Dow and DuPont forge biggest deal in chemical industry history, hey big spender - new data on Australian over-40s market, StriVectin moves into haircare, and Olay unveils ageless era.
Dow and DuPont forge biggest deal in chemical industry history
In a year when big deals were commonplace, 2015 is drawing to a close with a bang. Dow Chemical and DuPont Co have announced a game-changing mega-merger that will have a huge effect on the global chemical and cosmetic industries. Both chemical giants boast a market capitalisation of US$60 billion and combined total sales of US$90 billion in personal care and industrial chemicals, agriculture and material science.
The new company will be named DowDuPont and the agreement has been dubbed "The Deal of Three Centuries" because of storied heritage of both US giants. When contracts are finalised the new conglomerate will be split into three global market-leading companies across agriculture, material science and technology and innovation speciality products with a combined market value of US$130 billion. Ranked as the biggest merger in the history of the chemical industry, DowDupont will become the second largest chemical company in the world after German behemoth, BASF.
For the beauty and cosmetics industries, the agreement reduces the number of suppliers of ingredients and chemicals used to manufacture makeup, skin and haircare. Both Dow and DuPont are leading innovators and analysts are speculating that cost-cutting in R&D could affect the number of future breakthroughs and genuinely innovative developments. Both companies have already knocked billions off their R&D budgets.
Hey big spender - new data on Australian over-40s market
Sixty percent of Australians are now aged 40-plus and the demographic is the big prize for the marketing dollar says Nielsen. Working with Veda, the leading provider of financial data and analytics, the researcher reports that the over-40s are 21 percent more likely to spend on extras than other age groups.
Many are empty nesters and nearly half have paid off their mortgages report the analysts. Over 50 per cent have assets in excess of $300,000 and one in three has a household income of $104,000. The over-40s are also 32 per cent more likely than other Australians to have spent $1500-plus on their credit cards in the month before the survey and 29 percent more likely to have paid it off in full.
One in four Australian over-40s are heavy Internet users, logging over 20 hours online each week. They are also major consumers of newspapers, magazines, radio and TV. The study also provides a wealth of other useful insights for marketers and advertisers. Home renovations are high on the to-do list for 49 per cent of over-40s over the next year. Forty one per cent think quality is more important than price when buying food and FMCG products.
They've done their time "making do" and 43 per cent say their next vehicle purchase will be a new car. Over the next six months, 46 percent are planning domestic or overseas travel trips. And more than 24 per cent had spent $150 in a shopping centre the week before they were polled.
StriVectin moves into haircare
Rightly famed for its ground-breaking NIA-114 technology, StriVectin has been planning a move into haircare for over a decade. In January, the prestige skincare company will roll out a trio of targeted collections under the StriVectin Hair brand in the US- Ultimate Restore, Max Volume and Color Care. The goal? To bring the condition of hair to a virtually ageless state.
Each collection offers a sulfate-free shampoo, a revitalising conditioner and two deep-acting treatments to tackle the major concerns of ageing hair from root to tip. Pioneers of the anti- ageing haircare sector such as Pantene Pro-V Time Renewal were ahead of their time but P&G's NIOXIN has spearheaded the longed-for breakthrough. The past few years have seen growing recognition by consumers that hair ages just as noticeably as the skin and scalp health is vital to healthy, lustrous hair.
StriVectin Hair is a landmark development in the growing convergence of haircare and skincare technology. "This is a monumental moment for StriVectin and for the current hair care landscape as we know it" says Chief Marketing Officer, Amanda Baldwin. "We have known since the start that our patented NIS-114 technology has significant capabilities that extended to hair and scalp health, but wanted to put in the proper time, focus and market research and development before confidently launching."
StriVectin was acquired by Catterton Partners, one of America's leading consumer-focused private equity firms in 2009. The skincare brand had talks with other potential buyers in 2012 but thought it could get a better price at a later date. Perhaps kicking a goal in haircare could be the tipping point to attract new owners with big wallets.
