Global cooperation and harmonization emerged as a key theme at this year’s Personal Care Products Council meeting in Palm Beach, Fla., at a time when the industry was shaking off a brutal fourth quarter and planning strategies to overcome a tough business environment in the U.S. and abroad.
Association presidents from 13 countries — the U.K., France, Germany, Norway, Switzerland, Italy, Japan, South Korea, Australia, Canada, Mexico, Colombia and Brazil — as well as the president of Cosmetics Europe, were among the 483 people who attended the 120th annual meeting, which was held from Feb. 23 to 25 at The Breakers. Attendance grew by 20 people over 2013’s tally of 463.
E. Scott Beattie, president and chief executive officer of Elizabeth Arden Inc. and chairman of PCPC, described regulatory challenges both domestic and international as one of his key priorities. He also cited PCPC’s ongoing work with the Food and Drug Administration, seeking to modernize the agency’s regulatory structure, and collaboration with global cosmetics associations — including Cosmetics Europe, which represents the European Union — as successes of 2013 efforts.
“There are changes and catalysts for change that are creating opportunities,” Beattie told WWD as the event concluded. “Clearly, modernizing the FDA’s regulatory structure is a positive for us and for consumers and for the FDA. That’s a broad, ambitious framework that’s really been put forward by ourselves and by the FDA. It becomes an opportunity to create a framework for a national standard, which creates preemption across all the states, and it also creates very strong guidelines for international [standards]. What we’ve found through all of our collaboration internationally is that markets still buy for the largest market in personal care, and other markets look to the U.S. in terms of the structure of the regulation and oversight. Having a modern framework is an important advantage for us.
“Related to that, we’ve got two free-trade agreements that are unfolding rapidly, the Trans-Pacific Partnership [which includes Asia] and the Transatlantic Trade and Investment Partnership [which includes Europe]. They’re tremendously important, tremendous opportunities for us as manufacturers to have both a free-trade agreement with the 11 Asian countries [with TPP] and also to have a free-trade agreement with Europe. Between Europe and the U.S., that’s over three-quarters of the world’s consumption of personal care products. And then when you add Asia — boom, it’s the rest of the world, and certainly the rest of the world for the next 20 years.
“The opportunity that’s created by us having a strong, united, collaborative point of view in those discussions is, again, a window of opportunity. With both agreements, we’ve been able to identify an annex in the personal-care space that can be done without a lot of political controversy, as well.”
“The Council has worked hard to develop industry consensus regarding federal legislation,” Lezlee Westine, president and ceo of PCPC, said regarding state-level legislation and the Council’s goal to develop federal legislation that would nullify these unstandardized state initiatives and have them decided at the federal level. Approximately 150 pieces of personal-care products legislation came up through the states last year and were defeated, Beattie added.
“About six years ago, we realized that we had a very serious challenge in the states,” said John Hurson, executive vice president of government affairs for PCPC, during a panel discussion involving PCPC’s senior staff members. “We had a number of bills that were potentially damaging to the industry. We wanted to get a national federal standard, one standard to preempt all those state initiatives through a federal law. So we approached the FDA to beef up the regulatory process. The FDA had to include us in a bill that they were supporting, the FDA Globalization Act. There were several provisions on that. And then, in 2011, two bills were introduced in Congress, one by Republican Congressman Leonard Lance of New Jersey, which the industry supported, and one pushed by the activists introduced by Rep. Jan Schakowsky, a Democrat [from Illinois]. Eventually, we went to members of Congress, the House and Senate, to negotiate to figure out the bill. That’s how it’s done — the FDA laws are really passed in Congress after the industry works out all the details.”
FDA laws relating to cosmetics have not been updated since 1938, said Hurson. One key point in the discussions, said Hurson, was making the current voluntary reporting of ingredients mandatory. “But to get the level of preemption that we want, the FDA is really insisting on some additional regulatory authorities, including mandatory recall and reports of adverse effects, as well as a system for safety substantiation. It would also define safety substantiation. It’s really hard to tell what’s going to happen in terms of legislation this year — it’s not likely to move, but it could. One of our big supporters in Congress has been Rep. John Dingell [R., Mich.], who has said he will retire [at the end of his term] could [get involved]. But it’s a long shot.”
“The most threatening legislation involves environmental concerns,” said Alain Grangé-Cabane, chairman of FEBEA, the French cosmetics association. “But we can always do better, and we are trying.”
Fabio Franchina, president of Cosmetics Europe (formerly called COLIPA), said, “The main challenge we have is that laws are not similar globally and that cosmetics is a very global business.”
Regardless of circumstance, manufacturer attendees praised PCPC’s willingness to dig in and work with other global organizations. “This meeting has shown true globalization across many different organizations,” said Heidi Manheimer, ceo of Shiseido Americas Corp. “That’s especially important as we deal with more legislative issues. We need to band together globally.”
