Procter & Gamble's supremacy of the global beauty market ...

38 SPC April 2013

Despite the ongoing economicdifficulties in many parts of the world, thebeauty industry continues to defy thedownturn. NPD, R&D and the creation ofnew brands in the beauty sector isoutstripping many other consumerindustries and the outlook from analysts islargely positive.

“The resilience of the beauty industry isclear to see,” says Mary-Ellen Field,Chairman of Brand Finance (Australia). “Ifyou compare it to other industries it’sholding up very well. Fashion for instance,with the exception of a few retailers suchas Zara and Mango, is really suffering.”

The beauty industry’s ability to weatherthe financial storm can be attributed to anumber of factors: burgeoningconsumerism in developing markets isproviding demand for personal care andcosmetic products, while in more maturemarkets spending on discretionary itemssuch as beauty products has increased at theexpense of the bigger ticket items.

LUXURY LEADS Luxury brands in particular have enjoyed arenewed uptake, which is reflected in thisyear’s Brand Finance top 50 brands.L’Oréal’s Lancôme brand crept up to fifthplace in the rankings, while Christian Diorjumped four places to come in at numberten. The beauty arm of French fashionhouse Chanel climbed six places to reach

number 12, while Clarins comes in atnumber 17, a jump of two places.

“Lancôme’s jump was a surprise,” says

Field. “The fragrances are not quite rightbut there is a very good offer for skin careand colour.”

New launches include an extension tothe Absolue franchise: SublimeRegenerating Oleo-Serum, an anti-ageing,moisturising oil/serum hybrid containingnutrient-rich citrus, babassu and camelliaoils and L’Oréal’s exclusive pro-xylanesugar derivative, extracted from beechwood that works on the skin’s extracellularmatrix and helps to boost the skin’sregeneration abilities. The brand alsoextended its Visionnaire skin care rangeinto colour, with the creation of TeintVisionnaire, a foundation and concealerenriched with LR 2412, the activeingredient found in the orginal skin careproduct. The foundation is claimed toprovide coverage, while helping to reducethe appearance of wrinkles, dark spots,enlarged pores and other imperfections. Infragrance meanwhile, the big launch for2012 was La vie est belle, fronted by actressJulia Roberts.

Chanel meanwhile has increased itsfootfall with a number of new retailinitiatives. Its temporary pop-up store inLondon’s Covent Garden, which opened in2012, has now become a permanent fixturein the tourist hotspot and featureseducational workshops, make-upconsultations, facials and manicures, along

GLOBALTOP50BRANDS2013

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Procter & Gamble’s supremacy of the global beautymarket continues for a third consecutive year, with itsOlay brand taking the top spot in Brand Finance’sinfluential 50 Most Valuable Cosmetics Brands leaguetable. SPC takes a look at the winners and losers, andwhich brands to watch out for in the coming 12 months

TOP 50: BRAND VALUE CHANGE WINNERS

TOP 50: BRAND VALUE CHANGE LOSERS

top 50brands

With a retail presence spanning the globe and numerous retail channels,Olay’s dominance of the top 50 list continues. The brand, which hasbeen meeting women’s beauty needs since 1949, has carved out abusiness from the supermarket to cyberspace. “Olay comes top againbecause it is available in so many channels,” explains Field. “It’s to dowith ease of access. It has improved and widened its footstep globally –consumers can put it in their shopping trolley when they are at thesupermarket. It’s a legacy brand too. We grew up seeing it in ourmother’s cabinets.”

Olay has invested in its image too, with premium-looking packagingand numerous brand extensions. New launches include a Moisturiser andSerum Duo in its popular Total Effects range and Regenerist AdvancedAge-Defying Eye Roller, featuring a tri-ball massage head that is said tohelp increase lymphatic drainage, as well as cool and reduce puffinessaround the delicate eye area.

OLAY REIGNS SUPREME

with a number of exclusive products andsneak previews over its two floors. Newproducts include Les Beiges, a line oflightweight powders that impart a healthyglow on the skin and are enriched withcotton flower, white rose plant cells and anSPF of 15 to protect. The campaign isfronted by supermodel Giselle Bündchen.

