P&G buys New Zealand skincare brand Snowberry; botox maker acquires Sydney bio-tech startup for $AUD120 million; double digit luxury sales boost full year results for L'Oréal; 4-in-10 Australian radio listeners identify as Fashion Forward.
P&G buys New Zealand skincare brand Snowberry
The multinationals continue to snap up natural brands. P&G has inked an agreement to buy Snowberry, the cult New Zealand prestige skincare brand. Founded in 2007 by cosmetician Soraya Hendesi, the curated range uses 130 natural and organic ingredients, including Kiwi heros such as manuka honey and harakeke.
Financial details were not disclosed but sources estimate the buyout is a multi-million dollar deal. Apart from its products and technology, one of Snowberry's major assets is a 20 hectare plantation, Snowberry Gardens, located north of Warkworth. Like Jurlique, L'Occitane and Clarins with their farms and plantations in South Australia, Corsica and the French Alps, Snowberry grows, researches and sources many of the ingredients used in its anti-ageing products. Sustainability and ethical sourcing is a growing trend in the beauty industry as consumers demand more accountability, especially in naturally-based skincare.
Snowberry is also a standard bearer for natural skincare backed by scientific knowhow. Antioxidants such as idebenone and potent peptides deliver visible anti-ageing results in core products such as Smoothing Eye Cream and Intensive Facial Renewal Serum.
Another major attractor for P&G, the owner of Olay and SK-II, was Snowberry's sales in China and the US, in addition to the local New Zealand market. The current management team will stay in place, but the longterm goal is to expand the brand's global footprint. According to P&G spokesperson Kelly Vanasse: "Snowberry brings to our collection of skincare brands unique formulas rooted in the interaction of nature and science. It's a beautiful brand and story with outstanding performance which makes it a great fit for P&G".
Botox maker acquires Sydney bio-tech startup for $AUD120 million
Allergan is most famous as the manufacturer of Botox, but the US pharma giant also enjoys annual sales of more than $US1 billion for its Juvederm lineup of injectable fillers. Treatments for acne and stretchmarks have come a long way in recent years, but both common skin concerns remain a goldmine for companies who can improve on existing remedies. Allergan has bought Elastagen, a spin-off of the University of Sydney, for $US95 million ($AUD120 million) because the startup's tech prowess is based on tropoelastin, the precursor of elastin, one of the skin's two major proteins responsible for a more youthful appearance.
Tropoelastin is bio-identical to human elastin and offers a laundry list of potential applications from treating acne and stretchmarks to skin and surgical wound repair. Allergan will commercialise Elastagen's technology to create a new generation of injectable fillers, says Allergan CCO Bill Meury.
The buyout is the latest financial coup for Elastagen. The startup was one of the inaugural recipients of the NSW State Government Medical Devices Fund in 2013, receiving $4 million. Two years ago, a multi-million dollar Series B fund attracted key investors, including AmorePacific Ventures, the South Korean beauty giant's corporate venture capital arm, and the Wellcome Trust, the world's second largest charitable foundation for medical research.
Double digit luxury sales boost full year results for L'Oréal
L'Oréal Chairman and President Jean-Paul Agon anticipates that 2018 will be a dynamic year for the world's largest beauty company. A prediction backed by the multinational's 2017 full year results. Sales rose 2 per cent to 26 billion euros ($AUD40.75 billion) and net profit increased 2.8 per cent to 3.7 billion euros ($AUD5.8 billion).
The Luxe division continued its tearaway performance of recent years with double digit sales growth of 10.6 per cent to 8.476 billion euros ($AUD13.28 billion). The Active Cosmetics division, including La Roche-Posay and SkinCeuticals, broke the 2 billion euro ($AUD3.13 billion) barrier for global sales for the first time with a sales spike of 11 per cent. E-commerce sales also surpassed the same magic figure with growth for the period topping 33 per cent.
The Consumer Products division, the multinational's largest, increased worldwide sales by 1 per cent last year to 12.118 billion euros ($AUD18.99 billion). Slower sales in the US and French markets were offset by growth in Germany and the UK. Asia-Pacific may be the fastest growing regional market for L'Oréal with sales of 6.15 billion euros ($AUD9.64 billion), but it ranks third behind Western Europe at 8.125 billion euros ($AUD12.73 billion) and North America at 7.35 billion euros $AUD11.52 billion).
Jean-Paul Agon also singled out the multinational's soaring travel retail sales following a spectacular list of launches and promotions in world's airports and duty-free stores over the past year. "We are confident that this year, once again, we will outperform the market and achieve significant growth in like-for-like sales and can increase profitability". L'Oréal's shares soared this week on another of Mr Agon's bullish statements. If Swiss giant Nestlé, who own 23 per cent of the multinational's shares worth 23 billion euros ($AUD36.05 billion), are ready to sell L'Oréal is cashed up and ready to buy.
4-in-10 Australian radio listeners identify as Fashion Forward
Old myths die hard in spite of radio stations like KIIS, Triple J and Nova carving out significant youth audiences. The latest research from Nielsen and Commercial Radio Australia divides listeners into two tribes – Fashion Forward and Fashion Idlers. The latter group ropes in six-in-10 Aussie commercial radio listeners and they are more likely to be aged 50-plus, tradies, retirees or involved in home duties.
The sweet spot for those looking to appeal to a younger, cashed-up crowd is the four-in-10 listeners who identify as Fashion Forward. The majority are women – 57 per cent – who place a high value on appearance and status. With a higher-than-average household income of $104,000, they are more motivated to buy fashion and accessories, skincare, tanning products and cosmetics, reports Nielsen. Breakfast and prime time slots have the highest representation of females aged 18 to 24 and they have a greater willingness to recommend products to family and friends.
Snippets from the wires
- Chinese online behemoth JD.com will open an office in Melbourne later this month to springboard growth across Australia and New Zealand. Australian and Kiwi cosmetics and skincare are in high demand in China and JD will offer local brands access to its 266.3 million active users. JD also has an exclusive partnership with Tencent, owner of the massive social media networking platform, WeChat, which reaches more 900 million consumers. Australia currently has three million WeChat users, of which 38 per cent are non-Mandarin or Cantonese speakers.
- Organic beauty sales in the UK lifted 24 per cent in 2017 to $AUD134 million, reports the Soil Association. Proving that influence on beauty purchasing can come from less-than-obvious sources, a trio of Netflix documentaries, including Cowspiracy and Forks over Knives, were credited with playing a major part in the sales uplift.
- Avon has appointed its first male CEO in nearly 20 years. Jan Zijderveld, President of Unilever Europe, will take over from current CEO, Sheri McCoy. His extensive experience working in Australia, New Zealand, Southeast Asia, the Middle East and North Africa will help the direct seller expand in emerging markets and developed markets in Europe, lessening its dependence on the US.
- Australians are a traditional bunch when it comes to Valentine's Day gifts. Chocolate, flowers and jewellery are tipped to be the big winners this week, with the first two way out in front says the Australian Retailers Association. Interflora alone expects to deliver five million blooms nationwide.
- Wollongong Shopping Centre, home to 170 speciality retailers including Mecca Maxima, H&M and David Jones, has been put up for sale. Owners GPT Group are expecting bids in the vicinity of $500 million for the landmark shopping complex.
