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UNILEVER ENTERS HAIR COLOR MIX

SAN DIEGO -- Color them happy. Retailers were all aglow at this year's National Association of Chain Drug Stores' annual Marketplace Conference, not because of the sunshine, but because of reports that the vibrant hair color category is about to get...

SAN DIEGO — Color them happy. Retailers were all aglow at this year’s National Association of Chain Drug Stores’ annual Marketplace Conference, not because of the sunshine, but because of reports that the vibrant hair color category is about to get a new shot of pigment in the form of new players. It’s a move that could push smaller companies like Revlon further down the ranks of the $1.1 billion category.

This story first appeared in the June 21, 2002 issue of WWD.  Subscribe Today.

Among the biggest news to emerge from the four-day conference, held here in the Marketplace Convention Center June 15-18, is Unilever’s U.S. entry into hair color. Unilever declined to comment on its plans, but retailers, who were told to expect product launch details in September, speculated that an entry by the hair care giant will enhance the category, bring in some much needed attention and also make some weaker-performing brands vulnerable. “The category has had Revlon as a hanger-on for the past couple of years,” said one retailer. “With Unilever entering the category, it will be a threat to some of their slower performing brands, such as ColorSilk.”

Currently, Unilever, the Anglo-Dutch consumer products giant, sells permanent hair color under the SunSilk brand in Thailand, India and Vietnam and under the Sedal brand in Brazil, Argentina and Uruguay.

The crux of the hair color business belongs to L’Oreal and Procter & Gamble, each of which commands a 42.7 and 34.9 percent dollar share, respectively. Revlon has held on to a 6 percent dollar share of the category; ColorSilk is its strongest-performing brand,with only a 2.9 percent dollar share, according to data from Information Resources Inc. Revlon ranks fifth in overall hair color manufacturers, behind L’Oreal, P&G, Combe, and Garnier. According to IRI data, the category could use a bit more attention, and especially competition. Hair color sales increased 2.1 percent last year in food, drug and mass chains, excluding Wal-Mart, up from 1.4 percent the year before. But even after six years of category growth and opportunities now stemming from hair color brands that target men and teens, technological innovations have remained dormant, even though the segment remains one of the most promising in beauty. After peaking with double-digit growth in 1998 and 1999, last year’s new brand introductions failed to maintain the same level of momentum. Retailers, however, pointed out that this stands to change, too, and not just due to a Unilever introduction.

At the show, L’Oreal revealed to retailers its plans to launch a double-process hair color kit later this year. As the first manufacturer to bring the pricy and technical salon treatment to mass, L’Oreal’s new item could command as much as $25 per box, which one retailer said may be marketed under L’Oreal’s Preference brand. L’Oreal declined to comment on the new product. A double-process treatment, one that incorporates highlighting after a traditional hair coloring process, would provide an alternative to a $250 treatment now done in salons.

Other innovations in hair color, retailers said, include a highlighting stockkeeping unit by Revlon “with new delivery system technology,” as well as a possible hair color entry from Wella later in the year. Wella currently makes and markets the PerfectTone hair color brand, one that targets the Hispanic market with distribution in California, Texas and Florida.

While a shift in hair color is poised to stir excitement this fall, NACDS’ new Marketplace format, which bowed on Saturday, seemed to renew the faith of those manufacturers who often complain that retailers seldom visit their booth. The new format featured eight-minute one-on-one sessions between vendors and retailers. A key factor that attracted more than 50 retailers to these Saturday sessions was that each chain’s buyer was reimbursed for travel expenses.

The change in format was apparently motivated by the fact that Marketplace, one of most successful trade shows in the industry, has lost some attendance recently to competing shows.

Most participants, both manufacturers and retailers, gave the one-on-one sessions high marks. “We had three people who averaged 40 appointments each,” said Mark Griffin, this year’s NACDS chairman and president of Lewis Drugs Inc.