The brand’s Research and Technologyarm has also entered into an exclusive

partnership with French plant biologyspecialist Plant AdvancedTechnologies (PAT) todevelop a line of pureactive ingredients producedat the heart of plants.

Chanel will launch itsfirst regenerating anti-ageing skin care productcontaining an activesubstance developed usingthe new PAT technology

later this year. The technology now makesit possible for selection and purificationprocesses to take place at the very heart of

the plant. It involves stimulating themetabolism of plants, whichthen express compounds inconcentrations that mayreach 50 times higher thannormal.

RISING STARSThere were two newbrands in the top 50 thisyear, namely ReckittBenckiser’s anti-blemishbrand Clearasil (ranked 32)and Japanese beauty brandowner Pola Orbis (ranked36).

Clearasil’s most recentinnovations suggest thebrand is taking a morespecific approach to caringfor problem skin, withproducts aimed atconsumers with spot proneyet sensitive skin, or thosesuffering from acne scars.“The Clearasil brand hasbeen around since WorldWar Two but very muchtargets the youth market,”explains Field. “The brandhas been doing particularlywell in developing

Clearasil enters thetop 50 for the firsttime this year, buoyedby its growingpopularity indeveloping marketswhere the consumer isstill relatively young

TOP 50 BRANDS: NEW ENTRANTS

Clearasil

1,127* 1,017*

TOP 50 BRANDS: DROPOUTS

PZ Cussons Axe/Lynx

-35% -41%

April 2013 SPC 39

*Brand value. All the figures are shown in US$m

Pola Orbis

and treatment cream, containing vitaminB3 and lactic acid, said to enhance the skinrenewal process, to combat both theappearance of spots and the marks leftfollowing a breakout. Also new is the

countries, where there is a greaterproportion of younger people.”

New launches to the Clearasil line-upinclude Clearasil Ultra Blemish + Marksrange, featuring a wash and mask, scrub

Clearasil Vitamins & Extracts line,formulated with ingredients like avocadoand pomegranate known for their skinnourishing and antioxidant properties.

It has also been a remarkable year for

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40 SPC April 2013

TABLE 1: TOP 50 GLOBAL BEAUTY BRANDS 2013

No No No Brand Domicile Brand Brand Enterprise Brand/ % Brand Brand Enterprise Brand/ Brand Brand Enterprise Brand/ ‘13 ‘12 ‘11 value rating value enterprise +/- value rating value enterprise value rating value enterprise

2013 2013 2013 (%) value (%) 2012 2012 2012 (%) value (%) 2011 2011 2011 (%) value (%)1 1 1 Olay USA 11,709 AA+ 36,829 32 0 11,756 AA 36,578 32 11,066 AA 35,777 31

2 3 4 L'Oréal France 8,696 AAA- 26,205 33 12 7,744 AAA- 22,358 35 7,630 AAA- 23,935 32

3 4 6 Neutrogena USA 6,940 AA+ 16,383 42 11 6,248 AAA- 14,308 44 6,350 AAA 14,467 44

4 5 5 Nivea Germany 5,843 AA+ 12,288 48 5 5,574 AA+ 8,522 65 6,569 AA+ 10,178 65

5 6 7 Lancôme France 5,508 AA+ 13,467 41 8 5,095 AAA- 11,490 44 5,685 AA+ 12,300 46

6 2 2 Avon USA 5,169 AA- 8,186 63 -35 7,901 AA+ 11,656 68 10,171 AA+ 15,843 64

7 7 8 Dove UK 4,242 AA 10,690 40 -16 5,045 AA 10,250 49 4,517 AA 8,715 52

8 8 9 Estée Lauder USA 3,870 AA+ 8,711 44 4 3,716 AA 7,387 50 3,037 AA 5,095 60

9 9 10 Biore Japan 3,378 AA 5,317 64 1 3,336 AA- 5,858 57 3,014 AA- 5,575 54

10 14 Christian Dior France 2,952 AAA 4,362 68 16 2,540 AAA- 4,191 61

11 12 13 Pantene USA 2,910 AA 7,409 39 10 2,643 AA 7,358 36 2,545 AA 7,197 35

12 18 16 Chanel France 2,813 AAA N/A 23 2,292 AAA 2,283 AAA

13 15 15 Aveeno USA 2,793 AA 11,844 24 17 2,384 AA+ 10,344 23 2,319 AA 10,459 22

14 16 14 Garnier France 2,632 AAA- 7,051 37 12 2,340 AA 6,016 39 2,493 AA 6,440 39

