By and and and and  on February 22, 2008

Cosmetics companies have always prided themselves on being in touch with their consumers, but speaking to the consuming public with a unified industry voice has always been a more elusive matter.

The Personal Care Products Council, formerly known as the Cosmetic, Toiletry and Fragrance Association, aims to change that.

And just in time. The recast organization faces a thicket of sometimes thorny issues as it heads into its annual meeting Tuesday in Boca Raton, Fla. With a revved-up agenda designed to complement its souped-up name, the Council, as the 113-year-old organization has referred to itself since November, anticipates exploring retail consolidation, consumer ingredient concerns — often fueled by criticism from consumer watchdog groups — and supply chain integrity with keynote speakers and breakout sessions.

Executives from the organization, and its 600-plus member companies — including the 50 board member companies — discussed this week the hot-button issues in advance of the meeting.

Council chairman Marc Pritchard said the organization's focus has evolved to include not just legislative matters but also consumer concerns. This will be a strong focal point next week, he said.

"Our past was about focusing on ensuring there wasn't legislation that would prevent us from being able to innovate [from a product standpoint]," said Pritchard. "We still do that, but now we focus on reaching out to consumers to make sure that they have what they need in terms of product safety [information].

"We talked last year about a legislative focus, an activist focus and the consumer demanding more information about our products," added Pritchard, who is also president of strategy, productivity and growth at Procter & Gamble Co. Consumer demand for product information "was the sea change that caused us to shift our focus from inward to outward."

Pamela Bailey, president and chief executive officer of the Council, also spoke of upping the quantity of information the industry makes available to consumers.

"In addition to product price and efficacy information, consumers more and more want ingredient safety and standards in manufacturing information," said Bailey. "That has been our work for the member companies. With these programs in place, we can focus on how to maximize communication directly with consumers."Dan Brestle, chief operating officer of the Estée Lauder Cos. Inc. and a member of the Council's board, noted that issues to be discussed include consumer concerns about the chemicals they are placing on their bodies with beauty products; legislation affecting member companies, including the REACH law (Registration, Evaluation and Authorization of Chemicals); increased funding for the Food and Drug Administration, and the integrity of manufacturers' supply chains abroad. (For more on REACH, see sidebar on opposite page.)

"The organization has become considerably more consumer focused," said Brestle. "We are living in an age of 24-7 information, and the information consumers are getting isn't always factual. The direction of the agency has been to get out in front of that. We've spent two years creating a very intensive Web site which gives consumers in-depth information."

The site, personalcarecouncil.org, gives detailed information, test findings and regulatory opinions on 1,500 ingredients, and offers links to organizations such as the FDA and the National Institutes of Health, which provide information on product safety laws and safety test data and conclusions.

Brestle also noted that the Council's Consumer Commitment Code, instituted last year, was signed by all the companies on the board and a vast majority of the membership — equaling 93 percent of the U.S. sales of the organization's membership.

The code advocates the use of best practices that go "above and beyond" what is legally required, and even includes divulging ingredient safety information to the FDA upon request.

Brestle credited Bailey with leading the charge with the new direction. "She has really gotten out in front of it," he said.

Scott Beattie, chairman and ceo of Elizabeth Arden Inc. and a PCPC board member, noted that greater global collaboration will be an important theme at this meeting. "All of the heads of the international beauty organizations, such as COLIPA [the European Cosmetic, Toiletry and Perfumery Association], will be in Boca Raton, where we will discuss how we can better coordinate our efforts worldwide," he said. "Companies are becoming a lot more global in how they source products and it is important to strategize the priorities of all into a seamless organization which works together, particularly regarding issues like product testing and manufacturing standards — the things that we have identified in our Consumer Commitment Code." Beattie credited Jean-Paul Agon, ceo of L'Oréal worldwide, with being a vocal advocate for this strategy in Europe, and Pritchard and Bailey with doing the same domestically.Beattie also added that the organization's increased focus on consumers is key to its relevance going forward. "We have had a tremendous track record as a self-regulating industry —we've had immense innovation and very good safety records, and consumers trust us as an industry. We want to be able to continue to build on that confidence with initiatives such as the new Web site."

Virginia Drosos, president of Global Personal Beauty at P&G Beauty, underscored the company's long-term focus on serving popular needs and applauded the organization's name change and new Web site as providing more of a consumer focus and increased transparency.