However, there are a few kinks to work out. Specifically, since the schedule was random, some suppliers met with the wrong buyers. For example, one cosmetics buyer was pitched toothpaste. Nonetheless, NACDS is expected to continue the program in the future.

Aside from hair color, among the biggest news in beauty are new products in the spa and ethnic categories, and an ongoing invasion of youth merchandise.

Although the teen market has been discussed for the past eight years, a teen buzz continued at this year’s show thanks to a crew of teen trendspotters, supplied by Teen People magazine, who “shopped” the show for their hot trend product picks. Manufacturers and retailers also learned from the group that to get their attention, don’t try too hard. Teens want to be marketed to, but with quality products that deliver on promises. “Cool and hip aren’t really words we use,” said Chris Heinz, a teen trendspotter participant.

Caboodles continues to develop into a primary mass brand for tweens and teens. “Caboodles does really well for us. I liked the trifold container,” said Medic Drug’s Sally Yanke of an item filled with glosses and shadows within what appears to be a CD case. In boxes, Caboodles featured funky denim and “floating holographic designs.” In cosmetics, Caboodles unleashed an array of never-before-seen styles, from mini T-shirt-shaped lip gloss holders to glitter liquid eyeliner. So impressed were the teen trendspotters with Caboodles, they selected several Caboodles items as their hot picks of the show. In other company news, Caboodles is creating teen panels to assist retailers with their teen departments. “Retailers are finally interested in how to really understand teens,” said Gary Schofield, president of Caboodles Cosmetics.

Noticeably absent from Marketplace were two other youth players — Bonne Bell and Jane.

One manufacturer who pays close attention to teens is Larry Aronson, president of North American sales at Revlon. A teen panelist selected Almay Lip Vitality with Kinetin as one of her picks. “The teens said we don’t target Almay to them and maybe we should,” Aronson added. Perhaps he should also listen to the female pleas on the panels – “give us good-looking men in ads,” they said.

The teen spotters also liked Crest WhiteStrips, Endless Summer self tanner, Cover Girl Lip Slicks and Hot Head color combs.

Some other tween lines garnered retailer attention, including Candy Corner from Lotta Luv, which caught the eye of buyers from Rite Aid and Brooks. Lotta Luv has the licensing and marketing rights to many popular candy brands that are then linked to color cosmetics. Tweens and teens will also be tempted from new offerings from Markwins and Sassy Doo. Markwins, which has a hold on the makeup kit business, is branching into pegged cosmetics with a three-pronged approach covering all ages. Prices will be $2.49 across the board. Worldwide Cosmetics is also busy with products for a young target audience. One item demonstrated by Michael Eckert was Body Licker — an edible glitter. Under its Hotsie Totsie logo, the company is getting additional footage in several chains.

Also speaking to the tween market was CRL Marketing, whose projects include Jesse’s Girl, a brand now being tweaked for a slightly older audience. At the meeting, the company unveiled Yakity Yak, another tween concept. Jesse Lawrence, president of CRL, displayed the brand’s new multicolored body glitters. Another brand on the books for this summer is Key West Cosmetics, which promises a tropical feel, he said. Medic Drug’s Yanke voiced her approval for CRL’s lineup. “I was very impressed with what they are doing.”

New Dana has licensed the rights for Fetish cosmetics to Designs by Skaffles, which is creating a new look and marketing plan for the teen brand that has struggled to find a voice. Singer Christina Aguilera had signed on to develop and promote Fetish two years ago, but the effort was dissolved earlier this year. Bunky Mar, formerly marketing and design manager at Markwins, has joined Skaffles as director of cosmetics, heading up the project. The new Fetish is expected to hit stores by August, said Steven Sweky, Skaffles vice president.

Kathy Steirly, vice president of beauty merchandising for Eckerd, said she was intrigued with the number of spa items, including the Sweet Spa and Spa Solutions products.

Also in spa is a hand, nail and foot line under the Frills brand from New Dana Perfumes. The brand is built around a fictional character named Trina, who is a world traveler and brings back beauty tips from the places she visits, such as salt scrubs from the Dead Sea and fashion sensibilities from Paris. “Frills can be lots of things,” said Celeste Ward, vice president of sales for New Dana, suggesting that the brand could have legs beyond its first 24 sku’s.

