Issue 76
Talking Personal Care
An update of significant developments
in the global personal care sector
4 August–13 October 2014
Table of contents
Mergers, acquisitions and licensing deals
3
Organizational effectiveness and efficiency
5
Digital and omni-channel initiatives
6
Innovation and new product launches
8
Regulation, litigation and product safety
10
Focus on emerging markets
11
Focus on mature markets
13
Focus on branding
14
Sustainability and social responsibility
15
Financial news/performance
17
Analyst views
18
Management moves
20
Talking Personal Care is regularly published by EY. We hope you find
it both interesting and informative and we would welcome your
feedback. For more information, or to request to be added to our
distribution list, please contact:
Nicola Crouch
Talking series Editor
UK +44 20 7951 1743
[email protected]
Mergers, acquisitions and licensing deals
►
L’Oréal has announced an agreement to acquire Niely Cosmeticos Group, which it described as “the largest independent hair
coloration and hair care company in Brazil.” The company noted that Niely generated net revenue of €140m in 2013 and
sold the “widely distributed” Cor & Ton and Niely Gold brands at “accessible” prices. EVP Americas Frédéric Rosé described
the deal as a “strategic move” in “one of the biggest and fastest growing” global hair color and hair care markets, while
L’Oréal Brazil President Didier Tisserand noted: “Niely benefits from an excellent position and high penetration of the
growing Brazilian middle class and as such will positively complement the products offered by our Consumer Products
Division in Brazil.” Niely Founder Daniel Fonseca de Jesus, who L’Oréal said would join its Strategic Committee as a Vice
President, commented: “We are delighted to join L’Oréal. We are convinced this operation will allow Cor & Ton and Niely
Gold consumers to benefit from all of L’Oréal’s marketing and Research & Innovation expertise.”1
►
L’Oréal has confirmed its acquisition of Sayuki Custom Cosmetics. The company reportedly noted that Sayuki, a US
cosmetics brand founded in 2013, had proprietary “color-matching” foundation technology that would enable L’Oréal to
“offer personalized foundations.”2
►
Coty has announced a “binding” offer to acquire cosmetics brand Bourjois from French luxury group Chanel for 15m Class A
Coty shares. The company said that Chanel had agreed to “enter exclusive negotiations” and would become an “important”
Coty shareholder on completion of the proposed deal. Coty Chairman and interim CEO Bart Becht described Bourjois as
“highly complementary to Coty’s existing color cosmetics portfolio” and noted: “Additionally, the company’s strong
heritage, quality image and leadership positions in a number of Western European countries where Coty is seeking to
bolster its presence, provide a great opportunity for Coty to further strengthen its leadership position in the large and
growing color cosmetics category.” Meanwhile, Chanel Representative Michael Rena said: “Coty and Bourjois share a
passion for color cosmetics and together they would have strong potential to further advance their leadership in this
attractive global category. We intend to examine the offer in more detail and enter constructive talks with Coty.” According
to the Financial Times, the deal would give Chanel around 4% of Coty’s total equity, with a voting stake of “less than” 1%.3
►
Elizabeth Arden has said that it will evaluate an offer from Rhône Capital to acquire up to 6.44m shares, “approximately”
20% of the company’s outstanding common stock, for US$17.00 per share. Earlier, the company had confirmed that the
private equity firm had agreed to purchase US$50m of Elizabeth Arden redeemable preferred stock and receive warrants to
buy 7.6% of outstanding common stock for US$20.39 per share and gain the right to name one member to Elizabeth
Arden’s Board of Directors. At the time, Rhône also agreed to “not acquire more than 30%” of the company’s common stock
after exercising the warrants. Elizabeth Arden Chairman, President and CEO E. Scott Beattie had said: “I am very excited to
have Rhône Capital as an equity partner, to support the turnaround of our business in the short-term and the continued
global growth and development of our brands and organization in the future.” Meanwhile, Rhône Capital Co-Founder M.
Steven Langman had commented: “We firmly believe that this represents a unique investment opportunity to partner with a
proven entrepreneurial organization and help them achieve their ambition to be a leader in the global beauty industry.”4
►
Procter & Gamble (P&G) has announced that US-headquartered consumer products company Spectrum Brands is to acquire
its Iams and Eukananuba pet food brands in Europe, accounting for around 10% of P&G’s former pet care global sales, for an
undisclosed amount. The company said that the deal would close in 2015, “subject to regulatory approvals,” and noted that
P&G had now “closed deals or reached agreements to sell 100% of its Pet Care business.” Chairman, President and CEO A.G.
Lafley noted: “Exiting Pet Care is an important step in our strategy to focus P&G’s portfolio on the core businesses where
we can create the most value for consumers and shareowners.”5
►
P&G has confirmed the sale of its majority interest in Fujian Nanping Nanfu Battery, reportedly the largest alkaline battery
manufacturer in China, to a private equity fund managed by Chinese asset manager CDH Investments. Spokesperson Paul
Fox noted that Nanfu had been a “standalone business” and commented: “This will allow us to continue to drive growth in
our core Duracell (battery) business both globally as well as specifically in greater China.”6
1
“L’Oréal: News Release: “L’Oréal signs agreement to acquire Niely Cosmeticos Group in Brazil”,” Thomson Reuters ONE, 8 September 2014, via Factiva, © 2014 Thomson Reuters; “L’Oréal
Buys Hair-Color Maker Niely in Continued Expansion Spree,” Bloomberg, 8 September 2014, via Factiva, © 2014 BLOOMBERG L.P.
2 “L’Oréal acquires Sayuki Custom Cosmetics,” BW Confidential, 26 September 2014, via Factiva, © 2014 BW Confidential.
3 “Coty eyes Chanel’s Bourjois,” Financial Times, 7 October 2014, © 2014 The Financial Times Limited; “Coty Inc. Offers to Buy Bourjois Cosmetics Brand from CHANEL to Strengthen Its Global
Leadership Position in Color Cosmetics,” Business Wire, 7 October 2014, via Factiva, © 2014 Business Wire.
4 “Elizabeth Arden Announces Intent to Evaluate Tender Offer by Affiliates of Rhône Capital,” Business Wire, 27 August 2014, via Factiva, © 2014 Business Wire; “Investment Funds Affiliated
with Rhône Capital Announce Intention to Commence Tender Offer for up to 20% of the Common Stock of Elizabeth Arden, Inc.,” Business Wire, 25 August 2014, via Factiva, © 2014 Business
Wire; “Elizabeth Arden, Inc. Announces Fiscal 2014 Results,” Business Wire, 19 August 2014, via Factiva, © 2014 Business Wire; “Rhône Capital pushes Elizabeth Arden bid deadline to 1 Oct,”
M&A Navigator, 26 September 2014, via Factiva, © 2014 M2 Communications.
5 “Spectrum Brands to Buy P&G’s Remaining Pet Care Business,” Business Wire, 23 September 2014, via Factiva, © 2014 Business Wire; “Spectrum Brands Holdings to Acquire Procter &
Gamble's European Pet Food Business,” Business Wire, 23 September 2014, via Factiva, © 2014 Business Wire.
6 “P&G bows out of big battery business,” Business Courier of Cincinnati Online, 1 October 2014, via Factiva, © 2014 American City Business Journals, Inc.
4 August–13 October 2014
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Talking Personal Care
3
►
Sarantis Group has announced an agreement to acquire the Noxzema personal care brand in Greece from P&G for €8.7m.
The Greek-headquartered consumer products company said that the acquisition of the “well established brand name” was
expected to complete by 31 October 2014 and would “further enhance” its product portfolio.7
►
Henkel CEO Kasper Rorsted has confirmed that the company has acquired shampoo brand Pert in Mexico from P&G for
€24m.8
►
P&G CFO Jon Moeller has commented on the company’s earlier announced plans to “harvest, partner, discontinue or divest”
90-100 brands. Moeller said that the brands that P&G planned to exit had “in aggregate,” been declining at “3% per year
over the past three years” and accounted for “less than half the average” P&G margin, noting: “Exiting them will
mathematically increase top-line growth by about a point — with more concentrated focus on the remaining brands, we hope
to do much better than that. Before-tax operating margin will increase, as will the rate of profit growth.” Moeller said that
around 45% of the brands P&G planned to exit were sold in “three or fewer” countries, with a further quarter sold in “four to
10 countries.” Moeller noted that 85% of the brands to be retained were “broadly distributed” and commented: “These
brands account for 97% of the new company’s sales.”9
►
L’Oréal and German sports company PUMA have announced a license agreement for beauty products, effective from 1
January 2015. The companies said that PUMA’s current contract with personal care product licensee P&G would terminate
on 31 December 2014.10
►
Kimberly-Clark has announced details related to its health care unit spinoff, due to complete on 31 October 2014. The
company said that shareholders at close of trading on 23 October 2014 would receive one share in the new Halyard Health
business for every eight Kimberly-Clark common stock shares held and that Halyard Health would make a one-time cash
payment to Kimberly-Clark before completion, resulting in an increase in Kimberly-Clark’s 2014 share repurchase target
from US$1.3b-US$1.5b to US$2b.11
►
Private equity firm LBO France has confirmed its acquisition of an 80% stake in French skin care company Payot from
Spanish fragrance group Puig. LBO said that the remaining 20% stake would be held by a management team headed by
Andrea Surliuga, former CEO and owner of Italy’s Dibi Cosmetics, and noted that Payot’s products were “mainly” available
through beauty salons. Puig reportedly said that the deal formed part of its strategy to focus on “fashion and perfumes”
while Surliuga commented: “We are looking forward to working with LBO France on a number of key initiatives, notably in
targeting and harmonizing future product lines, according to the unique concept of Beauty in Motion.” According to an
unconfirmed report in Le Figaro, the deal valued Payot at €30m-€40m.12
►
Isdin, a Spanish cosmetics and skin care company owned by the Puig family and pharmaceutical company Esteve, has
reportedly closed its €7m acquisition of Auriga International, a Belgian facial and body care company whose products are
“exclusively” sold in pharmacies. Isdin reportedly said that the deal would provide it with a sales network in Belgium and
France, expand its product portfolio and enable it to focus on “the development of its innovation model.”13
►
US skin care company Murad has announced the acquisition of its “long-term” UK distribution partner, which it said would
give it the opportunity to “directly manage its rapidly growing business in prestige and professional channels in the UK.”
Global General Manager Richard Murad commented: “While we have a presence in more than 40 markets worldwide, with
the acquisition of a UK distributor as our European hub and the planned acquisition of a Hong Kong distributor who can
provide us with a robust presence in Asia, we are making a major strategic investment that will dramatically expand our
ability to reach consumers who are eager to transform their skin with Murad skincare.”14
►
Polish private equity fund Avallon has reportedly confirmed its acquisition of private label cosmetics, household products
and chemicals company MPS International from Sweden’s MPS Holding. Avallon also reportedly said that it planned to make
additional cosmetics sector investments.15
►
India’s Godrej Consumer Products has announced an agreement to acquire a 100% stake in the Ghana hair extensions
business of Africa’s Darling Group. Godrej, which holds a 51% stake in Darling Group and has the right to acquire 100% of
7
“Sarantis Group acquires Noxzema’s activities in Greece,” Athens News Agency, 8 October 2014, via Factiva, © 2014 Athens News Agency.
“Q2 2014 Henkel AG & Co KGaA Earnings Conference Call – Final,” CQ FD Disclosure, 12 August 2014, via Factiva, © 2014 CD-Roll Call, Inc.; “Mexico: Henkel buys Pert shampoo brand from
P&G for EUR 24mn,” Esmerk Latin American News, 12 August 2014, via Factiva, © 2014 M-Brain.
9 “Procter & Gamble Co at Barclays Back to School Conference – Final,” CQ FD Disclosure, 4 September 2014, via Factiva, © 2014 CQ-Roll Call, Inc.
10 “L’Oréal: News Release: “PUMA and L’Oréal sign a License Agreement for Beauty Products”,” Thomson Reuters ONE, 26 September 2014, via Factiva, © 2014 Thomson Reuters.
11 “Kimberly-Clark Provides Details of Planned Spinoff; Halyard Health Expected to Begin Trading Nov. 3 on NYSE,” The Wall Street Journal Online, 7 October 2014, via Factiva, © 2014 Dow
Jones & Company, Inc.; “Kimberly-Clark Announces Details for Completion of Kimberly-Clark Health Care Spin-Off,” PR Newswire (U.S.), 7 October 2014, via Factiva, © 2014 PR Newswire
Association LLC.
12 “French fund buys Payot skin care company from Spain’s Puig,” Reuters News, 26 September 2014, via Factiva, © 2014 Thomson Reuters; “LBO France Buys Skincare Company; Deal comes
as France has seen a rebound in private equity deal making this year,” Private Equity News, 29 September 2014, via Factiva, © 2014 Financial News Ltd.; “Italian group of investors buys Payot
brand from Spanish Puig,” Italian Collection, 29 September 2014, via Factiva, © 2014 AII Data Processing Ltd.; “LBO France and entrepreneurs acquire French skincare brand Payot from
Puig,” Private Equity Wire, 29 September 2014, via Factiva, © 2014 Global Fund Media Ltd.
13 “Spanish Isdin buys Belgian group Auriga,” Spanish Collection, 29 August 2014, via Factiva, © 2014 AII Data Processing Ltd.
14 “Murad Begins Major International Expansion with Acquisition of UK Partner,” Business Wire, 10 September 2014, via Factiva, © 2014 Business Wire.
15 “AVALLON and management team acquire MPS International,” MarketLine (a Datamonitor Company), Financial Deals Tracker, 8 September 2014, via Factiva, © 2014 MarketLine – an
Informa plc business; “Poland: Avallon acquires cosmetics producer,” Esmerk Eastern European News, 3 September 2014, via Factiva, © 2014 M-Brain.
8
4 August–13 October 2014
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Talking Personal Care
4
Darling operations by 2016, noted that it would now own 100% of Darling’s hair extensions operations in both Ghana and
Nigeria.16
►
India’s Emami has confirmed that it is “on the lookout” for foreign and domestic acquisitions in the personal care and health
care markets. Director Harsha Agarwal said: “We are looking at acquisitions in India. And globally, we are looking at
acquisitions wherever we have presence — West Asia, Africa and Russia.”17
►
Estée Lauder CFO Tracey Travis has said that acquisitions are a “high priority,” noting “lots of activity going on in terms of
looking at acquisition opportunities,” and commenting that the company was retaining “flexibility for M&A activity.”
Meanwhile, President and CEO Fabrizio Freda said that Estée Lauder was “particularly” focused on skin care acquisitions in
Asia and that its “ideal acquisition strategy” was “buying a medium-sized brand and making it huge over the years.”18
►
Kao CEO Michitaka Sawada has said that technology acquisitions form part of the company’s expansion plans. Sawada
reportedly said that technologies addressing issues including health, ageing populations, environment and hygiene issues
were more attractive than brand acquisitions, noting: “If you acquire a technology successfully, it can be applied in the
chemical business or in the consumer products business.”19
►
Intercos, the Italian cosmetics contract manufacturer, has announced that it will not continue with plans for an initial public
offering on the Milan stock exchange, citing “sharply deteriorating market conditions” that would “not allow for an accurate
reflection of the company’s intrinsic value and potential.” Intercos had reportedly planned to list up to 44.18% of its capital
for around €3.50 per share and had said that proceeds would be used to support its growth plans and reduce debt.20
►
Australian hair removal gel and head lice treatment business Nad’s has confirmed plans for an initial public offering.
Company founder Sue Ismiel said that the business, which reportedly generated sales of AUD40m in 2013-2014, said the
company intended to list in Australia within the next two years and commented: “We’ve already restructured so that we’re
run as if we are a public company.” Ismiel said she intended to retain around 30% of Nad’s equity following the listing.21
►
The Honest Company, the US provider of “natural, non-toxic” family products including baby care, oral care and skin care
products, has announced the closing of a US$70m financing round which will reportedly help prepare the company for an
initial public offering. Co-founder and CEO Brian Lee said the funding would enable the company to expand “current
category offerings and availability, and develop products across many new and exciting categories,” noting: “We believe
being a public company is the best path for us going forward and it’s good to get that validation early on.”22
►
US private equity firm Berkshire Partners is reported to be seeking a buyer for Vi-Jon, a US supplier of private label health
and beauty products, for up to US$400m.23
Organizational effectiveness and efficiency
►
Unilever’s Indian business has said that a new “planning and execution” framework will provide it with a “much more
granular understanding of consumers, customers and competitors” in “all parts” of its business and across channels and
geographies. The new “Winning in Many India’s” structure, effective from 21 September 2014, reportedly moves Hindustan
Unilever (HUL) from four branches to 14 “consumer clusters” with five sales branches. CEO and Managing Director Sanjiv
Mehta said that 55% of private consumption in India came from rural markets and the new framework used HUL’s “national
scale” with an “intense go-to market focus.” This followed an earlier announcement that HUL had separated its home and
personal care businesses into “two separate businesses” to “ensure focus on the growth drivers for each.”24
►
Unilever Pakistan has confirmed an agreement with Standard Chartered bank, under which “Virtual Accounts technology”
will be used to collect payments from “dealers in remote areas” and will reportedly transfer payments to the company
16
“Godrej to complete acquisition of Darling Group's hair extension business in Ghana,” VC Circle, 6 October 2014, via Factiva, © 2014 Mosaic Media Ventures Pvt. Ltd.; “GODREJ CONSUMER
PRODUCTS LTD. Acquisition of additional stake in Darling businesses,” BSE Company Announcements, 1 October 2014, via Factiva, © 2014 Bombay Stock Exchange Ltd.
