COTY’S HEALING POWER: HOLISTIC SCENTS

Byline: Kim-Van Dang

NEW YORK — At this year’s Cosmetic, Toiletry and Fragrance Association annual meeting in Boca Raton, Fla., Coty Inc. president and chief operating officer Jerry Abernathy predicted a shakeout in the fragrance industry if companies continue to launch scents because of volume pressure instead of concentrating on building brands.
Only a month later, Abernathy is setting into motion plans to introduce a brand that could ignite the birth of a whole new category in the mass market.
Called The Healing Garden, a new Coty U.S. Inc. division, it is being billed as “holistic fragrances that offer beauty and benefits to mind, body and spirit.”
“Stress is an all-out epidemic in America now,” said Teri Siegel, Coty senior marketing director, holding up a stack of recent magazine cover stories on the subject. “And the homeopathic market is a $1 billion industry in the U.S. Americans, clearly, are willing to spend money on botanicals.”
Industry sources estimate that the initial 39-item collection going on counter in October could generate $24 million at wholesale in the fourth quarter alone. By comparison, Coty’s Nokomis scent, debuting this month, is expected to generate $20 million at wholesale in its first year.
Four new fragrances under The Healing Garden banner promise various benefits. Lavendertheraphy, which features extracts of chamomile and valerian, is said to bring about relaxation. Tangerinetheraphy, which contains extracts of tea tree, ginger, mandarin and balm mint, is supposedly energizing. Jasminetheraphy has extracts of ylang-ylang, passion flower and neroli and is touted as sensual. Lastly, Green Teatheraphy, with extracts of sandalwood and peony petals, is billed as enlightening.
Items include potpourri for $12.50; cologne sprays at $8.50 for a half-ounce and $11.50 for an ounce; body soaks at $8.50 for 10 ounces; shower gels and body lotions at $8.50 for seven ounces; bath crystals at $8.50 for 10 ounces; aroma oil at $8.50 for one ounce; scented candles for $8.50 each; pillow and room sprays at $6.50 for 4 ounces, and incense sticks for $6.50.
“We see almost unlimited potential for The Healing Garden,” Abernathy said. “We see this as a way to rejuvenate the mass business. It is in reaction to the rise of alternative shopping channels. We have a competitive edge and we do feel pressure from specialty stores like Bath & Bodyworks, The Body Shop, Origins.”
Jean-Andre Rougeot, president of Coty Group Worldwide, explained the company’s position this way:
“We are in the fragrance experience business,” he said. “Wherever people get their fragrance experience, we should be there to supply it. We’ve been too much of an eau-de-toilette company. Today, traditional usage of fragrance is down. Instead of spritzing on a Saturday night scent, people might use a scented shower gel. We are thinking more and more from that point of view.”
Rougeot went as far as to describe The Healing Garden roll-out as “the launch of a new category.”
“Holistic products are not new,” Rougeot said. “But, in the mass market, they are new. The concept has finally made it into the mainstream. It’s not strange anymore for a bank clerk in Austin, Tex., to use a lavender-scented product for relaxation. Four years ago, it might have been.”
With a commanding 35.5 percent market share of the U.S. mass fragrance business and an estimated annual wholesale volume of $600 million, Coty might have enough muscle to carve out new real estate for The Healing Garden on the drugstore floor.
Slated for about 18,000 of Coty’s 28,000 doors, the line was conceived to work in several store areas including health and beauty aids. Siegel said that, additionally, several retailers are considering the creation of “wellness centers” near the pharmacy in which to house the line.
“Drugstores are interested in bringing back the customers who have been wandering into the specialty stores,” Siegel said, explaining that the new area would also stock herbal teas, vitamin supplements and homeopathic remedies.
“Some retailers think that kind of space would be best for this brand,” Rougeot said. “It’s a tough call, but I like being close to pharmacies. There’s a lot of traffic there.
“I think we should be outside of the traditional fragrance area,” he continued. “At least, I don’t want to be in the middle of it. These are not traditional fragrance products. Those sell a dream; these sell benefits. We want to make that point very clear.”
Coty has earmarked $9 million in advertising and promotional support of the line for the October to December period alone. For Nokomis, it is spending $10 million for an entire year.
Every detail has been carefully thought-out.
Siegel said the company wants to attract both aging baby boomers and Generation Xers who are open to earth-friendly companies.
Therefore, consumers will have to look hard to locate the Coty name on the products. And, instead of a New York address, where the company has its corporate headquarters, packaging copy will read: Sanford, Lee County, North Carolina — where Coty’s U.S. production facilities are based.
“We want to give the brand that homespun, local, friendly feeling,” Siegel said.
The company has designed special fixturing for the brand. A pine-paneled tray system that can be integrated onto a wall, an end-of-aisle display unit or a freestanding unit will reinforce The Healing Garden’s natural image.
“It provides tremendous flexibility so that each account can tailor it to their needs,” Siegel said.
Striving for maximum impact, the company will devote the division’s fourth-quarter ad budget of $5.6 million to print advertising.
“We need to explain what these products do,” Rougeot said.
Starting in October, about 40 titles ranging from women’s service, beauty and fashion magazines to dual-audience books like People and niche publications on health, fitness and New Age issues will feature four consecutive-page ads.
Working copy for the opening page reads: “There’s only one thing better than smelling good: feeling good.”
Each main spread will feature one of the four scents, Siegel said, adding that the last page will highlight the whole collection.
The remaining $3.4 million in support dollars will go toward promotional costs. Aggressive sampling, a Coty hallmark, will begin in October. The company plans to issue 13 million impressions through stores and direct-mail during the fourth quarter.
But, in its quest to differentiate the brand, it will avoid scent strips. Siegel said, instead, that Coty has opted to use Arcade’s Scentseal, a gel-based rendition of the fragrance, as well as colored powder samples from a yet-to-be-determined vendor.
“We wanted to give consumers that touchy-feely experience,” Siegel said.
The company will also sell samples at launch time.
Silver-colored 0.2-oz. purse sprays will retail for $2.95 and an aroma oil kit, containing all four scents in 2-ml. vials, will be offered at $6.95 a box.
Price has also been a major consideration for Coty executives. A 1-oz. bottle of cologne from The Healing Garden collection will be $11.50, for example, compared to a $20 same-size bottle of Nokomis.
“We are consciously at the low end of the mass market spectrum,” Siegel said. “In focus groups, women told us that choice is a benefit to them. We want them to be able to try more than one scent.
“We don’t use the word ‘aromatherapy’ on any of our products,” she noted. “The line’s origin is in aromatherapy. We use natural extracts derived from actual flowers, plants and fruits in all the products, but we are not selling 100 percent pure essential oils. We would have to retail such products for $300. This is a way for the average consumer to indulge.”

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