This year’s special Market Focus on Turkey & the Middle East provided in-cosmetics visitors with invaluable insights into the complexities of the beauty markets in the region. This topic was covered within the context of the Marketing Trends Presentations which also covered a number of wide-ranging subjects affecting the industry, including practical guides to cosmetic claims in the EU and property rights in fragrance, the latest developments in natural & organic cosmetics certification and trends in beauty devices and men’s grooming products.
Tuesday 14th April
Evolving habits in global beauty
Speaker: Ildiko Szalai, Beauty and Personal Care Senior Analyst, Euromonitor International
The global beauty industry was valued at $465bn in 2014, up 23bn which came in equal proportions from premium and mass brands. Skincare and haircare dominated the global market and is where future potential lies, especially in facial moisturisers, anti-agers and face masks. Szalai highlighted new emerging markets beyond the traditional BRICS, including Pakistan, Morocco, Indonesia, Saudi Arabia, Vietnam and UAE. “In these markets there is a young population, the middle classes and urbanisation are increasing, but most important is the sophistication of beauty habits,” she stated. Opportunities for growth include popular beauty formats in one market which could take off in another, such as hair oil, which is big in Japan, India and Indonesia and is finding growth in the Middle East.
“Asianification” is a key driver in 2015 with new formats, benefits and textures expanding from the Far East into international markets. Another aspect of this trend is the potential for mobile technology, such as South Korean Hwa-Hwa’s mobile app that provides consumers with information on beauty product ingredients. This fits in with a growing international demand for “brand Korea” which includes the success of best selling AmorePacific Corp brands and the expansion of The Face Shop into 29 countries.
Panel discussion: Green and natural standards and certifications
Moderator: Amarjit Sahota, CEO, Organic Monitor
Panellists: Emma Reinhold, Trade Relations Manager, Soil Association; Jaclyn Bowen, Director, NSF Agriculture – North America; Anaïs Hembis, Cosmetics Certification Manager, South Europe; Dr Mark Smith, Natrue; Alain Khaiat, Owner, Seers Consulting
There are over 40 standards for natural and organic cosmetics worldwide, most of which are in Europe. Organic Monitor values the global natural & organic market at $10.4bn and certified products account for just 1% of the total, most of which are in Europe. “In the food industry, where there are 400 standards, if it says it’s organic on the label, it must be certified,” pointed out Sahota. The panelists agreed that they want to see a harmonisation of certification bodies, something that Cosmos is working towards. “A harmonised standard that is recognised around the world would make it easier to achieve certification and for consumers to recognise,” pointed out Reinhold. Dr Mark Smith raised an important point: “What are you harmonising for? Is it ethics and values or profit?” Khaiat explained that consideration should be given to the ISO standard for ingredients which has been approved and will be published at the end of this year. A further ISO standard will soon be available for finished products. “If we have international criteria this will carry more weight in the future,” he stressed. The panel also discussed the reasons why consumer do not choose natural/organic, agreeing that they must firstly have the reassurance that products are safe, effective and have cosmeticity.
A-Z Beauty insights into Middle East consumers
Speakers: Andrea Visus, Associate Director, Butterfly London; Stephane le Moullec, Managing Director, Butterfly London
The Middle East is very complex and diverse and therefore poses significant challenges to beauty brands. There is immense poverty contrasted with an air of opulence amongst those who want to show off their wealth and adore cosmetics “bling”. The population is young and eager to try new brands. Fragrance is at the heart of Middle Eastern consumers’ beauty ritual and accounts for 42% of products sold, followed by haircare at 25%, skincare at 16% and colour at 16%. Oud is a particular favourite and the brand Arabian Oud is on sale in 20 countries through 1,000 stores.
Saudi girls were highlighted for their obsession with creating an online identity. “They have several Facebook accounts showing different personalised looks. They learn how to use make-up to look good on Facebook,” explained Visus. Arabian men are also extremely image conscious in order to emphasise their career success and social standing. Other interesting facts about the Middle Eastern consumer included a love of plastic surgery, even though they cover up, and a tendency to enjoy themselves by wearing fancy lingerie despite cultural restrictions. Beauty brands looking to launch in the region must also take into account high heat and humidity which can affect the way products react on the skin.
Two faced: the multicultural beauty products in the United States
Speaker: Vera Sandarova, Marketing Manager, Kline & Co
The US population is ethnically diverse with 28% Hispanics, 17% blacks and 8% Asians. A key feature is that these minorities use a lot of products to take care of themselves. Ethnic personal care grew by 3.7% in 2014, faster than the 2.8% recorded for the total US beauty market.