17 “Emami eyes acquisitions in West Asia, Africa and Russia,” Financial Express, 10 August 2014, via Factiva, © 2014 Indian Express Online Media Pvt. Ltd.; “Emami plans further acquisitions of
brands,” Press Trust of India, 9 August 2014, via Factiva, © 2014 The Press Trust of India Limited.
18 “Event Brief of Q4 2014 The Estée Lauder Companies Inc. Earnings Conference Call – Final,” CQ FD Disclosure, 15 August 2014, via Factiva, © 2014 CQ-Roll Call, Inc.
19 “Molton Brown Maker Steps Up Spending to Catch Unilever,” Bloomberg, 6 October 2014, via Factiva, © 2014 BLOOMBERG L.P.
20 “Italian cosmetics group Intercos starts selling shares in IPO,” Reuters News, 29 September 2014, via Factiva, © Thomson Reuters; “Intercos files request for admission on Milan’s STAR
segment,” Italian Collection, 10 September 2014, via Factiva, © 2014 AII Data Processing Ltd.; “Italy’s Intercos files listing request with Milan bourse,” Reuters News, 9 September 2014, via
Factiva, © 2014 Thomson Reuters; “UPDATE 2-Italy’s Intercos pulls IPO as European listings falter,” Reuters News, 9 October 2014, via Factiva, © 2014 Thomson Reuters.
21 “Nad's hair removal family business will IPO, says founder Sue Ismiel,” BRW, 23 September 2014, via Factiva, © 2014 Fairfax Media Management Pty Limited.
22 “The Honest Company Closes $70 Million Investment Round to Accelerate Growth, Business Wire, 26 August 2014, via Factiva, © 2014 Business Wire; “Jessica Alba’s The Honest Co. Raises
$70M, Preps for IPO,” Dow Jones Top North American Equities Stories, 27 August 2014, via Factiva, © 2014 Dow Jones & Company, Inc.
23 “Vi-Jon hits the auction block,” St. Louis Business Journal Online, 4 August 2014, via Factiva, © 2014 American City Business Journals, Inc.
24 “HUL rejigs structure to ‘win in many Indias’,” The Times of India, 19 September 2014, via Factiva, © 2014 The Times of India Group; “HUL to set up 14 new consumers clusters to drive
growth across smaller, fast-growing markets,” The Economic Times, 20 September 2014, via Factiva, © 2014 The Times of India Group; “HINDUSTAN UNILEVER LTD. Clarifies on News Item,”
BSE Company Announcements, 12 August 2014, via Factiva, © 2014 Bombay Stock Exchange Ltd.
4 August–13 October 2014
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Talking Personal Care
5
“within the same day.” Corporate Finance Director Asiya Zaidi said the technology would provide flexibility to “improve”
cash flows and “minimize” credit exposure and commented: “This is indeed a big leap forward in how businesses can
manage their operations more effectively especially in volatile market situations.”25
►
Coty has said that its global efficiency plan is expected to generate combined annual savings of US$200m, “within the next
three fiscal years,” with total pre-tax charges of US$250m–US$300m. CFO Patrice De Talhouet commented: “It is worth
noting that this over US$200m savings target includes our previously announced productivity program, which we had
indicated would drive over US$60m in annual savings exiting fiscal 2016, and the China mass business reorganization
which, as stated, would drive annual savings of north of US$20m.”26
►
P&G CFO Jon Moeller has said that the company is reducing spend on celebrity endorsements while continuing to focus on
marketing productivity, “through an optimized mix, driven by new, more efficient digital, mobile and social media.” Moeller
noted that P&Gs #LikeAGirl digital campaign for its Always feminine care brand had received “over 4.4b impressions in over
20 countries” in “less than two months,” with over 75m “free” YouTube views, and commented: “This is a high-return, highimpact marketing execution at a lower cost.” Moeller said that P&G was also producing “shorter ads with higher impact” and
reducing “both the number of spokespeople and the spending by nearly 50%” for its Head & Shoulders brand.27
►
P&G has reportedly confirmed plans to cut “about 300 jobs” at its German headquarters over the next two years. A
company spokesperson said that employees would be asked to “leave on a voluntary basis.”28
►
Japan’s Pola Orbis has announced plans to close its South Korean subsidiary, reportedly citing a “difficult” local economic
environment and “fierce” competition.29
►
Emami has confirmed that it will apply to liquidate its “dormant” UK subsidiary in the current financial year, noting that the
company was instead “looking to focus more on the emerging markets.” CFO N H Bhansali commented: “It was just a
trading company. There will be no impact on business.”30
►
Beiersdorf has reportedly postponed a €2m European “below-the-line review” and is working with the Marketing Agencies
Association (MMA) to “improve its search method.” UK trade association MMA earlier suggested that agencies “boycott” the
“wasteful” selection process after more than 50 agencies were reportedly invited to a “post-RFI meeting.”31
Digital and omni-channel initiatives
►
Avon has announced a new ecommerce site, which it said would support its Representatives through “their own
personalized eStore” and improve consumer access. VP North America Marketing Matt Harker commented: “The new site
and a recently launched social media center help to forge strong connections between the Representative and her
consumers. We are giving her the tools, training and incentives to be a successful multichannel social seller.”32
►
Estée Lauder President and CEO Fabrizio Freda has said that the company is working to support retailer omni-channel
activities. Freda noted the “clear, strong connection” between the online and “brick-and-mortar” success of retailers and
said Estée Lauder used direct sales to “penetrate” markets where retail partners were not present, to “create flagship brand
equity-building activities and show creativity and strength, or to complement high-traffic areas” and did not compete with
retail partners. Freda commented: “So all the move to direct, online, and in brick-and-mortar is actually a great move for
accessing the consumer around the world and to develop the brand equities. And our wholesale business is actually
benefiting from these activities in a big way.”33
►
Canadian technology company ModiFace has commented on its launch of a new mobile app that offers personalized skin
care and cosmetic product recommendations to users. The Beautiful Me app scans up to 500 personal images and
25 “Standard Chartered, Unilever ink MoU to collect payments from remote areas,” The Nation, 25 September 2014, via Factiva, © 2014 Asianet-Pakistan; “Standard Chartered launches first of
its kind collection system,” The Frontier Post, 26 September 2014, via Factiva, © 2014 The Frontier Post.
26 “Coty Inc. Reports Fiscal 2014 Fourth Quarter and Full Year Results,” PR Newswire (U.S.), 28 August 2014, via Factiva, © 2014 PR Newswire Association LLC.; “Q4 2014 Coty Inc Earnings
Call – Final,” CQ FD Disclosure, 28 August 2014, via Factiva, © 2014 CQ-Roll Call, Inc.
27 “Procter & Gamble Co at Barclays Back to School Conference – Final,” CQ FD Disclosure, 4 September 2014, via Factiva, © 2014 CQ-Roll Call, Inc.; “P&G redirects ad spending, slashes
celebrity endorsements,” Business Courier of Cincinnati Online, 5 September 2014, via Factiva, © 2014 American City Business Journals, Inc.
28 “Procter & Gamble to cut 300 jobs in Germany – Report,” SeeNews Germany, 4 August 2014, via Factiva, © 2014 SeeNews; “P&G planning to cut around 300 jobs at German HQ within 2
yrs,” German Collection, 4 August 2014, via Factiva, © 2014 AII Data Processing Ltd.
29 “Pola Orbis to shut Korean subsidiary,” BW Confidential, 22 August 2014, via Factiva, © 2014 BW Confidential.
30 “Emami to liquidate UK subsidiary, Q1 net profit up 16.7%,” Business Standard, 9 August 2014, via Factiva, © 2014 Business Standard Ltd.; “Emami plans further acquisitions of brands,”
Press Trust of India, 9 August 2014, via Factiva, © 2014 The Press Trust of India Limited; “Emami eyes acquisitions in West Asia, Africa and Russia,” Financial Express, 10 August 2014, via
Factiva, © 2014 Indian Express Online Media Pvt. Ltd.
31 “Beiersdorf puts ‘wasteful and damaging’ Euro pitch on hold,” Campaign, 22 August 2014, via Factiva, © 2014 Campaign, a Haymarket publication.
32 “Avon Launches Redesigned Ecommerce Site,” PR Newswire (U.S.), 8 October 2014, via Factiva, © 2014 PR Newswire Association LLC.
33 “Event Brief of Q4 2014 The Estée Lauder Companies Inc. Earnings Conference Call – Final,” CQ FD Disclosure, 15 August 2014, via Factiva, © 2014 CQ-Roll Call, Inc.
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reportedly “visualizes changes in facial features, makeup, aging and hair as well as revealing the user’s true skin tone and
how skin has changed over time.” Director of Partnerships and Mobile Strategy Miriam Pettinen said: “While most apps only
use basic analysis of a single photo, the combination of big data and machine learning algorithms used in Beautiful Me gives
users a much more accurate description of their skin profile.”34
►
A “virtual makeup mirror” technology developed by ModiFace, is reportedly due to become available in 40 international
Sephora stores, following a prototype launch in Italy, and will work with products from five brands. ModiFace founder and
Parham Aarabi commented: “It allows you to try on 100 eye shadows in the time it takes to try one in real life.”35
►
L’Oréal’s Yves Saint Laurent (YSL) Beauté brand has said that its department store staff worldwide will use Google Glass
technology to “capture makeup sessions on video” for consumers. YSL said that the personalized “how-to” tutorials would
be emailed to consumers who would be able to use YSL’s online store to order from the list of products used on their
makeover. YSL International General Manager Stephan Bezy commented: “We used to say that luxury is more than product,
it’s service. But this is even beyond that – it’s personalized service.” YSL reportedly said that the initiative should attract “a
new generation” to the brand while YSL Beauté SVP Marketing Alexandra Papazian noted that brands had to “excel” both in
the department store and online.36
►
L’Oréal USA has confirmed a partnership with Shoppable, a company founded by one of three winners of the company’s
Women in Digital 2013 Next Generation Awards. L’Oréal will reportedly become the first company to use Shoppable’s
proprietary technology, creating a “universal shopping cart” ecommerce platform that can be used “across its brands,
divisions and digital content.” L’Oréal USA VP Digital Strategy and Innovation Rachel Weiss noted that the Women in Digital
program was a “great funnel for entrepreneurs” to come into the company.”37
►
L’Oréal USA has announced that the three winners of its 2014 Next Generation Awards include Victoria Eisner, Co-Founder
and Chief Creative Officer of Glamsquad, an app delivering beauty services to “the home or office in as little as an hour’s
notice.” Cynthia Breazal, founder of social robotics and human robot interaction company Jibo and creator of the “world’s
first family robot” was another winner, along with Tania Yuki, founder and CEO of Shareablee, a “leading authority” on
social media audience intelligence, competitive benchmarking and actionable insights. L’Oréal USA VP Digital Strategy and
Innovation Rachel Weiss said the winners had “forward-thinking” products capable of transforming the way that consumers
interacted with the beauty industry and commented: “Each year we build upon the successes of years past, finding new
ways to enhance the program and expand the reach and resources we provide to female entrepreneurs.”38
►
L’Oréal USA’s Professional Products Division has announced a collaboration with StyleSeat, the“online destination” for
salon professionals and their clients founded by a Digital Next Generation Award finalist. The company said that L’Oréal
network salon owners and stylists on StyleSeat would receive “customized tools,” including online booking, with an
ecommerce function launching in the fourth quarter enabling qualifying members to sell products direct to their clients, with
L’Oréal managing “packing, shipping and confirmation.”39
►
L’Oréal’s Lancôme brand has commented on the impact of Elite Rewards, the loyalty program launched in 1 April 2014
including “social media, in-store and mobile components.” Lancôme reported that 60% of Elite Rewards members were
completing “one action” per month, with members spending 6% more per transaction than non-member shoppers. The
program reportedly offers 10 points for every US$1 spent online and 25 points if members connect their accounts to
Lancôme’s Facebook, Twitter, Instagram and Foursquare accounts, along with rewards for watching branded content,
opting into email and direct mail programs and points when purchases are made at third party “brick-and-mortar” retailers.
Sarika Rastogi, Assistant VP CRM and Loyalty at Lancôme, commented: “Going forward — it’s not in place right now — we
want to reward customers who are writing reviews on our products as well.”40
►
Kimberly-Clark has commented on a new “Time to Potty” app for its Pull-Ups brand that reportedly focuses on “mobile as a
utility tool” and enables the user to “customize” content, offering push notifications, rewards, games and branded content.
Brand Director of Child Care Melanie Huet said: “The area that we were able to improve is taking some of the pressure off of
mom with this app and let the app actually help you along the way by providing some of those reminders.”41
34
“Healthy Skin Portal Publishes Article Detailing Beautiful Me Photo Analysis App Designed to Generate Personalized Skincare Solutions,” PR Newswire (U.S.), 25 September 2014, via Factiva,
© 2014 PR Newswire Association LLC.
35 “L’Oréal’s Makeup Genius App: The Cosmetics Counter Goes Digital,” Bloomberg, 11 September 2014, via Factiva, © 2014 BLOOMBERG L.P.
36 “How technology is transforming the cosmetics industry,” The Telegraph Online, 7 October 2014, via Factiva, © 2014 Telegraph Media Group Ltd.; “Cosmetics Counters Ramp Up to Keep
Up,” The New York Times, 9 October 2014, via Factiva, © 2014 The New York Times Company.
37 “L’ORÉAL RETOOLS ONLINE SHOPPING CART THANKS TO DIGITAL MENTORSHIP EFFORT; Beauty marketer found Shoppable through its Women in Digital Next Generation program,”
Advertising Age, 15 September 2014, via Factiva, © 2014 Crain Communications, Inc.
38 “L’Oréal USA Announces 2014 NEXT Generation Award Winners,” PR Newswire (U.S.), 18 September 2014, via Factiva, © 2014 PR Newswire Association, LLC.
39 “L’ORÉAL USA Professional Products Division is Changing the Face of the Professional Salon Industry,” PR Newswire (U.S.), 28 August 2014, via Factiva, © 2014 PR Newswire Association
LLC.; “L’Oréal USA Announces 2014 NEXT Generation Award Winners,” PR Newswire (U.S.), 18 September 2014, via Factiva, © 2014 PR Newswire Association LLC.
40 “Lancôme Is Getting a 60% Monthly Action Rate With New Loyalty Program,” Adweek, 6 August 2014, via Factiva, © 2014 Nielsen Business Media.
41 “Kimberly-Clark Tackles Potty Training Woes With New App,” Adweek, 20 August 2014, via Factiva, © 2014 Nielsen Business Media.
