Jamie Matusow, Editor02.04.09
In our annual competition, Beauty Packaging polled our more than 7,300 online readers to determine which industry innovator they thought deserved the title of Company of the Year: Excellence in Packaging. Not surprisingly, the company that holds the enviable position as the world’s largest fragrance seller also drew top marks from our readers for its packaging prowess. Here, corporate executives reveal how Coty keeps to its century-old roots by thinking independently, acting creatively—and never losing sight of the power of packaging.
Ever since François Coty, who is credited with founding the modern fragrance industry in 1904, launched his first fragrance, La Rose Jacqueminot, in a bottle designed by French crystal house Baccarat, the company has prided itself on appealing to a prestige market as well as the masses, putting the same creative effort into each product no matter what the price point.
Coty’s first sales followed his notoriously clever stunt in which, after being turned away by the buyer at the Grands Magasins du Louvre department store in Paris, he reportedly smashed the bottle, spilling the rejected fragrance on the floor and causing a frenzied demand among shoppers. Orders poured in, product sold out—and within months, Coty had become a millionaire—and the innovator behind what would become a century-old company in which employees continue to think on their feet—and outside the box.
Key to François Coty’s success was not only that he had rapidly learned the fragrance side of the business, but that he had early on realized that the bottle was as important as the scent. In addition to working with Baccarat, François Coty also befriended René Lalique and collaborated with him on many flacons, including that for Le Muguet in 1910. François Coty had achieved his goal: presenting fine perfumes in attractive containers at affordable prices. (If only these masterpieces were readily available today!) Always thinking of presentation, Coty even employed Lalique to design the frosted glass windows of his parfumerie’s New York showroom, which today is the well-known Henri Bendel department store, located on Manhattan’s Fifth Avenue.
While Coty expanded in Europe and had its ups and downs in the U.S. (along with a succession of sales to Charles Pfizer and Joh. A. Benckiser, the current owner), the fragrance manufacturer was not a key player in the beauty industry when Bernd Beetz took the reins in mid-2001 as CEO, Coty, Inc.—but a radical change was about to ensue.
Over the last seven years, Coty has posted phenomenal growth, almost tripling in size from $1.4 billion to $4 billion—a result, Beetz says, of a combination of strong leadership, global expansion, organicinternal growth, acquisitions, line extensions and new licenses.
“Today,” says Beetz. “we are a different Coty from 2002. We are the world’s largest fragrance company, highly recognized in the States, and operate under a cosmopolitan management team that, together, shapes and defines the company’s growth path.
“Our past and future growth can be summarized by the company credo of Faster. Further. Freer,” adds Beetz. “It describes the spirit of Coty Inc.’s growth as a company that acts faster, takes ideas further, and thinks more freely than the competition. We plan to continue on this path of proven success.”
Beetz aspires to grow Coty into a $5 billion enterprise by 2010—and credits the company’s profitable climb to its more than 10,000 global employees, saying, “The company’s greatest success lies in its people. From marketing to finance, corporate to PR, factories and R&D, it’s the Coty family that is our greatest success—has and always will be. With our creative, innovative, out-of-the-box talent of the Coty family, as a company, we stand out against our competitors and continue to experience success.”
Part of the success, it seems, stems from a hereditary factor, which “Coty’s family” inherited from its patriarch. “François Coty,” explains Beetz, “once said, ‘Give a woman the best product you can make, market it in the perfect bottle, beautiful in simplicity yet impeccable in taste, ask a reasonable price for it, and you will witness the birth of a business the size of which the world has never seen.’ And this is how we gain success year after year, by keeping in tune with the wisdom of our founder.”
Modern day Coty also takes a cue from its founder in creating products for both prestige and mass markets. François Coty catered to the wealthy, including the Russian czar and czarina, with his fancy Art Nouveau flacons, but he also sold small, affordable bottles to Paris shop girls. Today, Coty, Inc. has developed an unrivaled portfolio of men’s and women’s prestige and mass market brands, distributed to consumers in 91 markets worldwide.
The Coty Prestige brand portfolio, which accounts for 52% of corporate sales, is distributed in prestige and ultra-prestige stores, and includes Baby Phat, Balenciaga, Calvin Klein, Cerruti, Chloé, Chopard, Davidoff, Home Skin Lab, Jennifer Lopez, Jette Joop, Jil Sander, Joop!, Karl Lagerfeld, Kenneth Cole, L.A.M.B. fragrance by Gwen Stefani, La Voce by Renée Fleming, Lancaster, Marc Jacobs, Nautica, Nikos, Phat Farm, Sarah Jessica Parker, Vera Wang, Vivienne Westwood, and Wolfgang Joop.
The Coty Beauty brand portfolio contributes almost half of the company’s sales, with a 48% share, and reaches a greater number of retail outlets than Prestige lines. Brands include Adidas, Astor, Celine Dion, Chupa Chups, David and Victoria Beckham, Esprit, Exclamation, Faith Hill, Halle Berry, Jovan, Kate Moss, Kylie Minogue, La Cross, Miss Sixty, Miss Sporty, N.Y.C. New York Color, Pierre Cardin, Playboy, Rimmel, Sally Hansen, Shania Twain, Stetson, Tim McGraw, and Tonino Lamborghini.
The decision as to whether a fragrance is marketed as prestige or mass is made jointly between Beetz and Coty’s chief marketing officers, but product development is identical. The process, says Beetz, works through various stages and collaboration between marketing, packaging concept development (PCD), purchasing, the design group and the license involved. Ultimate approval is submitted to the license or designer.