15 11 Schwarzkopf Germany 2,420 AA- 5,761 42 -10 2,682 A+ 4,579 59

16 20 23 Maybelline USA 2,398 AAA- 7,076 34 19 2,016 AA+ 6,037 33 1,568 AA 6,463 24

17 19 19 Clarins France 2,375 AA+ N/A 18 2,018 AA 2,057 AA

18 10 11 Shiseido Japan 2,203 AA+ 3,313 67 -24 2,907 AA+ 4,339 67 2,972 AA+ 4,818 62

19 21 21 Clean & Clear USA 2,196 AA 5,777 38 10 1,990 AA 5,045 39 1,959 AA 5,101 38

20 17 17 Natura Brazil 1,849 AA+ 12,091 15 -21 2,332 AA- 8,191 28 2,274 AA- 12,722 18

21 23 22 L'Occitane Luxembourg 1,698 AA- 4,194 40 5 1,611 AA- 2,776 58 1,705 A+ 4,316 40

22 29 28 Johnson's USA 1,513 AA+ 5,026 30 32 1,148 AA+ 1,179 AAA- 4,438 27

23 13 12 Lux USA 1,501 AA- 5,403 28 -41 2,541 AA- 5,181 49 2,797 AA 4,405 64

24 27 29 M.A.C. USA 1,382 AAA- 3,351 41 10 1,258 AA+ 2,841 44 1,094 AA+ 1,960 56

25 30 34 Kérastase France 1,360 AA 4,055 34 19 1,138 AA+ 3,459 33 936 AA 3,703 25

26 32 36 Redken France 1,285 AA 3,829 34 26 1,024 AA 3,267 31 884 AA 3,498 25

27 22 20 Rexona UK 1,203 A 4,856 25 -31 1,752 A 4,656 38 2,033 A 3,959 51

28 26 26 Biotherm France 1,174 AA+ 2,886 41 -8 1,277 AA+ 2,462 52 1,393 AA+ 2,636 53

29 28 32 Vichy France 1,170 AA 3,489 34 0 1,172 AA+ 2,977 39 1,036 AA 3,187 33

30 25 27 Oriflame Luxembourg 1,151 AA- 1,917 60 -12 1,310 AA 2,510 52 1,204 AA- 3,830 31

31 36 38 Matrix France 1,133 AA 3,379 34 30 871 AA+ 2,883 30 779 AA 3,086 25

32 Clearasil France 1,127 AA 5,557 20

33 42 39 Rimmel USA 1,109 A+ N/A 80 615 A+ 694 A+

34 35 37 Yves Saint Laurent France 1,092 AAA- 1,924 57 19 915 AAA- 1,641 56 872 AA 1,757 50

35 33 35 The Body Shop France 1,063 AA+ 2,969 36 9 977 AA 2,533 39 890 AA- 2,712 33

36 Pola Orbis Japan 1,017 A+ 1,159 88

37 31 25 Sunsilk UK 902 A 2,785 32 -21 1,135 A+ 2,670 43 1,410 A+ 2,270 62

38 37 41 Clinique USA 885 AAA- 1,564 57 12 790 AAA- 1,326 60 683 AA+ 915 75

39 40 30 Softsoap USA 826 AA- 4,295 19 10 754 AA 2,930 26 1,090 AA- 3,164 34

40 41 33 Irish Spring USA 655 A+ 3,758 17 -8 715 A+ 2,441 29 1,022 AA- 2,768 37

41 47 Coty USA 562 AA N/A 37 409 AA

42 34 43 Revlon USA 561 A 2,312 24 -39 922 A- 1,852 50 656 A- 1,852 35

43 49 49 Elizabeth Arden USA 502 AA 1,489 34 42 353 AA- 826 43 342 AA 826 41

44 43 44 Eucerin Germany 487 A+ 1,494 33 -12 557 A+ 1,036 54 618 A 1,238 50

45 46 45 RoC USA 481 AA 1,265 38 2 472 AAA- 420 AA 1,117 38

46 38 40 La Roche-Posay France 456 AA 2,326 20 -41 778 AA+ 1,985 39 689 AA 2,125 32

