HERBAL ESSENCES EXPANDS INTO HAIR COLOR
Byline: Andrea M. Grossman
NEW YORK — This April, Clairol will build on the phenomenal success of the Herbal Essences brand with the launch of a companion hair color collection. According to industry sources, the introduction could boost the $500 million brand by as much as $100 million in first year retail sales. The launch also provides Clairol with the opportunity to reclaim its leadership position in hair color dollar sales from L’Oreal, a ranking it lost for the first time in recent memory last year.
Known within hair care circles as the “comeback brand” of the Nineties, Herbal Essences was relaunched in 1993 with a cheeky marketing campaign that played up the joy of using the product — the company refers to this as experiential positioning. Since then, Herbal Essences has grown into a global brand with products in four different categories: hair care, skin care, bath and candles.
Clairol, which was put up for sale in September by pharmaceutical parent Bristol-Myers Squibb, continues to be the largest hair care company in the U.S., although it has just come off a less than stellar year. “This is a company that grew so fast it outgrew its capacity,” said Stephen Sadove, president of Bristol-Myers Squibb worldwide beauty care and nutritionals division.
Clairol’s hair color sales dipped 3.6 percent last year to $521 million in U.S. food, drug and mass channels, according to Information Resources Inc. Overall company sales fell 6 percent to $1.89 billion, domestic sales decreased 4 percent and international sales decreased 9 percent.
“Our spending in the year 2000 wasn’t at the levels we think are appropriate for the longer term and that’s why you saw relatively flat performance in terms of sales. It made no sense to spend lots of money on advertising when we weren’t able to support the business,” Sadove continued, adding that Clairol’s supply chain problems are a thing of the past.
Clairol’s roots in hair color are deep. It ranks second in the category, behind L’Oreal, which posted hair color sales of $573 million last year in U.S. food, drug and mass channels. The next closest competitor is Revlon, with $113 million in sales.
Herbal Essences Hair Color, however, looks like it has the potential to shake up the playing field. Clairol is targeting a younger, bolder, more confident woman who is looking for vibrant, rich color — in many ways, the same consumer as L’Oreal’s Feria. In less than two years on shelves, Feria garnered more than $114 million in sales and an 8.2 dollar share in U.S. food, drug and mass stores.
With hair color one of the fastest growing categories in personal care and Clairol fresh from supply chain difficulties, Herbal’s challenges are clear. Also, there are no less than three hair color launches slated for the next several months from L’Oreal, Revlon and Garnier. But Clairol remains confident. The group of executives who worked on formulation, packaging and marketing plans stressed that Herbal Essences is “quite a different beast” from the competition.
To carve itself a niche in the ever-crowded hair color category, Clairol made painstaking efforts to differentiate Herbal Essences Hair Color, which lands on shelves in May.
First, Clairol aimed to target the largest growing demographic using hair color, 13- to 24-year-olds, dubbed the “just color” segment. African-Americans and Hispanics, who generally have dark hair and who are showing more of an interest in hair color these days, were targeted too. Developing a technology that allowed a hair color formula to impart subtle tones or very vibrant tones on all hair types, especially pigment-rich hair, became a challenge.
Stephen Casperson, associate director for hair color product development, pointed to HDAP (hydroxyethyl diamino pyrazol) as the technology that took Clairol toward its desired results. “HDAP is a new dye molecule that enables us to formulate a variety of new colors,” Casperson said. Last summer, HDAP technology was applied to Clairol’s Hydrience Absolute Reds sku’s to achieve “a true red color without browning out.”
Thirty level-three shades were created for Herbal Essences Hair Color in the United States; 40 shades comprise the international collection. “Crisp, bright blondes designed to reflect light,” said Casperson, are addressed with three iridescent blonde sku’s. Golden browns were a key focus, and vibrant reds were developed, too.
“These are some of the boldest reds that have been offered, you’re talking salon, retail, anywhere,” Casperson said.
Four male-unisex level-two shades are also part of the offering. According to Clairol, the number of males coloring their hair is growing at twice the rate of women.
