HAMBURG, Germany -- The Beiersdorf Group, a pioneer in skin care since 1911, is finally coming into its own.
For 83 years, the company, based here, has been marketing round tins of Nivea skin cream at low prices -- a 6.7-oz. container costs around $4. Judging from recent sales figures, the inexpensive brand is now in tune with the parsimonious times.
In 1993, Nivea had a volume of $1 billion (1.6 billion marks at current exchange rates), making it what Beiersdorf claims is the world's largest body care brand. And for the first six months of this year, sales are up 17.8 percent worldwide with a boost from a new ad campaign.
Nivea Visage -- the company's premium-priced mass market facial skin care line and the centerpiece of Beiersdorf's growth strategy -- has been expanding its share in the increasingly tough German market, where prestige perfumeries and department stores are now locked in a fierce price-cutting war.
At the end of June, Nivea Visage claimed 16 percent of Germany's mass facial care market, according to industry estimates. In comparison, the brand finished 1993 with 12.3 percent.
Rolf Kunisch, Beiersdorf chairman and chief executive officer, maintains that the gains are not the result of any one initiative. It's just a case of getting the key elements right, he said, ticking off Beiersdorf's strengths: innovative formulas, steadily increasing advertising, a focus on the core business of skin care and Nivea, its bread-and-butter product that's now in step with the value-crazed Nineties.
"Nivea is a fairly basic, no-nonsense product," Kunisch said in an interview in his office here this year. "It offers high value at a reasonable cost."
However, he insisted that the Nivea boom was not simply a case of recession-weary department store shoppers trading down. "I don't think it's a recessionary trend. It hinges on the quality," he said, pointing to the more expensive Nivea Visage products. "It's top class, and if you can buy that for 25 marks ($16), it's very appealing."
Kunisch, who ran the group's cosmetics division for three years before stepping up to his present post in June, declined to disclose Beiersdorf's advertising expenditures. But it is clearly a key element.
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