47 45 KOSÉ Japan 452 A+ 836 54 -4 473 AA 1,034 46

48 47 Head & Shoulders USA 423 AA- 1,149 37 394 AA 1,116 35

49 48 48 Kiehl’s France 416 AA 962 43 10 379 AA+ 821 46 366 AA 879 42

50 44 42 Speed Stick USA 402 AA- 3,221 12 -19 498 A+ 2,441 20 681 AA- 2,373 29

*All the figures are shown in US$m

Tokyo based brand owner Pola Orbis,whose operations include Pola Inc(responsible for the BA line of luxurycosmetics) and mail order division OrbisInc (see p48).

WHO’S OUT Two brands, PZ Cussons and Axe/Lynx,dropped out of the top 50 altogether.Manchester based PZ Cussons – whoseportfolio includes Imperial Leather, StTropez and Fudge – suffered a badbeginning to 2012 in Nigeria, responsiblefor 90% of its African revenues.

As if social unrest in the north of thecountry, where Boko Haram Islamistsdemanding the implementation of Sharialaw have been conducting a terrorcampaign, didn’t impact revenue growth

disposable incomes as a result of theremoval of part of the fuel duty subsidy inJanuary 2012.”

However, PZ Cussons might just climbits way back into the top 50 in 2014, asprospects are now beginning to improve.

adversely enough, PZ Cussons also had tocontend with the results of the partialremoval of Nigeria’s fuel duty subsidy.Commenting in March 2013, the companysaid: “Consumers across the country[Nigeria] continue to adjust to lower

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April 2013 SPC 43

The valuation in the Brand Financebeauty brands puts a value on theintangible assets of a certain company,namely its ‘trademarks, logos andassociated intellectual property’ on aspecific date: 1 January 2013.

THE ROYALTY RELIEF APPROACHUsing royalty relief, a method favouredby most financial, legal and taxpractitioners, we determine the royaltyrate a brand owner would charge a thirdparty to use their brand.

So if the brand owner did not owntheir brand, but had been forced tolicense it from a third party, this wouldbe the amount paid for the privilege ofusing the brand forever.

The royalty relief method involvesestimating likely future sales, applyingan appropriate royalty rate and thendiscounting estimated future, post-taxroyalties to arrive at a net present value.We then call this the ‘brand value’ whichis recorded in US$.

THE STEPS TO BRAND VALUE1. Obtain financial and revenue data2. Model the market to identifymarket demand and the position ofindividual brands.

Three forecast periods are used:● Historical financial results up to and

including 2012 if available● A five year forecast period (2013-2018)

based on consensus forecasts, historic growth and GDP growth

● Perpetuity growth3. Establish the royalty rate by:● Calculating brand strength from 0 to

100 based on attributes from the financial sector, risk and security and brand equity

● Determine Brand Beta index score● Calculate royalty rate4. Calculate future royalty incomestream5. Calculate discount rate to eachbrand in relation to its size,geographical presence and reputation6. Discount future revenues todetermine the brand value

BRAND RATINGSThese are calculated using BrandFinance’s Brand Beta which looks at thebrand in relation to its competitors andawards it a rating on a scale from D toAAA. The data comes from sources suchas Bloomberg, annual reports, ourinternational offices and Brand Financeresearch.

BRAND VALUATION METHODOLOGY

TABLE 2: L'ORÉAL

Brand Brand Brand Enterprise Brand/ % Brand Brand Enterprise Brand/ Brand Brand Enterprise Brand/ value rating value enterprise +/- value rating value enterprise value rating value enterprise2013 2013 2013 (%) value (%) 2012 2012 2012 (%) value (%) 2011 2011 2011 (%) value (%)