4 August–13 October 2014
EY
Talking Personal Care
7
►
P&G and Unilever are reportedly among a group of advertisers joining Facebook’s new “EMEA Client Council,” an initiative
to “align” Facebook’s business priorities with the “marketing needs of brands,” including “greater levels of creativity in copy
and imagery” in social network advertising.42
►
A digital #whatheblack campaign for the Indian launch of Colgate-Palmolive’s SlimSoft Charcoal toothbrush reportedly
reached 23.8m consumers after being initially targeted at 200 “opinion leaders.” A company spokesperson noted: “Colgate
SlimSoft Charcoal is a first of its kind toothbrush and presented Colgate with an opportunity of creating brand visibility and
advocacy through disruptive communication techniques.”43
►
Unilever has reportedly partnered with shopping portal Daraz.pk for online beauty and personal care product sales in
Pakistan. Daraz Co-founder Farees Shah noted that Daraz delivered to over 200 cities in Pakistan and accepted cash-ondelivery.” Over 84% of all Dove sales via Daraz are reportedly being generated from “smaller cities and towns.”44
►
A new study from research firm L2 has reported that companies with direct distribution arrangements with Amazon,
“particularly” in categories including beauty, receive “special privileges.” The study of 30,000 consumer product listings on
Amazon reported that brands without a distribution deal had “about half as many listings from resellers,” with their
products “more visibly featured.” L2 co-founder and New York University Stern School of Business Marketing Professor
Scott Galloway commented: “It’s definitely pay to play and they are definitely muscling brands and retailers around.” L2
noted that Burberry had started sales via Amazon’s Luxury Beauty store in 2013 and commented: “Burberry has
strategically traded the official distribution of a limited number of its SKUs in exchange for Amazon cleaning up third-party
distribution of other Burberry products.”45
►
Amazon subsidiary Quidsi has announced the roll out of international shipping to 67 countries for ecommerce sites
including baby care focused Diapers.com and luxury beauty site BeautyBar.com. The company said that a “wide selection of
iconic American and European brands” would be available at “compelling prices” and at “competitive” international shipping
rates, with a “1-3 day” service to “select” destinations. International Expansion Leader Robyn Brown commented: “With this
launch, we reinforce our dedication to making busy parents’ lives easier via best-in-class product selection for the whole
family, fast shipping and 24/7 customer service - not just in the US, but now across the globe.”46
►
L’Oréal has commented on the issue of insurance policy coverage for cybersecurity breaches. Americas Chief Information
Security Officer Zouhair Guelzim said that incidents impacting companies including US retailers Home Depot and Target
were “very frightening for many organizations.” Guelzim said that companies were purchasing additional cover to fill “gaps”
as insurance policies were “often too broad” to meet requirements “specific to an industry.” Guelzim also said that policies
were “selective” on incidents covered and that providing inaccurate information such as the number of characters used in
company passwords could result in a claim denial, noting: “These are loopholes that CISO’s talk in private about.”47
Innovation and new product launches
►
P&G has commented on the US launch of its Always Discreet range of female incontinence liners, pads and underwear. The
company said the new line offered “incredible comfort, protection and discretion, in a flattering feminine design,” with its
pads “up to 40% thinner than the leading brand.” Product Research Director Chandrika Kasturi said the products were
“specifically designed to provide the things that matter most to women with sensitive bladders, including odor neutralization
protection and discretion.” Separately, CFO Jon Moeller said P&G had gained “over a 6%” share, “with limited marketing and
merchandising support,” since its UK launch of Always Discreet and noted: “One in three women over 18 years old suffers
from incontinence, but only one in nine uses an adult incontinence product. We’re entering the category with superior pad
and pant-style products that deliver significant benefit advantages from Always, a brand that women trust and prefer.”48
►
P&G’s SK-II skin care and cosmetic brand has reportedly launched Eye Wand, a new product including “magnetic micro-array
technology” provided by Australia’s OBJ to enhance the delivery and efficacy of “key molecules.” OBJ said that SK-II Eye
42
“Facebook signs up brands for 'Client Council',” Marketing, 1 October 2014, via Factiva, © 2014 Marketing.
“#Whattheblack: Colgate’s charcoal toothbrush,” Indiantelevision.com, 12 August 2014, via Factiva, © 2014 Indiantelevision.com; “Colgate SlimSoft Charcoal toothbrush paints the town
black,” Best Media Info, 19 August 2014, via Factiva, © 2014 Best Media Info; “Colgate: Black is the new White,” afaqs!, 14 August 2014, via Factiva, © 2014 Banyan Netfaqs Pvt. Ltd.
44 “Pakistan enters FMCG e-commerce,” Plus News Pakistan, 30 August 2014, via Factiva, © 2014 Plus Media Solutions Pakistan; “Online shopping making its way into rural areas,” The
Financial Daily, 17 August 2014, via Factiva, © 2014 The Financial Daily.
45 “Amazon Picks Favorites With Brands in ‘Pay to Play’ Strategy,” Bloomberg, 7 August 2014, via Factiva, © 2014 BLOOMBERG L.P.; “Study documents Amazon’s hardball tactics,” The Patriot
Ledger, 23 August 2014, via Factiva, © 2014 Gatehouse Media, Inc.
46 “Diapers.com Announces International Shipping to 67 Countries,” PR Newswire (U.S.), 13 August 2014, via Factiva, © 2014 PR Newswire Association LLC.
47 “Why Cyber Insurance Carries Its Own Risks - Market Talk,” Dow Jones Institutional News, 2 October 2014, via Factiva, © 2014 Dow Jones & Company, Inc.; “Many ‘Loopholes’ in Cyber
Insurance Policies, L’Oréal CISO Says,” Dow Jones Institutional News, 3 October 2014, via Factiva, © 2014 Dow Jones & Company, Inc.
48 “P&G’s Always Brand, the Global Leader in Feminine Care, Launches Revolutionary New Always Discreet (TM) for Sensitive Bladders,” Business Wire, 13 August 2014, via Factiva, © 2014
Business Wire; “Procter & Gamble Co at Barclays Back to School Conference – Final,” CQ FD Disclosure, 4 September 2014, via Factiva, © 2014 CQ-Roll Call, Inc.; “P&G enters new category
with goal to grab major share of $7B market,” Business Courier of Cincinnati Online, 8 August 2014, via Factiva, © 2014 American City Business Journals, Inc.
43
4 August–13 October 2014
EY
Talking Personal Care
8
Wand would initially be available in South Korea and Japan and was the first product to be commercially launched following
the Product Development Agreement between P&G and OBJ. SK-II Global Franchise Director Suda Sudarsana commented:
“Working in collaboration with OBJ has allowed us to leverage its expertise in diamagnetic physics which, in combination
with P&G’s biology and chemistry expertise, is resulting in record development speed in a key strategic growth area of
beauty.”49
►
Unilever has confirmed that a new GBP24m Advanced Manufacturing Center will open in 2016 at its Port Sunlight research
and development facility in the UK. The Center includes a pilot plant to “test new and transformational technologies” and
“instantly scale” innovations to a “factory scale” for personal care and household products. Unilever Port Sunlight site
leader Cameron Jones said: “The Center creates a step-change in our ability to bring truly innovative products to market
faster.” Earlier, the company announced that a new innovation laboratory would open at the UKs Liverpool Science Park in
September 2014 as part of a GBP6.9m investment supporting research in home and personal care products. The 4,000
square foot Integrated High Throughput Formulation Center will reportedly use “robotic automation and data management”
in the development and design of new products. Jones commented: “This is one of a number of initiatives we have running
across the North West and it will work hand in hand with our University of Liverpool connections.”50
►
Personal care companies including Beiersdorf, Colgate-Palmolive, Estée Lauder, Hengan International Group, Hindustan
Unilever, Procter & Gamble, Unicharm and Unilever Indonesia have been announced as members of the 2014 list of The
World’s 100 Most Innovative Companies by Forbes magazine.51
►
Beiersdorf has commented on the company’s innovation strategy. CEO Stefan Heidenreich, who said that existing
innovations including Black & White and Stress Protect were growing “double digits,” said more were planned for the “end
of the year” and that innovation now had “longer cycles” to really penetrate “across regions.” Heidenreich said that
Beiersdorf was “definitely not going into innovation mania” and noted: “We stay focused with a high discipline and then
when we see trends going down on an innovation, then we will bring new innovation to enhance the categories again.”52
►
Elizabeth Arden has commented on its new “cutting edge” global professional skin care brand, Elizabeth Arden PRO,
developed in partnership with skin care firm US CosmeceuTechs and launched in August 2014. The brand, sold “only” to the
professional skincare market, includes “five simple, concise regimens” to address “key skin conditions,” including in-salon
professional treatments and “homecare” products including “several new patent-pending technologies.” VP Research and
Development Arthur Pellegrino said: “Elizabeth Arden PRO offers a more complete approach to improving skin health with a
comprehensive skincare regimen that provides safe, effective, simple solutions both in and out of the salon/clinic.”53
►
Undercover Colors, developer of a prototype nail polish that changes color when dipped into a drink containing “date rape”
drugs, has confirmed that it has raised US$300,000 in funding from eight investors, compared to its original US$250,000
target. A spokesperson said that the funds would be used for research and development. The non-profit start-up, formed by
four students at North Carolina State University, has also reportedly received personal donations after news of the drugsensitive nail polish “went viral.” Undercover Colors said that it aimed to “empower” women through the development of its
“future product” and “be part of a larger social movement to end sexual assault.”54
►
Godrej Consumer Products has announced its entry into hair care products with the launch of a new B:Blunt branded range.
The company, which acquired a 30% stake in Indian salon group B:Blunt in 2013, said the launch would help Godrej move
into India’s “premium” market where the potential few acquisition targets were “over-valued,” The new line, currently
available in salons, will reportedly be rolled out online and into retail stores “in the near future.” Executive Director Nisaba
Godrej commented: “From personal wash (soaps) we have expanded into personal care (with Protekt and Cinthol). Similarly
with B:Blunt, we move from hair color into the larger hair care space.”55
►
Colgate-Palmolive has announced the US nationwide launch of a new “dual benefit mouthwash.” The company said that
Colgate Total Lasting White Mouthwash contained fluoride to help “re-mineralize” enamel, fight tartar and freshen breath
“without the burn of alcohol” and formed “an invisible shield” on teeth, to “help prevent stains from forming.” US Oral Care
49
“(AEOBJ) OBJ Limited: P&G launches first product incorporating OBJ Technology,” Ralph Wragg Australian Business News, 30 September 2014, via Factiva, © 2014 RWE Australian
Business News Pty Ltd.; “OBJ LIMITED; P&G Launches First Product Incorporating OBJ Technology,” ASX ComNews (Text version of ASX Company Announcements), 30 September 2014, via
Factiva, © 2014 The Australian Securities Exchange Limited.
50 “UNILEVER'S NEW £24m INVESTMENT IN REGION,” Liverpool Echo, 30 September 2014, via Factiva, © 2014 Liverpool Daily Post & Echo Ltd.; “Unilever to open innovation space at
Liverpool Science Park,” MarketLine (a Datamonitor Company), Company News, 18 August 2014, via Factiva, © 2014 MarketLine – an Informa plc business; “Unilever to open £6.9m research
lab,” Liverpool Echo, 14 August 2014, via Factiva, © 2014 The Liverpool Daily Post & Echo Ltd.
51 “The World’s Most Innovative Companies,” Forbes, 8 September 2014, via Factiva, © 2014 Forbes Media LLC.
52 “Q2 2014 Beiersdorf AG Earnings Call – Final,” CQ FD Disclosure, 7 August 2014, via Factiva, © 2014 CQ-Roll Call, Inc.
53 “Elizabeth Arden Takes First Step Into the Global Professional Skincare Industry,” Canada NewsWire, 26 August 2014, via Factiva, © 2014 Canada NewsWire Ltd.
54 “New drug-sensitive nail polish may help ward off date rape,” U-Wire, 12 September 2014, via Factiva, © 2014 M2 Communications; “NC students developing way to detect date rape,”
Associated Press Newswires, 28 August 2014, via Factiva, © 2014 The Associated Press; “Undercover Colors raises funds for date rape prevention nail polish,” Triangle Business Journal
Online, 2 October 2014, via Factiva, © 2014 American City Business Journals, Inc.; “Rape drug-detecting nail polish startup Undercover Colors snags eight equity investors,” Triangle Business
Journal Online, 8 October 2014, via Factiva, © 2014 American City Business Journals, Inc.; “NCSU nail polish developers eye funding opportunities,” Triangle Business Journal, 10 October
2014, via Factiva, © 2014 American City Business Journals, Inc.
55 “Godrej steps into hair care with B:Blunt,” Business Standard, 27 August 2014, via Factiva, © 2014 Business Standard Ltd.
4 August–13 October 2014
EY
Talking Personal Care
9
Marketing VP and General Manager Philip Durocher said: “We pride ourselves in listening to consumer wants and needs for
products that allow them to maintain a healthy oral care routine while delivering a whitening benefit.”56
►
Toothpastes incorporating taurine are reportedly “a trend to watch,” with Russian oral care manufacturer Remineralizing
Oral Care Systems (R.O.C.S) launching R.O.C.S Energy toothpaste with taurine for adults for “cheerfulness and energy in
the morning.” Market research group Canadean noted that “energizing” products were becoming more widely available in
the personal care segment, including “shower gels and shampoos with taurine.”57
►
Dabur International has announced the launch of a “first-of-its-kind” toothpaste in the Middle East and North Africa region
“to prevent the ageing of teeth and gums.” The company said that Dabur Herb’l Anti-Ageing Toothpaste contained a
“unique blend” of seven “power” herbs, “essential” minerals and Vitamin E. Dabur International Group Product Manager
Abhinav Kumar commented: “The regular use of the toothpaste ensures prevention of gum recession, strengthening of
gums, and protection of exposed roots against cavities, considerably reducing the risk of tooth loss.”58
Regulation, litigation and product safety
►
The Indian Beauty and Hygiene Association (IBHA) has confirmed legal action against a new government requirement for
personal care products to include a red or brown dot on their labels to indicate whether the product is derived from animal
products. Hindustan Unilever is reportedly a co-complainant in the action at Bombay’s High Court which alleged that the
Indian government had “failed to consult the industry” and that the measures would be “complicated and costly to comply
with.” In response, the Bombay High Court ruled that no “coercive action” should be taken against companies failing to
comply with the new rules until the issue was adjudicated. Separately, it was reported that India was planning to ban the
import of personal care products that had been tested on animals.59
►
P&G has said that a US federal District Court has ruled that Clio USA, a maker of private label teeth whitening products,
infringed “several” patents related to P&G’s Crest Whitestrips products. The company noted that the Ohio court had
“rejected” Clio’s claims that the patents were “invalid” and said the rulings confirmed “the strength” of P&Gs tooth
whitening patents. Chief Legal Officer Deborah Majoras commented: “Companies that want to compete legitimately with our
Crest Whitestrips would not copy our patented technology. But if they do, we will exert our rights as the law allows.”60
►
A US District Judge has dismissed a proposed securities class action lawsuit which reportedly alleged that Avon “knew about
or consciously disregarded” violations of the Foreign Corrupt Practices Act by employees “while failing to disclose that its
business success resulted from the alleged bribery.” Judge Paul Gardephe reportedly gave the plaintiffs permission to “refile an amended lawsuit.”61
►
Colgate-Palmolive has responded to a Bloomberg report suggesting that newly released documents showed that the US
Food and Drug Administration (FDA) “might not have done enough due diligence” before its 1997 approval of the use of
antibacterial chemical triclosan in Colgate Total toothpaste. Colgate said that it did not plan to remove triclosan from the
product and noted: “In the nearly 18 years that Colgate Total has been on the market in the US, there has been no signal of
a safety issue from adverse-event reports.” Spokesperson Thomas DiPiazza commented: “Its efficacy and safety have been
affirmed by regulators in the US, the EU, Australia and Canada based on 20 years of scientific reviews.” Meanwhile, a
spokesperson for the FDA’s Office of New Drugs said that triclosan’s “benefit as an active ingredient in toothpaste was made
clear through its FDA approval process.”62
►
Hong Kong’s Customs and Excise Department has said that it is “looking into” Colgate Total toothpaste and will “seek
professional advice” from the Department of Health. Colgate-Palmolive Hong Kong noted that a Bloomberg report had
56
“Colgate-Palmolive Introduces New Colgate Total(R) Lasting White(TM) Mouthwash,” PR Newswire (U.S.), 11 August 2014, via Factiva, © 2014 PR Newswire Association LLC.
“PLA Innovation of the Week: a new toothpaste to give you an energy boost in the morning,” MarketLine (a Datamonitor Company), Company News, 15 September 2014, via Factiva, © 2014
MarketLine – an Informa plc business; “Canadean Limited: Energised toothpaste - a trend to watch 25 August 2014,” News Bites – Private Companies, 26 August 2014, via Factiva, © 2014
News Bites Pty Ltd.
58 “Dabur launches anti-ageing toothpaste in the MENA region,” CNEgypt, 18 August 2014, via Factiva, © 2014 CNEgypt.
59 “India’s ‘vegetarian’ edict dismays cosmetics industry,” Financial Times, 12 September 2014, © 2014 The Financial Times Limited; “Government set to prohibit import of cosmetics tested on
animals, proposal needs Harsh Vardhan’s nod,” The Economic Times, 5 September 2014, via Factiva, © 2014 The Times of India Group.