Neil Katz, ceo and chairman of Parlux Fragrances, said, "If we can get consumers to see the organization as a watchdog for them," then member companies also might be viewed as safety advocates.

During the conference, Drosos said she will be talking up her new product strategy in meetings with magazine editors.

"The conference will provide a great opportunity to discuss the market challenges we all have," said Art Spiro, president of Liz Claiborne Cosmetics, noting that Macy's Inc. ceo Terry Lundgren's keynote address will be of particular interest. "I think everyone is looking at the latest consolidations in the department store area of distribution, and how it will affect our businesses," he said.

"I'm also looking forward to discussing regulatory issues that affect cosmetics and fragrances, including those that come up with California, which is habitually the strongest state in terms of challenges."

Heidi Manheimer, ceo of Shiseido Cosmetics (America) Ltd. and a Council board member, said the firm will take advantage of opportunities next week to "strategize with different partners on synergies to help us better communicate with consumers [about their needs] on every level" — from the Web and advertising to product pamphlets.

She added that, because they have obtained extensive material from the "media and Internet, consumers have become more savvy."

"Our message will be the basics of Clarins," said Jonathan Zrihen, president and ceo of Clarins Group USA. "When [economic] times are a little bit tougher, and you seriously believe in what sets your brand apart from the competition, you reinforce that point of difference."For Clarins, it is the brand's botanical heritage, according to Zrihen. "Green is a trend, but 55 years ago, our founder believed in the power of the plant," he noted.

Zrihen also said he'd like to emphasize skin care as a whole, considering what he described as a tendency for the media to favor the makeup category.

Council board member Chris Elshaw, executive vice president and general manager for the U.S. region at Revlon Inc., said the firm has decided to forgo formal product presentations to beauty editors this year, choosing instead to focus its efforts on participating in the Council's board meeting.

"Marc Pritchard and Pam Bailey have set a more proactive approach for the Council," he said, noting that such a strategy is necessary to respond to more sophisticated consumers, breakthrough technologies that need explaining and the growing interest in green natural products.

He mentioned that the role of the Council's Cosmetic Ingredient Review, which independently assesses the safety of ingredients, underscores its priority of product safety. He commented that the spate of recent press questioning the safety of cosmetics, including the lead in lipsticks charge, is a signal that the Council needs to do a better job communicating with consumers. He indicated that the Council is on the right track.

"Alberto Culver will be introducing new beauty care innovations to answer consumer needs," said Brandy Ruff, director of Integrated Marketing Communications. "The St. Ives brand is focused on developing new ways to naturally illuminate skin's potential.

"We also have a robust pipeline on the facial and body care businesses which promises to deliver impressive technology innovations."

In terms of regulatory issues usually discussed at CTFA, Alberto-Culver's John Berschied, chief compliance officer, said, "REACH certainly has the greatest potential impact on business and free trade with the EU. The second issue is how to deal with the growing issue of sustainability in a way that produces a real positive impact on the environment."

"There should be an open forum to discuss the regulatory issues we all face and to strategize on how to ensure consumer education is handled properly and that consumers are protected from misinformation," said Jerry Vittoria, Firmenich's president of fragrances, North America.Michel Mane, president of Mane Americas, added, "It will be important to know how REACH is taken into account and how its far-reaching implications will affect our industry Stateside. Let's face it, our industry is primarily driven by consumer associations and by regulators primarily driven by the safety considerations." He added that he feels something that should be fixed is more collaboration and better teamwork between fragrance houses' regulatory bodies, such as Fragrance Materials Association, and the PCPC regulatory commission.

According to Christophe de Villeplee, vice president and regional manager of North America Fragrances at International Flavors & Fragrances, the company set up a global, regulatory-oriented team about four years ago.

"We see this as an opportunity for our perfumers to be more creative and look at new ways to create fragrance," he said. "It allows us to push the envelope and create new ingredients."

Some of the other issues oil houses are faced with today include increased costs of raw materials, the proliferation of launches and the balance between consumer demand for natural products that are eco-friendly and sustainable and the need for protection of natural sources.

In order to capitalize on growth opportunities, some houses, including IFF and Givaudan, are looking to better understand emerging and developing markets such as China, Latin America, India and Eastern Europe.

"It is integral to our position to understand these markets and consumer attitudes and usage in order to provide winning solutions to our global clients," said Cosimo Policastro, executive vice president of fine fragrances at Givaudan.

— With contributions from Michelle Edgar, Molly Prior and Andrea Nagel

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