“Coty’s Beauty packaging shares the same core elements of creativity and innovation [as Prestige],” says Beetz. The challenge, he notes, still remains to achieve a unique, innovative and upscale look while delivering an accessible value proposition to the consumer. “This means that we have to use our creativity and innovation in engineering and manufacturing processes to achieve the desired aesthetics at the lowest possible cost,” he says.
Coty’s efforts have obviously paid off, winning the company accolades in both mass and prestige arenas, including four FiFis in 2008, for David and Victoria Beckham Intimately Beckham Women, Fragrance of the Year—Women’s Popular Appeal; David and Victoria Beckham Intimately Beckham Men, Fragrance of the Year—Men’s Popular Appeal; Daisy Marc Jacobs, Fragrance of the Year—Women’s Luxe and Best Packaging—Women’s Prestige.
Never one to rest on its laurels, Coty, in 2008, introduced more than 70 new products in fragrance, color cosmetics and skin care—which means a lot of package development. “Globally,” says Bernard Quennessen, Coty’s VP PCD, Prestige fragrances, “the package development team for fragrance alone is working on four to six dozen product launches per year. With promotions, limited editions, various sizes, that’s basically one package a day that requires technical development.”
At least 20 of the Coty products launched in 2008 were fragrances, according to data from market researcher Mintel, which reports that there were 314 fragrances launched in total during the year. Coty’s entries included McGraw by Tim McGraw, Playboy, Calvin Klein Secret Obsession, Lamborghini, Wolfgang Joop, Harajuku Lovers (L.A.M.B), Kapsule (Lagerfeld), Chloe Signature, Kylie Minogue: Showtime, Kylie Minogue Sexy Darling, David and Victoria Beckham Signature (Men/Women), Celine Dion Sensational, Deseo by Jennifer Lopez, Davidoff Adventure, Nautica White Sail and Baby Phat Fabulosity.
Coty is placing additional emphasis on color cosmetics, specifically with its Astor and Rimmel brands. Coty’s acquisition of Del Labs integrated popular skin care and color cosmetics brands Sally Hansen, N.Y.C. New York Color and La Cross into the Coty Beauty portfolio, and bolstered Coty’s presence in the color cosmetics and nail care market. Rimmel has been especially positioned for market expansion in Asia.
Euromonitor International’s October 2008 profile of Coty Inc, “Cosmetics and Toiletries-World,” notes that while the company is not as established as its competitors in the Chinese market, it holds the No.1 global ranking in Fragrance, and comes in at No.2 in the U.S. Coty sales are highest in Europe (54%), followed by North America (32%), Asia/Australia (7%) and Rest of World. Fragrance sales lead (65%), followed by color cosmetics (20%) and skin, sun and personal care (15%).
Euromonitor ranks Coty Inc. as No. 7 in global color cosmetics and No.14 in the U.S. Over the period 2002-2007, Euromonitor reports that most of Coty’s growth was global—with an average 37% rise in color cosmetics sales and more than a 47% increase over the same period in global fragrance sales.
According to Information Resources, Inc., a Chicago-based market research firm, Coty fragrances held 19 of the top 40 slots in women’s and men’s fragrance categories for top 20 brands sold in U.S. FDMx (supermarkets, drug stores and mass market retailers excluding Walmart) for the 52-week period ended 11/9/2008.Leaders in Women’s Traditional Fragrance included CK One, Jovan Musk for Women, Celine Dion, Baby Phat Goddess, Jovan White Musk, Glow by J.Lo, Exclamation and Shania.
The IRI list of Men’s Traditional Fragrance noted Stetson (No. 1), Jovan Musk for Men; Davidoff Cool Water, CK Eternity for Men and Joop Homme (all Coty Prestige brands); David Beckham Instinct; Adidas Moves and Adidas Moves 001; CK Obsession for Men; Nautica Blue; and Preferred Stock.
A number of leading scents on the IRI list fall under the category that many identify Coty with: that of a celebrity fragrance powerhouse. (Interestingly, Elizabeth Taylor’s White Diamonds from Elizabeth Arden, notable as the first celebrity fragrance, tops the IRI list.)
While true that Coty leads in the celebrity fragrance arena, surprisingly, sales of celebrity fragrance are responsible for only 10% of the company’s sales. The impressive remainder is generated by life style and designer fragrances.
To date, the longest running brand within the Coty portfolio is CK One, which recently launched a campaign playing off the philosophy of the incoming Barack Obama administration, with the slogan “We are one.” Fifteen years after the Coty Prestige brand debuted as the world’s original shared fragrance, it continues to project a current message. A limited edition CK One collector’s bottle with “We are one” handwritten in various languages and packaged with an MP3 speaker, kicked off the campaign. The collector’s edition is available at fine department and specialty stores globally.
Whatever the current trend, Coty seems to have its finger on the pulse. Whether celebrity or designer, “Coty has always been a visionary brand,” notes Lois Johnson, style and beauty editor at BettyConfidential.com. “They literally sniff out fragrance trends before anyone else, and quickly make them available and affordable. Starting back in the early 1900s, Coty developed the first oriental scent called Le Chypre introducing spicy woodsy fragrance to a mass audience which sparked a slew of more expensive others. In the ’90s when the vanilla craze hit, Coty was right on it with Vanilla Fields (is there anyone who didn’t buy a bottle?), and they were first to recognize the power of aromatherapy at-home with the creation of The Healing Garden line that essentially started the whole spa-at-home category of products. So yes, they are first-class innovators.
