AN UPMARKET OFFEROther companies have seen rising successwith their private label brands. This year,pebble&co, a UK-based boutiqueconsultancy that handles productdevelopment and manufacturing,marketing, retail and distribution, ispreparing to take to a wider market theRikRak private label bath productcollection it developed for FirmdaleHotels. The products will be sold through

44 SPC March 2016

Milette Baby Sun Cream SPF50 in baby care; and I am Natural Cosmetics Repair & Shine Conditioner featuringPhyto Protein & Avocado Oil in hair care.Other winners included Italy’s AspiagService supermarket’s Verde Vera OlioScrub; German chain Dirk Rossmann’sRival de Loop – Green Tea Tagescreme infacial care; and Spain’s Eroski’s Belle –Asian Sensations Aceite Limpiador in skin care.

market reportprivate label

Private label cosmetic and personalcare products are attracting consumers withan increasingly wide range of offerings thatstress their value-added nature, as well asaffordable prices. Reflecting private label’sinnate reliance on quality and functionrather than image, manufacturers have beenespecially focusing on using scents to addvalue, from traditional florals to moreadventurous notes. They are also creatingmore sophisticated ranges of products,offering a variety of bath, skin care andcosmetic items with different benefits totempt consumers to abandon high profilebrands. Some retailers are also developinghybrid private labels, working with othercompanies to provide brand name rangesexclusively through their stores.

It would seem that these players arepushing at an open door. Consumers areincreasingly willing to buy private labelitems, according to analysts. “It used to bethat private label products were forconsumers on a tight budget. However, a global shift has occurred inwhich consumer sentiment about storebrands is overwhelmingly positive,” said aDecember 2015 report from US-basedanalyst the Nielsen Company.

MORE THAN ME-TOOPrivate label can offer a wide range ofuseful products, the Private LabelManufacturers Association’s (PLMA)Amsterdam-based International Councilhas stressed in a communiqué releasedwhen naming several products in itsInternational Salute to Excellence Awards2015 last May. Private label personal careproducts were introduced in the past yearby supermarkets, hypermarkets, drugstoresand specialty retailers in 22 countries acrossEurope, according to this note.

Brian Sharoff, PLMA President, noted inthe statement that innovative private labelproducts are thriving: “Private label nolonger relies on me-too products for itsappeal to consumers. Many retailers nowhave a strong spirit of innovation and this isdisplayed in the award-winning products.”

Fruity and fresh scents were featured inseveral products garnering awards andrecommendations. Retailers have also beensensibly focusing on the emerging marketfor men’s personal care products, said thePLMA. For instance, Tesco’s Pro FormulaSatin Wild Berry Shaving Gel won in thetoiletries category, while German retailerLidl’s Cien Men Mini Rasierschaum wonin men’s toiletries.

The PLMA also honoured products fromSwitzerland-based supermarket Migros,such as its Zoé Ultra Sensitive Anti-AgeAugenpflege in the eye care category;

Consumer sentiment regarding private label isoverwhelmingly positive, as retailers and suppliersfocus on quality to get a head-start over big brands.Kitty So reports

Private label’semotionalconnection

Own brand BPC rangesare increasinglysophisticated, in orderto tempt consumers

March 2016 SPC 45

conditioning beard oil and hair fibres thatattach to existing hair to build density andgive the appearance of thicker hair.

In the US, private label products do wellin high purchase categories whereconsumers will notice little differentiation,noted Nielsen. It highlighted areas whereUS companies might struggle, such as inhair care, which requires significantinvestment and is therefore more difficultfor private label to compete. Likewise,“marketing spend is incredibly high, forexample, in the hair care category...although it’s a tough proposition toovercome, investing in marketing activitiesfor store brands will likely result inincreased equity, even if slightly”.

Private label brands could also performbetter among frequently bought products,unlike hair care. “Since hair productpurchasing is more sporadic, a higher pricetag for brands is less of a barrier, makingmore price-competitive private label brandsless of a contender,” added the report.

In addition, private label could strugglewhere there is already high productdifferentiation, such as in hair care.Companies have developed a wide range oftargeted products including anti-dandruff,colour protection and damage repair.

US INNOVATES PLMA highlighted some innovativeAmerican private label creations in its 2015awards, stressing “product concept, taste,texture and smell (for food items),packaging and presentation and value formoney”, according to an association note.

Winners from the personal care andbeauty sector included Walgreens Studio 35Beauty Coconut Lime Hand Soap (bathcategory); ULTA’s Be Beautiful-ColorEssentials Collection (beauty care andcosmetics); Whole Foods Market’s VanillaAmber Dry Skin Hand Cream (body care);Sephora’s Express Dry Shampoo (hair care);and Wegmans Food Markets’ Family PackSport Sunscreen (sun care).