Haircare is the largest segment and dominated by products for African-Americans. Styling aids is the largest and fastest growing sector, while relaxers has seen a decline, reflecting a trend towards a more natural look as well as consumers’ concern that they damage the hair. Make-up trends reflect those in the wider market with a focus on new and trendy colours which is driving eye make-up sales. Liquid foundation is the most popular format, with loose powder foundation attracting attention. Ethnic brands, such as Fashion Fair and Black Opal face stiff competition from general make-up products from multinationals such as L’Oreal and P&G. In skincare, naturally positioned ethnic products are growing, along with alphabet creams. However, there is a lower demand for anti-ageing products as this is not a major issue amongst African-Americans. Carol’s Daughter leads the ethnic skincare market. Overall, the US market is fragmented with the top 10 companies accounting for a little over 40% of the total in 2014. More mainstream brands, such as Maybelline, Cover Girl and Revlon, are entering the ethnic beauty market.
Global scent trends: the use of scent in beauty, personal care and household
Speaker: Emmanuelle Moeglin, Global Fragrance & Personal Care Analyst, Mintel
According to Mintel research, fragrance is a top purchase driver in personal care. While it may be obvious that scent is important in categories such as bath and shower products and body lotions, it is less so in haircare: 42% of US consumers choose shampoo and conditioner based on fragrance, yet 95% of brands say nothing about fragrance on pack. Meanwhile, hair perfumes are catching on in popularity with 60% of US female fragrance wearers interested in hair perfume that provides haircare benefits. Moeglin maintained that dry shampoo could help bridge the gap with hair fragrance. She identified new scented rituals for men, such as scented beard oils, and scented jewels which can be used to counter concerns over allergens.
Roundtable: How to overcome the main challenges for niche start-up cosmetic brands
Moderator: Angelika Meiss, Editor, COSSMA
Panellists: Helen Miller, Managing Director, Helen Miller Consulting; Lutz Hermann, Founder Lutz Hermann Design; Katia Tolmacheva, Sepai Skincare
This year’s niche brands roundtable focused on how niche brands can stand out from the crowd. Representing Spanish brand Sepai Skincare, Tolmacheva described the brand’s USP based on customised formulations that are mixed by the consumer. Lutz Hermann described how he focused on recreating a vintage feel for Berlin heritage fragrance brand J.F. Schwarzlose. “We used an old sleeping beauty to recreate something relevant for today,” he said. Retail expert Helen Miller used to be in charge of Boots beauty business with a turnover of £1.5bn and also developed the No.7 beauty brand. From her experience of seeing thousands of new brands presented in retail each year, she believes that it comes down to what the retailer thinks is the strongest brand with the strongest people behind it. “Be clear on your USP and make sure it has real appeal to your customer,” she said, advising against having white packaging because the consumer only notices a sea of white and cannot tell the difference between brands and products.
Beauty devices: trends to watch
Speaker: Ramaa Chipilkatti
Smart technology is responsible for the development of new beauty tools that help to boost the efficacy and functionality of the beauty routine. Chipalkatti explained how the trend for devices caters to consumer demand for products which are time-saving, offer value for money, instant gratification and an enjoyable experience. “Efficacy improvements and personalisation are key growth drivers of the ongoing beauty device boom,” she maintained.
These days, many women do beauty treatments at home as opposed to the salon, such as hair removal, hair treatments, skin lightening or tanning, body treatments, hand and nail treatments and facials. This equates to 2 in 3 women using or who will consider using a beauty device at home. Examples of new types of functional beauty devices include the ReVive Light Therapy handheld device with interchangeable LED light treatment heads for wrinkle reversal, anti-acne and pain relief, and the NuFace handheld facial toning device to improve facial contour and tone and reduce fine lines and wrinkles. Datamonitor is noting beauty device innovation for haircare and nailcare, as well as beauty brands upscaling their offer to devices, such as Olay Fresh Effect Powered Contour Cleansing System. Instant and real-time diagnostics are becoming available, including mobile apps to pre-empt choice, such as the Geneu in-store test to assess consumers’ DNA profile so that products can be tailored accordingly.
