BEIERSDORF BEAUTY SALES GET A BOOST FROM NIVEA
BERLIN — Beauty sales of the Hamburg-based Beiersdorf Group rose 4.4 percent in 1995 to reach $505.1 million (DM 2.91 billion), compared with DM 2.79 billion in 1994.
The Nivea brand, which contributes over 70 percent of the group’s beauty or Cosmed division sales, broke the DM 2 billion mark in 1995, with Nivea global sales growing by 10 percent in 1995.
In Germany, the Cosmed division also broke the billion-mark milestone.
Domestic sales grew by 10.5 percent to reach $714.3 million (DM 1.05 billion), up from DM 946.7 million in 1994. It was a particularly strong performance, considering that the overall market for body care sales slipped about 1.8 percent in 1995.
In a press conference held here Tuesday, Uwe WUlfer, Beiersdorf board director for the Cosmed division, attributed Beiersdorf’s “overproportional growth” internationally to regional expansion, strengthening of existing business and the successful launch of new products.
In Germany, he cited the successful launch of the Nivea Vital facial skin care line for mature skin, Nivea Soft moisturizing oil-in-water emulsion and Nivea Deo Balsam as the locomotives of domestic growth.
Moreover, older products gained momentum. Nivea Vital, for example, led the facial care segment with a market share of 17 percent, up from 15.6 percent in 1994.
Nivea is also the German market leader in deodorants, sun protection, bath and shower products and aftershaves, he asserted.
Beiersdorf will continue its strategy of growth via new products with two German launches in 1996. The Nivea shampoo range, which Beiersdorf says ranks number two in Germany, will be expanded to include two styling products, with a conditioning hair spray and hair mousse slated for an April launch.
The second biggest newcomer is Nivea Baby, scheduled for June. The 16-product assortment is the only full range on the market containing no preservatives, and while WUlfer would not give first-year sales goals, he said the company aimed to achieve a 15 to 20 percent share in the market after two years.
The German baby care market has a volume of about $272.1 million (DM 400 million) and is currently dominated by Johnson & Johnson’s Penaten line.
Due to exchange-rate fluctuations, the 1995 sales figures in German deutsche marks do “reflect the actual development of the division,” WUlfer said. The year’s sales volume in local currencies, or constant money, averaged about 6 percent, but conversion into deutschemarks reduced international growth to 1.3 percent, he said.
International sales amounted to $1.3 billion (DM 1.86 billion), compared with DM 1.84 billion in 1994.
In key international markets, sales volume in the U.S. and Canada increased by 15 percent in U.S. dollars, but in DM terms reached $105.03 million (DM 154.4 million,), maintaining 1994 levels.
In Europe, Beiersdorf generally outperformed the industry in general, WUlfer claimed, with double-digit growth achieved in Great Britain, Scandinavia, Austria, Greece, the Czech Republic and Turkey. European sales — excluding Germany — hit $809.5 million (DM 1.19 billion) versus 1.14 billion in 1994.
In Japan, where Beiersdorf holds a 60 percent stake in Nivea Kao, volume was down by 6.4 percent in local currency and 10 percent in terms of deutschemarks.
WUlfer attributed this weaker performance to general economic conditions in Japan and the discontinuation of pricing policies in the Japanese market.
In China, on the other hand, the group’s one-year-old joint venture with Daily Chemical Factory No. 2 in Shanghai closed its first year of trading with a profit, meeting its forecast volume of $5.03 million (DM 7.4 million).
The Cosmed division includes the prestige brands Juvena-La Prairie of Zurich, which managed a 2.4 percent sales increase in 1995 — $149.6 million (DM 220 million) — in spite of a general downturn in the higher-priced sector.
Overall, facial skin care products scored the biggest growth in the Cosmed division, with a 17.3 percent gain, followed by men’s skin care, up 7.3 percent; treatment, up 6 percent; sun protection, up 4.6 percent, and deodorants, which moved ahead by 2.1 percent.
Total 1995 sales for Beiersdorf AG will first be made public in May, but WUlfer said the group’s volume was up 5.3 percent, with the Cosmed division contributing 45 percent of sales. For 1996, Beiersdorf is predicting a slight upturn in global market conditions and forecasts a 5 to 6 percent increase in worldwide Cosmed sales.
As for the U.S., WUlfer said, “The basic Cosmed strategy [in the U.S.] is growth based on our own strength, with the primary focus on Nivea products.”
That doesn’t rule out acquisitions, he acknowledged, “but there aren’t that many interesting candidates out there. We are interested in the quality of sales and not merely the volume of sales,” he stated.