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| Issue 23 |  |
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| Print version | ||||
| Category | Title | Author | ||
| Market Report | L'Oréal: Because it's worth it | Julie Forster |
L'Oréal, which was founded in its earliest form in 1907 by Eugene Schueller, a French chemist, stands out amongst the giants of the cosmetics and toiletries market.
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L’Oréal
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| Established | 1907 |
| 1999 sales | FF 70.5 bn (€ 10.8 bn) |
| 1999 operating profit | FF 8.6 bn (€ 1.3 bn) |
| Website | www.loreal.com |
While its main rivals, such as Unilever and Procter & Gamble owe much of their strength to detergents and food among other categories, L'Oréal focuses clearly on cosmetics and toiletries. In fiscal 1999, cosmetics accounted for over 97.5% of total L'Oréal sales with dermatology adding a further 1.8%. L'Oréal may be large, but it's still growing. In the year to 31 December 1999, L'Oréal saw consolidated sales increase by over 12% to € 10.8 bn while operating profit rose by more than 18% to € 1.3 bn. In that period cosmetics sales grew by 11.9% and dermatology turnover soared, rising by almost 32%. The company's international expansion record is enviable. Today its products are sold in countries spanning Western Europe, Eastern Europe, North America, Latin America, Africa, the Middle East and Asia.
Within the personal care market, L'Oréal is present in the mass market, the selective channel, pharmacies and salons. Brands in the mass market are housed under a number of divisions, including L'Oréal Paris, Laboratoires Garnier, LaScad and Gemey. In the selective market top brands include Lancôme, Biotherm and Helena Rubinstein. It also covers a number of famous names in fragrance, such as Cacharel, Giorgio Armani, Ralph Lauren, Guy Laroche and Paloma Picasso. L'Oréal's main brand in pharmacies is Vichy but it is also represented by other brands including La Roche Posay.
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L’Oréal:
Key skin care brands
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| Mass market | L'Oréal Paris | Plénitude |
| Laboratoires Garnier | Synergie | |
| Jade | ||
| Ambre Solaire | ||
| LaScad | Mixa | |
| Vittel | ||
| Pharmacy | Vichy | |
| La Roche Posay | ||
| Selective brands | Lancôme | |
| Biotherm | ||
| Helena Rubinstein | ||
According to European Cosmetic Markets in 1998, L'Oréal claimed approximately 17% of total cosmetics and toiletries sales across France, Germany, Italy, Spain and the UK, placing it top of the rankings in this region, well ahead of number two, Unilever. In the facial skin care category, L'Oréal took 15% of sales across these five countries, in body care it claimed around 10% and in sun care it accounted for almost 25% (Source: European Cosmetic Markets, August 1999, European Overview).
L'Oréal's expertise in skin care is reflected across its divisions and its scientific advances span brands in different distribution channels.
In the company's mass market L'Oréal Paris division, its main facial skin care brand is Plénitude, which was first launched in 1983. According to European Cosmetic Markets in 1999, Plénitude was ranked second in mass market skin care in France and third in Spain. In Germany it is ranked third in mass market moisturisers but only sixth among cleansers and in the UK it is ranked second in terms of moisturiser sales and third in facial toners. In Italy, it is ranked joint fourth in both cleansers and moisturisers.
Recent innovations in the Plénitude portfolio included the 1999 launch of anti-ageing treatment Line Eraser, an intensive action night treatment which is said to achieve a spectacular reduction in wrinkles. Alongside its key active ingredient of pure, concentrated retinol, the formula also includes epidermal lipids similar to those present naturally. They act to reinforce the cutaneous barrier during the treatment to render the skin better equipped to take advantage of the benefits of the retinol. In 1997, the Plénitude line was extended with Futur·e, which fights the signs of ageing by delivering pure vitamin E to the skin. The product makes use of L'Oréal's Nanosome technology, which is used to transport lipophilic active ingredients. Futur·e also includes L'Oréal's UV filter Mexoryl SX. Earlier this year, L'Oréal extended its Plénitude line with Hydrafresh, known as Hydratonique in France. Described as a "cocktail of energy", the formula incorporates vitamin C for vitality, vitamin E to protect the skin, Vitamin B5 to soothe and prevent dehydration and calcium and magnesium to stimulate cutaneous metabolism. It is available in two types - one for normal or combination skin and one for dry or sensitive skin.
Plénitude has also taken advantage of the latest growth spurt in the cleanser category. Like many other mass cosmetic brands it has launched cleansing tissues and deep cleansing strips.
Under its Laboratoires Garnier division, L'Oréal's main facial skin care brand is Synergie. In the mass market moisturiser category Synergie is estimated by European Cosmetic Markets to be ranked third in Italy and the UK. In cleansers it is second in the UK and third in Italy. In Spain it is ranked seventh across all mass market facial skin care categories.
Recent innovations in the Synergie line have largely taken the form of sub-ranges. In 1998, Laboratoires Garnier followed the launch of Synergie C Daily Moisturising Cream and Fluid with the addition of an entire cleansing range incorporating vitamin C to create the sub-range Synergie C. Cleansing products in the line include foam wash, cleansing milk and toner. In 1999, the company followed this with the introduction of another sub-line, Synergie Pure, a line of five products for effective, yet gentle daily care for oily skin. The range comprises a facial wash, a toner and Sebum Control Moisturiser as well as two "emergency treatments": Synergie Pure Express Patch, a small adhesive transparent disc designed to be applied directly onto spots for overnight treatment and T-Zone Purifying Strip which is said to offer a quick and gentle action for the removal of blackheads and impurities. In spring 2000, Laboratoires Garnier went on to add Synergie Fresh, a range of four products: a foaming gel, a toner, a moisturiser and eye patches designed to eliminate bags under the eyes. The cleanser, toner and moisturiser are each available in a green shade for normal skin or a peach shade for dry skin and formulas are rich in vitamins and trace elements. The line is aimed at the 20-35 age group.