Thia Breen, a group president of the Estée Lauder Cos. Inc., with responsibility for the U.S. and Canada, also gave PCPC and the industry good marks for handling the blizzard of legislative bills coming out of the state level and number of ingredients that got registered. Thanks to the speed of the Internet, the information news cycle is more compressed, and consumers are more tuned in to some regulatory issues. One concern that was echoed in the general session was concern over supply chain management, as consumers become increasingly sensitive to the size of a product’s carbon footprint. “I can’t have a lipstick moving 8,000 miles,” Breen remarked.
PCPC members reelected Beattie as chairman of PCPC. Named vice chairman were Lauder’s Breen; Chris Elshaw, formerly of Revlon Inc.; Deb Henretta, group president of global beauty care at Procter & Gamble Co., and Shiseido’s Manheimer. George Calvert, vice president of research and supply chain for Amway, was elected as secretary, and David Holl, president and ceo of Mary Kay, was elected treasurer. The organization’s Look Good, Feel Better program celebrated its 25th anniversary at the gathering.
Industry leaders also discussed the current selling environment.
Beattie said, “It’s tough. International growth, particularly in Asia, has slowed. What I hear from the publishers and my colleagues is that most people are doubling down on their efforts in the U.S. because they see an improvement in the U.S. economy.”
Lauder, like other companies, has navigated through the trauma of the truncated holiday selling season and the effects of severe January and February weather, Breen said. Macy’s had just had a successful one-day sale, and Breen is looking forward to having an extra selling day in the 2014 holiday season. “We are very bullish on the spring season,” she said, citing brands like La Mer, MAC, Bobbi Brown and the new Pure Color Envy lipstick from the Lauder division.
A few industry leaders, spearheaded by Fabrizio Freda, Lauder’s ceo and president, have talked about how the U.S. is resembling a new emerging market. Breen concurred, noting that in New York’s borough of Queens, for instance, there is cluster of department stores that are located only 12 miles apart, but serve wildly divergent population groups, ranging from Asian-American to African-American to Latino. So the distribution has to be handcrafted on a door-by-door basis, manicuring each product assortment and counter presentation.
The Macy’s store in Flushing, Queens, was also cited by Jonathan Zrihen, president and ceo of Clarins Groupe Americas. Flushing is one of the company’s top 25 department store doors in the U.S., and it also is one of the best performing stores in cosmetics for Macy’s. The clientele is heavily Asian, consisting mostly of Chinese and some Koreans. The company has gone so far in tailoring the assortment that it is merchandising products there that it also sells in China. Zrihen was accompanied by Danyelle Boilard-Paul, the new executive vice president and general manager of Clarins Groupe USA.
Supermodel @helenachristensen teamed up with longtime friend and designer @camillastaerk on a joint @paredeyewear collaboration. The lineup features three styles and 11 offerings, all of which embody a vintage feel. Get all the details on how they celebrated the collab on WWD.com. #wwdaccessories #wwdeye (📷: @slovekinpics)
“It’s a hard industry to keep motivated, as well, so finding different subjects and people is what makes it worth it – when you’re like, oh, I’ve met great people, I feel like I’ve done something good, and I feel proud of having done this,” said French actress Stacy Martin on being grateful for the variety of roles she’s take on. Read @ktauer’s full interview with Martin on her her latest film “Godard Mon Amour.” #wwdeye (📷: @danieldorsa)
After showing in front of the Eiffel Tower for his last two women’s ready-to-wear collection, it looks like @anthonyvaccarello may be heading to the Big Apple. Sources say the designer will stage his next @ysl show in NYC on June 6. Get all the details on WWD.com. #wwdnews #wwdfashion (📷: @aitorrosasphoto)
EXCLUSIVE: Two and half months after John Targon, cofounder and codesigner of Baja East, was hired as creative director of the contemporary division at Marc Jacobs, he has left the company, WWD has learned. Marc Jacobs International, which is owned by LVMH Moët Hennessy Louis Vuitton, confirmed Targon’s departure in a statement: “John Targon is a talented designer and we appreciate the work he has done here. Ultimately working together did not make sense for the brand and we wish him the best.” Read the story by @jessiredale, link in bio. #wwdnews
@theluxurycollection is officially launching a collection, tapping Sofia Sanchez de Betak for the capsule. Over 30 styles will be featured in the Chufy x The Luxury Collection, debuting next month at Bergdorf Goodman, The Webster, FiveStory and more. De Betak, known as “@chufy,” drew inspiration for the collection from her trips to Japan in the past year #wwdfashion
@lhd, founder and CEO of @thewebster, has teamed up with @lebonmarcherivegauche for the European launch of her ready-to-wear line, LHD. The launch will come with an exclusive pop-up opening today that’s set to run through May 20. Located on the second floor, it carries her debut Miami-themed resort collection, launched in November as see-now-buy-now. #wwdfashion