Beauty & Wellness Briefing: After a rollercoaster ride, Unilever sets its sights back on beauty

This week’s briefing appears to be like at what’s been going on with Unilever after its failed bid for GlaxoSmithKline’s shopper well being unit. Plus:Unilever has had it tough currently.In January, the corporate was caught up within the headlines after it tried and did not buy the buyer healthcare arm of GlaxoSmithKline, which homes model names like Sensodyne toothpaste, Advil and Centrum nutritional vitamins. The rejected bid of $68 billion triggered a very public cleaning soap opera, together with a share-price collapse, the eye of activist investor Nelson Peltz and plans to chop 1,500 administration jobs as a part of an overhaul. Institutional buyers lambasted the corporate for making the outrageously sized bid and mentioned Unilever ought to focus on its core companies. Even credit standing company Fitch mentioned a debt-fueled buy of the GSK shopper healthcare division might set off a “multi-notch downgrade.” Though I’m no short-seller, I couldn’t assist however hold my eyes peeled to the ticker tape of a declining inventory value.
Though the corporate’s troubles have come to a head, its challenges with acquisitions lengthen a few years back. Unilever notoriously paid $1 billion for Dollar Shave Club in 2016, which did not develop gross sales in any substantial method, and acted as a harbinger of the decline of the direct-to-consumer gross sales mannequin. Alan Jope, CEO of Unilever, acknowledged such a scenario on the corporate’s fourth-quarter earnings name on February 10. DTC economics have modified through the years, together with the rising cost-per-click related to digital advert spending and, extra not too long ago, the Apple iOS updates that make it more durable to focus on adverts and collect buyer knowledge. Unilever declined to remark for this story.
“Obviously, Dollar Shave Club didn’t scale, however we must be grateful it didn’t scale. You don’t need to scale a loss-making enterprise that a lot, and clearly they’d restricted experience in that space,” mentioned Bruno Monteyne, a senior analyst at Bernstein.
Yet regardless of DSC’s underperformance, Jope remains to be seeking to beauty as a supply of underlying progress as he faces mounting pressures to ship a new technique for shareholders and enhance the share value. Unilever has been clear about the place it desires to speculate. Its 5 priorities embrace plant-based meals, skincare, hygiene, status cosmetics and useful vitamin. Since the Dollar Shave Club acquisition, Unilever has gone on to accumulate Living Proof, additionally in 2016, Hourglass Cosmetics in 2017, Walker & Co (which owns males’s grooming model Bevel) in 2018, Tatcha and medical skin-care model Garancia in 2019, and Paula’s Choice in 2021. Per Digiday reporting, 13 of the 25 firms Unilever acquired between 2015 and 2018 had been within the beauty and personal-care house. In 2019, six of those manufacturers — Dermalogica, Kate Somerville, Living Proof, Hourglass, Ren, Murad and Garancia — had been grouped by Unilever into a division known as the Prestige Group.
“My intestine feeling is that status manufacturers are very costly to scale. [A customer] must see a lot of promoting — megastars [all] convincing them that it’s the proper product. And for years, you put money into model fairness and by no means low cost the product, and after 4 or 5 years, you begin getting cash,” mentioned Monteyne. “Unilever [is] by no means prepared to put money into 5 years of brand name fairness constructing to scale these status beauty manufacturers in different nations. That bodes badly for his or her new deal-making plans.”
Outside of status beauty acquisition, Unilever has targeted on incubating its personal. In 2018, Unilever launched Love Beauty and Planet and ApotheCare, each of which prolonged their product portfolios in 2019. Also in 2019, mass-market hair-care model The Good Stuff debuted, in addition to a socially-conscious physique care line known as The Right to Shower and a wellness-inspired skin-care line known as Skinsei. And in March 2022, Unilever co-created a Gen-Z hair-care model known as BHS with Walmart for unique distribution.
“After months of cautious overview, the board concluded that accelerating our shift into shopper well being and wellbeing and beauty as two very enticing adjacencies would place Unilever for sooner progress for the many years to return,” mentioned Alan Jope, CEO of Unilever, in the course of the earnings name. “We are completely resolved on shifting the portfolio towards these enticing areas of beauty and shopper well being and wellbeing, however we’re extra affected person [now] with how we get there.”
But regardless of all of the unhealthy press, we’d be remiss to not level out a few key wins for the corporate. For the entire of 2021, its underlying gross sales progress was 4.5%, its strongest in 9 years, in response to its fourth-quarter and year-end earnings report. Beauty and private care was the biggest division within the full 12 months, notching $23.8 billion in gross sales, up 3.8% on the earlier 12 months. Prestige beauty, which incorporates Tatcha, Hourglass Cosmetics and Paula’s Choice, elevated gross sales by double digits. And although Unilever has acquired criticism for focusing on sustainability efforts greater than monetary efficiency, it may be good to place the planet (and a long-term curiosity in preserving it) forward of short-term monetary acquire for Wall Street. Shortly after taking on as CEO in 2019, Jope mentioned, “Brands with out a goal can have no long-term future with Unilever.” Unilever has not spelled out the prices or the returns on funding of its environmental sustainability efforts.
“It is true that some offers haven’t labored out as deliberate [like Dollar Shave Club], however total, year-to-date, Unilever’s status cosmetics unit and useful vitamin companies have added 60-70 foundation factors to group natural progress. This is spectacular and never correctly acknowledged by the market,” mentioned Warren Ackerman, an analyst at Barclay’s.
Kosterina goals to deliver a farm-to-face idea alive with olive oil beauty merchandise
As a former Walmart and Elizabeth Arden government, Katina Mountanos, founder and CEO of Kosterina, knew from the beginning there was long-term potential to deliver her olive oil-focused model into the beauty aisle.
Kosterina relies on the idea of blue zones, that are areas world wide the place there’s a increased inhabitants of people that reside longer than common. One of those locations is Icaria, Greece, and Mediterranean diets have lengthy been praised for his or her well being advantages. Kosterina has long-established itself on this vein, providing natural olive oils, balsamic vinegar, darkish chocolate, olive oil cake and now olive oil-based beauty. Kosterina launched with an olive-oil face oil in Nov. 2021, adopted by an olive-oil face stick and deodorant in February.
High-end olive oils in enticing packaging have been gaining favor, with manufacturers like Brightland, Kyoord and Flamingo Estate coming to thoughts. There is a lengthy historical past of beauty manufacturers utilizing meals and delicacies as a part of their ingredient tales, like Glow Recipe’s fruit-based merchandise or La Prairie’s focus on caviar. Kosterina will launch a face moisturizer, a cleanser and a physique cream in 2022.
Since Nov. 2021, 24% of all purchases from embrace a beauty product, and Mountanos mentioned the preliminary objective was to achieve 10% within the first six months. For now, Kosterina is simply advertising and marketing its merchandise to current clients, however it started testing with influencer advertising and marketing in January. So far, beauty merchandise are solely accessible on its e-commerce web site. Its meals merchandise are bought by means of Whole Foods and HSN. Mountanos mentioned she is in discussions with QVC for beauty retail and in addition hopes so as to add Sephora sooner or later. Kosterina clients are 65% ladies and 25- to 65-years-old.
“The method that we take into consideration competing within the beauty house, which is so fragmented, is that we’re bringing folks into the franchise by means of meals and our additional virgin olive oil, after which displaying them now we have different merchandise,” mentioned Mountanos.
Executive strikes