“But now,” says Johnson, “the marriage of designers, celebrities and fragrance has brought style and packaging into the mix. Coty’s power to lure top designers like Calvin Klein, Jil Sander, Kenneth Cole, Vera Wang and Marc Jacobs—and celebrities like Celine Dion—is impressive, but a big part of a fragrance’s success these days depends on an eye-catching bottle. Fragrance that looks as good as it smells is important to women. Since I’m a huge Marc and Vera fan, I have to admit that my own Coty favorites for both packaging and fragrance are the original Marc Jacobs’ signature gardenia scent (and all the extras for bath and body) and Vera Wang Princess, which is spectacular (I’m a sucker for anything with a heart and a crown). Coty’s team captured the unique aesthetic of each designer in bottles and outer packaging that complemented the fragrance and also provided consumers with a fashion accessory that looked as cool and pricey as the clothes.”
Steve Corsi, director design development, Markwins Classic Brands, also admires Coty’s design aesthetic and says, “Coty’s packaging is always tastefully developed, with meaningful design motifs. They are masters of the real trick that all great luxury purveyors have: the ability to present complex aspirational ideas in an everyday and accessible fashion—they do it with panache.”
Corsi adds that a few years ago, he attended a keynote address at HBA by then president of Coty Americas, Eric Thoreux. One of the insights he came away with was that the spotlight for aspirational packaging had moved in succession from design houses through to designers and then to celebrities. “In a playful mood,” recalls Corsi,“I asked him if he thought that the next stage was for consumers to design their own packages. Eric’s answer: ‘No—consumers always want to be entertained!’ That to me sums it up: Coty’s packaging is modern, tasteful, aspirational, accessible and, last but not least, entertaining.”
Nothing entertains like entertainers—who also capture instant recognition on shelf. While Coty was admittedly not the first to introduce a celebrity fragrance, it is credited with re-igniting the trend in 2002 when the company partnered with Jennifer Lopez.
“Coty was preemptive in the category of celebrity fragrance,” comments internationally acclaimed packaging designer Marc Rosen, who has worked with Coty on a number of projects. “They got in on the ground floor with J.Lo. They acquired good names and built the brands—and the packaging definitely helped.” Rosen admires the company for its understanding—inherited from its founder—that fragrance packaging is an art. “I enjoy working with Coty,” says Rosen, “because the marketing people value packaging in the marketing mix.” Rosen adds that the original J.Lo—the one with the charm necklace around the neck—was very innovative in its day.
In 2009, the 15th Jennifer Lopez fragrance is set to launch with Coty. A new scent, Sunkissed Glow, is slated for a February launch in Europe. It follows the Glow bottle design, which J. Lo debuted in 2002, and in keeping with the added jewelry embellishment on the original, the new colorful, sunset-hued bottle is adorned with a wearable seashell charm bracelet.
Unconfirmed reports say that J.Lo fragrances have thus far earned more than $1 billion for Coty.
So how did Coty’s celebrity fragrance phenomena come about? “The company needed something big that pushed us toward becoming an industry leader,” says Beetz. “In 2002, we were barely on the map in the United States. Working with our talented teams, we decided to take the celebrity fragrance route—no one else was doing it.”
Beetz says celebrities are chosen through due diligence. “Common sense tells us the celebrity must exude beauty in some significant way...so much that his or her fragrance is compelling enough to buy and use for a long time.” Also, he says, the celebrity is someone very well known, who has reached a star-status and is admired by a vast fan base to achieve a significant level of sales and market share.
Celebrities are involved in the olfactory structure of the fragrance, the concept, the advertising, the photography, package design, distribution—“just about everything,” says Beetz”—with a veto right. This is fair, he says, since it is their brand.
Coty, says Beetz, has the exceptional talent and internal agility as an organization to help celebrities bring their fragrance vision to life. “This is of course done by understanding completely the business parameters of the market, and aiming to make the fragrance a significant commercial success. This is also done, however, with respect for the great art of perfumery, and a fearless insight into the psyche of the celebrity, and how to express that in a bottle, a scent, a color, an image. I call it ‘marrying art and commerce,’ ” explains Beetz.
Currently, Coty works with more than two dozen celebrities, including Jennifer Lopez, Gwen Stefani, Sarah Jessica Parker, the Beckhams, Kate Moss and Halle Berry.
In 2008, the following celebrity fragrances were launched:J.Lo—Miami Glo, Deseo, Deseo Asia Editions, Deseo for Men; Celene Dion—Sensational, Sensational Moment; Beckham—Signature for Men, Signature for Women, After Dark; Baby Phat—Fabulosity, Seductive Goddess; Sarah Jessica Parker—Covet Pure Bloom; Kylie Minogue—Showtime, Sexy Darling; Gwen Stefani—Harajuku Lovers; Lamborghini; Tim McGraw; and Renee Fleming.
The most successful celebrity brands include J.Lo, David and Victoria Beckham and Sarah Jessica Parker. However, Beetz is quick to point out that at Coty, “all celebrity, designer or life style partners are successful in their own right.”
Coty’s risk with its initial J.Lo launch was obvious from the start, and was parlayed into the creation of an entire market segment: “We knew we had a winner with Jennifer Lopez, but were pleasantly surprised to exceed our first-year sales projections by almost three times,” says Beetz.
A tripling of sales projections was also the case with one of Coty’s most recent—and risky—launches ever: Harajuku Lovers, a collaboration with pop superstar Gwen Stefani, which hit counters last fall. Influenced by Stefani’s 1996 visit to Tokyo, during which she saw kids in the Harajuku section of Tokyo who were all about self expression, the singer had already developed a clothing and accessories line using the name when Coty formed the partnership to develop five fragrances that look more like irresistible, collectable toys than fragrance bottles.
“We took a risk,” says Carlos Timiraos, Coty’s group VP global marketing, and as a result, “we were moderate in our predictions—going into uncharted territory—with a fragrance shaped like dolls.” But the success was more than Coty imagined. “We tripled our forecast,” says Timiraos.