60 “District Court Rules in Favor of P&G on Patent Infringement Case Relating to Crest Whitestrips,” Business Wire, 23 September 2014, via Factiva, © 2014 Business Wire; “P&G wins court
battle over Crest 3D Whitestrips,” Business Courier of Cincinnati Online, 23 September 2014, via Factiva, © 2014 American City Business Journals, Inc.; “P&G's Patent Suit Win Helps Secure
Market for Crest Whitestrips,” Dow Jones Top News & Commentary, 23 September 2014, via Factiva, © 2014 Dow Jones & Company, Inc.
61 “Avon Gets Suit Over China Bribery Probe Statements Tossed,” Bloomberg, 29 September 2014, via Factiva, © 2014 BLOOMBERG L.P.; “Avon wins dismissal of lawsuit over China bribery,”
Reuters News, 29 September 2014, via Factiva, © 2014 Thomson Reuters; “Judges Rejects Suit Against Avon Products,” New York Law Journal, 2 October 2014, via Factiva, © 2014
LexisNexis, a Division of Reed Elsevier, Inc.
62 “Colgate Total Ingredient Linked to Hormones, Cancer Spotlights FDA Process,” Bloomberg, 11 August 2014, via Factiva, © 2014 BLOOMBERG L.P.; “Consumer Groups Put Pressure on
Retailers to Drop Triclosan,” Bloomberg, 13 August 2014, via Factiva, © 2014 BLOOMBERG L.P.; “Shoppers Ditching Colgate Total Amid Triclosan Fears,” Bloomberg, 15 August 2014, via
Factiva, © 2014 BLOOMBERG L.P.; “Colgate’s Media Buzz Score Suffers Amid Triclosan Concern,” Bloomberg, 20 August 2014, via Factiva, © 2014 BLOOMBERG L.P.; “Cancer-Linked Colgate
Total Ingredient Suggests Flaws in FDA Approval Process,” Bloomberg, 11 August 2014, via Factiva, © 2014 BLOOMBERG L.P.
57
4 August–13 October 2014
EY
Talking Personal Care
10
“unfairly” questioned the US FDA’s safety review of Colgate Total and said: “Colgate Total users can be fully confident in the
safety of our toothpaste.”63
►
South Korea’s Fair Trade Commission (FTC) has said that it has fined AmorePacific KRW500m for “abusing its power” by
ordering independent door-to–door sales agencies contracted by the company to move their highest-performing” employees
“to new or struggling agencies.” The FTC said that 3,480 agency employees were moved during the period 2005 to June
2013, with a negative financial impact to subcontractors. AmorePacific reportedly said that its actions had been part of a
strategy to increase sales at “low-performing” agencies. FTC Director Kim Sung-sam commented: “I hope this brings
awareness to the entire door-to-door sales industry, in which many company headquarters abuse their power over sales
agencies.”64
Focus on emerging markets
►
Unilever is reportedly investing US$190m in Kenya, including a new factory and warehouse development which will be its
“largest” sub-Saharan African plant on completion. Unilever CEO Paul Polman commented: “Our Nairobi-based site, which is
the hub of the East African business, will not be able to meet the rapidly growing business needs of our consumers by
2016.” A spokesperson said that the new facility would “cover the full range of products” and allow Unilever to “upgrade to
a brand new state-of-the-art facility operating to the highest environmental and energy efficiency standards and with better
transport links.” Polman said the new plant, expected to be completed by 2017, would “more than triple” current capacity,
to 250,000 tons per year, and noted: “Competition in the region is stiff but our strength lies in our reputation that we have
built over the years.”65
►
Unilever has reportedly confirmed that it is investing up to €150m “across its Nigerian production lines” and is in talks with
Nigeria’s Ministry of Agriculture on local raw material sourcing. Speaking on a trip to the country, CEO Paul Polman said
that Nigeria now accounted for “almost half” of Unilever’s “entire investment in Africa” and commented: “We will continue
to invest and our growth rate is accelerating.” Polman noted that nine suppliers that participated in the company’s earlier
“Partner to Win” conference in Nigeria had committed to establish a presence there that would “help create a more robust
supply chain” and commented: “Nigeria, over time, should be half of our African business and if the growth rate increases,
Nigeria could get more than half of our business.”66
►
Orbit Chemical Industries, a Kenyan-based contract manufacturer of household and personal care products, is reportedly
planning to expand to “brownfield” sites in Ethiopia, Nigeria and South Africa. The Financial Times noted that Orbit worked
for multinationals including Colgate-Palmolive, L’Oréal and Unilever and had increased annual turnover “more than fivefold”
in the last six years, to US$100m. Orbit’s Sachen Chandaria commented: “Every one of our customers is much larger than
they were five years ago, six years ago.”67
►
Emami CFO NH Bhansali Agarwal has said that the company will “re-strategize about Egypt,” noting that the political
situation there appeared to be “stabilizing.” Agarwal noted: “In Egypt, we have a small plant and we have a structure there.
It is on hold. We are evaluating that.”68
►
Baby care product companies operating in China, including local diaper manufacturer Hengan International, are reportedly
being impacted by higher living costs which have led to under 3% of 11m eligible Chinese couples from applying for
permission to have another child. Separately, Hengan noted a “challenging” short-term outlook, citing the number of new
entrants into the Chinese diaper market, and commented: “A majority of Chinese mothers believe foreign products are
better than domestic ones; therefore, it is necessary to educate consumers to change their minds.”69
63
“Hong Kong ‘Looking Into’ Colgate Total Toothpaste Safety,” Bloomberg, 14 August 2014, via Factiva, © 2014 BLOOMBERG L.P.; “Consumer Groups Put Pressure on Retailers to Drop
Triclosan,” Bloomberg, 13 August 2014, via Factiva, © 2014 BLOOMBERG L.P.
64 “AmorePacific pays the price for subcontractor abuse.(WORLD BUSINESS),” Cosmetics International, 19 September 2014, via Factiva, © 2014 Gale Group Inc.; “FTC fines AmorePacific for
subcontractor abuse,” Joins.com, 19 August 2014, via Factiva, © 2014 DRAMAHOUSE & J CONTENTHUB.
65 “Unilever Invests $190m To Scale Up Production Capacity In Kenya,” Ventures Africa, 23 September 2014, via Factiva, © 2014 Ventures Africa; “KENYA: Unilever plans new facility,” JustFood, 24 September 2014, via Factiva, © 2014 Aroq Limited.
66 “Unilever Expands Nigeria Operations With N30 Billion,” All Africa, 18 September 2014, via Factiva, © 2014 AllAfrica; “Nigeria Now Holds 50 Percent of Unilever’s Africa Business Says
Polman,” All Africa, 16 September 2014, via Factiva, © 2014 AllAfrica; “Unilever Reiterates Commitment to Developing Nigerian Economy,” All Africa, 19 September 2014, via Factiva, ©
2014 AllAfrica; “Unilever To Invest $194m In Nigeria,” Ventures Africa, 16 September 2014, via Factiva, © 2014 Ventures Africa.
67 “Consumer goods: Companies in Africa find that nice things come in smaller packages,” Financial Times, 5 October 2014, © 2014 The Financial Times Limited.
68 “Emami eyes acquisitions in West Asia, Africa and Russia,” Financial Express, 10 August 2014, via Factiva, © 2014 Indian Express Online Media Pvt, Ltd.; “Emami profit grows 16.7%,” The
Telegraph, 10 August 2014, via Factiva, © 2014 ABP Pvt Ltd.
69 “China Baby Boom Wagers Go Bust in Stocks as Kids Cost Too Much,” Bloomberg, 21 August 2014, via Factiva, © 2014 BLOOMBERG L.P.; “China’s nappy brands look to absorb local
demand,” Financial Times, 19 September 2014, © The Financial Times Limited.
4 August–13 October 2014
EY
Talking Personal Care
11
►
Japan’s Daoi Paper has said that it will invest ¥4.5b-¥4.6b to increase diaper production in China and Thailand by 1.5 times
and 1.3 times, respectively. The move is reportedly aimed at reducing logistics costs and ensuring a “stable” supply.70
►
The Honest Company has confirmed that it is in “early discussions with potential partners” to enter the Chinese market.71
►
Kao has announced plans to increase its total capital expenditure from around ¥60b currently to “up to” ¥100b to expand in
emerging markets including China, Indonesia and Thailand before “pushing deeper” into Europe and North America.
President and CEO Michitaka Sawada noted that P&G and Unilever had “extraordinarily large presences” in Asia and said
that Kao could “carve out market share” with “higher-value-added” products and by leveraging its brand recognition in Asia.
Earlier, Kao announced plans to build a new 165,000 square meter consumer goods factory in Thailand’s Rayong province,
reportedly to meet expected demand from the formation of the ASEAN Economic Community. Sawada said the investment
would be “about twice the size” of the company’s average investment in Thailand over the prior four years.72
►
Unilever Thailand has announced plans to invest THB8b over a three-year period, including a new THB2.6b headquarters
building and a THB1.2b investment in its Min Buri liquid personal care plant. Chairwoman Supattra Paopiamsap said she had
committed to the business retaining a “strong growth momentum” of “at least two times faster than GDP” and commented:
“The expansion will serve the potential growth of our domestic market and comply with the implementation of the ASEAN
Economic Community next year.” Paopiamsap also said that she expected annual sales to “double” by 2020 and noted: “I
would like to build up speed and simplify the working process at a large business organization like Unilever Thailand so that
the company can capture all coming business opportunities and the rebounding of the Thai economy.“73
►
P&G has confirmed the opening of a new plant in India which will reportedly become its largest manufacturing facility in
Asia. According to local reports, the company has invested US$150m in the “first phase” of the Kothur site and plans to
make a total US$800m investment in the plant. P&G India Managing Director and CEO Shantanu Khosta commented: “We
are delighted to start operations of the manufacturing plant near Hyderabad. It’s our sixth plant in India. We will continue to
invest in the plant and the community in line with our vision.”74
►
P&G has commented on an Indian campaign for its Whisper feminine hygiene brand which aims to tackle “menstruation
taboos.” A company survey reported that 59% of urban Indian women still followed “primitive practices” such as avoiding
touching a jar of pickle if menstruating, due the belief that it would “spoil.” A spokesperson said: “Not touching a jar of
pickle because your body is undergoing a natural biological process is nothing but laughable.”75
►
Shiseido has commented on its strategy for its Za skin care and cosmetics brand in India. Za, launched in India in April
2014, is reportedly currently available in “about 100 doors” and is “on track” to reach its targeted 250 doors by the end of
the year. Shiseido India Marketing Director Salman Bukhari said the company had focused on its whitening, age-prevention
and “two-in-one” foundation products skin care products and planned to launch Za cosmetics “later,” noting that although
the company was “a bit late” to the market, Indian consumers were “already more educated.”76
►
AmorePacific has commented on the South Korean male skin care market, which reportedly grew by 9% in 2013. VP
Product Strategy Kim Nan-hee noted that face creams and sun blocks were becoming popular among Asian men, with “clean
and well-groomed men” becoming “ideal types for many women in Asia” and male products currently accounted for around
15% of total South Korean skin care sales. Nan-hee commented: “Male skin care is not yet our main market, but it is the
fastest growing sector that we cannot miss.”77
►
South Korea’s Coreana Cosmetics has announced the start of exports of its Entia skin care brand to 10 countries. The
company said that it would deliver “directly” to overseas retailers and online stores and commented: “Amid growing interest
in K-Beauty in overseas countries, we decided to release Entia Aqua & White products targeting overseas consumers as part
of an effort to make bigger forays into the global market.”78
►
South Korea’s AmorePacific has commented on the planned October 2014 opening of a new manufacturing plant and
research and development center in China. CEO Suh Kyung-bae said the Shanghai facility would enable the company to
develop products “more customized to Chinese consumers” and “guarantee better quality.” Kyung-bae also said that
70
“Daio Paper to Boost Paper Diaper Production in China, Thailand,” Jiji Press English News Service, 8 August 2014, via Factiva, © 2014 Jiji Press, Ltd.
“The Honest Company Closes $70 Million Investment Round to Accelerate Growth, Business Wire, 26 August 2014, via Factiva, © 2014 Business Wire; “Jessica Alba's The Honest Co. Raises
$70M, Preps for IPO,” Dow Jones Top North American Equities Stories, 27 August 2014, via Factiva, © 2014 Dow Jones & Company, Inc.
72 “Molton Brown Maker Steps Up Spending to Catch Unilever,” Bloomberg, 6 October 2014, via Factiva, © 2014 BLOOMBERG L.P.; “CONSUMER GOODS - Kao readies for AEC with Rayong
plant,” Bangkok Post, 11 September 2014, via Factiva, © 2014 The Post publishing Company Limited; “Thailand: Japan’s Kao Corporation to set up new consumer goods factory on Thailand’s
Eastern Seaboard,” Thai News Service, 12 September 2014, via Factiva, © 2014 Thai News Service; “Kao to Build New Plant in Thailand,” Jiji Press English News Service, 9 September 2014,
via Factiva, © 2014 Jiji Press, Ltd.
73 “Supattra Paopiamsap, chairwoman of Unilever ThailandUnilever Thailand budgets Bt8 bn for building expansion over 3 years,” The Nation, 10 October 2014, via Factiva, © 2014 Nation
Multimedia Group Public Co., Ltd.; “Thai Unilever will invest B8bn,” Bangkok Post, 10 October 2014, via Factiva, © 2014 The Post Publishing Company Limited.
74 “P&G commissions Rs. 900-cr plant near Hyderabad,” Business Line (The Hindu), 19 September 2014, via Factiva, © 2014 The Hindu Business Line; “P&G, Cogent open Telangana plants,
Johnson & Johnson begins work,” Indo-Asian News Service, 18 September 2014, via Factiva, © 2014 Indo-Asian News Service.
75 “US consumer giant seeks to smash India menstruation taboos,” Agence France Presse, 3 October 2014, via Factiva, © 2014 Agence France-Presse.
76 “Shiseido’s Za Enters India,” WWD, 29 August 2014, via Factiva, © 2014 Condé Nast.
77 “From machismo to moisturiser – Korean men get a makeover,” Financial Times, 2 October 2014, © 2014 The Financial Times Limited.
78 “Coreana to Export “Entia” to 10 Countries,” The Korea Economic Daily, 14 August 2014, via Factiva, © 2014 Hankyung.com.
71
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AmorePacific was working with “local medical schools and dermatologists” to develop products that catered to the
“different demands” of different Chinese regions.79
►
A greater number of Latin American consumers chose “cheaper” brands over the past 12 months, compared to those that
“traded up,” according to a new Financial Times consumer survey which reported that this trend was “most pronounced” in
products including shampoo, deodorant and toothpaste and “strongest” in Argentina and Mexico.80
►
Nestlé’s Galderma dermatology business is reportedly planning to build a new Brazilian factory to meet demand from the
“Southern Cone” region of South America. The US$86m plant in Hortolandia, São Paulo, will reportedly produce nonmoisturizers and sun protection along with prescription products.81
►
L’Oréal Brazil President Didier Tisserand has said that the company will invest around €160m to build a new research and
development center in Rio de Janeiro. Tisserand reportedly said that the new facility would open in 2016 and formed part
of a wider initiative to “upgrade” the company’s headquarters and production capacity in Brazil, to benefit from “strong”
local market growth.82
►
Swedish direct selling cosmetics company Oriflame has commented on the company’s construction of a “large” Russian
production facility to serve the Russia and Ukraine markets. CEO Magnus Brännström said that the plant, reportedly due to
start production in late 2014, would “hopefully” start “early next year or late this year” and noted: “We are well positioned
to begin growing again in Ukraine, but then the situation must stabilize and people must get back to some sort of buying
power.” Brännström also noted that Oriflame was “looking to open new markets in Africa,” with Malaysia and South Korea a
longer term target, and commented: “We believe that China, India and Indonesia could all become new Russias.”83
Focus on mature markets
►
Avon has said that it intends to leave the Direct Selling Association (DSA), reportedly stating in a letter to DSA member
companies that the US trade organization’s guidelines “might not adequately protect consumers from fraud.” Avon said that
the DSA’s agenda was “overly focused on the issues of a few specific brands rather than industry-wide challenges.” SVP
Cheryl Heinonen commented: “We felt like it was a good moment to get some clarity around our business model and the
things that Avon believes in.” In response, DSA President Joe Mariano said he was “disappointed” in Avon’s decision and
stated: “Our association is far better equipped to address the challenges and opportunities of our industry when all of our
member companies stand together.”84
►
L’Oréal’s Urban Decay cosmetics brand has confirmed plans to open its first “freestanding” store. The Newport Beach
outlet, in the US state of California, is to open in November 2014 and will include items not currently available in its
wholesale partners, including additional color options, “new” items and “lifestyle” products. Chief Creative Officer and
Founding Partner Wende Zomnir said it made “sense” to “understand what the freestanding model would look like” as Urban
Decay expanded internationally and noted: “To have a personal interaction with a brand or another person is really special,
and a retail store allows you to speak to your customer in a one-on-one personal way.”85
►
Murad has announced that the company’s first “official stand-alone retail boutique” will open in Los Angeles in October
2014. The company said that the 1,500 square foot “flagship” store would include “state-of-the-art technology” and an
elevated consumer experience to “inspire people to look better, live better and feel better through a breakthrough, whole
person approach to skin care.” General Manager Richard Murad noted that the store would also help the company to “learn
more,” so that Murad could “better serve” its customers and retail partners.86
►
P&G has commented on New York Tough, a US campaign incorporating its Crest, Secret and Head & Shoulders personal
care brands which is reportedly the company’s “first ad campaign focused on urban consumers.” The New York city
campaign, originally launched in May 2014, includes slogans such as “Garlicky pizza bread is tough. Crest is tougher,” and a
new “online” series of interviews on the “challenges of living in the city.” Associate Brand Director Mark Jeffreys noted that
79 “Korean Beauty Firm Rides K-Pop Wave; Amorepacific CEO discusses expansion as pop culture exports boost company's products,” The Wall Street Journal Online, 28 September 2014, via
Factiva, © 2014 Dow Jones & Company, Inc.
