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BOLOGNA, Italy — This is the moment of truth for Italy and its beauty industry. Each is counting on a renewed Made in Italy campaign to ward off competition and restore vitality.
This story first appeared in the March 29, 2013 issue of WWD. Subscribe Today.
“All companies in Italy must invest more in the development of exports,” said Fabio Rossello, president of Unipro, the Italian association of cosmetics companies.
The troubles of the Italian economy run parallel to the challenges facing the Cosmoprof trade show, which has been losing cachet through the exodus of major international brands.
The Cosmoprof fair and its Cosmopack sibling ran from March 7 to March 11 here.
Rossello was responding to mixed figures that were unveiled by Unipro at Cosmoprof, on March 8. Domestic consumption of beauty products dropped 1.8 percent in 2012 for the first time in at least five years, while exports jumped 7 percent.
This year promises to bring more of the same. Unipro forecasts there will be a further decline in domestic consumption and that the sector’s revenues will remain bolstered by business abroad.
In an interview, Rossello asserted that the Italian cosmetics industry invests more in research and development than other industries (6 percent to 8 percent of sales, versus 4 percent for the Italian average). And he further declared that the country boasts a trade surplus of 1.24 billion euros, or $1.59 billion at current exchange.
Currently, 31.6 percent of Italy’s beauty revenues — 2.86 billion euros, or $3.66 billion — come from abroad. Domestic consumption last year was 9.6 billion euros, or $12.67 billion at average exchange for the period.
“The market has changed; we have to look to high-quality products at mass-market prices,” said Duccio Campagnoli, president of Bologna Fiere and SoGeCos, which organizes Cosmoprof.
He noted that an “oligarchy” of global brands has decided the fair no longer meets its needs, while the show organizers are trying to attract a new, more democratic group — of “artisans” and “professionals” producing mass — and midmarket products.
Campagnoli said the Cosmoprof in Bologna has been recast. “This is a meeting point between the Asian and Middle Eastern and the European market,” he explained.
He undoubtedly received some comfort from the fair’s attendance numbers. Cosmoprof boasted a 14 percent on-year increase of total visitors this session to 193,842, driven in part by a 22 percent jump in non-Italian attendees to 48,823.
There was a 3 percent rise in the number of exhibitors present to 2,390, with Italy the most represented, with 666; China, with 272, and France, with 161. The U.S., Germany and Spain followed closely behind. Twenty-four national collectives attended the fair.
Turning to market opportunities, Rossello had pinpointed Turkey as a prime export opportunity, and Campagnoli went one step further in suggesting Cosmoprof could put a show there.
“Turkey, as a manufacturing country, can become another important regional hub,” added Campagnoli.
Cosmoprof would also like to expand its reach to Brazil, and India “as soon as we have the opportunity,” he said.
But problems with the Bologna show remain, principally what many manufacturers view as a lack of a prestige perfumery element.
“To selective perfumers I would ask: ‘Is it important to you to meet such professionals?’” continued Campagnoli, during a panel discussion hosted by the Accademia del Profumo on March 8.
At his stand, amid other nail and hair brands that cater to salon industry professionals, George Schaeffer, founder and chief executive officer of OPI, talked passionately about his relationship to customers in that segment at the fair.
He clearly answered Campagnoli’s rhetorical question. “I’d like the big guys to come back,” said Schaeffer, referring to salon brands from the likes of L’Oréal and Wella. “I don’t look at it as competition; I think it complements the show.”
He called for a return to the fair, saying it’s a sign of respect and giving back to the trade.
“What this show does for me is I meet the international consumer,” continued Schaeffer. “You get the pulse of the industry.”
A second for that vote came from Davide Bollati, president and chairman of Davines. “We are loyal and consistent,” he said of his company’s perennial appearance at Cosmoprof. “I think our coherence is paying off.”
Davines is fine-tuning its international distribution, and its sales increased 13 percent to 61 million euros, or $80.51 million, in 2012.
Laura Zaccagnini, director of international affairs at SoGeCos, weighed in on the widespread belief that the luxury perfumery segment’s representation had faded away at the show.
“We still have it,” she said, adding it is no longer about high prestige, but rather medium-priced and niche products “based on the disposable income of consumers.”
Luciano Bertinelli, ceo of Ferragamo Parfums and president of the Accademia del Profumo, did not mince words. He said that the luxury perfumery segment does not exist at Cosmoprof right now, but “there has been a step forward compared to last year, and we as a selective perfumery brand would like to participate next year.”