Property rights over fragrances, smells and perfumes
Speaker: Sergio Balana Vicente, Laywer, Balana Vicente
The way things are protected are through trademark, copyright, patent (protection of an invention), utility model (protection of a simple invention), trade secrets. However, these forms of protection are not entirely comprehensive, especially when it comes to fragrance which cannot be graphically represented. Instead, fragrances need to be symbolised with a written description or a chemical formulation to represent the odour. The ECJ decided this was not accessible enough as most people do not understand the formulations to make it an effective measure. Balana Vicente described how the European Trademark System (2013-2015) is currently undergoing a revision. New odours that bring about technical effects, eg inhibiting the growth of micro-organisms in the liquid body secretions, are most likely to be protected. “Whilst this is a positive step, originality and technical novelty are two different things and both need to be protected,” he commented.
Wednesday 15th April
Rituals: how brands can capitalise on changing beauty regimes across the world
Speaker: Vivienne Rudd, Director of Innovation & Insight, Beauty & Personal Care, Mintel
Consumers worldwide are adapting their beauty routines to incorporate both multifunctional products and additional steps that address specific skincare concerns. According to Rudd, most consumers blend both approaches to create a curated regime. “People want to know what they can use with different products and which cancel each other out. There is a need for clearer labeling and beauty language in the future,” she maintained.
Describing South Korea as “the incubator of beauty inspiration,” Rudd described how Korean consumers tend to have 5-6 steps to their skincare routine which often increases to 8-12 steps. These include products which are not widely known or used in the west, such as double cleansers, boosters, emulsions and essences. In China, consumers prefer one cleansing step, rich and watery toners and like to use sheet masks, sometimes twice daily. The European routine is smaller and consumers often use products for a long period of time to ensure results. Night-time rituals include products that work with the skin rhythms, sleep packs for skin and eyes, night oils and night care for the neck down.
Rudd also talked about men’s rituals where new categories are emerging, although most men like to keep things simple. According to Mintel research, 86% of men want grooming to be as simple as possible. The newest categories are high tech pampering for removing or caring for beards and skincare products for men who shave daily or every few days.
Trends in haircare usage are starting to mirror that of skincare with consumers seeing the benefits of a multi-step regime, especially in Brazil and China, where consumers may use 7+ steps. The opportunities for new segments include pre-shampoo treatments, cleansing conditioners, scalp exfoliators, scalp refreshers for hijab wearers and night care for hair.
Halal cosmetics and personal care: a market with future potential
Speaker: Dr Yavuz Özoguz, CEO, Halal Zertifikat
The criteria necessary for brands looking for Halal certification involve a strict adherence to the purity regulations according to Islam. These cover every part of the production process from which raw materials can be used, how they are handled, product manufacture and packaging. Özoguz gave the example of glycerol, which can be produced in four ways, two of which are Halal: synthetic ethanol from the gas phase is considered pure, but alcohol from fermentation is not. Halal certifiers are not universally recognised, so brands must understand each target market. For example, there are five large German certifiers, but Indonesia, Turkey and Iran have state based systems.
Techno-poetry & self expression: two trend directions for the future of beauty
Speaker: Pierre Bisseuil, Research Director for Perclers Paris’ Research & Future Insight Department and Beauty Expert, Perclers Paris
An important trend is that the fast-moving tech environment means people no longer find technology fascinating and joyful, but are stressed. As a result, more human-friendly tech is being created with more emotional R&D solutions. “This idea of technology and emotion translates into a concept called techno-poetry,” stated Bisseuil. He also discussed the idea of sleep and consciousness which is providing cosmetic brands with new opportunities e.g. taking a picture of someone, changing it on photoshop and then asking them which they prefer while monitoring brain activity. Results so far have shown they always choose the photoshopped one. “It is essentially showing people the ideal image of themselves and what they want unconsciously.” Reflective pigments, supernatural shine, fresh and light palettes can be used to connect with this emotional technology.
Bisseuil discussed the importance of expressionism, in particular the selfie phenomenon. “People are now changing their beauty according to how they look in selfies which has meant cosmetics have changed tack with selfie make-up. People want to look good on their own stage…cosmetic companies must adapt to this.”
Insight based marketing
Speaker: Susanne Jentsch, Consumer Insights, Beiersdorf
Beiersdorf runs a Consumer Centricity Unit, as it believes that product innovation should always start and end with the consumer. “Only when you get really close to consumers can you turn insights into activation. You have to tell convincing stories to the consumer,” commented Jentsch. She maintained that the three factors for big innovation are strong impact, strong technological solutions that benefit the consumer and support for few big innovations for longer. Insight based marketing allows companies to have a very deep understanding of brands and future consumer and technological insights. Beiersdorf works in teams across regions and countries to achieve this. Jentsch provided examples of the work Beiersdorf has carried out, including how the company identified a gap in the market for occasional or non-users of body lotion. The result was the Nivea In-Shower Body Lotion which it supported with 360 degree consumer education.
