Every month, Simon Pitman (Editor, Journalist) takes a look at what’s shaken up the industry. From acquisitions to launches and everything in-between, don’t miss the latest cosmetics news, only here at in-cosmetics Connect.
Amyris expands in North America
Amyris says it has managed to secure a significant commitment from brick-and-mortar stores across North America to stock its range of clean beauty products, despite the ongoing pandemic continuing to impact retail.
The biotech and clean beauty player says it has secured commitments from retailers such as Sephora North America, CVS, KeHe North America, Loblaws SuperSaver, Rite Aid, Walmart Canada and Wegmens to sell the range of Amyris clean beauty products.
Investors and industry experts believe the deal is well-timed, as lockdowns and restrictions are starting to ease across North America, leaving retailers optimistic that footfall will increase significantly in the coming months. Amyris says that sales of its range of clean beauty products should start during the course of the next two quarters when the company is also hoping to take advantage of a consumer ‘supercycle,’ which is accelerating demand for natural, sustainable and safe products.
The Amyris beauty and personal care portfolio is built around no compromise clean ingredients and includes names like Biossance clean beauty skincare and Pipette clean baby skincare. Last month it added to its branding and marketing capabilities when it announced that it had agreed to buy Beauty Labs International, an expert in Artificial Intelligence targeting beauty and personal care communities.
Natura results reflect strong digital presence
Natura has posted very strong first-quarter results after reaping the benefits of investments in digital and e-commerce channels, as well as building on its expertise in the direct to consumer area. The multinational has also been increasing its direct to consumer footprint, which has particularly benefited from the addition of the Avon International business, which it bought in January 2020.
The company reported that net sales grew by 25.8% to Brazil Reals 9.5 billion (US$1.79 billion), which represented 8.1% in local currencies. Net sales were impacted because the Brazil currency has been significantly devalued by the economic impact of the pandemic, which is continuing to hit the country hard, putting the health system under huge strain and leading to high death rate.
“Natura & Co turned in another strong performance in the first quarter despite a persistently challenging environment, demonstrating again the strength of its direct-to-consumer, multichannel model,” said Roberto Marques, executive chairman and group CEO.
“All of our brands and businesses posted growth in Brazilian Reals in the quarter, and our continued pivot to digital and online sales allowed us to once again outperform the global CFT market.”
Company executives say they will continue to invest in sustainable initiatives as well as e-commerce and digital channels as a means of driving future growth. The only thing that cooled the results was the weakness of the Brazilian currency, which translated into lower margins from its international businesses.
Estée Lauder ups stake in Deciem
Estée Lauder’s has announced it is increasing its existing investment in the Canada-based Deciem Beauty Group. The company has committed to another $1 billion dollar investment, which raises the multinational giant’s investment in the company from 29% to 76%.
The company now has a majority stake in the highly successful international skin care business, and executives say that it is likely to raise the investment to a total buy out within the next several years.
Deciem’s reputation grew from its eponymous The Ordinary brand, which was created as a very simple line of products that can be personalised to consumers’ specific skincare issues. Besides Deciem, the five brands in the portfolio also include HIF, NIOD, The Chemistry Brand and Hylamide.
The brands have met with tremendous success, not only to a more personalised approach to skincare, but also thanks to the company’s efforts to cultivate a loyal and enthusiastic online community. Deciem was a pioneer in both of these areas when the business started out in 2013.
Estée Lauder took out is first 29% stake in Deciem back in 2017, an investment that allowed the business to ramp up its strategic growth goals. In 2020, it achieved total sales of $460 million, an achievement that has helped push the total value of the business to an estimated $2.2 billion.
Kao business plan targets recovery
Like many of the major players in the beauty and personal arena, Japan-headquartered Kao was hit hard by the pandemic But now it is now eyeing a strong recovery through a strategic plan to ramp up investments and rejig its top tier product portfolio.
The company has announced structural reforms and its intention to increase its spend on marketing in an effort to return the business to high growth by 2023.
Kao’s revenues fell by around 15% in 2020, hit hard by strict lockdowns in the domestic market of Japan, as well as across Europe. Kao was also hard hit by the fact that it has a significant amount of exposure to the colour cosmetics category, an area that was particularly hard hit by the pandemic.
Mask-wearing, working from home, and the fact that bars, restaurants and nightclubs were either closed or heavily restricted meant that the occasions to wear colour cosmetics largely disappeared.
Hardest hit was lipstick and base makeup, which both saw significant declines in Kao’s sales, but one brighter area was eye makeup which did grow significantly on account of mask-wearing shifting the emphasis to eyes.
The company also said it will revamp its top tier color cosmetics portfolio, and will replace two of its existing R8 color cosmetic brands, Lunasol and Coffret D’or with skin care brands Dew and Milano Collection.
MAC Cosmetics can now be bought on Snapchat
MAC Cosmetics has always been both a leader and a pioneer in the color cosmetics category and now it is taking its reputation for innovation to the next level by making it possible to buy its products on Snapchat.
The brand launched its try-on app on Snap Chat some time ago and has now chosen to build on that investment by adding the ability for its Snapchat customers to buy the products they digitally try on and like.
MAC is the first brand in the Estée Lauder portfolio to trial the technology that combines Augmented Reality (AR) try-on filters with the option to purchase items individuals like.
MAC customers simply download the dedicated app, which contains a filter known as a dynamic shopping lens, allowing individuals to view an image of themselves trying on 20 different lip and eye makeup products from the company’s range.
If they like a specific product, all they have to do is tap on it to add it to their shopping cart, then checkout to pay for it and add the shipping details.
Snapchat has been encouraging retailers to try selling products on the app after a survey it conducted found out that 94% of individuals said they expected to use AR for shopping in 2021, a figure that has been significantly accelerated by the pandemic.
Find out who’s been experiencing a boost in post-pandemic sales