One move SoGeCos made this year to restore the relevance of the fair was to create a new program with Vogue Italia for a shopping night on March 9 to build consumer awareness and buzz around beauty. More than 200 stores remained open until 10 p.m. in Bologna and offered special merchandise.
SoGeCos also brought 155 retailers and distributors to the fair, ranging from Jennifer Miles, senior buyer of beauty and fragrance for Henri Bendel, to three executives from The Shopping Channel in Canada to Lotty Eisenband de Eidelman, commercial vice president of Colombia’s Fedco.
One retailer, speaking not for attribution, complained that it can be difficult to figure out what merchandise is in which building. She added that the sheer acreage of product can be overwhelming.
“I think there’s too much square footage,” the executive said.
“It’s huge, huge,” said Miles, of the fair. “The value for me is I’m always looking for interesting brands that I’m not going to find in the U.S. They’re not going to come knocking at my door.”
Among the labels Miles pointed out was Überlâsh, a lash-growing product.
A number of retailers mentioned that Cosmoprof’s more “democratic” lineup, consisting of a sea of merchandise, is more conducive to spotting trends than the usual phalanx of corporate stands.
But perhaps there’s too much of a good thing. “Maybe there needs to be a beauty curator,” said Eisenband de Eidelman. “If I want to look for articles for the mass market, this is probably the right fair.”
Executives from The Shopping Channel had found items from various product categories, including skin care, self-tanner and makeup.
“From our appointments and walking the show, we’ve probably come away with five brands that will come to fruition,” said Wendy Pos-Cerveira, merchandise manager health and beauty for the channel, who added the products needed to tell a story for television.
Buyers were also scanning the merchandise, searching for newness.
“We’re looking for trends we can feel and see; we’re always looking for the newest products on the market,” said Nicolina Martucci, vice president of sales and marketing at Distribution Iris.
Three distributors from Latin America were after fragrance and natural and organic products at good value. They said in the region there’s no middle class, so everything has to be either mass market or premium, with Italian products perceived as luxurious.
Organic and natural items are still a big business in the region, according to Alex Naar Valenzuela, vice president of IBD Corp.
“It’s going to have growth at least in the next five to seven years,” he said.
The best Latin American beauty markets are Colombia, Venezuela, Mexico, Ecuador, Peru, Panama and Chile, agreed Naar; Mario Naar, IBD Corp’s commercial director, and Fabio Ernesto Buitrago Buitrago, commercial director of merchandise at Naissant. A less rosy assessment was given by Rolf van Volen, general manager of Beauty District, who works in the highly insular salon world and said he’s been coming to Cosmoprof for many years.
“I find it not a very good fair because of the downgrade of brands,” he explained. “Most innovative products you find through your own network of distributors.
Also seen during the fair in Bologna were José Barra, senior vice president, merchandising, of health and beauty at Target, with his merchandising and buying team; Ido Leffler, cofounder of Yes To Inc.; Katia Beauchamp, cofounder of Birchbox, and Ingrid Jackel of Physicians Formula. One figure striving to make the fair more productive for the companies is Tony Michalski, senior international trade specialist at the U.S. Commercial Service, who has been working as a matchmaker between buyers and American brands. For the first time, during this Cosmoprof session, he helped bring buyers from 11 EU countries to the show.
“There’s definitely business being done here,” he said. “Buyers appreciate the ability to come to the show and the assurance that they have a point person.”
At least one American brand, at Cosmoprof for the first time, drew a lather of attention by demonstrating its glittery body-decorating technique. G The Body Art Professional, which offers 52 stencils used to produce jeweled tattoo effects, had two models displaying their glued-on finery. There was a necklace, for instance, and a shimmering exotic bird applied to one’s back.
The process was being explained to an audience of about 40 people.
“Consistently we’re getting people,” said Macky Samaco, president of the company that sells its products to salons. He added the stand has attracted so many distributors that there are two or three candidates from each market G The Body Art Professional wants to enter, including Germany, Switzerland, elsewhere in Europe and the Middle East.
“At the least [Cosmoprof] met expectations, but I think we can improve,” said Samaco, who wistfully speculated he might be happier in the nail pavilion, which was the most high-energy, traffic-heavy part of the fair. “I would like to try that side. On this one we can certainly get distributors, but on that one we can get the feel of consumers.”