Beiersdorf looks forward to product growth in U.S.

4/21/2008

WILTON, Conn. —With a 125-year heritage and a robust international business, skin and beauty care company, Beiersdorf has set its sights on the U.S. market, and over the next five years it is planning to achieve significant skin care sales growth through its Nivea, Nivea for Men and Eucerin brands.

“We see an interest in the United States in some of the sophisticated products that have been in the mass market in Europe, and we feel that Nivea is ideally placed to build on this trend and to offer value to our customers and our retail partners,” said Iain Holding, president of North America for Beiersdorf, during a meeting with Drug Store News. “At the same time, we have a strong heritage in the therapeutic business with the Eucerin brand.”

The United States skin care business is attractive to Beiersdorf in that it accounts for 30 percent—or $22.8 billion—of the $76 billion global skin care business. And with just 14 percent of Beiersdorf’s 5.5 billion euros in sales in 2007 coming from the Americas (it doesn’t breakout the United States), there’s undoubtedly a great deal of opportunity in the U.S. market.

Armed with new and innovative products and its “Nivea Touch and Be Touched” campaign, that kicked off in September 2006, the beauty company thrived in the hand and body category in 2007 and experienced double-digit sales growth in the U.S. (not including the divested Curad brand) as it bolstered its overall market share in the category by 2.5 percent in the hand and body category.

“That’s important for us because we want to deliver added value and incremental sales to our retail customers,” said Holding, who also noted that the Nivea brand experienced growth of more than 20 percent.

The “Touch and Be Touched” campaign, which includes print ads, television ads and online efforts, is meant to be a little bit daring but is careful to convey sensuality and form an emotional connection with consumers.

According to Holding, what also is helping to drive sales is the product innovation taking place behind the scenes at the hands of its 873 scientists working at the Skin Research Center in Hamburg, Germany.

Such innovation is making its way to U.S. retail shelves in the first half of 2008 in the form of new products like the Good-bye Cellulite Body Beauty Program, which is comprised of a gel-cream and dietary supplement capsules; Nivea Natural Tone lotion for skin of color; Nivea for Men body wash and Nivea for Men extreme comfort shaving gel and Balm. In addition, many of Beiersdorf’s current offerings, such as Nivea Body Skin Firming Moisturizer and Eucerin Moisturizing Lotion, easily slid into the top 10 hand and body products in 2007, according to ACNielsen data provided by Beiersdorf.

“It was interesting to see that products that have been in the range before last year also had very strong growth, so we are seeing we are adding value not only by innovation but by growth from the core,” Holding said. “I think that also speaks to the success of the ‘Touch and Be Touched’ communication platform.”

For the second half of 2008, the company is focused on further developing the Nivea brand and will launch additional initiatives; however, Holding said it was too early to discuss details.

While new product innovation and an emotion-evoking campaign are undoubtedly the foundation for future growth, Beiersdorf also leverages the pharmacy with its Eucerin brand, whose history dates back more than 100 years.

The company has retailers calling on pharmacists at such chains as Walgreens, CVS and Rite Aid to provide them with Eucerin samples, educational brochures on specific skin conditions and product coupons. It also has a Redness program that provides coupons and product information on its Eucerin Redness Relief line to people when they fulfill their rosacea prescriptions.

In addition, the company has a strong dermatology and pediatrician program, which is why Eucerin is often recommended for patients with rosacea, atopic dermatitis and psoriasis. Such efforts are designed to drive patients back to the stores and toward the pharmacy.

Also central to its approach, said Holding: The ability to provide worldwide consumer insights and ensure replenishment and in-stocks.

When asked what opportunities exist for U.S. retailers and what they can learn from European retailers, Holding encouraged retailers to create “an experience.”

“I think by creating a more exciting shopping experience…It is clear that the retailers are focusing on creating an experiential shopping experience in skin care for their consumers, and offering integrated concepts and investing in exciting point-of-sale presentations, which heightens the shopping experience,” Holding said.

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