It is perhaps a rare man who can admit to getting passionate about damaged hair. But Laurent Attal is not your average guy.
He wears the mantle of a more than century-old tradition of trailblazing scientific inquiry at L’Oréal, dating back to when a chemist, Eugene Schueller, invented a safe hair dye in 1907 and founded what is
now the largest beauty company in the world. In 1936, Schueller followed the hair coloring breakthrough with the invention of sunscreen.
Attal, L’Oréal’s executive vice president of research and innovation, follows in those deep footsteps. He leads a global army of 3,800 scientists and other technical experts in driving what chairman and chief executive officer Jean- Paul Agon calls “the generator of the innovation machine” at “the heart of the company.”
L’Oréal spends 3.5 percent of its net sales— approaching $1 billion based on 2012 results converted with an average exchange rate—on science and research and development, a dramatic increase from the 2.8 percent of sales in 2002. The company maintains that it spends the most on R&D—in terms of percentage of sales. In absolute terms of euros and dollars, “L’Oréal is one of the industry’s highest spenders as it views science as key to its innovation process,” according to a UBS research note. Underscoring the power of innovation, UBS notes that 15 to 18 percent of L’Oréal’s sales are generated by products launched within the last 12 months.
Clearly, the “hope in a jar” school of marketing hype of decades past is dead; the future will be fought in the lab.
As Agon says, Attal brought an unusual profile to the job when he was appointed in 2010. The research chief has the disciplined curiosity of a trained dermatologist, which he was, and the heart and drive of a P&L-honed marketing man. His double-barreled persona is fueled by an unmistakable passion for turning science into innovative products. Attal says he dreams of one day creating products that can be customized or personalized for consumers.
Another deep-seated desire is to come up with treatments that rival the results now reached by aesthetic procedures using needles, like Botox injections. He also thinks about a universe of products aimed at 75-year-old women.
During a rare interview in his office at L’Oréal headquarters in the Paris suburb of Clichy and while guiding a visitor through the seldom-seen inner sanctums of Advanced and Applied Research, Attal touches on a wide-ranging number of issues, often animating them with flashes of emotion. At one point during a lengthy discussion, he zeroes in on one of his numerous points.
“I like this damaged-hair story because, first of all, this is the number-one concern,” he says, the cadence of his voice quickening. “This is really the number-one hair problem everywhere, everywhere, everywhere; it’s at a parity with hair loss. In terms of opportunity, it’s the number-one opportunity.”
In January of 2010, Attal returned from New York, where he was the ceo of L’Oréal’s U.S. subsidiary, with a mandate from Agon to reorganize the R&D operation. The aim was to link the innovation department to the research operation in order to give scientists some guidance in where they should be headed.
Today, the R&D organization is headed by Advanced Research, which is responsible for researching basic science—how skin problems occur—and developing key active ingredients, whether on their own or in collaborations with other scientific organizations or suppliers. Once this is done, the molecules are handed to Applied Research, which creates the formulas incorporating the active ingredients. Sometimes the Applied staff creates formulations without new actives. Then the formulas are handed to the development department for the creation of products. The research pipeline can stretch out five or 10 years, Attal says, proudly noting that L’Oréal has accumulated 611 patents, making it the fourth-largest patent holder in France. The auto industry is first.
The innovation department, headed by Jacques Challes, chief innovation officer, consults frequently with Advanced and Applied Research, often at the beginning of the process. “We believe that innovation can come from everywhere—everywhere—and that is very important,” says Attal, touching on a favorite refrain. “We foster the constant interaction between marketing and research because we believe that the big ideas will come from these interactions. This interaction is the interaction between consumers and science. This [science] push and [consumer] pull model defines the big innovations of tomorrow because it’s based on consumer need, but also it will change consumer attitudes.”
He continues, “We felt that it was quite relevant to strengthen our marketing vision, our marketing tools, prospective tools to nourish Advanced and Applied Research because our objective is to always transform science into innovative product.”
The coupling of innovation with R&D goes to the heart of Agon’s strategic vision for L’Oréal. “What’s important is to identify from the very beginning what are the areas in which the scientists should work because if you don’t, [they] are very eager to explore all kinds of areas and the universe,” says Agon. “It’s very important to channel them in the beginning and say, ‘Okay, this is where we want you to research.’”
Secondly, he continues, “It is very important to have business people and marketing people from the very early stage close to the scientist to make sure that the first discovery that they make is going to be able to be transformed into innovations. Very often, the great idea is the combination of a great scientific mind and a great
marketing mind.” Thus far, the strategy is working. “The past two or three years have been the best
in the history of the company in terms of innovation products,” Agon says, ticking off Lancôme Visionnaire, Skin Perfection by L’Oréal Paris and Vichy Neogenic hair-loss treatment as examples.
