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P&G Beauty is the unit within Procter & Gamble which manages what was until recently a substantial portfolio of cosmetics, haircare and fragrance products. It is still a big business, but after years of flat or worse sales a huge chunk of the division was divested in 2016 to rival Coty. Only 12 of the biggest brands remain, including billion-dollar sellers Pantene, Head & Shoulders and Olay. Others include Herbal Essences and Aussie haircare (and Rejoice in Asia), Secret deodorant (or its regional equivalents) and heritage soap brand Ivory. The group's collection of male products is led by the rejuvenated Old Spice brand, subject of one of the most talked-about (and imitated) marketing campaigns in recent years. Virtually the only premium-priced product P&G kept hold of was prestige anti-aging skincare brand SK-II, and more recently it has selectively added several niche premium beauty brands, mostly in the US. These include Native natural deodorants, Walker & Co ethnic skin care, First Aid Beauty and Snowberry skincare from New Zealand. The sell-off to Coty represented a major retreat for P&G. Until the late 2000s, the group had been pressing hard on the heels of market leader L'Oreal in premium beauty products and fragrances. However, the business stumbled after 2010 as sales and market share growth of multiple key products stalled or even declined. At the same time, L'Oreal strengthened its lead, and a string of acquisitions by Unilever had pushed P&G back into 3rd place in beauty by 2013. Fixing those problems became the single most most important goal for reinstated group CEO AG Lafley. However, with no significant turnaround after two years, Lafley adopted a new strategy. In 2015, P&G agreed to sell around a quarter of its beauty business, including CoverGirl, Clairol, Wella and the fragrance business to Coty. After a long delay, the deal completed in 4Q 2016. Yet it still took almost another two years for performance to improve significantly in P&G's beauty business. Divisional management is led by Alexandra Keith, president global hair care & beauty, based in the US, with support from Markus Strobel, president global skin & personal care, based in Singapore. Divisional sales for the year to June 2022 were $14.7bn, with net earnings of $3.2bn. Skin & personal care accounts for more than half of revenues with hair care contributing the rest. P&G is the global leader in retail hair care with around 20% share.
Capsule checked 6th January 2021
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Historical profile information for P&G Beauty
Adbrands Update 6th Jan 2022: Tula Skincare is the latest addition to P&G's prestige beauty portfolio, currently expanding at the rate of one new acquisition per month. No price was disclosed for Tula, a skincare brand based on probiotic superfoods, but sales last year were around $150m. It follows in the footsteps of prestige haircare brand Ouai, bought in December, and "farm-to-face" Farmacy Beauty.
Adbrands Daily Update 12th Dec 2018: P&G added to its beauty portfolio with the acquisition of Walker & Co, a premium personal care specialist targeting the African-American market. Founder Tristan Walker will continue to lead the business, which currently markets two main products: men's shaving care range Bevel and women's haircare brand Form. P&G Beauty chief Alex Keith said the purchase "will allow us to accelerate our consumer understanding and relevance in the very important and growing multicultural consumer space. Tristan and his team have done an incredible job in understanding the needs of African-ancestry consumers and creating propositions that are really meaningful." No price was disclosed.
Adbrands Weekly Update 19th Jul 2018: Procter & Gamble added another niche premium brand to its beauty portfolio. US-based First Aid Beauty - or FAB - was acquired for an undisclosed sum, and will continue to operate as a separate brand business under founder Lilli Gordon. "P&G has bought other brands before and hasn't been successful," said divisional president Alex Keith. "What we're doing very differently this time around is treating those businesses as standalone, often with the founders staying with the brand." It is the group's third beauty purchase this year after Native additive-free deodorants and New Zealand's Snowberry prestige skin care.
Adbrands Weekly Update 23rd November 2017: Procter & Gamble returned to the acquisition trail with a small purchase for its beauty division. The group has acquired direct-to-consumer deodorant brand Native for an undisclosed sum. The company specialises in "natural" deodorants made without added chemicals like aluminium or paraben. "We've really been focused on this fast-growing segment of the category with consumers that are really discerning and deliberate about the ingredients that are in or not in their products," said Bill Brace, VP, P&G North America Beauty Care.
Adbrands Weekly Update 15th Jun 2017: P&G has promoted Alexandra Keith to president of the slimmed-down P&G Beauty division, following the departure of Patrice Louvet to become CEO of Ralph Lauren. Keith was previously president of global skincare; she is replaced in that role by SK-II brand leader Markus Strobel. Following the divestment of more than 40 mostly prestige brands to Coty, P&G is left with a core of 12 mass-market brands led by Olay, Pantene, Head & Shoulders, Secret and Old Spice. Its sole remaining prestige brand is the super-premium SK-II skincare range, also one of the division's strongest performers in recent years.
Adbrands Weekly Update 6th Oct 2016: Coty completed its acquisition of Procter & Gamble's specialty beauty brands on Monday this week, creating a new giant in the global market. Brands joining the Coty stable include Covergirl, Max Factor, Clairol and Wella, as well as the Gucci and Hugo Boss fragrance licenses. Coty's annual sales will more than double to around $9bn, and it becomes the global #1 in fragrances, #2 in professional haircare and #3 in colour cosmetics. At the same time, Camillio Pane moves up to global CEO of the enlarged business under chairman Bart Becht. The other big winner from completion is Publicis Group's Zenith Media network which takes over responsibility for all the transferring brands from Starcom, MediaCom and other former incumbents. Creative duties will change in due course. Currently, Grey handles creative for most of the brands affected, with Saatchi & Saatchi and Leo Burnett also involved in some markets.
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