INTERCOS ITALIA STAYING BUSY AS COMPETITION INTENSIFIES
Byline: Amy B. Barone
MILAN — As the race to introduce technologically advanced cosmetics heats up, Intercos Italia SpA intends to remain a frontrunner.
The 25-year-old company, a manufacturer for what it says are some of the world’s leading beauty companies, is trying to solidify its position with a steady stream of introductions and an expanding global presence.
The strategy seems to be working. In 1996, Intercos’s sales rose 30 percent, to $93 million (150 billion lire). Dario Ferrari, chairman and president of Intercos, is projecting a 10 percent increase in sales for 1997.
After a slew of launches in 1996, the firm will introduce a complete range of cosmetics aimed at the ethnic market in April at the Cosmoprof beauty fair in Bologna.
The firm, which is based in Agrate Brianza, outside of Milan, currently operates production and marketing facilities in six foreign markets — France, England, Germany, Japan, the U.S. and Switzerland — and is eyeing South America, the Far East and Eastern Europe as regions with strong growth potential.
In December, Intercos inked a deal with CEI of Ridgefield, N.J., for the production of powders, lipstick and emulsions at the U.S. company’s headquarters. CEI produces cosmetics, toiletries, skin care and fragrances.
According to Ferrari, “We are in talks with a potential partner in Argentina and hope to establish a joint venture in the Hong Kong region in the near future, although Shanghai would be the ideal location for us in the Far East.”
The company also considers Eastern Europe and the former states of the Soviet Union priority markets, although it has no immediate plans to locate operations there.
On the home front, Intercos established a skin care production facility at its headquarters, where construction continues on a 9000-square-meter edifice to house new offices and laboratories.
The new skin care plant was established to realize more cost-effective production, although a skin care facility, Centre Recherches Biocosmetiques in Vevey, Switzerland, remains an integral part of the network.
New warehouse and shipping facilities are also under construction near its Italian base.
Intercos’s strongest market is France, which accounts for 32 percent of its sales volume, and Italy is second, with 25 percent of the volume. The U.S. market accounts for 22 percent of volume, the rest of Europe makes up 16 percent and the rest of the world, led by Asia, adds another five percent.
Although color powders continue to lead product sales, with 40 percent volume, lipsticks now account for 30 percent, and cosmetic pencils, mascara, and nail color make up the remaining 30 percent share.
Intercos was equally as active on the product front in 1996.
The company introduced three product lines last year, all of which combine color cosmetics items with treatment properties. The company said the lines respond to consumer concerns about the harmful effects of the environment and sun on skin.
For example, the Acquapoudre range of facial color cosmetics, consisting of four stockkeeping units, incorporates a low percentage of water. Ferrari said that gave researchers the advantage of working with a broader range of ingredients, including water-soluble ones, to improve the moisturizing quality of the products.
“Clinical tests proved that the product enables skin to maintain a 15 percent higher level of hydration than conventional products allow,” said Ferrari.
Although not yet on the market, Ferrari said the line will be launched sometime this year, most likely in the prestige sector because of its high research and production expenses. Another new line of four facial color cosmetics items, Alta Protezione, offers a high degree of sun protection, with UVA, UVB and IA filters. It, too, is slated to roll out in the beauty market over the next year or two.
“We are now taking the technology a step further by developing products that also shield individuals from external agents, such as those exacerbated by air pollution,” said Ferrari.
The third new line, called Vitamin C, is another line of four facial products and was named for its primary antioxidant-fighting ingredient.
Ferrari said the company developed a new process using a salt compound which stables the vitamin C and allows it to penetrate into the skin.
As for marketing hits in the beauty field, Ferrari raves about the nontransfer lip color craze, a concept conceived in the mass market sector that has now become a staple in the prestige sector as well.
“It was the biggest news in 1996, a real success story around the world, especially in the U.S., but excluding Asia where it first took off,” Ferrari said. “Women want convenience. They don’t want to have to fuss with touching up makeup throughout the day.”
Intercos now plans to expand the category by developing non-transfer lip color with shine, Ferrari said.
“In line with the current trends in fashion, we plan to give the product a more brilliant, luminescent finish that endures by adding special resins and polymers,” he said.
As to the future health of the beauty market, Ferrari believes that the saturated prestige market will be upstaged by the mass market.
However, he feels there is plenty of room for new professional lines, a concept more positioned for the middle market and led in popularity by MAC.
“It’s a whole new culture in color — a fun, rather magical approach offering clients a good choice of colors, different formulas and a price mix. Above all, with its emphasis on service, it is less confusing and gives one a better chance of making the right choice.”
Intercos will unveil the fruits of its latest research and development at Cosmoprof in April: a 450-sku line of color cosmetics geared toward the ethnic market. Separate products have been created for Asian, European, Hispanic and black skin tones.
“No one has conducted this level of research before, taking into account the difference in climates, humidity levels, as well as the differing cultural characteristics around the world,” Ferrari said.
Ferrari underscored the importance of developing specific formulas for this specialty market and not merely offering a wide palette of colors.
“For instance,” he explained, “Asians tend to have oily skin, requiring products that address the high humidity levels and different seasons typical of the region.”
Ferrari’s discretion surrounding the naming of clients extends to his preference to remain mum regarding special projects under way.
Although he did say, “There is work in process regarding new technologies and raw materials, but we are at the experimental stage.”
He did note a current project for the Asian market, which he said encompasses the use of resistant coatings to develop new foundations in compact and liquid form.
The company has also extended its know-how on nontransfer characteristics to eye and lip pencils.
On the constant lookout for new color trends, Ferrari credits the textile industry for a wealth of inspiration.
“The types and textures of fabrics mark the start of the fashion process; designers’ interpretation comes later,” he said. “We come in at the initial stages of the cycle and adapt cosmetics color to textile trends.”
In addition, its color consultants keeps up with street fashion and consumer trends, whiles its R&D people stay abreast of technological breakthroughs.
As 2000 nears, Intercos continues work on new textures in color, such as gel-based products that play on hot and cold sensations. “This will be the new generation of face products,” Ferrari said.
“As a company, we will always be color-oriented,” he continued. “It is our specialty and necessitates a specific culture. The makeup of the year 2000 will combine color and treatment and go beyond anti-aging and sun protection properties — but comfort and endurance will continue to take precedence.”