Cala Products, now in select Longs and Safeway stores, is hoping to build its customer base with its spa items, too. Its collection includes a range of manicure and pedicure kits, crystal tattoos and cosmetic sponges.

Hair care also made a mark at Marketplace. Unilever is expanding its highly successful Dove brand into shampoo and conditioner. Goody Inc. is changing packaging for its hair accessories to simple, plain cards that better reflect the Goody brand. Hot Heads, the temporary hair color company that has patented rights to the comb delivery system method, has signed on Kristi Furhmann, MTV’s key hair and makeup stylist, to represent its current line and its new permanent hair color launch. P&G was proud to announce its partnership with TV celebrity Kelly Ripa to promote the Pantene brand in unscripted TV commercials, which began airing last week. Tressallure made its second visit to Marketplace memorable to show attendees by weaving the company’s Revlon hair extensions into the heads of leather-clad models, who walked the show floor. And White Rain, which recently purchased the licensing and marketing rights to Te Tao, announced that it is in the midst of completing the sale of its parent’s private label business. Monies from the sale will help fund Te Tao’s marketing plans and could fuel further acquisitions.

A wave of interest in serving a more diverse audience was played out with new products for women of color. Posner, which was sold by L’Oreal to Carol Cosmetics earlier this year, has gotten a fresh slogan: “A Legacy of Beauty for Women of Color.” An advisory board is being put together to help develop products for the 40-year-old brand, as well as promotional and community events. New products and in-store shade charts will be added to help women select the right products.

Jordana was showing off its redesigned version of Milani, an ethnic cosmetics line. Marti Bentley of Duane Reade gave it her approval. “Milani looks terrific,” she said.

Pro-Line’s TCB also is trying to keep its brand vibrant with new packaging. Bottles have been replaced by tubes, and product names now reflect a woman on the go, such as Energizing Shampoo, R&R Revive and Restore Deep Conditioner, and 24-7 Around the Clock Conditioning Hairdress. Pat Bailey, vice president of marketing for Pro-Line, credits the company’s executive vice president, Renee Cottrell Brown, and director of marketing, Donn Monroe, with the brand’s new look.

In the ethnic skin care arena, actress and choreographer Debbie Allen made personal appearances for her new skin care collection. Allen’s line is off to a promising start with placement in key Wal-Mart markets.

There was also a lot of attention on the Hispanic market. At least two first-time exhibitors showed fragrances targeting the growing demographic. Mileah, a French company, entered the U.S. one-and-a-half years ago with distribution in select Walgreens and Rite Aid stores and now wants to expand. The scents, including Red Pearl, Sawsan, Inertia and Doriane, are all produced in France and carry price tags between $12 and $18.

MAG Trading Corp. also was promoting scents for the Hispanic market. Its biggest seller, Marine, is already in Wal-Mart stores.

Items that can differentiate their stores from the competition captivated retailers, such as buyer Marti Bentley at Duane Reade. For Bentley, one line has been brushes from Swissco. Ely Tawil, vice president of sales for Swissco, has firsthand knowledge of what is unique at retail. He formerly was with McKay Drug in Manhattan. “These are different items that can make a store stand out to customers,” he said of the collection ranging from glass nail files to upscale mirrors.

Bentley also earmarked Paris Presents, Virtual Makeover, Spa Solutions and a promotion from Del Laboratories’ NYC that will bow in September. The promotion is called “I Love NYC New York Color” and features pressed powders with laser-printed New York City icons like the Statue of Liberty and the NYPD and FDNY logos. For use of the NYPD and FDNY symbols, Del agreed to donate a portion of the proceeds from the sales to respective city charities. Bentley said Duane Reade has already snapped up a large order of the items. At the same time, under another New York City theme, NYC will issue lip glosses and eye shadows in mini CD cases. The plastic package is covered with a paper photograph of a city scene. Category leader Del Laboratories said in August that it would introduce a new polish called Nail Prisms, described as an item with a “rainbow in every bottle.” At $5.95 apiece, it will be Del’s highest-priced polish ever. To start, there are eight shades including pearl. Del’s nail color business has been on the fast track and now claims 28 percent of the market, according to Bill McMenemy, executive viced president of marketing. The higher price could help produce bigger sales totals for nail color, similar to the impact Del’s Chrome had last year.