US-based private label supplier AuralineBeauty launched in October 2015 abronzing powder, according to a companycommuniqué. The box houses a mirror inthe lid and a brush for application. The

wholesale avenues with leading high enddepartment stores and niche boutiques andsell directly to the hotel chain’s customers.The collection was created by pebble&coaround a year ago as an exclusive forFirmdale Hotels’ nine locations in Londonand New York and includes a body wash,lotion and oil, shampoo, conditioner, handwash, lotion and cream, eye cream,soaps and an orange peel lip balm.

“When we created the collection, wecreated it as its own standalone brand,” saysSarah McCubbin, pebble&co founder andManaging Director. “The presentation ofthe collection has struck a chord withFirmdale guests and visitors, andpresentation and retail sales of the productonline and through the hotels have proventhat there’s a real demand for this productoutside of the hotel environment.”

In 2015, pebble&co created a men’sfacial skin care collection for British luxuryretailer and spa operator Bamford Ltdcalled Bamford Grooming Department.This includes an exfoliating face wash, amoisturiser, shave oil, hand and body wash,and conditioning shampoo.

In the same year, pebble&co also createdthe #10MINUTEBLOW range for Britishbeauty bar company blow Ltd. “Thecollection perfectly complements blowLtd’s newly launched app, which is likeUber for your hair, nails and make-up,” saysTori Snowball, pebble&co’s Manager. Theapp allows customers to book a blow dry(plus make-up or nail care) that can bedone with a stylist at the customer’s home,office, hotel or an event.

While pebble&co’s products are made inthe UK, they are created and used forprivate label clients around the world,including in the US, China, Japan andSouth Korea. “We’re even working on arange to launch later this year, which is afine fragrance range for the Middle East,”says Snowball.

She notes that companies looking forprivate label cosmetics and personal careproducts are looking for bespoke productsand flexible manufacturing that can achievetheir ultimate designs.

ALL IN THE SCENTThe addition of intriguing fragrances intoproducts is also a crucial aspect of privatelabel products. “We’re doing interestingwork with fragrances and really unusualingredients in fragrances – not the standardflorals or materials,” Snowball says. Thecompany has been incorporating, forinstance, scents of materials, such as leatherand suede; tobacco; and alcoholic notes,such as whiskies.

“A big trend that we’ve seen over the

private labelmarket report

pebble&co has createdpersonal care products forFirmdale Hotels (right) andblow Ltd (above), whileSephora’s own brandshampoo has scoopedindustry awards

last 12 months and which is showing nosigns of dying down is the trend of smokey,rich ashes and charcoals. Unusual,challenging notes that are balanced with anumber of more familiar notes to softenthem,” adds McCubbin.

Fragrance preferences also differ byregion. For instance, musky scents are astrong trend among UK consumers. In fact,Western markets tend to be moreadventurous with fragrances. On the otherhand, Eastern markets prefer more traditionalfragrances, but are also more willing to trynon-traditional ingredients in products.“Climate plays a lot into that. In hot, muggycountries, you don’t want something heavy.You want something that’s light, like citrusscents, florals – especially in skin products,”says Snowball. Meanwhile, in the MiddleEast, musks and vanillas remain popular.

Likewise, UK-based supermarket chainWaitrose is using fragrances in its latestprivate label products. In 2015, the companylaunched its Waitrose Heritage Collection,according to documents sent to SPC. Thecollection, using floral scents with woodyundertones, features a hand wash, hand andbody lotion, hand cream, body wash, bathwash and body butter in three signaturescents: White Jasmine & Peony; Freesia &Pear; and Orchid & Honeysuckle.

ON THE HAIRY SIDE Meanwhile, UK-based Swallowfield, whichdevelops, manufactures and delivers personalcare and beauty products, created a malegrooming range in 2015. Swallowfieldpartnered with award-winning hairdresserJamie Stevens to develop a hair care rangefor men. “The range, called MR., isdesigned to combat theappearance of male hairloss,” notes aspokesperson.

It features 12 productsin three categories:thickening, style anddisguise, and includesshampoo, conditioner,

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March 2016 SPC 47

product comes in a matte, peachy tan (PalmSprings) colour as well as a shimmer paletteof gold, pink and copper shades (SouthBeach). The product can be used dry orwet, depending on the desired intensity ofthe colour, said the company.

The company also announced its HighIntensity Lipstick line featuring six colours:bright lilac (Lovely), orchid (Mardi Gras),vibrant pastel (Crush), deep pink (Pout),poppy red (Danger) and dark eggplant(Rogue). The formulations include jojobaand anti-ageing peptides “to improve theappearance of fine lines”.

Auraline also launched a Flash ConcealerPen to cover up dark under eye circles,blemishes and skin discolourations.Announced in September 2015, theconcealer features a lightweight formulacontaining aloe leaf extract, olive andsafflower oils, vitamin C, arnica flowerextract, cucumber extract and vitamin E.