Since the Herbal Essences brand focuses so heavily on the experience of using herbal products, a special selection of plant-derived conditioners were included in Herbal Essences Hair Color formulas. Floral and herbal blends include daisies, sunflowers, peonies, water lillies, angelica rosemary, heather, nutmeg, clover and ginger. A Color Seal Conditioner designed for five weekly conditioning treatments contains plant-derived ingredients such as thyme, wheat germ oil and vitamin E. The absence of alcohol in the tint contributes to Herbal Essences’ aroma. And yes, the Herbal Essences trademark fragrance is recognizable. Salon-professional gloves are included.
Constructing an ergonomic package “that makes you want to pick it up and grab it” was important, too, said Elizabeth Read, senior director for hair color marketing. Clairol hired a team of packaging engineers, including several from ice cream vendors, to perfect the oval package, a departure from the industry’s traditional square boxes.
Herbal Essences Hair Color will retail for $9.99, a premium-price point in the mass hair color arena. Clairol will support Herbal Essences Hair Color with $75 million in advertising, $50 million of which will be dedicated to print and T.V. campaigns, with the remainder slated for consumer and trade promotions. Print ads are scheduled to break in August magazines with on-air ads appearing in late June and early July.
According to Debra Leipman-Yale, president for Clairol’s international division, advertising played a key role in sparking initial trial overseas. The collection began rolling out abroad in the last half of 2000. “Energetic, vibrant characters, both men and women, were implemented in television advertising,” Leipman-Yale said. Clairol would not comment on U.S. marketing plans except that it will not use a spokesmodel to promote the brand, nor will Dr. Ruth Westheimer, the celebrity instrumental in playing up Herbal Essences’ sensual nature, be used in advertising.
Despite Herbal Essences’ brand awareness and mammoth ad budget, the challenge in launching any new product is generating awareness, trial and, most importantly, repeat purchase. Hair color, however, is a category with a relatively high loyalty rate. And in the case of Herbal Essences, Sadove is confident once people try it they’ll be back for more. “One of the things we know about this brand is that it has an extremely high repeat rate,” he said.
International sales data from Herbal Essences Color launches in the United Kingdom, Canada and Mexico back up Sadove’s statement.
In the U.K., products launched on shelves with a two-for-one promotion. Within in its first nine weeks on shelves, Herbal Essences Hair Color achieved as high as an 11 percent dollar market share. In its first 20 weeks on shelves, one in five consumers repurchased the products.
In Canada, Herbal Essences achieved a 5.5 percent dollar market share after three months. In Mexico, Herbal Essences Hair Color’s estimated dollar market share doubled.
Most revealing was how successful red sku’s sold in the Mexico and Canada regions. In Mexico, where hair is generally dark brown or black, Light Red, Dark Red, Dark Mahogany, Burgundy and Light Golden Brown were best sellers. In Canada, reds and browns performed best as Dark Red, Dark Blonde, Dark Brown, Burgundy and Bronze/Brown were the five best selling sku’s.
“You don’t typically see so many red shades as leading sku’s in any brand. It could be that the HDAP technology is really penetrating dark hair,” said Francine Gingras, director of public affairs for Clairol.
In the U.K., blonde sku’s, not surprisingly, were the most popular, such as Extra Light Blonde, Light Blonde, Dark Blonde and Pale Cool Blonde.
As for domestic performance, Sadove predicts Herbal Essences will do what only one hair color, L’Oreal Preference, has done: Achieve a dollar market share above 10. “The number of 10 share brands are few and far between, and we see it reaching at least a 10 share over the next 18 months.” According to Information Resources Inc., Clairol’s Nice ‘n’ Easy brand has the highest dollar share in the Clairol portfolio, with a 9 percent dollar market share for the 52-week period ended Dec. 24.
Despite already having shampoos, conditioners, styling aids, body washes, candles and facial skin care, Clairol executives felt that its comeback brand still had room to grow. Herbal Essences, which hit it big in the Seventies and fizzled in the Eighties, made its second coming to the trade in 1993 under Sadove’s leadership just as the herbal supplement market was hitting 15 percent annual sales gains. That was the year Herbal Essences’ translucent shampoos were packaged in clear bottles with decorative herbal backgrounds, which quickly became a hit with consumers. Its success was compounded by daring advertising and well-scheduled product category expansion.
Its secret to success?
“People talk about how businesses have difficulty moving a brand from one category to another,” said Sadove, “but the very nature of Herbal Essences, its experiential positioning, allows it to be appropriate in varying categories.”