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How to Mine Growth — And Avoid the Pitfalls of Brand Building

When three emerging brands met three industry heavyweights, the resulting insights pointed both to the opportunities in beauty — and the challenges in building a business.

Innovation is the lifeblood of the beauty industry, but it’s not always easy.

To learn firsthand about both the challenges and opportunities in brand building at its earliest stages, WWD introduced a new speaking format at BeautyVest called Innovation Lab.

During the conference, the founders of three hot beauty brands — Enrico Frezza and Junior Scott Pence of Peace Out Skincare, Cyndi Ramirez-Fulton of Chillhouse and Jose Alvarez and Michael Pass of Abbott NYC — presented their brand concepts to three industry leaders representing the areas of retail, investor and strategic buyer.

The panel consisted of Carol Hamilton, group president of acquisitions at L’Oréal USA; Marita Burke, creative director of Mecca Brands in Australia, and Janet Gurwitch of Gurwitch Consulting Group. Together, their feedback revealed how each sector approaches new areas of growth for the industry.

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Peace Out is a San Francisco-based skin-care brand, whose problem-solution, patch-based skin-care line was inspired by Frezza’s lifelong fight with acne. The mission of the brand is to deliver one-step skin care, and in just a few years, Peace Out has reached $12 million in sales, a figure the brand expects to double by 2021 as it branches out into topical skin care and global distribution.

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“You’ve combined efficacy with lifestyle design,” said Hamilton, who praised the brand’s eye-catching graphics as particularly effective “when you’re trying to stand out on shelf and aren’t merchandised at eye level.”

Gurwitch’s opening question pertained to intellectual property and whether the brand owned patents on its unique technology; she noted a common mistake young entrepreneurs make is not paying close attention to this aspect of the business early on. For its part, Peace Out has patent pending on three of its four stock-keeping units.

In terms of future growth, Frezza and Pence said Peace Out has a robust pipeline of about 16 products ready to go, and is also building out international and e-commerce, which launched six months ago and has grown 2,000 percent.

Chillhouse, a wellness-oriented spa-café-store founded by Ramirez-Fulton, has also been growing quickly, too. Ramirez-Fulton is getting ready to expand from her current Lower East Side digs into a new flagship in Manhattan, set to open in early November. While the business features a strong content component called Chill Times, plus some branded merchandise and third-party beauty products, the primary focus is services, a direction Gurwitch approved, albeit noting that it’s not an easy business.

“My background is Drybar, a business that was built on doing one thing very well. That can be very complex.”

While Ramirez-Fulton has experimented with different services, she noted it’s the core ones for face, body and nail, that are driving the business. “We want to be trend-proof but also trend-forward,” she said. “The core of the business is perfecting the services we know our customers love.”

For its part, Abbott NYC is a clean fragrance brand founded by Alvarez and Pass, a former finance executive and lawyer, respectively. The idea behind the brand is to translate nature into a bottle of scent and to encourage users “to slow down and enjoy the present,” the founders said.

While the brand markets candles as well as fine fragrance, Gurwitch encouraged Alvarez and Pass to focus primarily on scent, noting that a singularity of focus has been a key to success for the fragrance brands she tracks.

In terms of positioning, Abbott’s three key pillars of the brands are clean ingredients, environmental sustainability and luxury, messages which the panel encouraged the founders to emphasize more in their packaging and communications.

“You want to own these pillars, not just promote them,” said Burke. “At retail, with fragrance in particular, consumers want to know about a brand’s philosophy. You’ve got the elements consumers are looking for — you should own them, rather than someone else.”

Hamilton agreed, noting that Abbott reflects many of the key trends driving beauty today, from “slow” beauty to clean ingredients. “Your timing is outstanding,” she said. “I’ve been seeing so many clean brands in makeup and skin care, and have been looking for fragrance. And I like that the brand is socially relevant.”

That being said, she, too, encouraged Alvarez and Pass to think about their branding more holistically, questioning, for example, why the brand name is featured on the scent’s labels. (Instead, it’s embossed on the side of the bottle.)

“It’s a choice not to have your name on the label,” she said, “but it could be important as you build your brand. It’s not just about the flavors — it’s about the ecosystem.”