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Physicians Formula Expands Products, Changes Packaging

The Markwins-owned brand is embarking on a total revamp for 2018.

Physicians Formula is celebrating its 80th year in business, but the brand is just now growing into a full-range category contender in the mass market.

The Markwins International Corp.-owned makeup brand — perhaps best known to consumers for its popular bronzing items, including a recent launch called Butter Bronzer — has experienced fits and starts since its acquisition by the Southern Calif.-based company in 2012.

The line lost prime real estate five years ago when Walgreens cut Physicians Formula during a stockkeeping-rationalization. Ingrid Jackel, who sat at the helm of the brand for years pre-acquisition, departed in 2015. And according to the Markwins executives today, the sku-count had become too cluttered and confusing for consumers due to an excessive amount of franchises and no cohesive visual strategy or brand messaging to tie them all together.

But that was the old Physicians Formula — in early 2018, Markwins is rolling out a total revamp that touches all aspects of the brand, from product innovation, packaging, marketing and distribution strategies, a streamlined sku-count and a brand messaging that harks back to Physicians Formula’s heritage as an arsenal of beauty essentials formulated with good-for-you ingredients for sensitive skin. Even Walgreens is back on board — the retailer is putting Physicians Formula into planograms in 1,500 of its “beauty differentiation doors.” The brand is also sold in retailers including Wal-Mart, Rite Aid, Ulta Beauty and Target. International expansion is on the front burner, especially Europe and Asia. And like other mass brands such as Revlon, the brand has seen success online with Amazon.

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“We will always be problem and solution,” said Eric Chen, chief executive officer and founder of Markwins Intl. “But we are expanding our foundation and lip. Physicians Formula never played in that area — we want to be mainstream, rather than niche.”

Over the years, Physicians Formula has focused its launches on trend-driven segments like color correcting, Argan oil-infused makeup and ath-leisure-inspired items designed for use at the gym. But what was missing was a full-fledged color range that incorporated all the key categories, like face and lip.

“2018 is our year to fill in the gaps that we have,” said Alice Chen, vice president of marketing at Physicians Formula. “We did launch a lot of great ancillary products, to varied success in complete transparency. But we know our consumer is a loyalist who is looking for a full [regimen]. She doesn’t have that Physicians lip or foundation, and she’s really looking for that healthy problem-solution alternative because we never offered it to her.”

The January rollout of new products is a range of 10 items covering the basic makeup and a few skin-care essentials — and each item was designed to be a hero product. “This will make us into a complete collection,” Chen said.

The biggest launches are in the categories Markwins felt Physicians was lacking in — face and lip. There’s the Healthy foundation, $14.95 — a lightweight formula with a doe-foot applicator, containing an antioxidant blend of vitamins A, C and E and boosted by an SPF 20. It also includes a proprietary brightening complex containing Chinese Wu Zhu Yu extract and hyaluronic acid for brightening, tone-evening and hydrating effects. Then there’s the Healthy Lip Velvet Liquid Lipstick, $7.95, which is infused with avocado oil, vitamins A and E, hyaluronic acid and antiaging peptides.

Other products — nothing exceeds $14.95 — include an illuminating primer, a mascara formulated with collagen, peptides, amino acids and provitamin B5 for lash nourishing and strengthening, an exfoliating lip polish made with organic rosehip and coconut oil plus shea butter and raw sugar and a fiber-infused brow treatment designed to condition and strengthen brows while imparting a long-lasting tint. And then there is the extension of the Butter Bronzer franchise, which — thanks to social media exposure — has helped attract younger shoppers to the brand. There are two new shades of the Butter Bronzer, and a new product called the Butter Highlighter, a cream-to-powder blend that comes in four shades.

Three skin-care items — the Rosé All Day oil-free serum, Charcoal Detox cleansing stick and Refreshmint cucumber and bamboo eye de-puffer are designed to help prep the skin for makeup. They also recall the brand’s skin-care-based heritage, a legacy it is leaning into in order to attract today’s ingredient-wise Millennial consumer — Physicians Formula was founded in 1937 by a Los Angeles allergist whose wife had sensitive skin.

The products have always been hypoallergenic, fragrance-free and dermatologist-tested, but the brand is marketing this aspect of Physicians Formula in a much bigger way come 2018 with a new advisory board consisting of a dermatologist, allergist and plastic surgeon. Going forward, the doctors will serve as brand ambassadors and give input into new products.

Rolling out on the packaging front are silver, “clinical-looking” outer packs emblazoned with the Physicians Formula logo. Alice Chen said consumer research revealed the patchwork of designs found on the brand’s existing franchises — including bows, lace and a menagerie of colors and pattern — didn’t connect consumers to the Physicians Formula brand. “People loved our products, but didn’t always know they were Physicians Formula,” she said. The new packaging will serve to create a cohesive visual look for the brand on shelf.

Chen noted there are 16 shades each of the foundation and lip in the new collection — 12 foundations and 13 lip will be in stores, the rest online — what she calls a good “first start.”

“We are well aware of our lack of shade range and shade breaks in our assortment,” she acknowledged. “Our 2018 collection is really going to address that and start introducing shade breaks and becoming more inclusive of a much broader demographic. That’s a huge strategy going forward.”

She’d like to see that stretch beyond 10 to 15 hues under the warm, cool and neutral banners in the future, but realizing space is finite, online could be tapped to offer full assortments.

Looking ahead to 2018 and beyond, Chen noted that Physicians Formula is fully prepared to diversify its distribution strategy. Like other brands in the mass sector, it is experiencing lagging sales in the drugstore channel due to slowing foot traffic in brick-and-mortar retail. For Physicians Formula, some segments are soft, dragging down overall sales 2.1 percent for the 52-week period ended Oct. 8 in multiunit doors to $135 million. But that does not account for all of the brand’s sales such as dollars generated at Ulta Beauty, Amazon, or its own e-commerce web site. There were dramatic gains in categories such as bronzers where its Butter Bronzer racked up gains of 100 percent for the most recent period tracked by IRI.

The online channel is of increasing focus for Markwins. “We’re awfully strong on Amazon,” said Eric Chen. “We’re building [out] our own site and putting a lot of effort into it — it [could be] on of Markwins’ biggest growth drivers.”

Significant funds are being allocated to marketing, especially digital to hit beauty enthusiasts, especially as an avenue to show off the new goods.

But retail is still a priority for Physicians Formula, and the brand is busy keeping its retail partners — and consumers — satisfied with exclusive offers, promotions and more educational materials on shelf. “If we’re not doing that, it is just as easy to sit in your pajamas and order online,” said Bill George, president of Markwins Intl.

Markwins declined to talk numbers, but George asserted that the Physicians revamp will have a significant effect on sales. “We’ve been through a transition,” George said of the path to rebuild the brand. “The first half numbers reflect upward momentum leading into what is going to be a pretty big conversion.”

Another competitive edge at Physicians Formula, said George, is the nimbleness it has to launch new items thanks to its tight-knit team of decision makers. That’s crucial in the current trend-driven beauty category where mass is playing catchup to specialty and retailers want breakthroughs immediately. This year, the company accelerated efforts to bring product development closer to home with laboratories in Southern California — a vertically integrated system that enables Markwins to compete at the speed of a small brand — say, E.l.f. or Morphe — rather than the mid-size company that it is.

Recent industry data shows the company’s overall beauty sales growing two-and-a-half times compared to the rest of the mass beauty industry. And company executives say the Physicians Formula revamp will keep positive momentum going. “We’re the little engine that could,” George said.