When L'Oreal, the world's largest cosmetic company, bought the Body Shop little more than a year ago, industry observers reacted with shock as a small, ethical brand was gobbled up by a huge multinational. They represent polar opposites of the US$197 billion global beauty industry: one has all the glamour of Paris and the promise of products to transform your looks; the other is a company formed in a garage in the town of Littlehampton on England's south coast selling products in recycled urine sample bottles.
But a year later it has become clear that the US$1.3 billion acquisition was the start of something new at L'Oreal — the group has taken a leaf out of Body Shop's book and has decided to go natural.
Once the preserve of a few hippies, the natural cosmetics phenomenon has gradually migrated into the mainstream and is now a booming market. Sales are only one percent of the global beauty market. But it is growing at 15 percent to 20 percent a year, and all the big cosmetic firms have started paying attention.
PHOTOSl AFP
Clarins, for example, bought a 10 percent stake in the French organic cosmetic firm Kibio last October and Colgate acquired Tom's of Maine, a producer of natural oral-care products, last March. All followed in the steps of Estee Lauder, which was an early trendsetter in 1997 when it bought Aveda. Private equity has even moved into the natural market in a sure sign that it is a growth area. JH Partners, a US private equity firm, acquired Australia's Jurlique, an organic skin-care company, last June.
Fears and concerns
"There's an increasing fear that certain ingredients can be harmful in the long term as potentially dangerous chemicals are linked with falling sperm counts, hormonal damage and cancers," said Daniel Bone, a consumer analyst at the market researcher Datamonitor. "These fears and concerns are some of the things that are contributing to the rise in natural personal care."
PHOTOS: AFP
Retailers have also caught on. Just as they adjusted to the growing demand for organic food, supermarkets are moving into the natural cosmetic market, with Tesco in Britain launching its own personal care range called Bnatural.
"The whole natural and ethical area has clearly been a huge growth area for the cosmetics and toiletries business," said Rita Clifton, chairwoman of the branding consultancy Interbrand. "It wouldn't be wise for a company like L'Oreal not to be present in that sector."
Jean-Paul Agon, chief executive of L'Oreal, said as much at the company's annual results this year: "2006 marked the group's entry more than ever into the natural market. It is a market in full development in the whole world."
The group's acquisition of Sanoflore, a French organic products company, in October only served to reinforce that.
The group is divided into four sections: mass-market products that include the L'Oreal Paris and Garnier brands; active cosmetics that incorporate dermatological products; the luxury division, to which Lancome belongs; and the professional care unit, which provides products to hairdressers around the world. The company has not yet integrated Body Shop in any of its divisions but Sanoflore has already been included in the active cosmetics unit, which includes brands such as La Roche-Posay and Vichy. This was L'Oreal's fastest growing unit last year, with sales rising 12.2 percent to pass the US$1.3 billion mark for the first time. Body Shop's figures were equally good and like-for-like sales rose 9.7 percent last year. By comparison, L'Oreal's other three units increased by 4 percent to 6 percent.
Even in the mass market range, which includes L'Oreal Paris, the firm plans to embrace the natural trend. Garnier is a brand that traditionally uses as many natural ingredients as is safely possible, and a US$59 million global advertising campaign is repositioning the brand in the market with a new slogan: "Take Care."
Patricia Pineau, communication director for L'Oreal's research division, claims the company's researchers had identified the potential of natural products 20 years ago but consumer demand was not forthcoming, and the idea was rejected at the marketing level. "We were 20 years too early; when we put forward a cream made from plants, it did not interest anyone."
She says 40 percent of L'Oreal's products are already derived from natural ingredients but rather than create a whole new brand to respond to the trend, the company decided to acquire other companies — the Body Shop and Sanoflore — that were established in that area and already had a following.
Bone said: "One of the positive things for L'Oreal regarding the Body Shop acquisition is the way that L'Oreal can grow the market by leveraging existing branded products with well-established wellness connotations rather than focusing on creating new brands under the L'Oreal name.
"After all, L'Oreal products are not associated with having particularly strong natural credentials and may well be rejected as a result. In contrast, Body Shop-branded products ooze and exude natural far more than a typical L'Oreal brand or many other mass market brands for that matter."
In short, experts agree that this year should be an active year in the natural cosmetic industry. "The growth rate says it all," said Amarjit Sahota, director of Organic Monitor. "The conventional cosmetic market is stagnating, whereas the natural cosmetic market is growing at a rate of about 20 percent a year."
Last week the Economist (“A short history of Taiwan and China, in maps,” July 10) and Al Jazeera both sent around short explainers of the Taiwan-China issue. The Al Jazeera explainer, which discussed the Cold War and the rivalry between the US and the People’s Republic of China (PRC), began in the postwar era with US intervention in the Chinese Civil War and the Chinese Nationalist Party’s (KMT) retreat to Taiwan. It was fairly standard, and it works because it appeals to the well-understood convention that Taiwan enters history in 1949 when the KMT retreats to it. Very different, and far
To step through the gates of the Lukang Folk Arts Museum (鹿港民俗文物館) is to step back 100 years and experience the opulent side of colonial Taiwan. The beautifully maintained mansion set amid a manicured yard is a prime example of the architecture in vogue among wealthy merchants of the day. To set foot inside the mansion itself is to step even further into the past, into the daily lives of Hokkien settlers under Qing rule in Taiwan. This museum should be on anyone’s must-see list in Lukang (鹿港), whether for its architectural spledor or its cultural value. The building was commissioned
July 15 to July 21 Depending on who you ask, Taiwan Youth (台灣青年) was a magazine that either spoke out against Japanese colonialism, espoused Chinese Nationalist Party (KMT) ideology or promoted Taiwanese independence. That’s because three publications with contrasting ideologies, all bearing the same Chinese name, were established between 1920 and 1960. Curiously, none of them originated in Taiwan. The best known is probably The Tai Oan Chheng Lian, launched on July 16, 1920 by Taiwanese students in Tokyo as part of the growing non-violent resistance movement against Japanese colonial rule. A crucial part of the effort was to promote Taiwanese
Senior citizens sway to old-time tunes at a former kindergarten in northern China, as educators turn their sights away from children in the face of a rapidly aging population and a baby bust. Hundreds of millions of Chinese are set to enter old age in the coming decades while the country’s chronically low birth rate leaves ever fewer people to replace them, official statistics show. The crisis is already hitting the education sector, with thousands of preschools closing around the country as enrollments dry up. But others are changing with the times — such as a facility in Shanxi province, which has traded