80 “Latin America consumers switch to budget bands,” Financial Times, 23 September 2014 © 2014 The Financial Times Limited.
81 “Brazil: Galderma bulking up in Hortolandia,” Valor Economico – SABI (Abstracts), 12 September 2014, via Factiva, © 2014 SABI – South American Business Information; “Brazil: Galderma to
invest BRL 200mn in new factory in Hortolandia,” Esmerk Latin American News, 12 September 2014, via Factiva, © 2014 M-Brain.
82 “L’Oréal invests EUR 160m in construction of R&D center in Brazil,” French Collection, 9 October 2014, via Factiva, © 2014 AII Data Processing Ltd.
83 “INTERVIEW-Oriflame hopes for Russia, Ukraine cosmetics recovery,” Reuters News, 17 September 2014, via Factiva, © 2014 Thomson Reuters.
84 “Avon splits with trade group, citing risk of pyramid schemes,” Washington Post.com, 16 September 2014, via Factiva, © 2014 The Washington Post Co.
85 “Urban Decay to Open Freestanding Unit,” WWD, 8 August 2014, via Factiva, © 2014 Condé Nast; “Urban Decay’s Metro Moves,” Orange County Business Journal, 8 September 2014, via
Factiva, © 2014 Orange County Business Journal.
86 “Murad(R) Skincare Marks 25(th) Anniversary with Opening of First Official Flagship Retail Location,” Business Wire, 2 September 2014, via Factiva, © 2014 Business Wire.
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the campaign did not have an end date and commented: “New Yorkers have little struggles every day in the city, and they
add up.”87
►
Shiseido has reportedly launched a new Benefique branded “hair restoration serum” in Japan that “focuses on changes of
skin temperature” to treat the scalp. A spokesperson noted: “Women’s interest in anti-aging care is spreading to hair from
skin.” A spokesperson for Kao, which is reportedly planning to introduce new products under its Segreta brand targeted at
“hair loss, lack of hair tension and thinning hair” said that Japan’s anti-aging hair care market was worth ¥13b in 2013 and
was expected to continue to growth due Japan’s aging society and new product launches. Meanwhile, Kose is reportedly due
to launch products to repair “thinning hair caused by aging” while Fujifilm’s Astalift anti-aging cosmetics brand is launching
its “first-ever hair care products.”88
►
The Japanese government has launched a campaign recommending that households “stockpile” sufficient toilet paper to
last “at least” one month, citing “lessons learned” from Japan’s March 2011 earthquake and tsunami. The initiative, to
mark Japan’s Disaster Prevention Day, noted that nearly 41% of Japan’s supply of toilet paper came from one of the
country’s “most earthquake-prone zones” and that there could be a month-long toilet paper shortage after a natural
disaster. Toilet paper producers are reportedly offering a 150 meter long single-layer “tightly rolled” toilet paper that lasts
“more than twice as long as a regular roll” as part of the campaign.89
►
UK consumers would reportedly be willing to wait “up to a month” to receive personalized skin care products based on
laboratory testing. According to a new survey from Canadean, 59% would be prepared to pay premium prices for “one-toone” laboratory skin care products, with 54% willing to provide blood, skin and hair samples for laboratory testing and 52%
willing to provide DNA swab samples.90
►
Revlon has confirmed that its “principal executive offices” in New York have relocated from 237 Park Avenue to One New
York Plaza, with effect from 29 September 2014.91
Focus on branding
►
Global marketing intelligence service Warc has named Unilever the world’s “smartest” advertiser in an annual ranking of
campaigns, agencies and brands, based on “performance in effectiveness and strategy competitions.” PepsiCo was ranked
second and Coca-Cola the third “smartest” advertiser. Meanwhile, Unilever’s Dove was ranked the fourth “smartest brand in
the world,” behind Coca-Cola, McDonald’s and Vodafone.92
►
Interbrand has reported that P&G’s Gillette brand was ranked 18 in its 2014 ranking of the Best Global Brands. The brand
consultancy said that Gillette’s US$22.8b brand value was down 9% compared to 2013 when it was ranked 16. P&G’s
Pampers brand was ranked 30, compared to 29 a year earlier, with brand value up 8% to US$14.1b. Meanwhile, the L’Oréal
brand was ranked 43, compared to a 39 a year earlier, with a 3% rise in brand value to US$10.2b. Coca-Cola was the
highest ranked consumer products brand, ranked third with a brand value of US$81.6b.93
►
P&G’s Gillette brand has confirmed that it has commissioned 52 new Gillette World Sport shows which will “go live across all
media platforms” from January 2015. Gillette World Sport, reportedly the “world’s most widely distributed sports show,” is
to have a “strong focus on precision in sport.” Gillette Global Brand Director Francesco Tortora commented: “At its peak,
Gillette World Sport was watched by millions in over 100 countries around the world, and we’re delighted to bring it back.
Gillette’s business is built on precision engineering, where attention to detail makes the difference between good and
great.”94
87
“P&G Takes to Confines of New York Subway to Pitch Deodorant, Fresh Breath,” Bloomberg, 10 October 2014, via Factiva, © 2014 BLOOMBERG L.P.
“Lineup of Antiaging Hair Care Products Expanding in Japan,” Jiji Press English News Service, 2 September 2014, via Factiva, © 2014 Jiji Press Ltd.
“Japan rolls out campaign to stockpile toilet paper,” Associated Press Newswires, 1 September 2014, via Factiva, © 2014 The Associated Press; “Japan gov't calls on citizens to stockpile
toilet paper,” Agence France Presse, 29 August 2014, via Factiva, © 2014 Agence France-Presse.
90 “Canadean Limited: Skincare made in the lab just for you: The future of personalisation 15 September 2014,” News Bites-Private Companies, 15 September 2014, via Factiva, © 2014 News
Bites Pty Ltd.
91 “Revlon Files 8K - Other Events >REV,” Dow Jones Institutional News, 29 September 2014, via Factiva, © 2014 Dow Jones & Company, Inc.
92 “Coke, Unilever Top Smartest Brand and Advertiser Rankings,” PR Newswire (U.S.), 12 September 2014, via Factiva, © 2014 PR Newswire Association LLC.
93 “Apple and Google Each Worth More Than USD $100 Billon on Interbrand's 15(th) Annual Best Global Brands Report,” Business Wire, 9 October 2014, via Factiva, © 2014 Business Wire.
94 “Gillette World Sport show set to return,” SportzPower, 6 October 2014, via Factiva, © 2014 Sportz Network Pvt. Ltd.
88
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Sustainability and social responsibility
►
L’Oréal USA has announced that it has become the first company in the US to receive certification under the new Economic
Dividends for Gender Equality (EDGE) global standard for workplace gender equality. L’Oréal USA SVP, Diversity & Inclusion
Angela Guy said the certification provided “a new level” of accountability and transparency and gave the company a
“competitive edge.” Guy noted: “We’re committed to taking leadership on this issue and will continue to develop innovative
solutions toward achieving ongoing gender balance.” The company also noted that L’Oréal operations in a further seven
countries were “in the process” of EDGE certification.95
►
US retailers Target and Wal-Mart Stores have commented on their decision to hold a joint Beauty and Personal Care
Products Sustainability Summit. The companies said a “coordinated, industry-wide approach or standard” was needed, with
the summit aiming to identify sustainability issues in the sector and potential collaborations to develop “better options for
products.” The “private” summit reportedly included a presentation from sustainable development organization Forum for
the Future and had attendees from chemical, fragrance, personal care product and packaging manufacturers.96
►
P&G has announced two expanded 2020 sustainability goals, focusing on water conservation and product packaging. The
company said that it had reduced water usage in its manufacturing plants by over 70% per unit of production between 2002
and 2012 and would now reduce water usage by “an added 20%” per unit of production, “with a specific focus on
conservation efforts” at facilities in “water-stressed” regions. P&G said that it would also provide one billion people with
access to “water-efficient” products. The company announced that it was “raising the bar” on its existing commitment to
reduce packaging by 20% per unit of production by 2020 and would also double the use of recycled resin in plastic
packaging and ensure that 90% of product packaging was recyclable, or that programs were “in place to create the ability to
recycle it.” The company also noted: “In addition to these two expanded goals, P&G is working across its supply chain to
develop the capability by 2020 to replace top petroleum-derived raw materials with renewable materials, as cost and scale
permit.” Martin Riant, P&G Executive Sponsor of Sustainability and Group President, Global Baby and Feminine & Family
Care, noted: “P&G’s growth objectives and sustainability goals are mutually interdependent.”97
►
P&G has confirmed that the “majority” of its Crest dental products will be “microbead-free” by March 2015, with
microbeads removed from all Crest products by March 2016, “well ahead” of any US “state legislation targets.” This
reportedly follows consumer concerns over environmental pollution and the potential for the particles to become embedded
in gums. The company noted that microbeads were included to “add color and visual appeal.” A spokesperson commented:
“While the ingredient in question is completely safe, we understand there is a growing preference for P&G to remove this
ingredient, so P&G will.” Separately, the American Dental Association said that Crest’s “colored polyethylene specks” had
been approved by the US Food and Drug Administration.98
►
Unilever and the World Resources Institute have announced a partnership to “increase transparency” in Unilever’s
agricultural commodity supply chain. Under the new agreement, Unilever and its global suppliers will use the WRI’s Global
Forest Watch Commodities online platform to “monitor forest cover change” in supply areas and processing facilities.
Unilever Chief Supply Chain Officer Pier Luigi Sigismondi said: “This partnership will bring new focus to see where our risks
are highest and to improve forest management.”99
►
Unilever and the UK Department for International Development (DFID) have announced a partnership to use “new social
business models” to “create jobs, improve water and sanitation and develop sustainable supply chains in developing
countries.” Under the partnership, described as the “first of its kind” between “a leading international business” and the
DFID, each will contribute GBP5m to a research and innovation program on affordable sanitation and safe drinking water.
Unilever CEO Paul Polman commented: “By working collaboratively with our suppliers, NGOs and governments, we can
make the biggest difference and go well beyond what’s possible in our own operations alone.”100
►
Unilever has said that it welcomes the New York Declaration on Forests pledge from “dozens of global leaders, companies
and NGOs across the world to cut forest loss in half by 2020 and end it by 2030.” CEO Paul Polman said that there had been
a “welcome race to the top” in the prior “few months,” with companies responding to a “clear signal” from consumers on
the issue of deforestation, and commented: “Better still, companies are committing to working in partnership with suppliers,
95
“L’Oréal USA Becomes First Company in the U.S. to Receive EDGE Gender Equality Certification,” PR Newswire (U.S.), 26 August 2014, via Factiva, © 2014 PR Newswire Association LLC.; “A
seal of approval for corporate gender equality,” WashingtonPost.com, 26 August 2014, via Factiva, © 2014 The Washington Post Co.
96 “Wal-Mart, Target team up on sustainability Rival retailers seek organic products for beauty aisles,” Chicago Tribune, 5 September 2014, via Factiva, © 2014 Chicago Tribune.
97 “P&G Expands Sustainability Goals to Conserve Resources, Protect Environment,” Business Wire, 13 October 2014, via Factiva, © 2014 Business Wire.
98 “Fish-Choking Balls Have States Limiting Cosmetic Contents,” Bloomberg, 18 September 2014, via Factiva, © 2014 BLOOMBERG L.P.; “Are microbeads in your toothpaste hurting your
gums? If you brush with brand-name toothpastes, you could be getting a mouthful of plastic with that minty fresh taste,” The Globe and Mail (Breaking News), 17 September 2014, via Factiva,
© 2014 The Globe and Mail Inc.; “P&G will make changes to ‘dangerous’ Crest ingredient,” Business Courier of Cincinnati Online, 16 September 2014, via Factiva, © 2014 American City
Business Journals, Inc.; “Crest to remove microbeads from dental products by 2016,” Plastics News, 22 September 2014, via Factiva, © 2014 Crain Communications, Inc.
99 “Unilever and World Resources Institute to partner on ending deforestation,” ENP Newswire, 2 September 2014, via Factiva, © 2014 Electronic News Publishing.
100 “Press release: British government and Unilever join forces to help world’s poor,” ForeignAffairs.co.nz, 22 September 2014, via Factiva, © 2014 Multimedia Investments Ltd.
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governments and NGOs to strengthen forest governance and economic incentives. It can be done and this Declaration
signals a real intention to accelerate action.”101
►
PZ Cussons has announced a commitment to eliminate deforestation from its supply chain and noted that it was also a
member of The Forest Trust (TFT) and had pledged “No Deforestation and No Exploitation” in its palm oil supply chain.
Director of Sustainability and Communications Eileen Donnelly said: “Through the PZ Palm Oil Promise we have developed
what we believe is a vital part of our role as a buyer of responsible palm oil.” The company said that an initial phase, “to
define the approach and priorities for traceability” was due to be completed by the end of 2014.102
►
L’Oréal has announced the inauguration of a new biomass plant at its Burgos professional hair care plant in Spain. The
company said the “pioneering initiative” combined biomass, photovoltaic and trigeneration energy, would meet all
manufacturing and packaging process energy needs and enable the site to become “carbon neutral” in 2015. L’Oréal noted
that 30% of the thermal energy produced by the biomass plant would be “commercialized amongst other companies in the
area.”103
►
Kao has reportedly been named the Dow Jones Sustainability Indices’ Households & Personal Products Industry Group
Leader for 2014–2015. Meanwhile, Unilever was named Food, Beverage & Tobacco Industry Group leader and was also
recognized for being included in the Dow Jones Sustainability World Index in all 15 years of the index’s existence.104
►
Kimberly-Clark has commented on its receipt of a SmartWay Excellence Award from the US Environmental Protection
Agency as one of 11 companies recognized as industry leaders in “freight supply chain environmental performance and
energy efficiency.” The company said that it was the fifth time that it had been recognized since it joined the program. VP
Transportation Steve Harmon noted: “Since we joined SmartWay in 2006, we have been advocates of the program within
the industry and have worked with our carriers and internal supply chain partners to reduce emissions.”105
►
Kimberly-Clark has announced the US national rollout of Scott Naturals Tube-Free Bath Tissue. The company said the
“tubeless” product had initially been launched in test markets in 2010 and contributed to “a better, cleaner world, without
sacrificing quality.” Brand Manager Jared Mackroy commented: “Right at the end, when you’re done, instead of there being
a cardboard tube, there’s nothing left at all. You can use every last sheet.”106
►
P&G has responded to the US National Football League’s (NFL) handling of domestic violence cases involving NFL players.