Market analysts agree. Eva Quiroga, an analyst at UBS, believes there’s been an uptick in innovation at L’Oréal over the past three-and-a-half years. “What’s good about the setup is that there is a direct link between research and commercial, which creates a good balance between consumer pull and push [of science],” she said recently after taking a three-day tour of the labs. She notes that L’Oréal spends the most in percentage of sales, “and even in euro terms, they are pretty high up,” adding that the company’s strategy of increasing R&D spend moving forward is positive.
“It’s always a good idea to spend a bit more, as R&D is in their genes, and marketing can only go so far if the product is not right,” says Quiroga.
Karen Grant, vice president and global industry analyst at NPD Group, also notes a pickup in innovation in the last three years, citing the positioning of oil in L’Oréal Paris’ Age Perfect franchise, the development of Garnier and the Lancôme launches, Visionnaire and DreamTone Ultimate Dark Spot Corrector.
Victoria Gustafson, principal and team lead of strategic insights at IRI, says L’Oréal has “made significant strides,” in hair color and hair care.
Agon says that L’Oréal will again increase its support of R&D this year, and gives high marks to Attal. “Laurent has completely transformed, modernized and globalized in three years the R&D department that in a way even went beyond my wildest dreams.”
L’Oréal now has six R&D hubs, with France serving as the home of the Worldwide Center for Advanced Research. The five other hubs are in the U.S., Brazil, India, China and Japan. There are also 17 evaluation centers and 50 scientific departments all over the world.
Attal explains the theory behind globalizing technology. It’s not about emerging or developed markets. “The idea is to innovate locally, but for innovation that has a global reach,” he says.
Explaining further L’Oréal’s doctrine of universalization, Attal says, “It’s not just about respecting the differences of the Chinese, but to be inspired by the Chinese beauty routines, by the Chinese hair…to invent new technology for the rest of the world. This is much more ambitious than just adaptation.”
He says that L’Oréal has labs in China and India at least partly because both countires have long traditions of medical knowledge, which gives L’Oréal a starting point. “We start from the traditions and [then] from the observations, we go backward to the molecule,” he says. “This is very complementary.”
The globalized technologies are also adapted to satisfy regional needs. To illustrate the point, Attal turns to one of his favorite subjects—damaged hair—and its number-one market, Brazil. He lists the five key characteristics of damaged hair—split ends, roughness of feel, dry hair, fragile, brittle hair and dullness—which served as the inspiration for L’Oréal’s worldwide product, Total Repair 5. It launched in Brazil in 2009, utilizing the main ingredient Ceramide R, which was developed in 1994. “It was a huge success four years ago in Brazil,” Attal says. “So in 2011-2012, we rolled out the Total Repair 5 line and adapted the formula to all the local consumer needs and made it global. We are [currently] introducing it in the U.S. in the new line, Advanced Care with Total Repair 5 Extreme.”
He notes conditioners are popular with American women, but the resultant feel of the hair is also important to them. Hence a new formula was designed for the U.S. Back in Brazil, the L’Oréal team decided they wanted to incorporate the U.S. version, but it was too expensive. So they found a way to reduce the cost. Meanwhile, in China, which is largely a shampoo market and where hair damage is also a key concern, the Shanghai team took the Western technology and developed “a completely new technology for shampoo for damaged hair.” “This technology was taken up now by other countries,” Attal concludes. “We are in an ongoing process to make it global with local adaptations.”
Attal recalls making a home visit to a 27-year-old middle-class Brazilian woman— “but low-middle class”—last February. She had a beauty routine of seven products— all for hair. “She knows perfectly how a product works and she can immediately—just by the touch and the way it works—say, ‘This product is better than this one.’”
L’Oréal has always been an exponent of the primary role science plays in beauty marketing, and Agon sees it as the way the company will win in the future. He says he always tells investors that L’Oréal has the conviction: “Beauty is about technology, it’s about quality and if you are always at the top of quality and innovation, it goes through the best R&D and science. This is more than ever true.”
Damaged hair may present a huge opportunity, but Attal has his eye on the horizon. Asked to name a dream product he would like to create, the R&D chief responds by naming future frontiers. One revolves around the customization and personalization of products.