L'Oréal 8,696 AAA- 26,205 35 19 7,744 AAA- 22,358 35 7,630 AAA- 23,935 32

Lancôme 5,508 AAA- 13,467 44 16 5,095 AAA- 11,490 44 5,685 AA+ 12,300 46

Garnier 2,632 AAA- 7,051 37 12 2,340 AA 6,016 39 2,493 AA 6,440 39

Maybelline 2,398 AAA- 7,076 34 19 2,016 AA+ 6,037 33 1,568 AA 6,463 24

Kérastase 1,360 AA 4,055 34 19 1,138 AA+ 3,459 33 936 AA 3,703 25

Redken 1,285 AA 3,829 34 26 1,024 AA 3,267 31 884 AA 3,498 25

Biotherm 1,174 AA+ 2,886 41 -8 1,277 AA+ 2,462 52 1,393 AA+ 2,636 53

Vichy 1,170 AA 3,489 34 0 1,172 AA+ 2,977 39 1,036 AA 3,187 33

Matrix 1,133 AA 3,379 34 30 871 AA+ 2,883 30 779 AA 3,086 25

Yves Saint Laurent 1,092 AAA- 1,924 57 19 915 AAA- 1,641 56 872 AA 1,757 50

The Body Shop 1,063 AA+ 2,969 36 9 977 AA 2,533 39 890 AA- 2,712 33

La Roche-Posay 456 AA 2,326 20 -41 778 AA+ 1,985 39 689 AA 2,125 32

Kiehl’s 416 AA 962 43 10 379 AA+ 821 46 366 AA 879 42

TOTAL 28,382 25,726 25,220


BRAND RATING DEFINITIONS

Brand rating StrengthAAA Extremely strongAA Very strongA StrongBBB–B AverageCCC–C WeakDDD–D Failing

TABLE 2: TOP BRANDS BY BRANDRATING

Brands Brand ratingChristian Dior AAA Chanel AAA L'Oréal AAA- Maybelline AAA- Garnier AAA- Clinique AAA- Source: Brand Finance

In the half year to 30 November 2012, thecompany enjoyed a 13% jump in operatingprofit, buoyed by a better performance inAustralia and a robust performance in theUK, where it recently introduced motherand baby care brand Cussons Mum & Me.Said to be practical and simple to use, therange includes Dry Shampoo and StretchMark Fader for new mothers, as well asSleep Easy Baby Bath and Ultra MildEmollient creams for babies.

The brand value of male toiletries brandAxe/Lynx, meanwhile, dropped a dramatic41% in line with Unilever stablematesRexona (-31%) and Dove (-16%). WhileUnilever reported solid financial results in2012 (with underlying sales up 6.9% on2011), it admitted that its performance inthe intensely competitive European markethad been sluggish against a background offragile consumer confidence.

On a more positive note, Axe iscurrently enjoying a period ofdiversification and energetic launch activity,with the European roll-out of Axe Hairand the launch of Axe Face. It alsointroduced Axe Anarchy which, in additionto a male scent, features the brand’s firstever female one. And, in 2013, itintroduced its most ambitious marketingcampaign to date – sending 22 Axecustomers into space as part of its Axe

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44 SPC April 2013

TABLE 3: PROCTER & GAMBLE


Olay 11,709 AA+ 36,829 32 0 11,756 AA 36,578 32 11,066 AA 35,777 31

Pantene 2,910 AA 7,409 40 11 2,643 AA 7,358 36 2,545 AA 7,197 35

Head & Shoulders 423 AA- 1,149 37 394 AA 1,116 35

TOTAL 15,042 14,399 14,005


TABLE 4: ESTÉE LAUDER


Estée Lauder 3,870 AA+ 8,711 45 5 3,716 AA 7,387 50 3,037 AA 5,095 60

M.A.C. 1,382 AAA- 3,351 41 10 1,258 AA+ 2,841 44 1,094 AA+ 1,960 56

Clinique 885 AAA- 1,564 57 12 790 AAA- 1,326 60 683 AA+ 915 75

TOTAL 6,136 5,764 4,815


TABLE 5: COTY


Rimmel 1,109 A+ N/A 80 615 A+ 694 A+

Coty 562 AA N/A 37 409 AA

TOTAL 1,671 1,024 694


Founded in London in 1834 as aperfumery, Rimmel has always been abrand that has stayed ahead of beautytrends, forging a presence on every highstreet in the UK and further afield. Underthe guidance of parent company Coty, itsavailability in local towns combined withits accessible price points andinnovative productshave made the brand afavourite with youngand old alike,according to Field.