IIn Germany, Laboratoires Garnier also markets the Jade brand and innovations which emerge through the Synergie brand elsewhere are often unveiled under Jade in that market. For example, in Germany, Laboratoires Garnier markets a facial skin care line similar to Synergie C under the name Jade C. Jade is also present in the area of facial skin care for oily skin with the Jade Hautklar line.
Jade is ranked fifth amongst mass market cleansers in Germany and seventh among moisturisers.
Laboratoires Garnier's strength in the sun care market cannot be overlooked. According to European Cosmetic Markets, its Ambre Solaire brand, launched as early as 1936, is the mass market leader in sun protection in France; in the UK, supremacy in the market is a hard fought battle between Ambre Solaire and Boots The Chemists' own brand Soltan. It is third in Germany and Italy and fourth in Spain. Products span sun protection, aftersun and self-tanners. Ambre Solaire sun protection incorporates L'Oréal's two patented UV filters Mexoryl SX and Mexoryl XL.
In the French mass market, L'Oréal is also represented by its LaScad division which includes Mixa body and hand care products and Vittel facial skin care. The Mixa brand was first launched in 1969. Mixa Intensif Peaux Seches dry skin treatments are ranked top in the hand care market in terms of volume sales, third in general purpose creams and second among body moisturisers. Mixa also includes baby care products.
In the pharmacy channel, L'Oréal's top brand is Vichy which spans facial skin care, body care and sun care. Vichy products are designed to be effective, safe to use and accessible in terms of price. L'Oréal states that the Vichy brand leads the European dermo-cosmetic market. Recent launches include Nutrilogie Deep Treatment for Dry and Severely Dry Skin, an oil-in-water emulsion formula which incorporates a new molecule, the patented Sphingo-Lipide, which stimulates natural lipid production deep within the epidermis. In 1999, Vichy unveiled Reti·C, said to be the first product to combine retinol and vitamin C to smooth away wrinkles, creating youthful radiance and a glowing complexion. Vichy does not overlook the male consumer - its Basic Homme range is a line of caring products for men. It also boasts the highly innovative Capital Soleil sun care brand which was the first L'Oréal sun protection line to incorporate its Mexoryl SX UV filter technology. This is now used in all L'Oréal sun protection products.
In the selective market, L'Oréal's key skin care brands are Lancôme, Biotherm and Helena Rubinstein. These are all strong in the areas of facial skin care, body care and sun care. Although selective market brand share figures are difficult to come by, industry sources suggest that Lancôme is the most significant of the three in Europe, in terms of value sales. Biotherm is particularly notable for its skin care offering designed specifically for men. Its men's line Biotherm Homme comprises a total of over 20 products including facial skin care and shaving products, deodorants and bathroom products.
Many recent launches from Lancôme, Biotherm and Helena Rubinstein have had one key ingredient in common - retinol. In late 1999, Lancôme launched Re-Surface Intense Wrinkle Corrector, said to be the first anti-wrinkle corrector enriched with concentrated retinol Nanocapsules. By transporting the retinol via Nanocapsules it is said to ensure that it is targeted correctly, released effectively and protected. Biotherm's recent retinol addition is Retinol Repulp, heralded as the first skin care product to unite the latest breakthroughs in cosmetic anti-wrinkle research with the power of thermal spring water. This triple emulsion cream is made with pure retinol and extracts of thermal plankton. It arrived on counter early in 2000. Rubinstein's most recent retinol development was Power A Pure Retinol Repair Therapy which launched in October 1998. It was developed following six years of research during which the company designed a patented technological method that associates vitamin A with the enzyme lipase. The two ingredients are kept separately in the container but when they join on application the vitamin A palmitate is bio-converted through the action of lipase into pure, active 100% fresh retinol. Rubinstein has since added a treatment for the eye area, Power A For Eyes Pure Retinol Repair System.
Other innovations from these three selective houses include Hydra Zen from Lancôme, a skin destressing moisturising treatment available as a cream or fluid. Helena Rubinstein also introduced Force C Premium Super Energising Cream, an updated version of its original Force C. Cream. The new formula contains a combination of three forms of vitamin C - fresh vitamin C, vitamin C magnesium phosphate and glucosylated vitamin C. Said to fortify and hydrate the skin, the treatment also boasts anti-fatigue benefits to leave skin softer, smoother and more resilient to the first signs of ageing.
As it approaches its centenary, L'Oréal's future looks bright. With the force of a strong research department behind it, the innovations are going to keep coming, particularly in a continuously evolving and competitive area like skin care. What's more, with the company's ability to apply these innovations across its many brands its hold on the market is likely to continue to grow.
Author
Julie Forster
Julie Forster is Editor of the monthly trade magazine European Cosmetic Markets, published by UK-based Wilmington Publishing. European Cosmetic Markets focuses on retail trends in the major European markets, providing in-depth data on the main cosmetics and toiletries categories, alongside company profiles, regional reports and all the latest news and new products. Contact: Wilmington Publishing; Tel: +44 20 7549 8626; Fax: +44 20 7549 8622; email: ecm@wilmington.co.uk. Website: www.cosmeticsbusiness.com
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