Aug 12, 2019: Elisabeth King reports on this week’s business news

Top 15 international beauty and personal care companies for 2019; Canada's Cronos acquires US CBD company for US$300 million; Africa/Asia/Australia the strongest growth region for Beiersdorf; and 12.4 million Australians buy headache and pain relief products.

Top 15 international beauty and personal care companies for 2019
The US boasts many of the titans of the beauty and personal care industry from Procter & Gamble to Johnson & Johnson and Estée Lauder. But Europe, Asia and South America are the heartlands of some of the biggest multinationals in the beauty business, topped by Unilever and L'Oréal.

There's been plenty of movement and buyouts over the past year from such majors as L'Oréal, which expanded its footprint in Asia through the acquisition of South Korean brand — Nanda. Brazil's Natura bought Avon's global business and private equity firms continued to make strategic investments. An increasing number of the big players such as Shiseido are also investing in startups, rather than paying big money for existing brands.

Here are the top 15 international companies for 2019, as ranked by Household & Personal Care Industry.

  1. Unilever - US$36.3 billion
  2. L'Oreal - US$31.7 billion
  3. Henkel (owner of Schwarzkopf) - US$12.2 billion
  4. Kao Corporation (John Frieda, Biore, Molton Brown) - US$11.1 billion
  5. Shiseido - US$9.9 billion
  6. LVMH - US$7.1 billion
  7. Beiersdorf (Nivea, La Prairie) - US$6.9 billion
  8. Reckitt Benckiser (Veet, Clearasil) - US$6.4 billion
  9. AmorePacific (Innisfree, Laneige, Annick Goutal) - US$5.7 billion
  10. LG Houshold & Healthcare (The Face Shop, The History of Whoo) - US$5.2 billion
  11. Avon Products - US$3.7 billion
  12. Chanel - US$3.7 billion
  13. Boticario Group (one of Brazil's two largest beauty companies)
  14. Natura & Co (the other Brazilian giant and owner of Aesop, The Body Shop and Avon's global business)
  15. GlaxoSmithKline (oral care and OTC wellness) - US$3.3 billion

Canada's Cronos acquires US CBD company for US$300 million
Regulating bodies in the US, Europe and Australia may still be working out the guidelines for CBD (cannabidiol) products, medicines and skincare. But that hasn't stopped companies rushing to stake a claim in the potential goldrush. Few are better placed to take advantage of the bonanza than Canada's Cronos Group through its major brands — Peace Naturals, a global wellness and health platform, and Spinach.

Cronos is a global company and has interests in Germany, Israel and Australia. Cronos Australia debuted last year and is a joint venture with local private equity firm, New Southern Capital. The strategic target is to become the company's distribution hub for CBD products in Australia, New Zealand and Southeast Asia.

Expansion into the US has been spearheaded by the acquisition of Redwood Holding Group, the parent company of CBD personal care brand, Lord Jones, for US$300 million. Founded by Robert Rosenheck and Cindy Capobianco in 2015, Lord Jones offers body lotions, bath and oil products. The two founders will join the Cronos Group, following the closure of the deal involving a US$225 million cash payment and newly-issued Cronos shares.

Africa/Asia/Australia the strongest growth region for Beiersdorf
Beiersdorf, the parent company of Nivea and La Prairie, achieved organic sales growth of 4.8 per cent in the first six months of the year. Global sales jumped 6 per cent to 3.837 billion euros (AUD$6.33 billion) over the period.

The Africa/Asia/Australia area was the fastest-growing region — up 11.1 per cent to 1.028 billion euros (AUD$1.69 billion). The Americas also performed well with an uptick of 8.5 per cent over the period to 530 million euros (AUD874.53 million). Europe, the multinational's largest market, edged up 2.9 per cent to 1.588 billion euros (AUD$2.62 billion).

It's been a busy year for Beiersdorf, which recently acquired Coppertone from Bayer for US$550 million. La Prairie again proved a winner with strong sales in European travel retail and the Asia/Pacific region. Although Nivea has been under pressure from natural skincare and new brands in the mass space, the iconic brand achieved growth of 3.2 per cent in the first half. According to CEO Stefan De Loecker, the needle is moving in the right direction and the company confirmed its guidance for growth in 2019 at 3 to 5 per cent.

Health - 12.4 million Australians buy headache and pain relief products
Life is getting tougher and/or more stressful, it seems. According to Roy Morgan Research, 12.4 million Australians buy headache and pain relief products in an average month — up from 12.1 million in 2016. Women are the major purchasers — 58 per cent — by contrast to men — 42 per cent. Older Millennial and Gen X females aged 35 to 49 account for close to a third — 28 per cent — of the market.

Other insights into the core female market are revealing. Most are likely to be employed with an average household income of $105,000. General attitudes and lifestyle strike a familiar chord. According to Roy Morgan, “she” is more likely to agree that her pet is a fussy eater and buying magazines and checking cholesterol levels rank highly. Women who buy headache and pain relief products are also more likely to have attended a rock or pop concert recently, participated in dancing or Pilates and watched swimming, diving or horse racing on TV. She also thinks ahead and being well-insured is another priority.

Panadol is the nation's number one choice to relieve headaches and pain with 38 per cent of Australians — 7.8 million — purchasing the stalwart brand in an average month. Nurofen is the second place-getter (21.8%) and there's a big gap between the third and fourth ranking choices — supermarket brands (9.9%) and chemist/pharmacy brands (8.3%).

Pharmacies are the most popular purchase locations with 30.1 per cent buying pain relief products from chemists in an average six months. Chemist Warehouse is far and away the market leader (15.1%). Supermarkets are the second most popular provider — 26 percent — almost evenly divided between Coles and Woolworths.

Snippets from the Wires

  • The global natural and organic personal care market has reached US$15.5 billion reveals MarketStudyReport, a US-based hub for global market intelligence. Skincare is the hero with a 48 per cent market share, followed by haircare, oral care and cosmetics. Rapid growth over the next five years is expected to push worldwide revenues to US22.3 billion by 2024.
  • Cult US brand, Drunk Elephant, will debut in China in September through Sephora's new stores in Hong Kong and Alibaba's Tmall. The full range will be available and hopes are high that the Chinese market will boom to 10 per cent of global sales.
  • Consumers opting for the natural look have dented prestige makeup sales in the US, reports the NPD Group. Overall prestige beauty sales in the second quarter climbed 2 per cent to US$4.3 billion. Makeup sales dropped 4 per cent to US$1.79 billion by contrast to the same period last year. Fragrance sales were up 2 per cent to US$834 million and skincare rose 7 per cent to US$1.4 billion. Interestingly, sales of face masks also declined.