Bernard Quennessen says packaging was obviously a big part of the Harajuku launch. “Of course the juice is important too…but you can almost sell a fragrance by its packaging.”Timiraos agrees and says, “Packaging is taking on increasing importance.”
The bottles, in 30- and 10mlsizes, are designed as collectibles, and uniquely decoratedto represent Gwen Stefani and her four backup dancers. The glass, manufactured by Pochet, is the same for all five “girls,” with a scalloped design unique to the Harajuku Lovers apparel. The caps (supplied by Alcan Packaging Beauty and Jackel) are replicas of each of the girls in their very own style. The bottle concepts and fragrances were inspired by the individual personalities of Love, Lil Angel, Music, Baby and Gwen. They were designed by Stefani and Jolie Clemens (Harajuku Lovers’ apparel designer) in collaboration with Coty’s creative team. Fragrances were created by IFF, Firmenich, Givaudan and Fragrance Resources; pumps were supplied by Rexam.
Like the bottles, the carton, manufactured by Cartondruck, expresses key elements of the Harajuku Lovers apparel brand as well as the girls’ personalities. The scallop pattern is used as the background for all the cartons, and each has its own colored ribbon and description of the girls on the back.
“One of the first challenges with this project,” says Quennessen, “was to transform a 2D image into a 3D ‘human’ figure.” To do this, he says they had to look beyond traditional fragrance packaging resources.
“The technology we used is not one usually used for cosmetics and personal care,” he explains. “It’s more for toys; we had to adapt it. We had to create not a toy—but a beautiful perfume cap.”
“It had to stand out on its own as a luxury product,” adds Timiraos. And the concept is unique: The bottles themselves are collectable items that consumers can enjoy. And Timiraos says the concept is working; according to consumer focus groups, people are collecting all five.
Quennessen notes that not only was the project very complicated to produce, with its attention to detail and very complex cap technology, it was launched in record time. The standard amount of time allotted for new product launches is 72 weeks, he explains, but “Harajuku was launched in 60 weeks by a handful of people including Gwen Stefani herself—who has very high standards.”
The Harajuku Lovers line also includes a coffret that contains five solid fragrances. The heads on the solids are slightly smaller than those on the bottles. Part of the original vision for the brand, the solids are slightly more consumer friendly as they are purse size—and more portable.
However, says Carol Suchocki, director, packaging concept development, Coty, “It was another risk in technical development—pushing the envelope.” Solids are sold as a pack of five, but may be offered individually in some areas.
Also somewhat risky is that Harajuku is a prestige line marketed to teens. Catherine Walsh, senior vice president of American licenses Coty Prestige, says the line was developed for the young, hip and non-traditional girl who seeks her own style and finds a connection with her personality in the fragrance. The target consumers are 13-18 year old girls.
As many of them are Gwen Stefani fans, not surprisingly, G has so far been the best selling of the Harajuku girls—both domestically and abroad. But, says Timiraos, this may change. Due to the complexity of the project, he says Coty had to stagger the launches. The fragrance collection has so far debuted in the U.S., Canada and Australia. Next up: Japan, home of the real Harajuku girls, where Timiraos expects some of the other girls to gain in popularity, mostly due to the individual scents. “Gwen will most likely not be most popular in Asia,” he says, “as coconut and tropical don’t work in Asia.”
With two sizes of juice and a line of solids becoming popular collectibles, is there room for further extension of the brand? I ask Timiraos if there could be a male Harajuku backup singer on the horizon? “I wouldn’t rule it out,” he says. What about personal care? Color cosmetics? “I wouldn’t rule that out either,” he adds with a laugh. “We’ll keep innovating, pace announcements, keep them collecting. We’ll be innovating to satisfy the people who are buying them as collectibles.”
McGraw by Tim McGraw, which debuted in August 2008, was another of Coty’s most noteworthy introductions last year. The unique packaging captures the essence of country music superstar Tim McGraw’s Southern heritage with a prestige look, yet is accessible to consumers in mass markets.
McGraw is a prime example of Beetz’s conviction that Coty’s Beauty division share the same core elements of creativity and innovation as prestige lines such as Harajuku Lovers. The packaging, from the bottle to the carton, was inspired by Tim McGraw’s modern appeal and masculine magnetism. The uniquely shaped rectangular glass bottle is adorned with elements that reference the singer’s personality and style. From the sleek silver cap to the black leather-like collar (achieved by Qualipac), which resembles the brim of his signature cowboy hat, the McGraw bottle is masculine and sophisticated. The carton’s matte black texture coupled with the custom-designed silver embossed pick at the top of the carton and rope running along each panel, communicate a fashion-forward, aspirational and sexy fragrance.
“The most challenging part about this package,” says Stephanie Martins, Coty’s VP PCD Beauty fragrances, “was achieving the leather finish on the glass. We had to accomplish the leather look and feel in a cost-effective way while maintaining rich aesthetics.”
Nirav Mehta, PCD director Coty, who also worked on the project, says, “We developed a shoulder piece out of a soft touch PP. To achieve the leather pattern,we started with the real leather piece to mimic and then used a special photochemical process; the image of the real leather pattern was etched on the interiors of the mold. These pieces with a leather pattern were then assembled on a groove in the glass shoulder and held in place by the pump collar.”
On the heels of the success of the Tim McGraw fragrance, came word of a related act. Coty has signed McGraw’s superstar songstress wife, Faith Hill, for a fragrance of her own—yet another celebrity fragrance—scheduled for debut in 2009.
Coty does not appear to be influenced by skeptics warning about waning interest in celebrity fragrance. I ask Timiraos for his thoughts on this. “In fact,” he says, celebrity brands are growing according to 2008 over 2007 figures (year on year). It’s a myth about what’s really going on at counter.”