He references studies L’Oréal has completed that show old skin repairs itself more slowly than young skin, indicating that product formulas have to be adjusted. More puzzling—and a more opportune challenge—is why a product will work for some people and not others, even though their situations are similar. Attal says that ”it has also been proven that “some cosmetics ingredients in the same type of skin have different responses,” he says. “To get an additional level of performance, the individualization, the personalization, the customization of our product ingredients will take us to new heights and that’s a new level of performance.”
Asked how far off these customizable products of the future are, he replies, “We’re working on the path.”
Another dream product would “get closer to the performance of aesthetic procedures but remain in the cosmetics field and preserve a natural look,” he says in an apparent reference to procedures like Botox injections. “We have a research program on that challenge,” he says, adding that the work is being done “in full respect of cosmetics regulations.”
In the hair-care area, Attal’s goals turn more sweeping—“get rid of hair loss, get rid of hair graying. Find out the universal and long-lasting solution for hair damage all over the world. We have a lot to do on that. I have many, many dreams about that.”
Some of Attal’s “dreams” are well on their way to becoming reality. In a later interview at the Worldwide Advanced Research Center, which occupies a campus in the suburb of Aulnay, Isabel Marey-Semper, senior vice president of the division, explains that scientific teams are at work on how to personalize products for individuals with similar characteristics or groups (“clusterization”). “In terms of cosmetics, we are more and more evolving towards a personalized solution,” she says. “We are working on understanding the differences not only between ages and cities, but also between people.”
Attal is also extremely focused on the population growth of people over 75, noting that demographic figures project that by 2030, 385 million women and men will be over 75. That’s larger than the U.S. population, he points out, adding that 90 million will come from China, 80 million from Europe, 30 million from North America and 22 million from Japan. L’Oréal studied the product consumption of seniors and discovered that they use less hair color and color cosmetics, but “foundation is still high and skin care remains very substantial.” Attal says. “That is a clear signal we absolutely need to adapt our formula to seniors. This is very important to consider. It’s not going to be taken for granted. We need to work very, very hard on that.”
“A lot of people say China will become old before it becomes rich—per capita,” agrees Challes of the innovation department. “If we want to do our job for the next 10 years, we better look at the aging of the Chinese population, and the aging of the Chinese population is not the same as the aging of the European and the American population.”
In addition to the beauty habits pointed out by Attal, Challes says these “superseniors” tend to favor foundations, powders and blush “because it gives you a sort of lively look,” he says. They stop using mascara because it’s too tricky to apply. “Hair color—a lot give it up because it’s a chore. We could make easier-to-use hair color or lighter shades so that it’s not such a big contrast between your features and your hair,” he says. Moreover, perceptions may change by 2030. Just as today’s 55-year-olds think and behave as if they are still 30, Challes says the bet that marketers have is that the “75 of tomorrow won’t be the 75 of today.” His recipe for tomorrow: “Whiten, brighten eyes, intensify lashes, eyebrows, mistake-proof makeup, contrast of femininity, re-densify skin surface and so on.”
Challes, whose previous assignment was to run L’Oréal’s India subsidiary, heads a team of 25 innovation experts. “Our job is to be ahead of the game and also help the labs understand the consumer needs ahead.” He says someone on one of the research teams “told me that we are the headlights in the night for some researchers. Sometimes the researchers do not always know if there will be an outcome or any market for whatever they are inventing. We can help them because we know them, we talk in confidence. We are not going to put that on the market tomorrow morning, so they have the trust and the room in their head to think and discuss with us.”
He demonstrates one of the tools he uses, a chart for every global market showing the top 10 beauty opportunities of local consumers. It measures the level of inconvenience felt by consumers as they deal with beauty problems. “If a problem is very big,” he says, “you have a big potential if you can bring a solution.”
In China, for instance, Challes says the number-one problem is thinness of hair tive ingredients,” she says, adding that these proprietary chemicals are a fundamental and hair loss and in Brazil it’s damaged hair.
Pointing to another chart, he says, “Pointing to another chart, he says, “This is skin care in China, which everybody agrees in 10 years will be the largest single market in the world. Skin care in China might be bigger than the full beauty market of France or Germany.”
Challes says his team delves into studies, takes pictures of women in the field, visits them at home and then goes back to the lab and says to scientists, “What can we do for each of these?”
Challes is not alone in trying to stay a step ahead. Attal is already there. When asked what is the most important mark that he wants to imprint and leave on the organization, Attal replies that he would like to leave a worldwide, multipillar organization with a highly creative international team of scientists who will contribute to the task of attracting one billion new L’Oréal consumers, as Agon has decreed. “That means major breakthroughs,” he says, “major innovations in skin care and hair care. Innovation will be the key driver in this new adventure.”