The NFL sponsor said that it would cancel its Crest brand’s “on field” sponsorship of the NFL’s breast cancer awareness
campaign while continuing to make a planned US$100,000 donation to the American Cancer Society. The company stated:
“Domestic violence is completely unacceptable and we have strongly urged the NFL to take swift and decisive action to
address this issue, and we will determine future actions as needed.” Separately, it was reported that a P&G CoverGirl
campaign aimed at female NFL supporters had been “digitally altered” and circulated on social media sites by activists
campaigning against the NFL’s position on domestic violence.107
►
Manufacturers have commented on advertising guidelines released by the Advertising Standards Council of India to prevent
the reinforcement of “negative social stereotyping on the basis of skin color.” Hindustan Unilever said it was “fully
committed” to the guidelines and noted: “They were framed by the body in consultation with industry, including member
companies such as Hindustan Unilever.” L’Oréal’s Garnier said it “strongly” believed that advertising “should not encourage
social discrimination of people based on aspects like the color of their skin” while Emami commented: “The aim of an
advertiser should be to ensure that viewers are not misguided about the efficacy of any product or promote discrimination
of any sort, without compromising the creative license to portray product attributes.”108
►
L’Oréal has announced that it has received a Chinese business license for Shanghai Episkin Biotechnology and noted that its
Episkin human epidermis model was “essential for the validation of alternative methods to animal testing for cosmetic
products and ingredients.” EVP Research and Innovation Laurent Attal said the company had started to produce
“reconstructed Asian skin” in China in 2008 and would begin marketing it through Shanghai Episkin Biotechnology “in the
near future.”109
101
“Unilever: First global timeline to end forest loss welcomed,” ENP Newswire, 24 September 2014, via Factiva, © 2014 Electronic News Publishing.
“PZ Cussons unveils palm oil promise.(International),” Household & Personal Products Industry, 1 September 2014, via Factiva, © 2014 Gale Group Inc.
“L’ORÉAL INAUGURATES NEW BIOMASS PLANT IN BURGOS,” ENP Newswire, 30 September 2014, via Factiva, © 2014 Electronic News Publishing.
104 “Results Announced for 2014 Dow Jones Sustainability Indices Review,” PR Newswire (U.S.), 11 September 2014, via Factiva, © 2014 PR Newswire Association LLC.
105 “Kimberly-Clark Receives US EPA 2014 SmartWay Excellence Award; Award Recipients are Top Program Performers and Leaders for Freight Supply Chain Efficiency,” ENP Newswire, 24
September 2014, via Factiva, © 2014 Electronic News Publishing.
106 “Scott Naturals(R) Tube-Free Bath Tissue Now Available Nationally,” PR Newswire (U.S.), 21 August 2014, via Factiva, © 2014 PR Newswire Association LLC.; “Tubeless toilet paper rolls
out: Beech Island plant creates eco-friendly bath tissue,” Aiken Standard, 15 September 2014, via Factiva, © 2014 Aiken Standard.
107 “P&G pulls out of NFL breast cancer campaign,” CNN Wire, 23 September 2014, via Factiva, © 2014 Cable News Network; “P&G responds to domestic violence problem, cancels promotion,”
Reuters News, 19 September 2014, via Factiva, © 2014 Thomson Reuters; “Social media turns on P&G for NFL sponsorship,” Business Courier of Cincinnati Online, 17 September 2014, via
Factiva, © 2014 American City Business Journals, Inc.; “Procter & Gamble cancels on-field NFL promotion,” Associated Press Newswires, 19 September 2014, via Factiva, © 2014 The
Associated Press; “CoverGirl ad attacked by NFL protesters,” CNN Wire, 15 September 2014, via Factiva, © 2014 Cable News Network; “Activists throw shade at NFL with altered Cover Girl
ad,” Chicago Tribune, 17 September 2014, via Factiva, © 2014 Chicago Tribune.
108 “Fairness cream makers welcome new ad norms,” Business Standard, 21 August 2014, via Factiva, © 2014 Business Standard Ltd.; “Fairplay guidelines for fairness products,” Mint, 20
August 2014, via Factiva, © 2014 HT Media Limited.
109 “L’Oréal Obtains Business Licence for Reconstructed Skin Models Episkin in China,” India Retail News, 29 September 2014, via Factiva, © 2014 Contify.com; “L’Oréal receives Chinese
business license for Shanghai Episkin,” MarketLine (a Datamonitor Company), Company News, 3 October 2014, via Factiva, © 2014 MarketLine – an Informa plc business.
102
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►
L’Oréal’s Garnier business has responded to reports that packages of the brands’ soaps, facial products and deodorants
were sent to female soldiers in the Israel Defense Forces (IDF). Garnier Corporate Communications Director Kari Kerr said
the distribution of around 500 products was “part of a local retailer initiative” and that the company did not support the
initiative and was “very sorry if anyone was offended.” Kerr noted: “Garnier values peace and harmony and has a strict
policy of not getting involved in any conflict or political matter.”110
Financial news/performance
►
Unilever has reported a slowing of global market growth, with both personal care and food brands impacted and a
worsening of emerging market growth. Speaking at an investor conference, CFO Jean-Marc Huët said: “Our markets, which
had been growing at around 4% last year, slowed to about 2.5% in the first half of this year.” Huët commented: “They have
slowed further since then, with no sign that we will see improvement any time soon.” Later, a company spokesperson noted
that Huët had referred to Unilever’s markets rather than the performance of the company.111
►
L’Oréal has said that it expects the cosmetics market to grow by 3.0%-3.5% in the second half of 2014, compared to its
earlier forecast of 3.5%–4.0%, with growth to return to a “better rhythm” in 2015. Chairman and CEO Jean-Paul Agon, who
noted that the cosmetics market had shrunk in western Europe in July and August 2014 and was “barely positive” in the
US, said that L’Oréal’s revenue growth was expected to “exceed” market growth.112
►
Coty has announced financial results for its fourth quarter. Net revenues for the three months to 30 June 2014 fell by
1.6%, to US$1.04b, with like-for-like sales down 0.7%, like-for-like Color Cosmetics sales down 4% and like-for-like sales in
the Americas down 7%. The company reported a net loss of US$20.1m in the period, compared with a net loss of US$62.3m
a year earlier. Coty said adjusted net income was “flat” at US$9.9m, while adjusted diluted earnings per share were “flat” at
US$0.03. Commenting on the full year, CEO Michele Scannavini said Coty had made “good progress” towards its strategic
objectives by “rapidly expanding” in emerging markets and “growing most of its “power brands.” Scannavini commented:
“As a result, the company enjoyed strong performance in EMEA and Asia Pacific, which was more than offset by revenues
softness in North America, where our nail and fragrance businesses were impacted by market contradiction, trade destocking and increased promotional and competitive pressure, mainly in the mass channel.” Coty forecast a “return to
revenue growth” in fiscal 2015 and said it expected “modest” growth in the first half of fiscal 2015 due to “challenging
market conditions.” Separately, Coty announced an annual dividend of US$0.20 per share, payable 1 October 2014.113
►
Beiersdorf has reported financial results for its first half. Sales for the six months to 30 June 2014 rose by 0.2% to €3.17b,
with organic sales up 5.0%, while adjusted earnings rose by 4.3% to €452m. The company said that Consumer Business
segment organic sales rose 5.0% with sales up 6.1%, 6.8% and 7.0% for the Nivea, Eucerin and La Prairie brands,
respectively. Organic sales increased by 1.6% in Western Europe and by 3.9% in Eastern Europe. In the Americas, organic
sales rose by 4.2% in North America and by 5.1% in Latin America, with a “particularly strong” increase in Brazil, while in the
Africa, Asia and Australia region, organic sales rose by 11.3%. Beiersdorf noted that the “economic slowdown” in Thailand,
Japan and China had impacted sales in the period. CEO Stefan Heidenreich commented: “Once again, we increased sales
and earnings, and gained market shares in our relevant markets and key categories. We achieved this both in emerging
markets and in Europe, despite sometimes difficult market conditions.” Beiersdorf confirmed its forecast for full year sales
growth of 4%-6% for the Consumer division and said its earnings before interest and taxes margin was expected to increase
from 12.5% to 13.0%.114
►
Estée Lauder has reported financial results for its fourth quarter. Sales for the three months to 30 June 2014 increased by
13% to US$2.73b, reflecting “innovative new products,” as well as “double-digit” growth in the US, travel retail and “many”
European emerging markets. Skin care sales rose by 14%, makeup sales rose by 12%, fragrance sales rose by 14% and hair
care sales rose by 6%. The company reported quarterly net earnings of US$257.7m, compared with US$94.0m a year
earlier, and diluted net earnings of US$0.66 per share, compared with US$0.24 per share a year ago. Excluding the impact
of “accelerated” sales orders and a Venezuela currency charge, the company said constant currency sales and diluted
110 “Israel-Gaza conflict: Garnier apologizes after ‘girly’ care packages sent to female IDF soldiers sparks boycott threats,” Independent Online, 11 August 2014, via Factiva, © 2014
Independent Print Ltd; “L’Oréal’s Garnier, singer Bruel boycotted for supporting Israel. French hair care firm, Jewish performer accused of helping IDF,” The Jerusalem Post, 10 August 2014,
via Factiva, © 2014 The Jerusalem Post.
111 “Unilever Heads for Weakest Sales Gain Since 2005 as Market Growth Slows,” Bloomberg, 18 September 2014, via Factiva, © 2014 BLOOMBERG L.P.; “Unilever comments on growth
prospects spark share price fall,” Financial Times, 17 September 2014, © 2014 The Financial Times Limited.
112 “L’Oréal CEO cuts 2014 cosmetics market forecast –Le Figaro,” Reuters News, 8 September 2014, via Factiva, © 2014 Thomson Reuters; “L’Oréal Shares Retreat in Paris as Agon Lowers
Forecast for Market Growth,” Bloomberg, 9 September 2014, via Factiva, © 2014 BLOOMBERG L.P.
113 “Coty Inc. Reports Fiscal 2014 Fourth Quarter and Full Year Results,” PR Newswire (U.S.), 28 August 2014, via Factiva, © 2014 PR Newswire Association LLC; “Coty Inc. Declares Annual
Dividend of $0.20 Per Share,” PR Newswire (U.S.), 16 September 2014, via Factiva, © 2014 PR Newswire Association LLC.
114 “BDF’s consumer division sees slight sales decrease in first half,” BW Confidential, 8 August 2014, via Factiva, © 2014 BW Confidential; “Beiersdorf Reports Rise in First-Half Profit,” Dow
Jones Institutional News, 7 August 2014, via Factiva, © 2014 Dow Jones & Company, Inc.; “Q2 2014 Beiersdorf AG Earnings Call - Final,” CQ FD Disclosure, 7 August 2014, via Factiva, ©
2014 CQ-Roll Call, Inc.; “Beiersdorf H1 Profit Rises, Confirms Full Year Outlook - Quick Facts,” RTT News, 7 August 2014, via Factiva, © 2014 NoticiasFinancieras.
4 August–13 October 2014
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Talking Personal Care
17
earnings per share would have increased by 5% and 83%, respectively. President and CEO Fabrizio Freda described the
company’s fourth quarter and full year results as “strong” and commented: “We achieved record results across many
metrics, including sales, operating margin, earnings per share and operating cash flow in fiscal 2014.” Freda noted: “The
year held considerable changes in terms of overall macro and geopolitical market shifts and we adapted dynamically in what
was undeniably a tougher environment.” Estée Lauder forecast fiscal 2015 local currency sales growth of 6%-7% and
“double-digit” earnings per share growth and set a long-term operating margin target of 17.5% for 2017. Separately, the
company announced a quarterly dividend of US$0.20 per share, payable 15 September 2014.115
►
Colgate-Palmolive has announced a quarterly dividend of US$0.36 per share, payable 14 November 2014.116
Analyst views
►
Analysts have responded to Unilever’s comments on a slowing of growth in global markets. Barclays said that Unilever had
been the first consumer products company to warn on emerging markets sales growth in 2013 and noted that its alert had
“proved to be prescient for the rest of the group.” Oriel Securities and Nomura both reportedly reduced their 2014
underlying sales growth forecasts for Unilever to 3.3%, with Nomura’s David Hayes commenting that “growing evidence of
weaker sales performance in the second quarter” had “continued into the third quarter,” and noting: “The extent of the
slowdown across categories was a little more severe than expected.” ING’s Marco Gulpers said that “weaker” market growth
was “not surprising,” with the trend expected to be “visible” in Unilever’s financial results, and said that Russian sanctions
and “bad” economic developments in Brazil could “turn out negative” for Unilever while foreign exchange could “turn
positive.” Meanwhile, J.P. Morgan Cazenove forecast a fall in Unilever’s organic growth rate from 3.8% in the second
quarter, to around 3.4%, and noted “downside risk” from a “possible” China slowdown, inflation in Argentina and Eastern
Europe and Middle East “geopolitical tensions.” The brokerage said that Unilever required “sustained sales growth” to
“boost reinvestments while still hitting earnings targets” and commented: “We see pressure mounting on consistent margin
delivery as we do not think the business is geared for such low growth.”117
►
Jefferies has cut its rating on Unilever from “hold” to “underperform” and reduced its share price target from GBP27.60 to
GBP21.20, noting that shares had “handsomely” re-rated and that while there was “much to admire” in the company’s
performance, margins had “not improved.” The brokerage reportedly questioned whether Unilever could have “levered its
balance sheet” in the period 2010-2012 when asset prices were lower and noted that CEO Paul Polman was likely to be
“early in the final phase” of his tenure: “We now think it’s appropriate to weight succession risk into our calculations.”
Earlier, Jefferies commented on the investor response to Unilever’s approach to sustainability. Analyst Martin Deboo said
the company had “built a strong niche position” with investors who focused on environmental issues, while noting: “But for
mainstream investors it is a modest positive at most, and then only so long as it does not cost much.”118
►
Jefferies has suggested that L’Oréal’s lowering of its forecast for cosmetics market growth in the second half of 2014 is an
indicator that company revenue growth will be “slightly on the disappointing side for the year.” Analyst Alex Howson said
that it was “most likely” that the mass consumer products business was “still being very sluggish” while the US was “just not
picking up.” Howson noted that acquisitions such as that of Niely Cosmeticos helped “keep things ticking” in an environment
where growth was “hard to come by.”119
►
Analysts have responded to Beiersdorf’s second quarter results. Credit Suisse described them as “disappointing,” noting
that no other company had seen “such a sharp and sudden” slowdown in emerging markets. The brokerage, which lowered
its share price target from €64 to €61 and maintained its “underperform” rating, said: “The company’s claim to be gaining
market share is hard to reconcile with this.” Jeff Stent at Exane BNP Paribas commented: “While the market was braced for
a soggy second-quarter sales print, this is likely worse than anyone had feared.” Sanford Bernstein said the “strong
momentum generated from the CEO’s dynamic push for top-line growth” had “suddenly and sharply stalled,” which was
“presumably” due to pressure from “weak markets and strong competition.” Meanwhile, Société Généralé noted that
115
“The Estée Lauder Companies Reports Record Fiscal 2014 Fourth Quarter and Full Year Results,” Business Wire, 15 August 2014, via Factiva, © 2014 Business Wire; “Estée Lauder gloss
provided by emerging markets,” Financial Times, 15 August 2014, © 2014 The Financial Times Ltd.; “The Estée Lauder Companies Inc. Declares Quarterly Dividend of $.20 Per Share,”
Business Wire, 15 August 2014, via Factiva, © 2014 Business Wire.
116 “Colgate Declares Regular Quarterly Dividends,” Business Wire, 10 September 2014, via Factiva, © 2014 Business Wire.
117 “Analysts not surprised by Unilever’s weak markets,” SeeNews Netherlands, 18 September 2014, via Factiva, © 2014 SeeNews; “Unilever Heads for Weakest Sales Gain Since 2005 as
Market Growth Slows,” Bloomberg, 18 September 2014, via Factiva, © 2014 BLOOMBERG L.P.; “Unilever comments on growth prospects spark share price fall,” Financial Times, 17 September
2014, © 2014 The Financial Times Limited.
118 “Jefferies Downgrades Unilever to Underperform - Market Talk,” Dow Jones Institutional News, 24 September 2014, via Factiva, © 2014 Dow Jones & Company, Inc.; “Unilever downgraded
to Underperform from Hold at Jefferies,” Theflyonthewall.com, 24 September 2014, via Factiva, © 2014 Theflyonthewall.com; “Unilever: In search of the good business,” The Economist, 9
August 2014, via Factiva, © 2014 The Economist Newspaper Limited.
119 “L’Oréal Shares Retreat in Paris as Agon Lowers Forecast for Market Growth,” Bloomberg, 9 September 2014, via Factiva, © 2014 BLOOMBERG L.P.