Trends and innovations in male grooming
Speaker: Jamie Mills, Associate Analyst, Datamonitor
According to Datamonitor Consumer, just 31% of men use a facial skincare products and some men even use hand cream or nothing on their faces. However, the strong visual culture is creating opportunities for brands. “Spornosexual” is a form of hyper-metrosexual and is driven by sportsmen and the emphasis on male sexuality. “Lumbersexual” is the antithesis to this and describes a more masculine, rugged appearance. Beards are a big trend with beard hygiene and maintenance attracting a number of small niche players. Mills described how male cosmetics appeal to small groups of men who use concealer, face bronzers, lip balm and even male polish e.g. Evolution Man Nail Paint. She noted the trend for simple targeted male grooming products designed to make men more comfortable when using them, such as Biotherm Homme Total Recharge CC Gel Instant Healthy Look.
The race to outpace: the global natural & organic cosmetics market
Speaker: Agnieszka Sainte Marie, Project Manager, Consumer Products; Nikola Matic, Industry Manager, Chemicals & Materials Practice, Kline Group
Kline Group defines natural as all brands that are positioned as natural and further segments the market into truly natural vs natural-inspired. In 2014, it valued the global natural cosmetics market at $33bn, up 10% year on year, with Brazil the fastest-growing country and Asia the largest region. Skincare was the largest category taking 40% of the total. Not all product categories lend themselves to natural formulation, such as nail polish and hair colourants. Growth has been driven by consumers becoming increasingly educated and more inclined to read labels. Two new growth areas are the professional sector and private label brands with a natural positioning.
According to Kline, the US and Europe have the highest share of truly natural brands, such as Weleda, Jason, Yves Rocher and Korres and it has noted several brands reformulating their products to make them more natural. However, the US market is fragmented with many small companies competing within around 75% of the market (the remainder taken by Johnson & Johnson, Shiseido, Estée Lauder, The Clorox Company and L’Occitane). In Europe, Yves Rocher and Oriflame dominate the natural cosmetics market, followed by L’Oreal, L’Occitane and Weleda.
Opportunities in the Middle East and Turkey haircare market
Speaker: Benedetta Cordaro, Senior Research Analyst (Middle East and Africa), Euromonitor International
According to Euromonitor, the MEA (Middle East & Africa) haircare market was valued at nearly $5bn in 2014, the same size as Eastern Europe, but per capita spend is extremely low at just $3, compared to the US where it is $37. The main haircare markets are Turkey, Iran, Egypt, Saudi and UAE, accounting for 65% of the MEA haircare total and 4% of global haircare. Lucrative markets include Iran worth $830m, Turkey, at $790m and Saudi at $630m. Benedetta pointed out that Israel has the highest per capita spend at $36, which is on a par with many international markets.
Haircare growth is driven mainly by a young demographic that accounts for 40% of the population and is exposed to global trends. Most are not brand loyal. Young Muslim women are a sophisticated target, even though hair is covered for modesty. “Hair is a significant marker of beauty, even when wearing the veil,” explained Benedetti. “The veil is a misconception for European audiences. Companies are launching products specifically for women who wear the veil.” Other trends include high demand for oil based haircare products, the keratin trend and natural/organic products. However, there is significant price sensitivity and 90% of the sales value is represented by mass brands, but not global brands such as Garnier, Pantene and Dove which are often considered premium.
Digital beauty – the perfect ingredients
Speaker: Anna Malmberg, Group Account Director, Lowe Profero London
As technology becomes embedded in every aspect of our lives, it is transforming the way brands behave. Burke suggested that in order to engage with consumers to drive purchase, brands should find, inspire and connect. “Relevancy is key – by adding social context to a purchase, brands can increase sales by up to four times,” she stated, highlighting the importance of YouTube, which is the world’s second largest search engine. YouTube ‘how to’ content is very popular and used by companies such as Unilever for its All Things Hair non-branded channel. Other channels which help consumers make choices include thread.com and Digit, which monitors consumer saving without them realising it.