In 2001 Rimmelsigned Britishsupermodel KateMoss, and with theslogan ‘Get theLondon look’,launched a range oflipsticks under themodel’s name, whichmarry the brand’scutting edgecosmetics with Moss’fashion-forwardimage. Other Rimmellaunches include

Apocalips, a new range of lipstick/lipgloss hybrids, which provide thecoverage and colour payoff of a lipstickwith the shine and texture of a gloss.Colours include nudes, vibrant reds andbright pinks and the advertisingcampaign is also fronted by Moss.

RIMMEL: BRIT POWER ON THE UP

actress Courtney Cox, best known asMonica from Friends, as its brandambassador.

Anti-dandruff brand Head & Shoulders,meanwhile, targeted female consumerswith the launch of Head & ShouldersApple Fresh, part of its improved Fresh &Clean range, and simultaneouslystrengthened its position with maleconsumers by signing football superstarLionel Messi and Los Angeles Angelspitcher CJ Wilson as ambassadors.

care claims in hair care by introducing itsExpert Collection, which comprises tworanges: AgeDefy and Advanced+ KeratinRepair. At the same time it announced US

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April 2013 SPC 47

TABLE 6: JOHNSON & JOHNSON


Neutrogena 6,940 AA+ 16,383 42 11 6,248 AAA- 14,308 44 6,350 AAA 14,467 44

Aveeno 2,793 AA 11,844 24 17 2,384 AA+ 10,344 23 2,319 AA 10,459 22

Clean & Clear 2,196 AA 5,777 38 10 1,990 AA 5,045 39 1,959 AA 5,101 38

Johnson's 1,513 AA+ 5,026 30 32 1,148 AA+ 1,179 AAA- 4,438 27

RoC 481 AA 1,265 38 2 472 AAA- 420 AA 1,117 38

TOTAL 13,924 12,241 12,227


TABLE 7: UNILEVER


Dove 4,242 AA 10,690 40 -16 5,045 AA 10,250 49 4,517 AA 8,715 52

Lux 1,501 AA- 5,403 28 -41 2,541 AA- 5,181 49 2,797 AA 4,405 64

Rexona 1,203 A 4,856 25 -31 1,752 A 4,656 38 2,033 A 3,959 51

Sunsilk 902 A 2,785 32 -21 1,135 A+ 2,670 43 1,410 A+ 2,270 62

TOTAL 7,848 10,474 10,757


Avon has taken a tumble in this year’s Brand Finance rankings, falling from secondplace in 2012 to sixth, a drop of 35%. Following CEO Andrea Jung’s departure,incumbent CEO Sheri McCoy has implemented an aggressive cost saving strategythat will see a saving of $400m by the end of 2015 but at the expense of 1,500workers worldwide, two US distribution facilities and the decision to withdraw frommarkets including South Korea and Vietnam. McCoy described 2012 as a “challengingyear”; total beauty sales declined 5% and ongoing bribery problems in China haveresulted in the beauty brand calling off its direct sales model in the country. Productwise, the brand’s flagship Anew range continued to expand with the launch of AnewClinical Absolute Even Multi-Tone Skin Corrector with DSX-7, a multifunctional skincare treatment that is claimed to target dark spots, blemishes, uneven skin tone, redpatches, freckles, post blemish marks and sallowness to leave skin looking even andradiant. “Avon’s troubles do not seem to be easing,” says Field. “It has had two knock-backs from Coty, but fundamentally it’s a good company. Its door to door policy isempowering women from Afghanistan to French Guyana.”

AVON: TROUBLE AT THE TOP

Apollo launch – all of which bodes well forthe future.

US brand Revlon has also seen itsfortunes wane in the top 50, dropping nineplaces in this year’s list. Despite recording a3.2% increase to net sales in 2012, and aparticularly profitable year in the Americas,the brand has failed to crack the lucrativeEuropean market, where sales dropped 11%for the same period. “Revlon has beenstruggling as a brand for a long time,” saysField. “The problem is it looks tired. Justbecuase it’s a heritage brand doesn’t meanit needs to be old.”

The brand has injected a dose of youthinto its DNA with the signing of actressEmma Stone, along with a number of newproduct launches, but according to Field:“The positioning is wrong. There is somuch competition out there at this pricebracket and Revlon is just not doingenough to stand out.”

