 900 stores in 18 countries. At the beginning of this year, Kiko USA filed for Chapter 11 bankruptcy and closed 24 of its 29 stores. But ever onwards and upwards, Kiko Milano has scored a US$92.5 million investment from UK private equity firm Peninsula for a 33 per cent stake in the company.
The investment will be used to fuel Kiko's growth in India, the Middle East and other parts of Asia. Within a day of the news last week, Tmall announced it would be launching Kiko Milano and three other Italian beauty brands – Deborah, Diego dalla Palma and RVB Lab – on the e-commerce platform. China is one of the fastest-growing markets, and thanks to the prestigious shop window provided by Alibaba Group's Tmall Global, we aim to boost growth in that area", says Kiko CEO, Cristina Scocchia. "We estimate revenue of about 50 million euros (US$57.8 million) over the next three years".
CosmoProf owner acquires beauty forum publishing and events
Many Australian brands, retailers, beauty executives and cosmetic buyers attend Cosmoprof events in the US, Europe and Asia. For the past 51 years, BolognaFiere Cosmoprof has organised the world's leading beauty industry B2B trade shows on three continents, attracting 6600 international cosmetic companies and more than 360,000 annual visitors. To further expand its international network and dominance, the BolognaFiere Group has bought Germany's Health and Beauty Group.
The acquisition extends Cosmoprof's reach in fast-growing Eastern European markets and also expands its business into publishing and digital. The Health and Beauty Group is also an international media company with a portfolio of 30 trade magazines focusing on the beauty industry. The company also organises Beauty Forum events in 14 countries, including Germany, Switzerland, France, Poland, Hungary and Romania. Another sweetener of the deal is the Health and Beauty Group's "match-making" meeting activities in the Middle East and France.
Snippets from the Wires
- Netflix has announced huge gains over the past year, reveals Roy Morgan Research. By the end of the June quarter, more than 9.8 million Australians accessed the subscription on-demand service.
- Tmall has been confirmed as the online retailer of choice for Chinese beauty fans. According to marketing consulting firm Westwin, 53 per cent of Chinese consumers consider the giant platform to be their most favoured e-commerce destination for cosmetics and beauty.
- Johnson & Johnson has extended its presence in the natural wellness category. The multinational has bought Zarbee's Naturals, a 10 year old US company with a stable of natural vitamins, cough, sleep and immune support supplements. Majority-owned by L Catterton, the investment arm of LVMH, Zarbee's has the potential to become a global natural and wellness brand under J&J's ownership.