Karen Grant, vice president, NPD Beauty—and a member of Beauty Packaging’s Board of Advisors—cites Coty’s innovation and packaging as key to its success at counter. “Coty continues to help fuel new launch activity in the fragrance market. Never resting on its laurels, Coty continues to look for new partnerships and vehicles to generate excitement and newness into the category. Also, over the past year, Coty has captured attention in the market with novelty in design. With fragrances like Marc Jacobs Daisy and the new Harajuku Lovers line, they have added not only novelty, but a dash of playfulness. This has been a winning combination for Coty for these brands.”
With possibly tough economic times ahead, will Coty continue its risk-taking tactics? “As a global company,” says Beetz, “Coty faces the same marketplace challenges as the general economy. We continue to have strong brands with impressive market positions despite sales challenges continuing to stay in line with the overall economic activity. In 2009, we will continue business as usual and evaluate all potential scenarios on an ongoing basis and adjust our strategies to make sure we continue to perform well.”
“Any launch is a combination of brand, packaging, juice, price point, etc.,” says Timiraos, “it’s a complicated mix. I think that over the last couple of years, Coty has raised the bar of packaging in the mix of successful fragrance marketing.
“Two of our biggest successes in recent history had packaging that took big risks,” adds Timiraos, “and as a result, the packaging stood out—and made them instant successes when they hit the shelves [Daisy and Harajuku]. We took a risk—and will continue to take risks to excite consumers in this area.”
Obviously a risk taker himself, Timiraos embodies the corporate philosophy and thinks outside the box. When I ask him which Coty fragrance he favors, he responds: “Last night I went to a black tie dinner and wore Vera Wang men. This morning, I put on Sarah Jessica Lovely—there’s a masculine component to it—and I’m not embarrassed to admit it.”
Ever since François Coty, who is credited with founding the modern fragrance industry in 1904, launched his first fragrance, La Rose Jacqueminot, in a bottle designed by French crystal house Baccarat, the company has prided itself on appealing to a prestige market as well as the masses, putting the same creative effort into each product no matter what the price point.
Coty’s first sales followed his notoriously clever stunt in which, after being turned away by the buyer at the Grands Magasins du Louvre department store in Paris, he reportedly smashed the bottle, spilling the rejected fragrance on the floor and causing a frenzied demand among shoppers. Orders poured in, product sold out—and within months, Coty had become a millionaire—and the innovator behind what would become a century-old company in which employees continue to think on their feet—and outside the box.
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Coty made the most of its FiFi award winning packaging for the Marc Jacobs Daisy fragrance. |
Following the Leader
While Coty expanded in Europe and had its ups and downs in the U.S. (along with a succession of sales to Charles Pfizer and Joh. A. Benckiser, the current owner), the fragrance manufacturer was not a key player in the beauty industry when Bernd Beetz took the reins in mid-2001 as CEO, Coty, Inc.—but a radical change was about to ensue.
Over the last seven years, Coty has posted phenomenal growth, almost tripling in size from $1.4 billion to $4 billion—a result, Beetz says, of a combination of strong leadership, global expansion, organicinternal growth, acquisitions, line extensions and new licenses.
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Coty CEO Bernd Beetz |
“Our past and future growth can be summarized by the company credo of Faster. Further. Freer,” adds Beetz. “It describes the spirit of Coty Inc.’s growth as a company that acts faster, takes ideas further, and thinks more freely than the competition. We plan to continue on this path of proven success.”
Beetz aspires to grow Coty into a $5 billion enterprise by 2010—and credits the company’s profitable climb to its more than 10,000 global employees, saying, “The company’s greatest success lies in its people. From marketing to finance, corporate to PR, factories and R&D, it’s the Coty family that is our greatest success—has and always will be. With our creative, innovative, out-of-the-box talent of the Coty family, as a company, we stand out against our competitors and continue to experience success.”
Part of the success, it seems, stems from a hereditary factor, which “Coty’s family” inherited from its patriarch. “François Coty,” explains Beetz, “once said, ‘Give a woman the best product you can make, market it in the perfect bottle, beautiful in simplicity yet impeccable in taste, ask a reasonable price for it, and you will witness the birth of a business the size of which the world has never seen.’ And this is how we gain success year after year, by keeping in tune with the wisdom of our founder.”
Prestige and Mass Market
Modern day Coty also takes a cue from its founder in creating products for both prestige and mass markets. François Coty catered to the wealthy, including the Russian czar and czarina, with his fancy Art Nouveau flacons, but he also sold small, affordable bottles to Paris shop girls. Today, Coty, Inc. has developed an unrivaled portfolio of men’s and women’s prestige and mass market brands, distributed to consumers in 91 markets worldwide.
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A portion of sales from Coty's La Voce by Renée Fleming went to New York City's Metropolitan Opera. |
The Coty Beauty brand portfolio contributes almost half of the company’s sales, with a 48% share, and reaches a greater number of retail outlets than Prestige lines. Brands include Adidas, Astor, Celine Dion, Chupa Chups, David and Victoria Beckham, Esprit, Exclamation, Faith Hill, Halle Berry, Jovan, Kate Moss, Kylie Minogue, La Cross, Miss Sixty, Miss Sporty, N.Y.C. New York Color, Pierre Cardin, Playboy, Rimmel, Sally Hansen, Shania Twain, Stetson, Tim McGraw, and Tonino Lamborghini.
The decision as to whether a fragrance is marketed as prestige or mass is made jointly between Beetz and Coty’s chief marketing officers, but product development is identical. The process, says Beetz, works through various stages and collaboration between marketing, packaging concept development (PCD), purchasing, the design group and the license involved. Ultimate approval is submitted to the license or designer.
