Democratisation and premiumisation are the keys to a winning strategy that has seen the Consumer Products Division go from strength to strength. Thanks to social media and other digital tools, consumers worldwide have access to a vast quantity of beauty information and expertise, which fuels new expectations. Capitalising on their exceptional ability to innovate, the Division’s brands are more committed than ever to creating inclusive and responsible beauty that everyone can afford.
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What were the strategic drivers behind the best year of growth in more than 30 years? Alexis Perakis-Valat, President, Consumer Products, looks back on the highlights of 2023.
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With the power of our aspirational brands and innovation ethos, we are uniquely positioned to seize new opportunities.
The Consumer Products Division had its best growth in more than 30 years at +12.6% like-for-like and +8.2% reported.
The Division outperformed a dynamic mass market and delivered strong growth surpassing €15 billion. Throughout the year, growth was driven by volume and value as the Division continued to pursue its strategy of simultaneously democratising and premiumising.
All four key brands grew in double digits, with L’Oréal Paris crossing the €7 billion mark.
All major categories posted strong growth, as disruptive innovations met flawless execution. Makeup was the leading contributor to the Division’s growth. Hair was also very dynamic, thanks to premium launches. Skincare grew significantly. By region, the most noteworthy performances were in Europe, where momentum saw a truly spectacular acceleration, making it a key growth contributor, and in emerging markets, particularly Mexico, Brazil, and India. North America delivered robust growth.
+12.6%growth in Division sales
3billionaire brands: L’Oréal Paris, Garnier, Maybelline New York
No.1L’Oréal Paris is the number one beauty brand worldwide
+16%growth in makeup sales
Highlights
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Democratisation and premiumisation: a winning twin-track strategy
Increasingly expert consumers on a quest for innovation
Consumers are increasingly knowledgeable and demanding thanks to the beauty information they glean from social media. These insights into new rituals and trends draw them to increasingly innovative, high-end products. They perfect their beauty regimens by adding new steps, such as the use of targeted haircare products after shampooing and serums in addition to moisturising creams. L’Oréal is seizing on this unique impetus for offer-driven growth in the consumer products beauty market through new, exceptional high-value products.
Democratising new beauty rituals
L’Oréal Paris is inventing products that provide additional benefits for consumers. For example, the brand’s new skincare routine Revitalift Clinical pairs a 12% Vitamin C serum with an anti-UV SPF 50+ fluid, combining the antioxidant power of vitamin C with the added benefits of SPF 50+ sun protection. This combination meets consumer demand for quality, efficacy and safety, and is popularising a new ritual of daily sun protection in beauty products. Brow beauty is another ritual on the rise. Maybelline New York is riding the trend with its Build a Brow pen and sealing gel, a two-in-one solution that allows users to draw precise lines and sculpt their eyebrows.
Innovation driving demand for premium products
To keep pace with consumers’ growing expertise and launch innovative new products, the Division’s brands are also capitalising on L’Oréal’s experience and Research. To cite just one example, Garnier’s Good hair colour range is positioned at a higher price point than traditional at-home hair dyes because it provides a completely revamped and more sustainable beauty experience. Good has broken new ground with innovative packaging featuring 45% less plastic than previous Garnier kits and enabling consumers to mix the dye directly in the tub. The ingredients in its formula, which provides a more enjoyable sensory experience, are of 90% natural origin.
As a champion of innovation through science, L’Oréal Paris has continued to premiumise with products featuring revolutionary technology. The Bond Repair haircare range is a prime example: eight years of research culminated in the development of a formula enriched with citric acid, using precise molecular technology to penetrate deep inside damaged hair fibres. The results speak for themselves: the four-product Bond Repair routine (pre-shampoo treatment, shampoo, conditioner and leave-in serum) reduces breakage by 98% and enhances shine by 90%.
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Consumer Products expands new beauty frontiers
L’Oréal’s Consumer Products Division is ideally positioned to seize the potential in the emerging markets of South-East Asia, the Middle East, Africa and Latin America. These markets accounted for about a third of the Division’s growth this year. And this is only the beginning.
The digital beauty boom
Young, connected consumers who are big beauty fans are driving rapid growth in emerging markets, particularly among the Consumer Products Division’s target group, the upper middle class. By 2030, emerging markets will be home to more than 40% of this cohort, representing a billion consumers worldwide. This is a colossal opportunity for growth in the coming years. Consumer habits are shifting as emerging markets experience a real digital revolution. E-commerce is an important tool for market penetration, particularly in countries like India, where cities and towns may be isolated or remote. Highly connected younger generations follow iconic, celebrity influencers who fuel their followers’ interest in beauty while expanding their product expertise and knowledge. Social media is also a window into consumer trends and expectations. The data analysed by our teams is a precious tool for developing and creating the products consumers want.
Innovations specially designed and deployed for emerging markets
Thanks to its powerful brands and innovation capabilities, the Consumer Products Division is perfectly poised to seize this tremendous opportunity. A winning example is Garnier’s Vitamin C serum, which helps create a radiant complexion and combat imperfections. The brand has been a pioneer in the Indian market in particular, thanks to a successful strategy building on its high-quality formula, smaller sizes to ensure affordability for all, distribution of free samples on university campuses and awareness-raising campaigns both on- and offline. The approach has led to unprecedented penetration in a market where consumers are highly interested in beauty and on the lookout for innovations. The serum is now a star product in all emerging markets, and Vitamin C is among the top ingredients consumers search for on all platforms.
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New sales concepts, new buying experiences
L’Oréal continues to work with its partners to transform the purchasing experience and bring new energy to all product categories in supermarkets and drugstores. Brands showcase their expertise with serum bars and skincare counters. For example, the Soriana “skin centre” in Mexico aims to educate consumers, demonstrate skincare routines and highlight innovations. These new distribution concepts are completely reinventing points of sale. The Division has also rolled out this premiumisation at Italian distributor Acqua e Sapone, making stores easier to get around and simplifying communications. This more intuitive and experiential approach to selling products has had a significant positive impact on sales.
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Using brand influence for more sustainable beauty
Sustainability lies at the heart of Consumer Products strategy. This year saw ongoing transformation on several fronts, accelerating use of recycled plastic and transforming iconic bottles to make them lighter and more environmentally friendly.
Our brands are committed to raising awareness about environmental responsibility. In 2023, Garnier became one of the first beauty brands to promote more sustainable everyday habits in its commercials worldwide. Brands are also mobilising their ecosystems through partnerships focused on shared goals. L’Oréal’s has teamed up with Walmart in Mexico to streamline product transport to reduce CO2 emissions and raise awareness among consumers with an online and offline activation plan that includes collection points for empty bottles and collaborations with influencers. In the United Kingdom, L’Oréal has worked with Tesco, Sainsbury’s and Superdrug to roll out a makeup packaging collection scheme at 1,485 stores.
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Self-service beauty: powered by Beauty Tech
Beauty Tech is a powerful tool for providing additional services and personalisation for consumers; it’s also the best way to put a beauty advisor in the hands of billions of consumers. For example, Garnier’s new analytical tool, Skin Coach AI, simulates the effectiveness of a product on the skin, with a before-and-after comparison based on a simple selfie.
Maybelline New York has partnered with Microsoft Teams to create virtual makeup looks users can apply during calls and videoconference meetings. Teams’ 300 million users worldwide can now virtually try on 12 Maybelline looks with a single click, then recreate them in real life. The tool is helping to democratise makeup and promote self-confidence in the workplace.
