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| Market Report | Johnson
& Johnson: Innovation holds the key |
Julie Forster |
US company Johnson & Johnson was established in 1886 when Robert Wood Johnson joined forces with his two brothers, James Wood and Edward Mead Johnson, who had formed a partnership in the previous year. The company started out in surgical dressings but today its worldwide business spans three segments: Consumer, Pharmaceutical and Professional. The Consumer segment's principal products are personal care and hygienic products, including non-prescription drugs, adult skin and hair care, baby care products, oral care, first aid products and sanitary protection. Major cosmetic and toiletry brands include Aveeno skin care, Clean & Clear teen skin care products, Bebe skin care, Johnson's Baby, Johnson's pH 5.5 skin and hair care products, Neutrogena skin and hair care, RoC skin care, Penaten and Natusan baby care products, Piz Buin and Sundown sun care, Reach toothbrushes, and Shower To Shower personal care products. Johnson & Johnson also produces some prescriptions drugs in the dermatology field. At the end of the 1999 financial year, Johnson & Johnson had operations in 51 countries around the world, selling products in more than 175 countries.
Within the cosmetics and toiletries market, Johnson & Johnson's key strength lies in the baby care, body care and facial skin care categories. In 1999, the company achieved worldwide sales of $27.5bn, up 14.5% over the previous year. Consolidated net earnings rose 13.8% year-on-year to reach $4.2bn. Sales through the company's consumer products division rose 5.2% to $6.9bn and this growth was attributed to continued strength in its skin care franchise.
According to European Cosmetic Markets data from industry sources, in 1999 Johnson & Johnson was ranked fourth in the UK mass hand and body care market with a value share of 5.5%. In Spain the company's Johnson's brand takes a 4% value share of the mass body lotion/oil category, placing it fourth, and in Italy, its Neutrogena brand is ranked fourth in the mass hand care market with a 6.5% value share. In Germany, J&J has three successful brands in the mass hand and body care market - its Bebe line is ranked second, according to industry sources, with a 5.5% value share; Penaten takes 2.5% and Fenjal claims 1%. These figures only track the company's mass market brands. This is slightly misleading too because there is a great deal of adult usage of Johnson's Baby products, which is not reflected in these figures as sales of these would automatically be tracked within the baby care products market. Although the baby care market is not tracked by European Cosmetic Markets, it is clear that J&J is a dominant force in this category across Europe.
In US trade magazine Happi's 2000 Top 50 ranking of US manufacturers of household and personal products and industrial and institutional goods, Johnson & Johnson was ranked 16th with sales of $1.36bn in those categories.
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The Johnson's brand is synonymous with baby care. But it's not just babies and young children that benefit from the company's gentle formulations. Adult usage of this range of products is also thought to be extremely high. The Johnson's Baby range includes wash and bath products, including moisturising variants, moisturising lotions, oils and creams and even lotions for babies with sensitive skin and with added UV protection. The line also includes other baby products, including talcum powder, feeding apparatus and nappy rash treatments.
Johnson & Johnson's Clean & Clear range is aimed at consumers with oily skin. Johnson & Johnson purchased the line from Revlon in 1991. Cleansing products in the range include facial washes, cream cleanser and body wash. There are three astringent products and a moisturiser. Additionally, there are two oil and shine control items: oil absorbing sheets and shine-control powder. The range also features some acne treatments, including overnight acne patches and Maximum Strength Persa-Gel 10 which is formulated with 10% benzoyl peroxide.
In Germany, Johnson & Johnson markets the bebe Young Care line of skin care products, aimed at young users who want to maintain their skin's good condition. Products in the range include gentle cleansers, refreshing toners, and a whole host of moisturising creams and lotions. The bebe Young Care range includes cleansers, including cleansing wipes, toners, moisturising creams and gels, lip care and shower and body products.