BRAND OWNERS ON THE RISEAs if Olay’s third year atop Brand Finance’stop 50 weren’t cause enough forcelebration at Procter & Gamble, P&Gowned hair care brands Pantene and Head& Shoulders also made it on to the list.Pantene continued its climb from number13 in 2011 and 12 in 2012 to reach the11th spot, while Head & Shoulders, whichappeared for the first time on the top 50 in2012 (at number 47), was at number 48.

In the last 12 months, both brands havebenefited from new product launches andthe signing of high profile ‘faces’. InOctober, Pantene responded to emergingtrends towards premium hair care and skin

Fundamentally Avon is a goodcompany but it has had twoknock-backs from Coty and itstroubles do not seem to be easing

Recent months have seen the brandconfirm its reputation for innovation. Itsthree-step system Age Perfect Cell Renew,for example, is claimed to be L’Oréal’s mostadvanced technology to date and is based

Indeed, to support P&G’s position as aWorldwide Olympic Partner at the London2012 Olympic and Paralympic Games, thecompany amassed a line-up of 150 athletesto sponsor its brands internationally. Theseincluded Swiss tennis player Roger Federer,British cyclist Sir Chris Hoy, Chinesebadminton player Lin Dan and swimmersFelipe Franca (Brazil) and Ryan Lochte(US), who all featured in Gillette’s ‘A GreatStart Every Day’ campaign.

While beauty care net sales in fiscal 2012(ended 30 June 2012) dipped 4%, P&G’sfigures for the quarter ended 31 December2012 showed signs of a rebound, with netsales in a majority of businesses in P&G’sbeauty care segment up verses the prioryear quarter, indicating that 2012’sHerculean promotional push might now bepaying off, particularly in mature marketregions.

Of all the parent companies in thebeauty and personal care industry, however,L’Oréal delivered the strongestperformance, with more top 50 brandsthan any other company; 13 of its 36brands made it into Brand Finance’s roster,with L’Oréal Paris hot on Olay’s heels asthe second most valuable name in beauty.

on 20 years of research in skin cell biologyand the protection of stem cells andcorneocytes. L’Oréal Paris also paysassiduous attention to what is poised totrend in beauty, as recent additions NudeMagique CC Cream and Skin Perfection3-in-1 Purifying Micellar Solution canattest.

As well as L’Oréal Paris and Lancôme,L’Oréal owned Garnier and Maybellinewere among those brands included in thetop 20. Garnier bounced back from 16thplace in 2012 to its 2011 position atnumber 14. The brand benefited from theintroduction of an industry first last year:Olia, Garnier’s ammonia-free oil basedpermanent hair colour. Meanwhile,Maybelline’s rapid fire approach to launches(new products include Fit Me customised

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48 SPC April 2013

TABLE 8: COLGATE-PALMOLIVE CO


Softsoap 826 AA- 4,295 19 10 754 AA 2,930 26 1,090 AA- 3,164 34

Irish Spring 655 A+ 3,758 17 -8 715 A+ 2,441 29 1,022 AA- 2,768 37

Speed Stick 402 AA- 3,221 12 -19 498 A+ 2,441 20 681 AA- 2,373 29

TOTAL 1,883 1,966 2,793


TABLE 9: BEIERSDORF


Nivea 5,843 AA+ 12,288 48 6 5,574 AA+ 8,522 65 6,569 AA+ 10,178 65

Eucerin 487 A+ 1,494 33 -12 557 A+ 1,036 54 618 A 1,238 50

TOTAL 6,330 6,131 7,187


New to the Brand Finance top 50 this year,Japanese beauty company Pola Orbis isexpected to make record group operatingprofits for the fourth consecutive year in 2013,thanks to strong domestic sales and earningsfrom the Jurlique brand, which the companypurchased in 2012. Operating profit isexpected to rise 13% to around ¥16bn, whilesales are expected to climb 4% to about¥189bn.

The company ended 2012 with an 8.5%increase in net sales. Within its Beauty Caresegment, which consists of its flagshipbrands Pola and Orbis, along with brandsunder development Orlane, decencia andThree, and overseas brands H2O Plus andJurlique, net sales came to ¥169bn edging up9.1% on the prior year. Operating incometotalled nearly ¥12bn, up 9.5% year on year.