While the acquisition of one billion new customers is the overall goal, the day-to-day work is more focused. “The real target is how to conquer the new middle class emerging everywhere, which is going to be a huge opportunity,” Attal says. “Wealthy people of tomorrow won’t be the wealthy people of today. The new Chinese are very wealthy people. In one generation, they don’t have the same kind of beauty aspiration. For example, the personalization could be much more important to them. All that is going to change, but the emerging middle class is a huge opportunity. When you look at L’Oréal just after the Second World War and the way they captured the middle class in Europe, it’s actually the same job that we have to do.”
Attal believes that conquest will depend upon scientific breakthroughs; the heart of that work beats at Advanced Research. The spark plugs of L’Oréal’s vast R&D engine are found in the search for proprietary active ingredients. Scientists at Advanced Research can spend five to 10 years developing such molecules because they can result in products for a succession of brands covering a lifespan that bridges decades. The development of these supermolecules, as expensive and time consuming as it is, offers L’Oréal the opportunity to cascade the active ingredients down through different brands, adopting different chemical signatures along the way. Usually, these ingredients are first used in the higher-priced premium and specialty brands and then work down. Attal ticks off a series of market-altering molecules, starting with Pro-Xylane that first appeared in Lancôme Absolu in 2006, then was worked into formulas for Vichy, SkinCeuticals and La Roche-Posay before ending up last year in Revitalift Laser X3 by L’Oréal Paris. It is an antiage weapon with “extraordinary efficacy” in treating wrinkles, promoting firmness and plumping up the skin, Attal says. Another major advance for the L’Oréal labs is LR 2412, which powers the formula of Lancôme’s 2011 antiage cream, Visionnaire. Attal asserts that it was “a great step forward and creates a new category in antiaging, which was the improvement of skin quality—even skin tone—reducing the pore size and smoothing the skin.”
At the Advanced Research Center in Aulnay, Maria Dalko, described as “the mother of LR 2412” by Marey-Semper, heads up the chemistry and process-development group. She and her team synthesized the molecule, using jasmonic acid as an inspiration. Jasmonic acid is a substance produced by many plants as a defense mechanism in reaction to stress. It was one of the occasions in which the synthesized molecule had to be stabilized by a formula created by the Applied Research team. The 800-member Advanced Research division is home to a string of landmark molecules: the Mexoryl sun filter, which screens UVA and UVB rays; Ceramide R, which strengthens hair and smooths the fiber; Stemoxydine, which promotes hair density based on L’Oréal’s research into growth cycles.
Marey-Semper discusses how the division goes about its work. First comes basic research, digging into how skin disorders, like wrinkles and dark spots, happen. “Our mission is to understand the scientific origins of cosmetic problems and concerns to better deal with them and to create and develop major and effective captive active ingredients,” she says, adding that these proprietary chemicals are a fundamental asset of the company. “The bottom line is the profit of L’Oréal,” she says. “When we are able to develop new ingredients with a major performance on skin, scalp, hair, arm pits etc., we know that these ingredients can last for decades.”
Among current projects, the teams are working on the biological impact of long UVA rays and studying non-covalent bond chemistry—supermolecules held together by loose attraction—that might figure in the development of materials requiring flexibility. Attal also hints that big things can be expected from L’Oréal’s acquisition of Clarisonic, the hot-selling skin-cleansing device. “Clarisonic brings a level of performance which has been unmatched today in cleansing,” he says. “Tomorrow it will bring unmatched benefits in skin care, too.”
Noting that L’Oréal also works with ingredient suppliers like Dupont, Dow Chemical and Symrise, Marey-Semper says Advanced Research also collaborates with world-class research institutes, such as MIT and the Shanghai Institute, to develop cutting-edge technology. But with all the energy expended on basic research and invention of ingredients, a great deal of attention is paid to evaluating the fruit of scientific labor. “We can invent many, many ingredients, Marey-Semper says. “Maria can invent hundreds of thousands of new molecules. The question is not to invent molecules, it’s to [find] the right one with the right performance.”
A tour through the evaluation labs suggests that the twin objectives are efficacy and safety. Attal, who quotes François Rabelais as saying “science without conscience is but the ruin of the soul,” proudly points out that L’Oréal began finding alternatives to animal testing 34 years ago. First, the company invented a way to create reconstructed epidermis for testing purposes in 1979, then it claims to have been the first to end animal testing on finished products in 1989. Since then, L’Oréal has continued to find alternative testing methods for ingredients. In order to guard against systemic toxicity, L’Oréal switched from alternative testing to a system of more rigorous predictive evaluation, complete with opening a predictive evaluation center in 2011. Even though the European Union implemented a ban against animal testing on March 13, China still requires testing. Attal acknowledges that China remains “a prescriber” of animal testing. “We are the ones to promote alternative methods in China,” he says. “We are making quite significant progress with them.”