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Johnson & Johnson acquired French company, RoC from LVMH in 1993. RoC started life as Cosmetique Medicale SA in 1957 when it was founded by Jean-Charles Lissarague. He worked in close collaboration with dermatologists to create a range of hypo-allergenic skin care formulas which he sold first through his own pharmacy and then in wider pharmacy distribution. The company changed its name to RoC in 1968. The new name was derived from Roge Cavailles, the name of the dermatological dispensary where Lissarague first prepared the products. RoC's product portfolio spans a wide range of advanced treatments. In the anti-ageing sector the company offers Retinol Concentre Bi-Actif with alpha-hydroxy acids and pure vitamin A to reduce the appearance of wrinkles and Chronoblock Prevention Active to prevent skin ageing by blocking the major factors that contribute to it. RoC also offers an anti-cellulite treatment, RoC Retinol Concentre Anti-cellulite which is formulated with retinol, caffeine and ruscus to stimulate cell activity, break down fatty deposits and stimulate microcirculation.
Neutrogena Corporation was bought by J&J in 1994. It dates back to 1930 when Emanuel Stolaroff started a small cosmetics company called Natone. In the mid-1950's, Stolaroff came across an unusual glycerine soap developed by Dr. Edmond Fromont, a cosmetic chemist. Fromont's patented soap formula produced a particularly mild, clear soap that rinsed off completely, leaving absolutely no residue. This was an unusual attribute for a soap and quite unlike the harsh everyday bars that most people were accustomed to. The soap was to become Neutrogena Facial Cleansing Bar. By 1962, Neutrogena soap was so synonymous with Natone's image that the company name was officially changed to the Neutrogena Corporation. Many Neutrogena product ideas stem from relationships with the medical profession. The company's relationship with expert dermatologists has helped Neutrogena to understand and respond to consumers' needs in this field. Today, Neutrogena manufactures and markets a line of premium products in the area of skin and hair care. Its products fall into nine categories: facial cleansing, moisture and treatment, acne care, sun care, hand and body, shower products, hair care and therapeutic hair care. One of Neutrogena's most innovative products is Neutrogena Healthy Skin® Anti-Wrinkle Cream, which is said to visibly reduce the signs of sun damage, such as wrinkles, fine lines, and age spots. The formula contains retinol, the purest form of Vitamin A, to work deep within the skin's surface where wrinkles develop. Additionally, multi-vitamins and special moisturisers soften and smooth the skin.
Johnson & Johnson's prescription-only dermatological products include Renova A (tretinoin cream), heralded as "the only prescription cream proven to reduce certain clinical signs of photodamage associated with environmental exposure and the natural ageing process". It is available in two formulations Renova 0.02% Cream and Renova 0.05% Cream. Both are approved by US drugs administration body, the FDA. The 0.02% formulation is said to reduce fine facial wrinkles while the 0.05% formulation is said to fade brown ageing spots and smooth roughness, as well as reducing fine wrinkles. Both formulations contain the active ingredient tretinoin, a vitamin A derivative identical to one occurring naturally in the body. There are also two acne treatments, Retin-A (tretinoin) and Retin-A Micro. Both contain tretinoin and both work by loosening and expelling acne plugs in the skin and preventing new lesions from forming. However, Retin-A Micro uses a technology called Microsponge® System, which is said to avoid the problem of irritation sometimes suffered by users of Retin-A. The Microsponge system enables the tretinoin in the formulation to be distributed to the skin over a longer period of time.
| Johnson & Johnson: Key facts |
Established:
1886
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| 1999 Sales: |
$ 27.5 bn
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| 1999 consolidated net: |
$ 4.2 bn
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Although Johnson & Johnson comes in some way behind the giants like Beiersdorf and L'Oreal in the European skin care market, its scientific expertise is enviable. As consumers demand greater results from their skin care products, whether they are available on prescription, through the pharmacy, in the selective channel or in the mass market, this technical know-how is sure to be a strong weapon in the pursuit of market share.
Author
Julie Forster
With this company profile Julie Forster, previously editor of European Cosmetic Markets, concludes her series of market reports for Skin Care Forum. European Cosmetic Markets focuses on retail trends in the major European markets, providing in-depth data on the main cosmetics and toiletries categories. Contact: Wilmington Publishing; email: ecm@wilmington.co.uk.
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