Meanwhile, CVS/pharmacy has beenpartnering with existing brands to offercustomers ranges available exclusively at itspharmacies, instead of creating its ownprivate label brand. “CVS/pharmacy’sexclusive store brand category has been oneof our fastest growing beauty segments withthe portfolio doubling in size in 2015.Created in response to specific consumerneeds for quality ingredients at affordableprices, the CVS/pharmacy exclusive lines

give women more options when they shopfor beauty,” a spokesperson tells SPC.

In 2015, CVS/pharmacy began offeringCanada-based Jouviance’s products in theUS exclusively through its stores. Theanti-ageing skin care line features productswith ingredients derived from natural plants,targeted towards specific skin concerns.

CVS also launched in February 2015 itsexclusive brand, Beauty 360, whichincludes products such as tweezers withreal diamond particles for grip andergonomic nail clippers for easy handlingand accuracy.The company also introduceda Promise Organic line, withorganic/natural ingredients. “The range ispacked with healing ingredients like aloeleaf, argan oil, coconut milk and cupuaçubutter to offer replenishment, nourishmentand hydration,” says the spokesperson.Finally, in 2015 it introduced the Wilma

Schumann skin care range, feauringantioxidants, repairing and liftingingredients in concentrated serums,emulsions and masks.

GLOBAL FOCUSIn Japan, private label companies showcasedtheir latest innovations at the COSMETech 2016 expo (20-22 January). Itfeatured a ‘contract manufacturing/privatelabel zone’ for exhibitors to present theirlatest products, such as Bio Fact Japan,which produces a ‘bio-cellulose mask’ madeof natural cellulose. Cosmecca Japan alsopromoted its collagen foundation, whichfeatures collagen capsules deliveringnutrition and moisture to the skin.

According to Euromonitor International,the global private label market wasUS$13bn of the world’s $465bn 2014beauty and personal care market. Privatelabel products performed particularly wellin Western Europe ($7.8bn of the region’soverall $104bn sector) and North America($3.5bn of the region’s overall $84.9bn).Meanwhile, private label made up $637.9mof the $134.5bn beauty sector in AsiaPacific (excluding Australasia); $134m ofthe $7.2bn sector in Australasia; $571.7m ofthe $26.8bn sector in Eastern Europe;$251.3m of the $81.5bn sector in LatinAmerica; and $148.9m of the $26bn sectorin the Middle East & Africa.

E-commerce growth is drivinginnovation among Chinese bricks-and-mortar personal care product retailers,says Mark Godfrey

Chinese consumers are buying more oftheir cosmetics online on China’s top twoe-commerce sites – Tmall.com andJD.com – and specialist sites Lefung.com,Tiantian.com and Jumei.com, forcingbricks-and-mortar own brand retailers torethink their strategy. Market leadingretailer AS Watson, a Hong Kong-basedchain which operates 14,000 stores ingreater China and worldwide, and whichsells a wide range of Watson’s own brandpersonal care products, has also beenadjusting to compete. It operates its own store on Tmall but

also runs online stores in variouscountries, allowing consumers to collecttheir purchases at a local Watson’s outlet.Many of these are own brand lines, suchas a 40g pack of collagen facial cream forChinese yuan renminbi RMB40; a 500mlolive oil based shampoo for RMB39.90;

and a bird’s nest facial mask RMB125 for apack of six. An AS Watson spokespersonpoints to the firm’s Customer 360 strategyfor driving sales in its physical storesthrough online customer relationshipmanagement (CRM) while using big dataand location-based social media promotionto reach consumers. “We are determinedto make digital an integral part of ourbusinesses across the globe because thisis what customers expect, and customerexperience is always our priority,” says thespokeswoman. The company in the 2015interim results for its parent company CKHutchinson Holdings claims to have spent$60m since 2012 to “build a single andmuch more powerful digital and CRMplatform for its 24 markets worldwide”. ASWatson “strives to integrate online andoffline experiences by offering a click-and-collect option for e-commerce shoppers,and the analytics models help the group tocapture and understand customerbehaviours, in order to provide them withpersonalised services”, said the company’sresults report.

Meanwhile, brands are aware of thisshifting trend and are developing their ownonline platforms, and increasing theirpresence on platforms such as Jumei.com,explained Thibaud André, ResearchAssociate at Daxue Consulting in Beijing.Cosmetics retailers offering own brandsare concerned that online channels “have astrong advantage in terms of their offerrange”, explains André. But he thinks“customisation” is critical – the ability totarget individual consumer groups.Education and information are powerful

persuaders for Chinese consumers, notesAndré. “Traditional retailers will have todevelop services that cannot be availableonline and shift their client acquisitionstrategy,” he adds, suggesting retailersoffer a full range of in-store services suchas massage, make-up, nail polish andconsumer gatherings. Looking ahead, “thetraditional store cannot stay a place wherepeople come and pick up a product, but aplace where people stay to purchase,enjoy, learn and experience a product”,André concludes.

MARKET FOCUS: HOW ARE CHINESE RETAILERS SECURING OWN BRAND BUY?

Swallowfield created a men’s hair care range for celebrityhairdresser Jamie Stevens