Francois Bonin was named the brand new CEO of Naturium.
Dollar Shave Club’s CFO Jose Zuniga joined Madison Reed.
Amazon Fashion CMO Kara Trousdale joined Beautycounter as chief industrial officer.
Myles McCormick left his function as CEO of Forma Brands and was changed with Too Faced president Eric Hohl.

What we’re studying
Lavender important oil triggers uncommon sickness: In March 2021, a lady’s dying baffled docs who couldn’t pinpoint how she contracted septic shock, which killed her. It would result in a federal investigation that linked her dying to medical mysteries in three different states. After months of analysis, scientists found what killed two folks and left two extra critically ailing: an aromatherapy spray bought at Walmart. Such a story involving a widespread ingredient, a widespread wellness pattern and the nation’s largest retailer exhibits the gaps in high quality management and security within the beauty and wellness industries.
“You go lady!” and the cult of girls’s confidence: Since the early 2000s, when Dove famously turned the tables on beauty advertising and marketing by attempting to prop up ladies’s vanity, a cult of confidence has developed inside ladies, with numerous industries and their remora shifting their advertising and marketing ways towards superficial ladies’s empowerment. This iteration of self-care has inspired us to lean in, clap back on the haters and present that confidence is the brand new attractive, whereas diminishing the influence of real points like revenue inequality. A brand new guide known as “Confidence Culture” by Shani Orgad and Rosalind Gill examines the cult of confidence and its ramifications.
Byredo builds itself out as the subsequent beauty juggernaut: Niche and luxurious fragrances are having fun with the shine of rebounding beauty gross sales, and Byredo particularly seeks to profit. Over the previous two years, Byredo’s gross sales elevated considerably, it launched into the cosmetics house, and it appointed a former LVMH government as its first CEO. Next, it plans to launch a skin-care line.
Inside our protection
Influencers see their very own NFT alternative: Mega celebrities like Paris Hilton and Snoop Dogg have been seen shilling NFTs currently, and social media influencers are eager to not be omitted. Huda Kattan not too long ago publicly declared her pleasure over NFTs, even posting NFTs from the World of Women collective as her profile photos on Twitter and Instagram. Meanwhile, critics of NFTs say influencers and celebs alike are utilizing their platforms for self-enrichment.
Alicia Keys on altering the beauty trade: When Alicia Keys launched Keys Soulcare in Dec. 2020, it was to handle a new dimension of wellness and self-care that creates merchandise that nourish not just one’s bodily wellbeing, but additionally one’s soul. Keys spoke with Glossy about her long-term objective for altering the beauty trade, the private rituals she practices, and the that means of her final album.
Scarlett Johansson’s beauty model lastly debuted: Rumors and rumblings about Scarlett Johansson’s beauty line have been stirring for months, and on March 1, it lastly arrived. Called The Outset, the skin-care model focuses on minimalist packaging and a pared-back beauty routine.

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