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PCPC Faces Off Against Regulation

Joining the fight were 20 representatives from nine international personal care organizations.

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NAPLES, Fla. — The beauty industry wants to present a unified front globally to battle what it sees as onerous government regulation.

That was the message that emerged last week as industry executives gathered here for the Personal Care Products Council’s annual meeting.

Joining the fight were 20 representatives from nine international personal care organizations — including Cosmetics Europe (formerly COLIPA) and the Canadian Cosmetics, Toiletries and Fragrances Association — as well as representatives from Japan, Korea, Norway, Brazil and Mexico. The three-day meeting, held from Wednesday through Friday at The Ritz-Carlton here, drew 473 people, a 4 percent gain over last year’s numbers.

Outgoing PCPC chairman Dan Brestle handed the gavel over to E. Scott Beattie, chairman, president and chief executive officer of Elizabeth Arden Inc., at the meeting. Brestle urged executives to continue the effort to “sell as many products as possible, the same packaging, following the same regulations around the world. Companies must either create internally or fund externally some form of global oversight and coordination to ensure their interests are consistently represented around the world.” He then summed up his four-year tenure with his trademark humor as “s–t happens.”

“Four years ago, when I agreed to serve as chairman of the Council, the outgoing chair, Marc Pritchard of Procter & Gamble, told me nothing much was happening and that my tenure would be a ‘piece of cake,’” said Brestle. Hardly, he pointed out, reeling off a catalogue of setbacks the organization had to weather, including the economic meltdown; the resignation of PCPC ceo Pam Bailey; the introduction of a strict Colorado proposal that would have banned many commonly used ingredients; the federal Dingell bill, which would have involved greater FDA control over personal care products, and Chinese regulatory restrictions on imports.

Next, Brestle ticked off a list of the Council’s successes during his tenure, including sunscreen regulation allowing greater focus on product benefits; stepping up international efforts to help level the playing field in emerging markets such as India and China, and, most importantly, he said, expanding the capacity of the Cosmetic Ingredient Review.

Brestle continued, “As we’ve rebounded from the recession, our consumer has emerged as wiser and more sophisticated — even fundamentally changing the way she shops. She’s gone from passive receiver of information about our brands to actively walking the aisles with her device scanning QR codes or augmented-reality-enabled displays. She is more value-oriented and less indulgent in her purchases. She follows our brands on Facebook and lets us know what she thinks about our products through a variety of channels. More than ever before, she controls the conversation.”

During an interview with Lezlee Westine, president and ceo of PCPC, Brestle and Beattie laid out a plan to strengthen collaboration with foreign personal care groups. Westine had just returned from two days of meetings in Brussels with Cosmetics Europe discussing ingredient defense, China and communication.

Part of the current problem, said Brestle, is that individual companies and advocacy groups are not presenting a consistent global message. “We have found that the same company employees in different parts of the world were taking different positions and advising and participating with their trade associations,” he said, noting that a Lauder Asia employee might be suggesting one approach with the Japanese association, while in another corner of the world another Lauder employee could be advocating for another position.

Beattie noted that to achieve this, senior executives in each country need to be participating at the board level, “so they can bring their gravitas to the decision-making process and move things forward.” Beattie pointed out that currently in the U.S., ceo’s and executives are involved with PCPC, where, for instance, in Europe, those participating in Cosmetics Europe tend to be scientific and regulatory people. “It’s both getting the right participation as well as making sure there’s a coordinated kind of view by the companies. There hasn’t been the catalyst from the leadership to say, ‘Let’s really create a global platform,’” said Beattie. “Let’s focus and make sure we are all aligned.”

“There’s definitely a consensus that there needs to be a collaboration,” said Westine. “We need to leverage each other’s resources, we need to collaborate on these specific issues.”

Westine noted that PCPC will host its sixth gathering of international cosmetics groups in July in Washington, D.C. “China has been invited as an observer,” she noted. “I have been working very closely with the EU commissioner because this is one of his passions as well. We actually have the head of the Brazilian association come here.”

Added Beattie: “The reality is that China’s an outlier right now from a regulatory point of view, and if we can get our act together between Europe and the U.S. — which is where 95 percent of the volume is and we can present our case in a unified way into that market — we are going to neutralize some of the politics of it and have a more powerful position. That doesn’t mean it’ll save the day; China’s operating on its own principles, but we’re much better if we come with a coordinated effort.”

Still, said Brestle, the industry has answered many challenges and emerged a stronger and more resilient industry.

“And the good news is that business appears to have turned around,” he said. “We’ve seen a somewhat unexpected and very welcome turnaround in U.S. sales, with growth in the luxury category for much of the year and a recent uptick in mass — especially in the nail category. The overall prestige business was up 12 percent last year. Makeup was up 10 percent, skin care was up 15 percent, and fragrance was up 12 percent. Thank you, Justin Bieber and Taylor Swift.”

Cosimo Policastro, executive vice president of fine fragrances for Givaudan, noted that he’s seeing fragrance growth coming from niche businesses, which play well abroad as well as the U.S.; direct-to-consumer projects; specialty retail businesses, especially in the U.S., and from Latin America and Asia. “Overall, there is still room for growth globally, and we also need to find a way to re-engage fallen-away consumers,” he said.

Jerry Vittoria, president of fragrances for North America for Firmenich, added, “Europe is very difficult at the moment, but the U.S. is better. The Middle East is booming. Germany, Holland and the U.K. are all OK. For everyone else, we see 18 months of tough business.” Vittoria added that one popular target, celebrity fragrances, have proven their strength in today’s market: “A few years ago, we were all announcing the death of the celebrity fragrance. Obviously, they are not dead — look at the strength of Justin Bieber’s fragrance, which we did. There are designers and up-and-coming celebrities who are being talked about and more are coming.” He predicted that the U.S. fragrance market would grow by “solid single-digit gains” in the coming year.

During his first speech as the new chairman, Beattie listed four immediate priorities: Focusing on legislative advocacy and regulatory policy; strengthening the science-based CIR program to support the safety of personal care products; supporting and building new action steps to harmonize global regulation and trade barriers, and building and defending the reputation of the personal care industry. “Now that we have those priorities in place, we need to make sure our governance of the organization is updated to reflect how we work into the future, how we leverage all that we are and how we make the most of it, not just here but globally,” said Beattie. “More and more, we face the same issues around the world and we need to arm ourselves as one voice as much as possible. The Council’s organization structures, staffing, committee configuration and resources, both financial and manpower need to be aligned to those priorities.

“The fact that nine international trade associations have joined us here this week is indicative of the type of collaboration we need to execute upon our common initiatives,” continued Beattie. “I’m sure the international meeting this week will result in stronger cross-country, cross-regional and cross-functional collaboration to secure our right to innovate and sell products globally. Leveraging our combined resources will be required for this next step in our journey. If we as member companies have varying views around the world, it will be complicated to do. I urge you to take stock of your positions so we can, where possible, move forward collaborating with our trade associations and creating the future we need for our companies, employees and, most important, our consumers.”

In addition to Beattie, PCPC elected other cosmetics industry leaders as officers. Vice chair roles will be filled by Virginia Drosos, group president, Global Female Grooming, for Procter & Gamble Co.; Chris Elshaw, executive vice president and chief operating officer of Revlon Inc., and Heidi Manheimer, ceo of Shiseido Cosmetics (USA). Linda Marshall, ceo of Elysée Scientific Cosmetics, is secretary, while David Holl, president and ceo of Mary Kay Inc., is treasurer.

 

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