Now, the cultivation of skin is a familiar practice at L’Oréal. José Cotovio, director of the predictive models and methods department, gave a demonstration in the Aulnay evaluation center on how a bit of human skin, discarded from plastic surgery, can be grown into sizable lab samples, complete with all of the necessary cellular components. In another lab, a multiphoton microscope penetrates the layers of skin and provides a 3-D image of the workings of cells, showing the different materials—collagen, elastin and keratins and so on. The machine reveals the natural dyes in the skin to show the working parts in color, so researchers can track the effect of molecules. For instance, researchers can monitor Pro-Xylane, which promotes the production of collagen by fiberblasts. Frederic Leroy, director of the physics department, points out the study of melanin, as another example, is important for the development of sun protection and whitening products. In another lab, tests measure the level of friction in hair to see how well conditioner is working.
Finally, eco-toxicity tests are run to detect the effects of a substance on the environment, such as freshwater microalgae.
As for general testing, L’Oréal makes thorough assessments on two levels—in vitro and in vivo—meaning laboratory examinations on skin cells and actual tryouts on human volunteers. Marey-Semper says she aims for a success rate of 50 percent over the course of the two levels of testing.
The Advanced Research teams are not the only ones making breakthroughs. Attal points out that the Applied Research squad came up with ODS, or Oil Delivery System. First launched in Inoa hair color by L’Oréal Professionnel in 2009, it allowed the formula designers to avoid using ammonia, therefore eliminating its smell. Oil is used in the emulsion to enhance the penetration of the hair colorant in the fiber. “So you get a large range of color,” Attal says, describing the formula “as a real game changer.”
Jean-Marc Ascione, worldwide hair research director, says that the technology was later used with Matrix and Redken.
In the nearby suburb of Saint-Ouen stands a gleaming new Worldwide Hair Research Center, which contains 25,000 square meters (269,097 square feet) of work space and cost about $135 million to build. It is Ascione’s domain. Applied Research makes formulas with the active ingredients developed either by Advanced Research or obtained from outside sources. “What we do is we investigate their full potential,” says Ascione, adding that ingredients could be very specific, like a hair dye, or very general like a surfactant or a polymer. “That’s the beauty of Applied Research, to investigate and see what could be the biggest potential of the new active ingredient coming from Advance Research.” Ascione notes that the goal is to create “winning formulas. We meet the specific goals of the needs of consumers, the needs of the market but also the needs of the brands.”
The final pillar in their research is evaluation, often done with highly sophisticated equipment. One machine analyzes a swatch of hair’s ability to move and swing. “We have known for years that the hair feel—softness and shine—are known characteristics. But the movement is something that we are trying to decode because it is very important,” Ascione says. “There is an expectation of a natural flow.
“When it’s stiff, when it’s limp and has no movement, it doesn’t have the same healthy-looking aspect. It doesn’t convey the right message,” he says, adding that stiffness is a characteristic of damaged hair. Another type of evaluation is by hairdressers, who are working in a laboratory salon with volunteers. It’s common to see women sitting in chairs while the two sides of their head are treated differently so an expert can analyze the difference. “These experts are able, just by touching hair or passing their fingers through it, to reliably characterize the performance of the product.”
As befits a gleaming new research building, the state of the art equipment includes a roomful of robotic machines that are designed to relieve scientists of mind-numbing repetitive tasks like weighing raw materials. One robot has already performed one million weighing operations for 130,000 formulas, and the mixing robot can make as many as 100 formulas a day. The third robot, which does evaluations, “simulates multiple hair routines, such as repeated washing of colored hair,” Ascione says.
“There is as much research on cosmetics products as in the space shuttle,” Attal says. “The fact that we are a pure player in the beauty industry is a fantastic advantage because of the complexity. The more you work on beauty topics and you [gain] expertise on aging, on damaged hair, on hair density—the stronger you will be in the future. Imagine the scientific data we have built up over 104 years.”
In remarking how diversified the company has become, Attal, who joined L’Oréal 28 years ago, recalls “the beauty world was much more, let’s say, homogeneous [then]. We were the same everywhere. Now we look at the world of beauty differently. We have very sophisticated studies to look at in terms of consumer insight, in terms of clinical research, biological research and so forth. This is really exciting.”