“Coty’s Beauty packaging shares the same core elements of creativity and innovation [as Prestige],” says Beetz. The challenge, he notes, still remains to achieve a unique, innovative and upscale look while delivering an accessible value proposition to the consumer. “This means that we have to use our creativity and innovation in engineering and manufacturing processes to achieve the desired aesthetics at the lowest possible cost,” he says.
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David and Victoria Beckham are among Coty's top performing scents. |
2008 Launches
Never one to rest on its laurels, Coty, in 2008, introduced more than 70 new products in fragrance, color cosmetics and skin care—which means a lot of package development. “Globally,” says Bernard Quennessen, Coty’s VP PCD, Prestige fragrances, “the package development team for fragrance alone is working on four to six dozen product launches per year. With promotions, limited editions, various sizes, that’s basically one package a day that requires technical development.”
At least 20 of the Coty products launched in 2008 were fragrances, according to data from market researcher Mintel, which reports that there were 314 fragrances launched in total during the year. Coty’s entries included McGraw by Tim McGraw, Playboy, Calvin Klein Secret Obsession, Lamborghini, Wolfgang Joop, Harajuku Lovers (L.A.M.B), Kapsule (Lagerfeld), Chloe Signature, Kylie Minogue: Showtime, Kylie Minogue Sexy Darling, David and Victoria Beckham Signature (Men/Women), Celine Dion Sensational, Deseo by Jennifer Lopez, Davidoff Adventure, Nautica White Sail and Baby Phat Fabulosity.
Coty is placing additional emphasis on color cosmetics, specifically with its Astor and Rimmel brands. Coty’s acquisition of Del Labs integrated popular skin care and color cosmetics brands Sally Hansen, N.Y.C. New York Color and La Cross into the Coty Beauty portfolio, and bolstered Coty’s presence in the color cosmetics and nail care market. Rimmel has been especially positioned for market expansion in Asia.
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Sexy Curves mascara comes in a slightly curvaceous purple tube and features a Triple Plump brush. |
Euromonitor ranks Coty Inc. as No. 7 in global color cosmetics and No.14 in the U.S. Over the period 2002-2007, Euromonitor reports that most of Coty’s growth was global—with an average 37% rise in color cosmetics sales and more than a 47% increase over the same period in global fragrance sales.
According to Information Resources, Inc., a Chicago-based market research firm, Coty fragrances held 19 of the top 40 slots in women’s and men’s fragrance categories for top 20 brands sold in U.S. FDMx (supermarkets, drug stores and mass market retailers excluding Walmart) for the 52-week period ended 11/9/2008.Leaders in Women’s Traditional Fragrance included CK One, Jovan Musk for Women, Celine Dion, Baby Phat Goddess, Jovan White Musk, Glow by J.Lo, Exclamation and Shania.
The IRI list of Men’s Traditional Fragrance noted Stetson (No. 1), Jovan Musk for Men; Davidoff Cool Water, CK Eternity for Men and Joop Homme (all Coty Prestige brands); David Beckham Instinct; Adidas Moves and Adidas Moves 001; CK Obsession for Men; Nautica Blue; and Preferred Stock.
Reaching for the Stars
A number of leading scents on the IRI list fall under the category that many identify Coty with: that of a celebrity fragrance powerhouse. (Interestingly, Elizabeth Taylor’s White Diamonds from Elizabeth Arden, notable as the first celebrity fragrance, tops the IRI list.)
While true that Coty leads in the celebrity fragrance arena, surprisingly, sales of celebrity fragrance are responsible for only 10% of the company’s sales. The impressive remainder is generated by life style and designer fragrances.
To date, the longest running brand within the Coty portfolio is CK One, which recently launched a campaign playing off the philosophy of the incoming Barack Obama administration, with the slogan “We are one.” Fifteen years after the Coty Prestige brand debuted as the world’s original shared fragrance, it continues to project a current message. A limited edition CK One collector’s bottle with “We are one” handwritten in various languages and packaged with an MP3 speaker, kicked off the campaign. The collector’s edition is available at fine department and specialty stores globally.
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Coty Beauty’s Nautica Fragrances is now launching its first eco-friendly fragrance, which supports Oceana, a global ocean conservation organization. |
“But now,” says Johnson, “the marriage of designers, celebrities and fragrance has brought style and packaging into the mix. Coty’s power to lure top designers like Calvin Klein, Jil Sander, Kenneth Cole, Vera Wang and Marc Jacobs—and celebrities like Celine Dion—is impressive, but a big part of a fragrance’s success these days depends on an eye-catching bottle. Fragrance that looks as good as it smells is important to women. Since I’m a huge Marc and Vera fan, I have to admit that my own Coty favorites for both packaging and fragrance are the original Marc Jacobs’ signature gardenia scent (and all the extras for bath and body) and Vera Wang Princess, which is spectacular (I’m a sucker for anything with a heart and a crown). Coty’s team captured the unique aesthetic of each designer in bottles and outer packaging that complemented the fragrance and also provided consumers with a fashion accessory that looked as cool and pricey as the clothes.”
Steve Corsi, director design development, Markwins Classic Brands, also admires Coty’s design aesthetic and says, “Coty’s packaging is always tastefully developed, with meaningful design motifs. They are masters of the real trick that all great luxury purveyors have: the ability to present complex aspirational ideas in an everyday and accessible fashion—they do it with panache.”