There also was an exhibit for Chelly Cosmetics of Miami, which markets a line of nail polishes and lipsticks. Despite the general slowdown of the nail polish market, Chelly’s sales have continued to grow, said the brand’s marketing director Rebeca Granado.

And Physicians Formula continued to churn out product news. First-quarter product plans include a light-reflective concealer called Wanderful Wand; Pearls of Perfection Blush, which features larger pearls with richer color than Pearls of Perfection face powders. There is also Virtual Face Potion, designed to deliver an allover glow to skin. It can be used alone or mixed with foundation and comes with a sponge applicator. Turn-It-Loose, a multicolor loose powder, is another new item. It comes in a grater-like package. There is also Lash-in-a-Tube mascara, which features a cream formula for a full, false eyelash look. A major launch for Physicians Formula picks up from the success of its RetroGlow face powder that looks like a cameo. “It was a big success, so we will launch an entire line on that concept,” said Ingrid Jackel, vice president of marketing. The line will resurrect the brand’s logo from when it launched in 1937, and will feature retro packaging of antique silver and bowed boxes.

Meanwhile, executives at AM Cosmetics expect to announce a new owner for its portfolio of brands, which include Wet ‘n Wild, Tropez and Black Radiance, within the next couple of weeks. The expected buyer is a financial group, not another cosmetics manufacturer as originally rumored. And Michael Tedesco, formerly of Fifth Avenue Cosmetics, is now president of the startup Cosmetics Manufacturing Group. CMG packages private label, but also is unveiling Nyla (meaning New York Los Angeles), a cosmetics line for tweens. He said the brand would be an “interactive cosmetics concept” with unique packaging and products “that teens want at a value price.” At Marketplace, he unveiled Floating Lipstick – — two lipstick bullets, a day shade and an evening shade — surrounded in a clear plastic block with a hinge that folds back into two parts. The color is applied with a brush. Nyla also showed a holographic lip gloss.

Meanwhile, retailers agreed that the bath category is languishing and in need of something racier. Coming in to help them out are new products by Sarah Michaels. Ken Kaplan, a consultant for the brand, said the new products, which are fashion-driven and have a sassy-looking woman as their icon, will begin to ship in September. The new products will offer five sku’s under five different flavors, as well as an array of gift sets. Sarah Michaels also is relaunching the Freeman line of bath products, specifically Barefoot moisturizers, which follow an island holiday theme.

International players also made a mark at the show. From China comes AquaFeel, a broad collection of bath-and-body and cosmetics. As noted by Sandy Chow, president, “with the acceptance of China into the WTO [World Trade Organization], the U.S. entered China, so it seemed right for China to enter the U.S.” She said company representatives have been in the U.S. since December studying the beauty market.

Other international brands eyeing the U.S. included IsaDora, a 600-sku collection from Sweden. According to its marketing materials, IsaDora, since its launch in 1983 has achieved a 25 percent market share in Scandinavia. Its broad range includes cosmetics, skin care, fragrance, sun care, hair care and body care.

While there were many new faces at NACDS, there was also an old familiar industry veteran. Joe DeKama, known for his days at Faberge and owning a variety of beauty firms, is now hawking his own pasta sauce called Joey Pots and Pans. He even cooked it up for some friends at a San Diego restaurant. DeKama also is helping market some older brands he has acquired, such as Rise shaving foam and Vibrance shampoo.

Also seen among the manufacturer aisles was Ronald Ziegler, NACDS’ former president for 12 years.