POLA ORBIS: RISING STAR

BRAND VALUE OF TOP 50 PARENT COMPANIES Parent companyL’Oréal has thegreatest number ofbrands in this year’stop 50 list thanks toits strong positioningin both the mass andpremium retailchannels

make-up, Superstay 14hr Lipstick andVolum’ Express The Rocket Mascara) hasclearly worked for the colour cosmeticsbrand as it moved from number 20 tonumber 16.

At 25 Kérastase is the highest placedbrand from L’Oréal’s Professional ProductsDivision (just ahead of stablemate Redken,the US equivalent to Gallic Kérastase) and(like L’Oréal Paris and Garnier) the brandrecently enjoyed a ‘star’ product launch inthe form of Initialiste by Kérastase, toutedas the first hair ‘skin care’ serum, which actsat the base of the hair to generate thegrowth of stronger, shinier and moreresilient hair.

The worst performance by any L’Oréalbrand included in the top 50 was pharmabrand La Roche-Posay, which slid from38th place to 46th. Field notes that whileLa Roche-Posay enjoys a unique positionwith regards to distribution in France

Overall, however, despite natural andorganic brand Sanoflore (part of L’Oréal’sActive Cosmetics Division) performingbelow par, one can expect positive thingsfrom most of the L’Oréal line-up in2013/14.

And it will be interesting to monitorwhich other L’Oréal owned brands(SkinCeuticals, Shu Uemura, or Innéov, forexample) might join L’Oréal Paris,Lancôme etc in the Brand Finance top 50in coming years.

LOOKING AHEADBut outside of the L’Oréal stable, what canwe expect from our beauty brands in2013/14? Despite McCoy’s best efforts, willAvon slide yet further down BrandFinance’s top 50 ranking, as Field suggests?Will LVMH’s efforts move Benefit into thetop 50, as predicted? And will Olay’s potentcombination of accessibility and heritagesecure it the top spot for the fourth yearrunning?

What is certain is if brands continue todisplay the creative momentum shown in2012/13 the beauty industry will continueto be the success story of this difficultfinancial period.

where “it is prescribed by pharmacists fordermatological issues”, which serves to setit apart, this is not the case in otherregions, where the therapeutic skin carebrand risks getting swamped in a throng ofon-shelf competitors.

top 50brands

April 2013 SPC 51

and colour sets as well as, most recently,relaunching its core colour range ofeyeshadows, lip glosses and lipsticks.Geographically there has also been a bigpush and the brand is now available inover 2,000 locations worldwide. “We’ve

seen a lot of growth fromBenefit so I’m confident wewill see them in the top 50next year,” says Field.

TABLE 10: TOP 50 BRANDS BY COUNTRY

No of brands Value ($m) Percentage 2 yeargrowth (yoy) growth

(%)Domicile 2011 2012 2013 2011 2012 2013 2012 2013 CAGRUnited States 1 1 1 52,793 43,547 45,161 -18% 4% - 8% France 19 19 16 33,759 34,362 36,523 2% 6% 4% UK 2 2 2 12,589 12,137 9,534 -4% -21% -13% Germany 6 6 7 7,187 8,812 9,442 23% 7% 15% Japan 2 3 5 5,986 6,716 7,738 12% 15% 14% Luxembourg 2 3 6 2,909 2,922 2,849 0% -2% -1% Brazil 18 16 21 2,274 2,332 1,849 3% -21% -10%

LVMH-owned colour and skin care brandBenefit prides itself on beguiling anddelighting its customers with acombination of serious beauty know-howand a playful attitude towards make-up.It has ramped up its launch rateconsiderably over the last 12months with new skin products

BENEFIT: ONE TO WATCH

Benefit has ramped up itslaunch rate considerably over thelast 12 months with new skinproducts and colour sets

France 16 Brazil 21

Germany 7

Luxembourg 6

Japan 5UK 2US 1

NUMBER OF BRANDS BY COUNTRY

US 45,161

France 36,523

UK 9,534

Germany 9,442

Japan 7,738Luxembourg 2,849Brazil 1,849

VALUE OF BRANDS BY DOMICILE ($M)

Procter & Gamble's supremacy of the global beauty market ...

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