Corsi adds that a few years ago, he attended a keynote address at HBA by then president of Coty Americas, Eric Thoreux. One of the insights he came away with was that the spotlight for aspirational packaging had moved in succession from design houses through to designers and then to celebrities. “In a playful mood,” recalls Corsi,“I asked him if he thought that the next stage was for consumers to design their own packages. Eric’s answer: ‘No—consumers always want to be entertained!’ That to me sums it up: Coty’s packaging is modern, tasteful, aspirational, accessible and, last but not least, entertaining.”
Celebrity Knockouts
Nothing entertains like entertainers—who also capture instant recognition on shelf. While Coty was admittedly not the first to introduce a celebrity fragrance, it is credited with re-igniting the trend in 2002 when the company partnered with Jennifer Lopez.
“Coty was preemptive in the category of celebrity fragrance,” comments internationally acclaimed packaging designer Marc Rosen, who has worked with Coty on a number of projects. “They got in on the ground floor with J.Lo. They acquired good names and built the brands—and the packaging definitely helped.” Rosen admires the company for its understanding—inherited from its founder—that fragrance packaging is an art. “I enjoy working with Coty,” says Rosen, “because the marketing people value packaging in the marketing mix.” Rosen adds that the original J.Lo—the one with the charm necklace around the neck—was very innovative in its day.
In 2009, the 15th Jennifer Lopez fragrance is set to launch with Coty. A new scent, Sunkissed Glow, is slated for a February launch in Europe. It follows the Glow bottle design, which J. Lo debuted in 2002, and in keeping with the added jewelry embellishment on the original, the new colorful, sunset-hued bottle is adorned with a wearable seashell charm bracelet.
Unconfirmed reports say that J.Lo fragrances have thus far earned more than $1 billion for Coty.
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CK One's global "We are one" campaign, includes this limited edition fragrance bottle. |
Beetz says celebrities are chosen through due diligence. “Common sense tells us the celebrity must exude beauty in some significant way...so much that his or her fragrance is compelling enough to buy and use for a long time.” Also, he says, the celebrity is someone very well known, who has reached a star-status and is admired by a vast fan base to achieve a significant level of sales and market share.
Celebrities are involved in the olfactory structure of the fragrance, the concept, the advertising, the photography, package design, distribution—“just about everything,” says Beetz”—with a veto right. This is fair, he says, since it is their brand.
Coty, says Beetz, has the exceptional talent and internal agility as an organization to help celebrities bring their fragrance vision to life. “This is of course done by understanding completely the business parameters of the market, and aiming to make the fragrance a significant commercial success. This is also done, however, with respect for the great art of perfumery, and a fearless insight into the psyche of the celebrity, and how to express that in a bottle, a scent, a color, an image. I call it ‘marrying art and commerce,’ ” explains Beetz.
Currently, Coty works with more than two dozen celebrities, including Jennifer Lopez, Gwen Stefani, Sarah Jessica Parker, the Beckhams, Kate Moss and Halle Berry.
In 2008, the following celebrity fragrances were launched:J.Lo—Miami Glo, Deseo, Deseo Asia Editions, Deseo for Men; Celene Dion—Sensational, Sensational Moment; Beckham—Signature for Men, Signature for Women, After Dark; Baby Phat—Fabulosity, Seductive Goddess; Sarah Jessica Parker—Covet Pure Bloom; Kylie Minogue—Showtime, Sexy Darling; Gwen Stefani—Harajuku Lovers; Lamborghini; Tim McGraw; and Renee Fleming.
The most successful celebrity brands include J.Lo, David and Victoria Beckham and Sarah Jessica Parker. However, Beetz is quick to point out that at Coty, “all celebrity, designer or life style partners are successful in their own right.”
Coty’s risk with its initial J.Lo launch was obvious from the start, and was parlayed into the creation of an entire market segment: “We knew we had a winner with Jennifer Lopez, but were pleasantly surprised to exceed our first-year sales projections by almost three times,” says Beetz.
Packaging Phenomena
A tripling of sales projections was also the case with one of Coty’s most recent—and risky—launches ever: Harajuku Lovers, a collaboration with pop superstar Gwen Stefani, which hit counters last fall. Influenced by Stefani’s 1996 visit to Tokyo, during which she saw kids in the Harajuku section of Tokyo who were all about self expression, the singer had already developed a clothing and accessories line using the name when Coty formed the partnership to develop five fragrances that look more like irresistible, collectable toys than fragrance bottles.
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Sally Hansen remains the flagship brand of Del Laboratories, now a division of Coty Inc. |
Bernard Quennessen says packaging was obviously a big part of the Harajuku launch. “Of course the juice is important too…but you can almost sell a fragrance by its packaging.”Timiraos agrees and says, “Packaging is taking on increasing importance.”
The bottles, in 30- and 10mlsizes, are designed as collectibles, and uniquely decoratedto represent Gwen Stefani and her four backup dancers. The glass, manufactured by Pochet, is the same for all five “girls,” with a scalloped design unique to the Harajuku Lovers apparel. The caps (supplied by Alcan Packaging Beauty and Jackel) are replicas of each of the girls in their very own style. The bottle concepts and fragrances were inspired by the individual personalities of Love, Lil Angel, Music, Baby and Gwen. They were designed by Stefani and Jolie Clemens (Harajuku Lovers’ apparel designer) in collaboration with Coty’s creative team. Fragrances were created by IFF, Firmenich, Givaudan and Fragrance Resources; pumps were supplied by Rexam.
Like the bottles, the carton, manufactured by Cartondruck, expresses key elements of the Harajuku Lovers apparel brand as well as the girls’ personalities. The scallop pattern is used as the background for all the cartons, and each has its own colored ribbon and description of the girls on the back.
“One of the first challenges with this project,” says Quennessen, “was to transform a 2D image into a 3D ‘human’ figure.” To do this, he says they had to look beyond traditional fragrance packaging resources.