Olay unveils ageless era
Many marketers and beauty execs have always been negative about stressing age groups when selling beauty and skincare products. Newsflash: Women are vain. Olay has just gone to tremendous trouble to confirm this widely-held view. The P&G power brand's marketing team conducted a global survey in 11 countries to discover how women today perceive ageing and whether they are being approached in the right way.
Modern skincare products have worked so well, it seems, that 66 per cent of women surveyed said that in the past five to 10 years women look better than ever and it's tough to tell a woman's true age. Seventy five percent thought physical appearance is more likely to give away a woman's age - not the way she behaves - and the best compliment they can receive is - "I would have never guessed your age". The beauty industry can be proud of its educational efforts, too. Over 75 per cent of women believe that a combination of genetics and lifestyle has the biggest impact on the way skin ages.
Olay have identified women who have done all the right things as "exceptional skin agers". The brand has also fingered Baby Boomers as the ones who "call the shots", thanks to their unprecedented spending power and socially liberated attitudes. "Discoveries like this put Olay in the best possible position to fuel the new ageless era"says Alex Keith, President of Global Skin and Personal Care at P&G. "Our experts know skin better than anyone else and we know how to formulate the most effective ingredients into skincare products that deliver real, visible results".
No argument there but how will the new ageless strategy be implemented? Stop seeing youth as the major growh opportunity advises leading trend tracker, LS:N Global, and focus less on categorising generations in favour of appealing to "flat agers". Another wrinkle or two isn't fatal and the best way to appeal to older women is through fun, being empathetic and focusing on individuality. Many brands are already using older models in their campaigns and this trend should intensity says LS:N.
Snippets from the wires
- The new extension to the German Museum of Technology in Berlin has included Yves Saint Laurent Beaute's Forever Youth Liberator Serum in its permanent exhibition - Sugars and Beyond - Food -Matter- Energy. Containing Glycanactif, a complex of three sugars, the ground-breaking serum introduced the the science of glycobiology to skincare.
- Kerry Washington scored her first beauty contract with Neutrogena in 2013. The star of the popular TV series Scandal has been appointed Creative Ambassador for OPI. She will work closely with founder Suzi Weiss-Fleishmann to design a new collection for the Coty-owned nail brand.
- Germany remained the number one European market for fragrances, skincare and cosmetics in 2014, reaching a total value of 13,012 billion euros (AUD$19.09 billion) according to Cosmetics Europe. France ranked second with sales of 10,583 billlion euros (AUD$16.19 billion), pipping the UK in third place with sales of 10,397 billion euros (AUD$15.90 billion).
- Beauty intensified the trend for older models by appointing 64 year old Jessica Lange as its face two years ago. The brand has appointed 44 year old Winona Ryder as the new face of its 2016 ad campaign.
- Young Frenchwomen aged 15 to 24 now buy more cosmetics in volume terms from Kiko Milano than Sephora reports Kantar Worldpanel. The inexpensive Italian brand releases a continuous flood of new products rather than collections and global revenues have reached 432 million euros (AUD$ 660.9 million).
- AmorePacific became the first South Korean beauty company to break the US$100 million export barrier in 2013. With demand from China continuing to soar, the Korean giant's exports will top US$200 million by year's end. Forbes Magazine Asia has just named AmorePacific's Chairman and CEO, Suh Kyung-bae, Businessman of the Year 2015.
- Rapidly expanding Aussie haircare brand has shifted its corporate HQ to the US. "While our brand will always retain its Australian roots, the timing was right to move our headquarters to California" says founder Kevin Murphy.
- Aussies are willing to pay more for niche gourmet ice-cream reports IBISWorld. The nation is still crazy for Streets, the Unilever-owned maker of Magnum, Cornetto and Golden Gaytime, which boasts a 27.6 per cent market share. Icecream sales are expected to reach $1.1 billion in 2015/16 says the researcher.