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Beiersdorf was “far from alone in reporting a slowdown in emerging markets” and said that Beiersdorf’s organic sales
growth was “among the best” compared to peers.120
►
Neev Capital has responded to Estée Lauder’s fourth quarter and full year results. Analyst Rahul Sharma described the
company’s performance as “very impressive,” with a “great portfolio” and “multi-generational market” that continued to
“show huge growth potential.” Sharma commented: “Management always guides conservatively, however they always
deliver margin expansion and sales growth.”121
►
Citi has responded to the resignation of Avon CFO Kimberly Ross. The brokerage, which cut its rating on the company from
“buy” to “neutral” and lowered its share price target from US$18 to US$15, said that it would take “some time” before a
new CFO was in place and understood what was required, particularly due to Avon’s complex business model, and
commented: “Avon’s overhead costs seem still way too high, its internal controls/systems are still weak, its cash flow is still
depressed, and too many markets are still in disarray.” Analyst Wendy Nicholson said that Citi was “less confident in the
timing and pace of a recovery in earnings at Avon” and the “symbolic importance of Ross abandoning ship at this stage”
was “hard to overstate,” given “the number of new external hires at Avon over the last few years.” Meanwhile, Mark
Astrachan at Stifel Nicolaus reportedly said that the CFO transition increased risk to the “ultimate success” of what had
“already been a prolonged turnaround.” Later, Citi reportedly responded to “investor pushback” and, “defending” its earlier
downgrade of Avon, said that it was “comfortable” with “below consensus” estimates due to recent strengthening of the US
dollar and had “less confidence” in Avon’s “turnaround” following the departure of Ross.122
►
UBS has upgraded its rating on Avon from “sell” to “neutral” and reduced its share price target from US$12.50 to
US$11.00. The brokerage said that Avon shares had fallen by over 20% since “late” August 2014 and that while investors
might be concerned at “more bad news” in the company’s third quarter results, there was anecdotal evidence from the US
and Brazil of “increased engagement, suggesting modest sequential improvement.” UBS said that Avon could “still
disappoint,” noting “undeniably difficult” conditions, structural “challenges” and the recent resignation of the CFO, while
suggesting that “not so bad” might “well be good enough,” given current valuations.123
►
Analysts have responded to Coty’s offer for Chanel’s Bourjois brand. Rahul Sharma at Neev Capital said the offer was “no
surprise,” and commented: “Like Elizabeth Arden, Coty is a company that has a great deal of exposure to the weaker
product lines and distribution channels of the beauty market, including personality-driven cosmetics and struggling US
retailers like Walmart and Target.” Sharma said that Coty shareholders were “acutely aware of these shortcomings” and
noted: “The focus now will be boosting its prime beauty brands portfolio, avoiding duplication and streamlining retail
operations across markets.” Meanwhile, B. Riley upgraded Coty from “sell” to “neutral,” citing valuation, a “potential
inflection in industry fundamentals,” and “upside” from the Bourjois acquisition.124
►
Analysts have commented on Rhône Capital’s investment in Elizabeth Arden and fourth quarter results. KeyBanc Capital
Markets Analyst Jason Gere said that having “some fresh ideas in there” was “a good thing” and noted: “It’s going to be an
uphill battle to fix the business and get back to where they were, if they can.” Earlier, Gere noted that investor concerns
that Elizabeth Arden would face “challenges into 2015” had been confirmed by the company’s fourth quarter loss. Patrick
Trucchio at BMO Capital Markets commented: “For now it seems an outright sale of the company isn’t possible. Rhône’s
investment might support the shares in what would otherwise be a painful day.” Moody’s Investors Service downgraded
Elizabeth Arden from “Ba3” to “B1” and placed its ratings on review for “further downgrade,” noting “continued weak
operating performance” and “ongoing challenges in the fragrance category.” Later, Standard & Poor’s said that it had
lowered its rating on Elizabeth Arden from “BB-“ to “B+,” citing “weaker-than-expected” operating performance. The
ratings agency said the outlook was “negative” and that operating performance “could face slow and uneven improvement”
over the next one to two years, “amid a highly competitive and promotional environment.”125
►
Analysts have commented on whether Colgate-Palmolive might become an acquisition target. Jack Russo at Edward Jones
said that while the company’s size limited the number of potential acquirers, there had been “many large M&A transactions”
in the current year. Russo noted that potential targets were assessed for their brands and products, emerging market
120
“Germany’s Beiersdorf Feels Pain in Emerging Markets — Market Talk,” Dow Jones Institutional News, 8 August 2014, via Factiva, © 2014 Dow Jones & Company, Inc.; “Beiersdorf Fairly
Downbeat Amid Soft Markets; SocGen — Market Talk,” Dow Jones Institutional News, 7 August 2014, via Factiva, © 2014 Dow Jones & Company, Inc.; “UPDATE 2-Beiersdorf results disappoint
as emerging markets stutter,” Reuters News, 7 August 2014, via Factiva, © 2014 Thomson Reuters; “Beiersdorf 2Q Weak Across the Board-Bernstein — Market Talk,” Dow Jones Institutional
News, 7 August 2014, via Factiva, © 2014 Dow Jones & Company, Inc.; “Beiersdorf Shares Drop as Sales Growth Falls Short of Estimates,” Bloomberg, 7 August 2014, via Factiva, © 2014
BLOOMBERG L.P.
121 “Estée Lauder gloss provided by emerging markets,” Financial Times, 15 August 2014, © 2014 The Financial Times Ltd.
122 “As Avon Products CFO Leaves, So Does Citi – Baron’s Blog,” Dow Jones Institutional News, 9 September 2014, via Factiva, © 2014 Dow Jones & Company, Inc.; “BUZZ-Avon Products Inc:
CFO quits,” Reuters News, 9 September 2014, via Factiva, © 2014 Thomson Reuters; “Citi defends recent downgrade of Avon Products,” Theflyonthewall.com, 18 September 2014, via
Factiva, © 2014 Theflyonthewall.com.
123 “UBS Has Seen Enough of Avon's Stock Swoon - Market Talk,” Dow Jones Institutional News, 10 October 2014, via Factiva, © 2014 Dow Jones & Company, Inc.; “Avon Products upgraded
to Neutral from Sell at UBS,” Theflyonthewall.com, 10 October 2014, via Factiva, © 2014 Theflyonthewall.com.
124 “Coty eyes Chanel’s Bourjois,” Financial Times, 7 October 2014, © 2014 The Financial Times Limited; “Coty upgraded to Neutral from Sell at B. Riley,” Theflyonthewall.com, 8 October
2014, via Factiva, © 2014 Theflyonthewall.com.
125 “Elizabeth Arden Reviewing Rhône’s Tender Offer for 20% Stake,” Bloomberg, 28 August 2014, via Factiva, © 2014 BLOOMBERG L.P.; “Elizabeth Arden shares sink as sales of Justin Bieber
fragrance sour,” Postmedia Breaking News, 19 August 2014, via Factiva, © 2014 Canwest News Service; “Elizabeth Arden reveals record loss as shoppers shun Justin Bieber fragrance,” The
Telegraph Online, 19 August 2014, via Factiva, © 2014 Telegraph Media Group Ltd.; “Moody’s downgrades Elizabeth Arden to B1 and places its ratings on review for downgrade,” Moody’s
Investors Service Press Release, 19 August 2014, via Factiva, © 2014; “S&P Lowers Elizabeth Arden Rating To 'B+'; Outlk Negative,” Dow Jones Institutional News, 29 September 2014, via
Factiva, © 2014 Dow Jones & Company, Inc.
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exposure and whether they had “something unique and differentiated,” and said: “Colgate would pass a lot of those tests.”
Meanwhile, Sanford Bernstein’s Ali Dibadj said that while Colgate’s size was “the challenge,” its “really fantastic distribution
system,” meant that it would be a “fantastic candidate” for a merger. Dibadj reportedly suggested that Unilever and
Johnson & Johnson were among those companies who would potentially benefit from gaining “complementary products or
distribution.”126
►
BMO Capital has cut its rating on Colgate-Palmolive from “outperform” to “market perform” and reduced its share price
target from US$75 to US$70, citing “slowing” global growth and “FX headwinds.” Meanwhile, Barclays cut its rating from
“overweight” to “equal weight” and reduced its share price target from US$69 to US$65. The brokerage, which noted
“slowing” growth in emerging markets and a “sluggish consumer environment,” said it now expected Colgate’s 2015
revenue growth to be “only slightly better than peers.”127
►
BTIG has said that quarterly estimates are “at risk” for some personal care companies, due to a “slower Asia & Latin
America,” a “weak” US mass market, “stalled” European improvements and “strong dollar impacts.” Analyst April Scee said
there would be a short term “risk-reward” for Colgate-Palmolive, Estee Lauder and Unilever and issued a “negative shortterm conviction” for P&G, noting that estimates were “too high” as guidance had “assumed no change in FX, competitive
landscape or category growth,” while there was “no new news likely” on the company’s brand “purge.”128
►
Edward Jones has suggested that Colgate-Palmolive will “probably” remove the chemical triclosan from its products.
Analyst Jack Russo said: “It’s perception. It’s how customers and consumers think about your brand, and Colgate really has
strong brand equity. They’ve built that up over time. They’re not going to let something short-term in nature destroy that
real quickly.” Meanwhile, Morningstar’s Erin Lash said the company was likely to take action if they felt triclosan concerns
would “ultimately damage the brand,” while noting: “But at this point, I don’t think they think it will damage the brand.”129
►
Wells Fargo has said that its new US online pricing study, conducted with price tracking firm 360pi, found that health and
beauty products were priced 10% lower on Wal-Mart’s online site in August 2014, compared to Amazon. This compared to
six months earlier, when Wal-Mart prices were “just 1% below” Amazon’s. The brokerage said that the shift was attributable
both to Wal-Mart price cuts and price rises at Amazon, with higher Amazon prices “more of a factor.” Wells Fargo said that
both Wal-Mart and Target had lower online prices than Amazon in four categories, including health and beauty, and
commented: “Perception is not necessarily reality. Amazon is not the low price leader vs. mass retailers.”130
Management moves
►
Coty has announced that CEO Michele Scannavini has “stepped down” from his role “for personal reasons” and has resigned
from Coty’s Board of Directors. The company said that Chairman Bart Becht would become interim CEO, with a search
process for Scannavini’s permanent successor to start “immediately.” Becht said that Scannavini had been a “material part
and key contributor to Coty’s success over the past decade” and the Board intended to appoint a permanent CEO who would
“further accelerate” progress to the company’s “stated strategic priorities of growing Coty’s power brands across the globe
and implementing its global efficiency plans.” Meanwhile, Scannavini commented: “I feel honored to have led Coty through
an important chapter of its history and proud to have contributed to the success of the Company over the last 12 years.”131
►
Avon has announced the resignation of EVP and CFO Kimberly Ross, effective from 2 October 2014, and said that VP and
Corporate Controller Robert Loughran had been appointed acting CFO while it conducted a search for a permanent CFO.
Separately, US oilfield services firm Baker Hughes announced the appointment of Ross as SVP and CFO, with effect from 22
October 2014. Avon CEO Sheri McCoy said that Ross had been “a strong leader” over the prior three years and commented:
“We have an outstanding finance leadership team, and I have full confidence in Bob and the team during this transition
period.” Meanwhile, Ross commented: “I’m proud of the work that’s been accomplished by the team at Avon. I believe it is
laying the right foundation for the future, and I look forward to working with Bob and Sheri during this transition.”132
126
“Colgate Takeover Odds Rise Amid Megamergers: Real M&A,” Bloomberg, 24 September 2014, via Factiva, © 2014 BLOOMBERG L.P.
“Colgate-Palmolive downgraded to Market Perform from Outperform at BMO Capital,” Theflyonthewall.com, 9 October 2014, via Factiva, © 2014 Theflyonthewall.com; “Colgate-Palmolive
downgraded to Equal Weight from Overweight at Barclays,” Theflyonthewall.com, 6 October 2014, via Factiva, © 2014 Theflyonthewall.com.
128 “BTIG Issues ‘Anti-Preview’ On Consumer Staples With Short-Term Convictions,” Benzinga.com, 8 October 2014, via Factiva, © 2014 Benzinga.com.
129 “Shoppers Ditching Colgate Total Amid Triclosan Fears,” Bloomberg, 15 August 2014, via Factiva, © 2014 BLOOMBERG L.P.; “Colgate’s Media Buzz Score Suffers Amid Triclosan Concern,”
Bloomberg, 20 August 2014, via Factiva, © 2014 BLOOMBERG L.P.
130 “Who Are Low-Priced Online Retailers? Hint: Not Amazon, Investor’s Business Daily, 3 October 2014, via Factiva, © 2014 Investor’s Business Daily; “Amazon’s Been Doing Some PriceRaising - Market Talk,” Dow Jones Institutional News, 3 October 2014, via Factiva, © 2014 Dow Jones & Company, Inc.
131 “(PR) Coty Inc. Announces Executive Leadership Change,” PR Newswire (U.S.), 29 September 2014, via Factiva, © 2014 PR Newswire Association LLC.; “Coty CEO Scannavini Resigns for
Personal Reasons; Chairman Bart Becht To Take Over as Interim Chief Executive,” The Wall Street Journal Online, 29 September 2014, via Factiva, © 2014 Dow Jones & Company, Inc.; “Coty
Inc Announces Executive Leadership Change Conference Call – Final,” CQ FD Disclosure, 29 September 2014, via Factiva, © 2014 CQ-Roll Call, Inc.
132 “Avon Announces CFO Transition,” PR Newswire (U.S.), 8 September 2014, via Factiva, © 2014 PR Newswire Association LLC; “Baker Hughes Names Kimberly A. Ross Chief Financial
Officer,” PR Newswire (U.S.), 8 September 2014, via Factiva, © 2014 PR Newswire Association LLC.
127
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►
Avon India has confirmed the appointment of Romulus Marian Sirbu as Managing Director, effective from 7 July 2014. The
company said that Sirbu had previously been Country Manager for Moldova, Serbia and Montenegro, before leaving Avon to
gain a “differentiated perspective of the industry,” and would bring “extensive knowledge and global experience and help
develop and implement business strategies to meet the company’s growth, market share and profitability objectives.” Sirbu
commented: “India is an important growth market and the company has been focusing immensely on further strengthening
its business. I am elated to be a part of Avon once again.”133
►
P&G has announced that Werner Geissler, Vice Chairman and Special Advisor to the Chairman and CEO, will retire from the
company on 31 December 2014 “after more than 35 years.” P&G Chairman, President and CEO A.G. Lafley said: “Werner is
the definition of a global executive and led dynamic growth in many regions. He is leaving a lasting and positive legacy on
both the business and the organization.” Separately, Advent International said that Geissler would join the UK-based private
equity firm on 1 January 2014 as an Operating Partner. Advent Partner Tim Franks said that Geissler was “one of the
leading consumer-focused executives” and commented: “His substantial operational experience, gained from working with a
large number of different companies and brands during his time at P&G, will support our existing businesses as well as help
us pursue future investment opportunities across the global consumer industry.”134
►
P&G Marketing Director of North America Brand Operations Julie Eddleman has reportedly joined Google as Director of
Client Service while P&G VP of North America Brand Operations Jodi Allen has taken on Eddleman’s responsibilities.135
►
P&G’s Indian subsidiary, Procter & Gamble Hygiene and Health Care, has announced the appointment of Prashant Bhatnagar
to the post of CFO, effective 1 October 2014. The company said that Bhatnager succeeded Karthik Natarajan.136
►
Unilever has said that COO Harish Manwani will retire on 31 December 2014 and remain Non-Executive Chairman of Indian
subsidiary Hindustan Unilever. Unilever CEO Paul Polman said that Manwani was “an inspirational leader” who left “a
remarkable legacy” and commented: “He has role-modelled the 4G sustainable growth model — competitive, consistent,
profitable and responsible — which has become such a strong focal point for the markets.” Meanwhile, Manwani commented:
“Today, Unilever is in a strong position with a clear strategy and capabilities to drive long-term growth. This makes it a good
time for me to make this personal transition.”137
►
Unilever Thailand has said that Bauke Rouwers, Chairman for Thailand, Myanmar, Cambodia and Laos, has been appointed
Chairman of Unilever France while Supattra Paopiamsap, VP Home Care, Foods & Ice Cream for Thailand, has been
appointed Unilever Chairwoman for Thailand and Sandeep Kohli, VP Marketing Operations for South East Asia Australasia,
has been appointed Chairman of Myanmar, Cambodia and Laos. Rouwers noted that Paopiamsap’s appointment reflected
“all the strengths of Unilever’s talent strategy” and commented: “Her promotion to the top Unilever management position in
Thailand signals the success of the company’s strategy to develop both diversity and local leadership talent.” Meanwhile,
former Chairman of Unilever France Bruno Witvoet has reportedly been appointed head of African operations.138
►
Hindustan Unilever (HUL) has announced that Samir Singh, Global Brand VP Lifebuoy and VP – Personal Care Lead, South
Asia Cluster, has been appointed Executive Director – Personal Care for HUL while HUL VP Laundry Priya Nair has been
named Executive Director Home Care for HUL. The company said announced that Hemant Bakshi, HUL Executive Director
Home and Personal Care, had been appointed EVP of Unilever Indonesia, subject to “external board approval.” HUL CEO
and Managing Director Sanjiv Mehta commented: “We have reorganized the Home and Personal Care business into two
separate businesses to ensure focus on the growth drivers for each of these businesses. I am pleased to welcome Priya and
Samir to their new roles. Both bring with them rich and diverse marketing and business experience in Unilever.”139
►
HUL has announced the appointment of J.P. Morgan India CEO Kalpana Morparia as an Independent Director, with effect
from 9 October 2014. The company said that Morparia, reportedly HUL’s first female board director, would join its Audit
and Corporate Social Responsibility Committees. Chairman Harish Manwani commented: “Kalpana’s vast experience and
proven track record of leadership will add tremendous value to our board.”140
133
“Avon India appoints R M Sirbu Managing Director,” Press Trust of India, 4 August 2014, via Factiva, © 2014 The Press Trust of India Limited; “Avon India appointed Romulus Marian Sirbu,”
Indiainfoline News Service, 4 August 2014, via Factiva, © 2014 Indiainfoline Ltd.
