The cosmetics industry often tries to wow consumers with high-tech arsenals of ingredients packed into new products, primarily skin care. But for years, there has been a growing market for shoppers who care more about what has been left out.
These cosmetics buyers fret about the sensitivity of their skin and worry about allergies. Over the last three decades, a growing portion of the population has become more sensitive. One company trying to capitalize on this very specific trend is VMV Hypoallergenics, founded in 1979 by Dr. Vermén Verallo-Rowell, a dermatologist and dermatopathologist based in the Philippines, who develops and tests every formula within the line.
The company has been quietly building a foothold in the U.S. with a 1,700-square-foot flagship and spa on Broadway, north of Union Square, in New York, which opened in December 2010. In addition to carrying its entire product line, the outpost, staffed by VMV “Skin Specialists,” offers a range of sensitive-skin-friendly treatments, including “Skin-a-Jiffy” quickie and collagen-infused antiaging facials, as well stress point massage and foot and hand scrubs.
Despite a somewhat slow start in early 2011 and another dry spell during the summer doldrums, sources report a strong finish for the year, with annual volume approaching the $1 million mark.
Totaling about 400 stockkeeping units, including hair care and household products, VMV Hypoallergenics is also distributed in seven Edge shops within Dillard’s department stores and through 20 doctors’ offices in the U.S. Products range from $18 for hypoallergenic laundry shampoo to $105 for a pigmentation-reducing treatment.
Coming off a year in which the company generated $8 million in worldwide retail sales, according to industry sources, VMV plans to grow 30 percent in 2012, bringing total global sales to about $10.4 million. Of that 2012 total, about $2.6 million is expected to be generated in the U.S., according to industry sources. In addition, within four to five years, the brand plans to quadruple that number, with most growth coming from U.S. markets. The U.S. contributed 10 percent to the global total in 2011.
With products available at 100 points of sale globally, VMV expects to open an additional 20 points of sale in 2012, including two new stand-alone shops and eight department store locations in Asia. Ten back-wall displays within multibrand store locations in the Middle East are also planned. In the U.S., the company will focus on expanding its spa and doctors’ markets, and midway through next year, it will unveil a redesigned Web site. Plans also call for increased communication with doctors as well as some selective advertising to boost brand awareness, as well as the addition of 10 more U.S. stores in the next three to four years.
Not only has VMV been expanding, but the demand for hypoallergenic products has been growing. CC Verallo-Rowell, the U.S. brand director and daughter of the founder, quoted the American Academy of Dermatology as saying that, during the Seventies and Eighties, 10 allergens were commonly cited. Now that figure is 76.
“More than one in five Americans (22 percent of the population) react to ingredients commonly found in cosmetics and skin care products,” said Dr. Verallo-Rowell, who added that this is a “huge increase” compared to 5.4 percent of the population with skin reactions less than 30 years ago.
Karen Grant, vice president and senior global industry analyst for The NPD Group, agreed.
“A few years ago, the number-one reason a woman bought a product was because it was right for her. Today, if she perceives the product as safe for her skin, it is tied for number one.”
She said when “you think hypoallergenic, you think it is a small group. In fact, more than half of skin care users think they need it. People who use hypoallergenic products are more loyal and are willing to spend more.”
Verallo-Rowell said Grant’s last point has been proven constantly this year in the Broadway store. She said the conversion rate of shoppers to buyers is 40 to 50 percent, compared with the more common industry rate of 30 to 40 percent. “We are seeing a lot of repeat customers,” she said, adding that the knowledge level of New York consumers is impressive.
Noting that the shop markets everything from hypoallergenic diaper rash ointments to dermabrasion skin care products, Verallo-Rowell noted that a few of the shop’s top sellers are eye serum and sunscreen.
A full range of color cosmetics, including a 92-shade lipstick line — half of which is free of dyes — was added to the VMV lineup in the spring and accounts for 40 percent of the business being done at VMV’s Broadway space. The remaining 60 percent of the business is in skin care. Rowell added that there has been talk about doing a hypoallergenic fragrance.
In March, VMV will introduce products designed to tackle redness, rosacea-related acne and skin conditions: Essence Skin-Saving Clark Wash, $28; Red Better Flare-Up Balm, $50; Red Better Spot Corrector, $25, and Skin-the-Bluff Concealer, $20. Each product contains soothing ingredients like antioxidants, anti-inflammatories and USDA-certified organic virgin coconut oil.
“It’s not about one ingredient as much as it is in formulation,” said Grant, referring to the very targeted hypoallergenics category. “Offering sensitive lines should be a part of the basic elements of skin care.”
Each VMV product is rated according to an exclusive VH-Rating System, which was created in 1988 by Dr. Verallo-Rowell. Billed as the only validated hypoallergenic rating system in existence, it ranks according to how many allergens are not present within a particular product. As with an SPF rating, the higher the VH number, the more hypoallergenic the formula. VMV also periodically reformulates its products, consistent with updated allergen listings from the North American Contact Dermatitis Group and the European Surveillance System on Contact Allergies.
“There is a lot of opportunity in hypoallergenic skin care,” said Grant. “The key demographic for growth is in younger demographics and ethnic groups, where [sensitivity] is a bigger concern.”
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