Unilever does not seem to be looking to get into the color cosmetics or fragrances businesses, but the company seems to see men’s skin care as an opportunity.
Unilever North America president Kees Kruythoff said fragrance lacks synergy with the rest of the Unilever portfolio, in a discussion at a Cosmetic Executive Women event in New York with Tamara Rogers, executive vice president of personal care for the U.S., on March 29.
“We used to be in Elizabeth Arden and the Calvin Klein business world, which is obviously fragrances, and the synergies with fragrance with the rest of the portfolio is absolutely close to zero,” Kruythoff said. “What you now see what we are doing in terms of buying Dermalogica and Murad and Ren and Kate Sommerville, it’s all about prestige hair and skin care as being the focus, especially skin care,” he said. “This is where we say there is a real synergy with the business in terms of capability in terms of trends.”
He also acknowledged that Unilever’s entry into prestige skin care via acquisitions isn’t likely to be echoed in color cosmetics. “I think never say never, or never say ever,” Kruythoff said. “At this moment, what we’ve said is…we want to make sure that we are driving our business…especially our hair care, our skin care and our current portfolio.”
One of Unilever’s tactics to drive those newly acquired companies is to leave them alone. Those prestige skin-care companies are run completely separately from the rest of Unilever, according to Kruythoff.
“They’re successful businesses and they know what they’re doing, and we’re best keeping them running their space,” said Rogers. “There’s lots we can learn, and one of the first things we learned was we could do things quite a bit faster. We’re a bit slow.”
“As the Unilever executive team, obviously we are responsible for the global business…but as head of North America, I have absolutely zero, nothing to do with it, because we want to keep it completely separate,” said Kruythoff. “We want to keep it in a way so that we don’t contaminate it.”
The overlap between the new prestige skin-care brands and the rest of Unilever’s core personal-care portfolio is that all of the lines started with a purpose, Rogers said. Vaseline started for healing cuts and Dove started as soap, for example.
Other core Unilever brands, once they’ve established their core products, have since “premiumized” their offerings.
“From a stronger core, you can then innovate and then premiumize the next generation of products,” Kruythoff said. Suave, for example, now makes Suave Gold — a more expensive hair-care line inspired by salon brands. It “takes all the benefits that some of the salon brands have and brings it to more women so they can enjoy those benefits at a great price,” Rogers said.
Unilever is also upping its deodorant offerings with dry sprays, which cost more. “Consumers are really prepared to pay more for something that costs more like that,” Rogers said. And while there can be some sales cannibalization of other deodorants, overall she classifies the sprays as a “growth engine.”
Looking forward, Unilever may consider adding some more skin care or men’s products, Kruythoff insinuated. “If you go back into skin care in Asia, especially the development there of men’s is super exciting,” he said. “If you look at what you see here in the U.S., we actually are behind in terms of total male grooming and skin care, so there’s something there where we see a clear opportunity to grow into.”