134 “P&G Vice Chairman Werner Geissler to Retire,” Business Wire, 24 September 2014, via Factiva, © 2014 Business Wire; “No. 2 P&G exec leaving to join private equity firm,” Business
Courier of Cincinnati Online, 24 September 2014, via Factiva, © 2014 American City Business Journals, Inc.
135 “P&G’s top ad buyer departs to join Google,” Business Courier of Cincinnati Online, 12 September 2014, via Factiva, © 2014 American City Business Journals, Inc.; “NEED TO KNOW,”
Advertising Age, 15 September 2014, via Factiva, © 2014 Crain Communications, Inc.
136 “PROCTER & GAMBLE HYGIENE & HEALTH CARE LTD. Change in Chief Financial Officer,” BSE Company Announcements, 1 October 2014, via Factiva, © 2014 Bombay Stock Exchange Ltd.
137 “Harish Manwani to retire as Unilever COO,” ENP Newswire, 6 October 2014, via Factiva, © 2014 Electronic News Publishing; “Unilever COO Harish Manwani to retire after 38 yrs of
service,” Press Trust of India, 30 September 2014, via Factiva, © 2014 The Press Trust of India Limited.
138 “New Unilever Thailand chairperson Supattra Paopiamsap, left, and Bauke Rouwers who will become chairman of Unilever France in October. Thai takes over local unit of Unilever First
female exec appointed to the top,” The Nation, 28 August 2014, via Factiva, © 2014 Nation Multimedia Group Public Co., Ltd.; “Thai woman to lead Unilever,” Bangkok Post, 28 August 2014,
via Factiva, © 2014 The Post Publishing Public Company Limited; “Bruno Witvoet becomes CEO of Unilever Africa,” French Collection, 30 September 2014, via Factiva, © 2014 AII Data
Processing Ltd.
139 “HUL announces key appointments,” ENP Newswire, 13 August 2014, via Factiva, © 2014 Electronic News Publishing; HINDUSTAN UNILEVER LTD. Clarifies on News Item,” BSE Company
Announcements, 12 August 2014, via Factiva, © 2014 Bombay Stock Exchange Ltd.
140 “HINDUSTAN UNILEVER LTD. Appointment of Kalpana Morparia as an Independent Director on the HUL Board,” BSE Company Announcements, 9 October 2014, via Factiva, © 2014
Bombay Stock Exchange Ltd.; “HUL appoints Kalpana Morparia an independent director,” Press Trust of India, 9 October 2014, via Factiva, © 2014 The Press Trust of India Limited; “Morparia
inducted on HUL board,” The Times of India, 10 October 2014, via Factiva, © 2014 The Times of India Group.
4 August–13 October 2014
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►
HUL has announced that VP Sales and Customer Development and Executive Director Manish Tiwary has been appointed
Managing Director of Unilever Gulf and will be succeeded by Punit Misra, VP Customer Development for Global Route to
Market and Traditional Trade, effective from 1 November 2014.141
►
Unilever has reportedly appointed Ignacio Segares to the post of Central America Managing Director.142
►
L’Oréal has announced the appointment of Barbara Lavernos, Managing Director of Travel Retail Worldwide, as EVP
Operations, effective 1 November 2014. The company said that Lavernos, who would join the Executive Committee,
succeeded Jean-Philippe Blanpain. Vincent Boinay, previously Global Retail Director for L’Oréal Luxe, will reportedly
succeed Lavernos as head of Travel Retail.143
►
UK pallet maker RM2 International has said that it has appointed L’Oréal Suisse CFO Jean-François Pierre Blouvac as its
CFO, with immediate effect.144
►
L’Oréal’s Canadian subsidiary has announced the appointment of L’Oréal Canada General Counsel Nadia Petrolito as Chief
Communications Officer to develop the company’s new Corporate Social Responsibility Program. Petrolito, who the
company said would remain as General Counsel in addition to her new role, commented: “L’Oréal, as one of the leading
cosmetic companies in the world, will be a pioneer in the realm of Corporate Social Responsibility. I am eager to take on this
challenge and look forward to helping bring this program to life.”145
►
L’Oréal has reportedly appointed L’Oréal Korea President and Executive Director Richard Cymberg as Clients Management
Director for Travel Retail and Europe Zone General Manager Fragrances John Mangan as General Manager of Travel Retail
Europe, Middle East, Africa and India, succeeding Anne Valentin.146
►
Colgate-Palmolive’s Indian unit has announced that Managing Director Prabha Parameswaran has been promoted to the
position of Africa and Eurasia President and will relocate to Switzerland. The company said that Global Toothbrush Division
VP and General Manager Issam Bachaalani would succeed Parameswaran as Managing Director of India, for a period of five
years, with both appointments effective from 1 October 2014.147
►
Estée Lauder has announced the appointment of Nancy Mahon as SVP Global Philanthropy and Corporate Citizenship,
reporting to Executive Chairman William Lauder. The company said that Mahon would succeed SVP Corporate
Administration Deborah Krulewitch, who would continue to be responsible for Executive Office Administration, Office
Services and the company’s partnerships with the Breast Cancer Research Foundation and Alzheimer’s Drug Discovery
Fund. Estée Lauder noted that Mahon, previously SVP MAC Cosmetics and SVP Philanthropy and Social Initiatives, would
also continue in her existing role as Global Director of the MAC AIDS fund. Lauder commented: “Nancy is a seasoned leader
with a unique combination of experience spanning the corporate philanthropy, legal, and public policy fields.”148
►
Estée Lauder has confirmed the appointment of Marie-Pierre Stark-Flora as SVP Global Marketing for the Estée Lauder
brand, succeeding Charisse Ford, who has left the company. Stark-Flora, founder of skin care device company Illuminage,
was previously Chief Marketing Officer of the joint venture between Unilever and Syneron Medical. Estée Lauder Global
Brand President Jane Hertzmark Hudis noted Stark-Flora’s “experience with major corporations” and “very entrepreneurial
spirit” and commented: “We’re accelerating our leadership in skin care, and Marie-Pierre is extremely strong there.” Hudis
also reportedly commented that skin care devices were “not in the immediate future for the Lauder brand.”149
►
Estée Lauder has announced the appointment of Agnes Landau, Clinique SVP Global Marketing, as Darphin SVP Global
General Manager, with effect from 1 January 2015. Landau succeeds Jane Lauder who reportedly ran the brand after the
earlier departure of Olivier Fontaine. Stephane de la Faverie, SVP and Global General Manager for Origins, Ojon and Darphin
said: “Currently, France is our largest market, but the brand is expanding rapidly globally. Agnes has a deep understanding
of each of the global markets, which will make this expansion successful and take the brand to a new level.”150
141
“HUL announces key appointments,” Indiantelevision.com, 25 September 2014, via Factiva, © 2014 Indiantelevision.com; “HUL ELEVATES MANISH TIWARY AS MD IN GULF (with effect
from 1 Nov 2014),” Indian Business Insight, 25 September 2014, via Factiva, © 2014 Informatics (India) Ltd.
142 “Central America: Unilever sells USD 500mn annually across the region,” Esmerk Latin American News, 19 August 2014, via Factiva, © 2014 M-Brain.
143 “Vincent Boinay to become head of L’Oréal Travel Retail,” French Collection, 1 October 2014, via Factiva, © 2014 AII Data Processing Ltd.; “L’Oréal appoints Vincent Boinay managing
director travel retail,” BW Confidential, 30 September 2014, via Factiva, © 2014 BW Confidential; “APPOINTMENT TO THE EXECUTIVE COMMITTEE OF L’ORÉAL GROUP,” ENP Newswire, 1
October 2014, via Factiva, © 2014 Electronic News Publishing.
144 “RM2 International SA Appointment of CFO,” Regulatory News Service, 1 September 2014, via Factiva, © 2014.
145 “Nadia Petrolito appointed Chief Communications Officer for L’Oréal Canada,” Canada Newswire, 29 August 2014, via Factiva, © 2014 Canada NewsWire Ltd.
146 “L’Oréal makes travel retail appointments,” BW Confidential, 16 September 2014, via Factiva, © 2014 BW Confidential; “L’Oréal Group Travel Retail.(PEOPLE),” Cosmetics International, 19
September 2014, via Factiva, © 2014 Gale Group, Inc.
147 “Colgate-Palmolive rejigs top level management,” The Times of India, 20 August 2014, via Factiva, © 2014 The Times of India Group; “COLGATE-PALMOLIVE (INDIA) LTD. Change in
Directorate,” BSE Company Announcements, 18 August 2014, via Factiva, © 2014 Bombay Stock Exchange Ltd.
148 “The Estée Lauder Companies Inc. Appoints Nancy Mahon to Senior Vice President, Global Philanthropy and Corporate Citizenship,” Business Wire, 7 October 2014, via Factiva, © 2014
Business Wire.
149 “Estée Lauder names new head of global marketing,” BW Confidential, 22 September 2014, via Factiva, © 2014 BW Confidential; “Stark-Flora Joins Lauder,” WWD, 19 September 2014, via
Factiva, © 2014 Condé Nast.
150 “Lauder Taps Landau for Darphin,” WWD, 24 September 2014, via Factiva, © 2014 Condé Nast.
4 August–13 October 2014
EY
Talking Personal Care
22
►
Estée Lauder has reportedly appointed P&G Country Manager Prestige Greece and Israel Moira D’Agostini as Director of its
La Mer and Jo Malone division, succeeding Giovanna Benatti who is to leave the company.151
►
Kimberly-Clark has said that Vikas Singh has been appointed Managing Director for its Indian business, Kimberly Clark
Lever. Singh was previously Hub CEO for Kerala and Tamil Nadu at telecommunications firm Bharti Airtel. Achal Agarwal,
Kimberly-Clark President, Asia Pacific, commented: “India is a priority market for Kimberly-Clark Corporation and we are
pleased to have Singh lead the company. His experience and his local consumer understanding will be invaluable in this role
as we continue to bring our latest innovations to India.”152
►
Revlon has confirmed that its Board of Directors has elected SVP Global Finance Roberto Simon as EVP and CFO,
succeeding EVP, CFO and Chief Accounting Officer Lawrence Alletto with effect from 30 September 2014. In a filing, the
company said that Alletto was leaving Revlon to “pursue other opportunities” and had worked with Simon “to ensure a
smooth transition of the Company’s financial functions.” Separately, Revlon confirmed that Jessica Graziano, SVP, Chief
Accounting Officer, Corporate Controller and Treasurer, had resigned “to pursue a new career opportunity.” Revlon said
that Graziano would work with its finance and accounting teams “to ensure a smooth transition” ahead of her departure on
30 November 2014. 153
►
Shiseido has reportedly confirmed the appointment of Ralph Ahrbeck, previously a representative director at Novus
Lifescience, to the newly created position of Corporate Advisor and Chief Strategy Officer. Separately, it was reported that
the company had also made management changes alongside the reorganization of its Luxury Marketing Group and
Consumer Marketing Group into the three divisions of Prestige Marketing, Cosmetics Marketing and Personal Care
Marketing. Yu Okazawa, Corporate Executive Officer responsible for Asian strategy and Chief Officer for the China Business
Division, now has the additional responsibility of General Manager of Marketing Development for the China Business
Division. Shigekazu Sugiyama, currently responsible for marketing for domestic cosmetics and the Clé de Peau Beauté
global unit has been appointed Chief Marketing Officer for Japan and Hiroshi Maruyama, responsible for international
business strategy and marketing and General Manager of the International Business Planning Department in the
International Business Division, has been named head of international business strategy and marketing.154
►
Energizer Holdings has announced the leadership team for its Personal Care business, due to be separated from its
Household Products business by 1 July 2015. The company said that Sandy Sheldon would become CFO of the new
Personal Care company, with Manish Shanbhag in the post of VP General Counsel & Secretary, Al Robertson in the post of
Chief Marketing Officer, John Hill as VP Commercial – North America, Colin Hutchison VP Commercial – International, Dave
VerNooy VP Global Operations & RDE, Peter Conrad as Chief Administration Officer, Tony Bender as Chief Information
Officer and Teresa Ceotto as VP Human Resources. Ward Klein, CEO of Energizer and Executive Chairman of the Board of
the new Personal Care business, commented: “We are excited to have such an experienced and talented group of individuals
to lead Energizer’s Personal Care and Household Products businesses as each company moves forward independently.”155
►
LVMH Perfumes & Cosmetics, a division of LVMH Moët Hennessy Louis Vuitton, has reportedly appointed Corrado Raimondi
to the post of General Manager of LVMH Fragrance Brands Italia, focusing on the development and marketing of the
Givenchy, Kenzo and Fendi brands. Raimondi reportedly previously worked for L’Oréal and replaces Benjamin Garofalo.156
►
Beiersdorf’s La Prairie business has reportedly appointed LVMH Fragrance Brands Travel Retail International Director
Laurent Marteau to the newly created position of Head of Travel Retail Worldwide.157
►
Mary Kay has announced the promotion of Director of Corporate Communications and Corporate Social Responsibility
Crayton Webb to the post of VP Corporate Communications and Corporate Social Responsibility. Chief Legal Officer and
Secretary Nathan Moore noted Webb’s “strong leadership skills” and “extensive experience” at Mary Kay and commented:
He walks the talk as it relates to community involvement and we know his counsel will continue to be invaluable as we grow
Mary Kay’s presence and continue to enrich the lives of women around the world.”158
151
“D’Agostini New Director of La Mer & Jo Malone,” Pambianco Daily News, 1 September 2014, via Factiva, © 2014 Pambianco Strategie di Impresa Srl.
“Kimberly-Clark appoints Vikas Singh as MD for India operations,” Press Trust of India, 17 September 2014, via Factiva, © 2014 The Press Trust of India Limited.
“Revlon Files 8K – Changes Exec Mgmt>REV,” Dow Jones Institutional News, 23 September 2014, via Factiva, © 2014 Dow Jones & Company, Inc.; “Revlon names Roberto Simon as EVP,
CFO, effective September 30,” Theflyonthewall.com, 23 September 2014, via Factiva, © 2014 Theflyonthewall.com; “Revlon Files 8K - Changes Exec Mgmt >REV,” Dow Jones Institutional
News, 30 September 2014, via Factiva, © 2014 Dow Jones & Company, Inc.
154 “Shiseido announces new structure and corporate appointments,” BW Confidential, 5 September 2014, via Factiva, © 2014 BW Confidential; “Shiseido names corporate advisor, chief
strategy officer,” BW Confidential, 19 September 2014, via Factiva, © 2014 BW Confidential.
155 “Energizer Announces Executive Leadership for Household Products and Personal Care Businesses,” ENP Newswire, 1 September 2014, via Factiva, © 2014 Electronic News Publishing.
156 “Raimondi New GM of Lvmh Fragrance Brands Italia,” Pambianco Daily News, 5 September 2014, via Factiva, © 2014 Pambianco Strategie di Impresa Srl.
157 “La Prairie names Laurent Marteau to new top travel-retail role,” BW Confidential, 5 September 2014, via Factiva, © 2014 BW Confidential.
158 “Mary Kay Inc. Names Vice President of Corporate Communications and Corporate Social Responsibility,” Business Wire, 20 August 2014, via Factiva, © 2014 Business Wire.
152
153
4 August–13 October 2014
EY
Talking Personal Care
23
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