Thursday 16th April
Packaging innovation in skincare technology
Speaker: Peter Luebcke, Head of Personal Care, Cambridge Consultants
Cambridge Consultants develop novel and disruptive packaging and delivery systems to companies operating in many industries, such as healthcare and medtech, agriculture and consumer markets, including cosmetics and personal care devices. “Getting the formulation to the right place in the right dose is key and it must be enjoyable for the consumer,” commented Luebcke, who explained how inspiration for drug delivery and food applies to personal care products as well. The latest packaging innovations include the dual phase serum for Clarins Double Serum and IOMA’s device and IOMA’s device for measuring hydration in the skin. Cambridge Consultants’ CC Foamer technology is a novel mechanism for generating micro-foams without the need for liquefied propellants or dissolved gases.
“In the future, there will be connective devices that work across the wireless spectrum,” he predicted. For example, a device to tell if you are drinking enough or that measures UV, vitamin D or is even a predictor of cancer.
Roundtable: Looking into the crystal ball – challenges and opportunities in the beauty industry of the future
Moderator: Andrew McDougall, Editor, Cosmetics Design
Panelists: Garett Moran, Director Product Safety, Oriflame; Simon Duffy, Co-Founder Bulldog Skincare; Antonia Kenning, Regulatory Manager – New Product Development, Burberry
The challenges in addressing global formulation and packaging regulations were discussed by the panel. Operating in 65 countries worldwide, Oriflame’s biggest challenge is in the Asia region. “The last couple of years has been getting more difficult, so we are investing more in the regulatory area,” explained Moran. Animal testing of cosmetics is a particular bugbear for Duffy, who pointed out a global misalignment on animal testing, particularly in China where it is not legal to launch without animal testing. “In the UK, we try to do everything to be a sustainable and natural as possible and we avoid high risk ingredients”. Kenning explained the need to be pragmatic when dealing with regulatory challenges. “You need to watch all the time, for in three years it could all change.”
What do you need to know about cosmetic claims when selling in the EU?
Tadej Feregotto, CEO, CE.Way Regulatory Consultants
Consumer claims are essential for brands looking to win over consumer trust, aiming for increased sales and because they are mandatory when selling in the EU. Feregotto explained that claims do not apply just to product labels but to everywhere a brand operates, including websites and point of sale material. Listing the claims which cannot be made, Feregotto referred to products which say they contain ingredients when they do not, or specify unique properties that are not. Furthermore, brand names should not have syllables that imply medicinal attributes, such as med- or pharm-.
When should a brand start thinking about claims? “The sooner the better, as it’s one of the big bottlenecks,” suggested Feregotto. “When choosing raw material suppliers, ask for supporting evidence. Do testing to substantiate your claims and carry out customer tests.” He advised not to rely on one single prescribed test but also to include consumer perception tests based on what consumers observe and feel. The role of the Responsible Person (RP) is key in ensuring compliance and can help avoid the pitfalls.
R&D Marketing – new challenges to market technologies in a consumer relevant way
Speaker: Diana Sexhauer and Ute Doepner-Reichenbach, Managing Partners, SpringPool
R&D Marketing is about applying tools, guidelines and best practices from consumer marketing to market the chemistry side. By combining facts with emotions, companies can create a competitive advantage. The best time to apply R&D marketing is when a new technology or ingredient offers a better solution or when an existing one has a creative variation. Firstly, a deep dive into technology is needed to understand what it means and its uniqueness. “Get an idea of what is new and innovative and get under the skin of the consumer. What do they really want and wish for?” asked Doepner-Reichenbach. Only then, can you develop a concept.
Roundtable: Latest advancements of in vitro evaluation of cosmetics, from regulatory compliance of ingredients to finished product claims
Moderators:Anne Canet, CEO, European Centre of Dermocosmetology, CED Lyon
Vincent Gallon, Publisher & Editor, PremiumBeautyNews.com and BrazilBeautyNews.com
Panelists: Marissa Meloni, CEO, VitroScreen; Béatrice le Varlet, In Vitro Safety & Efficacy Cosmetic Consultancy; Amélie Thepot, President & Founder, Lab Skin Creations; Bart de Wever, President, ATERA
The latest advancements include in vitro methods for assessing the sensitising potential of ingredients, in vitro models for 3D reconstructed human skin and in vitro tests for supporting cosmetic innovation and marketing claims. “Scientific formats and regulations need more assays. As a result, Cosmetic Europe is identifying assays that are promising as they no longer use animals in finished product testing,” explained de Wever. The panelists also discussed the issue of ethnicity and skin sensitivity in testing, along with the possibility of developing in vitro models that mimic chronological ageing.
By Imogen Matthews