C&T is competitive. Exactly how competitive is demonstrated in the upcoming April issue of SPC in Brand Finance’s ‘Global top 50 brands 2014’ – the definitive beauty brand league table. The brand valuation consultancy allocates brand ratings from D (poor) to AAA+ (extremely strong), which reflect the strength, risk and future potential of a brand relative to its competitors. While it is rare in other industries to find any ‘double A’ status brands, the C&T industry is crammed full of ‘triple A’ ones.
“You rarely get so many highly rated brands in one sector,” comments David Haigh, Founder and CEO of Brand Finance plc. “What this shows is that beauty is a very highly contested sector involving a lot of brands. If you look at banking, insurance or utilities, there are almost no brands that get a ‘double A’ status, let alone a ‘triple A’ one.”
However, instead of fighting tooth and claw to stay ahead of the competition, beauty bigwigs can benefit from collaborating in order to leverage one another’s strengths. In February, Avon and Coty announced a commercial arrangement whereby Avon Brazil will market and sell select Coty fragrances through Avon’s 1.5 million independent Sales Representatives in Brazil. The consumer appeal of Coty’s celebrity and lifestyle brands will allow Avon Representatives to grow their consumer base and increase their earnings, while Coty will benefit from Avon’s strong direct sales footprint and broad geographic coverage in Brazil. The door to door sales giant has likewise struck a deal with Greek skin care brand Korres, which will grant Avon exclusive rights to develop, manufacture and market Korres products across the whole of Latin America.
Such collaboration can – and should – extend well beyond the confines of the cosmetics industry, however. Also in April’s SPC, Darren Ragheb of Chemistry Innovation explores how sharing expertise across non-competing sectors can benefit a wide range of industries, C&T included.
According to Ragheb, companies are constantly searching for the next molecule that will bring a novel function and a big commercial return. They are also seeking more natural alternatives to synthetic ingredients.
“All of these create formulation challenges,” he adds. “It’s rarely as simple as replacing one molecule with another… the product’s functionality is based on the interplay between the various ingredients – and how this actually works is poorly understood. We are dealing with systems rather than a individual components. So often completely new formulations are necessary when a new ingredient is discovered or required.
“Such problems are not unique to cosmetics. Formulated products are externally distinct but share complex microstructures. Many industries face similar reformulation challenges and the move to bio ingredients in particular is relevant to all sectors. Such challenges are cropping up in pharmaceuticals, agrochemicals, paints, coatings and adhesives, and food and drink.
“There is a huge amount to gain – in terms of business opportunities and economic potential… which can be unlocked by sharing expertise across non-competing sectors.” In the UK, Ragheb draws attention to a proposed Formulation Centre, which will enable the country’s C&T industry to work with other companies and academics to find collaborative solutions to current challenges.
Perhaps more C&T companies should ask themselves: what have we got to share?
Julia Wray is Editor of Soap, Perfumery & Cosmetics (SPC) Magazine, SPC Asia, and SPC China.