“The technology we used is not one usually used for cosmetics and personal care,” he explains. “It’s more for toys; we had to adapt it. We had to create not a toy—but a beautiful perfume cap.”
“It had to stand out on its own as a luxury product,” adds Timiraos. And the concept is unique: The bottles themselves are collectable items that consumers can enjoy. And Timiraos says the concept is working; according to consumer focus groups, people are collecting all five.
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G, the Gwen Stefani fragrance “doll” has so far been the best selling of the Harajuku girls. |
The Harajuku Lovers line also includes a coffret that contains five solid fragrances. The heads on the solids are slightly smaller than those on the bottles. Part of the original vision for the brand, the solids are slightly more consumer friendly as they are purse size—and more portable.
However, says Carol Suchocki, director, packaging concept development, Coty, “It was another risk in technical development—pushing the envelope.” Solids are sold as a pack of five, but may be offered individually in some areas.
Also somewhat risky is that Harajuku is a prestige line marketed to teens. Catherine Walsh, senior vice president of American licenses Coty Prestige, says the line was developed for the young, hip and non-traditional girl who seeks her own style and finds a connection with her personality in the fragrance. The target consumers are 13-18 year old girls.
As many of them are Gwen Stefani fans, not surprisingly, G has so far been the best selling of the Harajuku girls—both domestically and abroad. But, says Timiraos, this may change. Due to the complexity of the project, he says Coty had to stagger the launches. The fragrance collection has so far debuted in the U.S., Canada and Australia. Next up: Japan, home of the real Harajuku girls, where Timiraos expects some of the other girls to gain in popularity, mostly due to the individual scents. “Gwen will most likely not be most popular in Asia,” he says, “as coconut and tropical don’t work in Asia.”
With two sizes of juice and a line of solids becoming popular collectibles, is there room for further extension of the brand? I ask Timiraos if there could be a male Harajuku backup singer on the horizon? “I wouldn’t rule it out,” he says. What about personal care? Color cosmetics? “I wouldn’t rule that out either,” he adds with a laugh. “We’ll keep innovating, pace announcements, keep them collecting. We’ll be innovating to satisfy the people who are buying them as collectibles.”
Making More Packaging Music
McGraw by Tim McGraw, which debuted in August 2008, was another of Coty’s most noteworthy introductions last year. The unique packaging captures the essence of country music superstar Tim McGraw’s Southern heritage with a prestige look, yet is accessible to consumers in mass markets.
McGraw is a prime example of Beetz’s conviction that Coty’s Beauty division share the same core elements of creativity and innovation as prestige lines such as Harajuku Lovers. The packaging, from the bottle to the carton, was inspired by Tim McGraw’s modern appeal and masculine magnetism. The uniquely shaped rectangular glass bottle is adorned with elements that reference the singer’s personality and style. From the sleek silver cap to the black leather-like collar (achieved by Qualipac), which resembles the brim of his signature cowboy hat, the McGraw bottle is masculine and sophisticated. The carton’s matte black texture coupled with the custom-designed silver embossed pick at the top of the carton and rope running along each panel, communicate a fashion-forward, aspirational and sexy fragrance.
“The most challenging part about this package,” says Stephanie Martins, Coty’s VP PCD Beauty fragrances, “was achieving the leather finish on the glass. We had to accomplish the leather look and feel in a cost-effective way while maintaining rich aesthetics.”
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The unique packaging developed for country music superstar Tim McGraw’s fragrance captures a prestige look that’s accessible to consumers in mass markets. |
Celebrity on the Wane?
On the heels of the success of the Tim McGraw fragrance, came word of a related act. Coty has signed McGraw’s superstar songstress wife, Faith Hill, for a fragrance of her own—yet another celebrity fragrance—scheduled for debut in 2009.
Coty does not appear to be influenced by skeptics warning about waning interest in celebrity fragrance. I ask Timiraos for his thoughts on this. “In fact,” he says, celebrity brands are growing according to 2008 over 2007 figures (year on year). It’s a myth about what’s really going on at counter.”
Karen Grant, vice president, NPD Beauty—and a member of Beauty Packaging’s Board of Advisors—cites Coty’s innovation and packaging as key to its success at counter. “Coty continues to help fuel new launch activity in the fragrance market. Never resting on its laurels, Coty continues to look for new partnerships and vehicles to generate excitement and newness into the category. Also, over the past year, Coty has captured attention in the market with novelty in design. With fragrances like Marc Jacobs Daisy and the new Harajuku Lovers line, they have added not only novelty, but a dash of playfulness. This has been a winning combination for Coty for these brands.”
Continued Risk-Taking
With possibly tough economic times ahead, will Coty continue its risk-taking tactics? “As a global company,” says Beetz, “Coty faces the same marketplace challenges as the general economy. We continue to have strong brands with impressive market positions despite sales challenges continuing to stay in line with the overall economic activity. In 2009, we will continue business as usual and evaluate all potential scenarios on an ongoing basis and adjust our strategies to make sure we continue to perform well.”
“Any launch is a combination of brand, packaging, juice, price point, etc.,” says Timiraos, “it’s a complicated mix. I think that over the last couple of years, Coty has raised the bar of packaging in the mix of successful fragrance marketing.
“Two of our biggest successes in recent history had packaging that took big risks,” adds Timiraos, “and as a result, the packaging stood out—and made them instant successes when they hit the shelves [Daisy and Harajuku]. We took a risk—and will continue to take risks to excite consumers in this area.”
Obviously a risk taker himself, Timiraos embodies the corporate philosophy and thinks outside the box. When I ask him which Coty fragrance he favors, he responds: “Last night I went to a black tie dinner and wore Vera Wang men. This morning, I put on Sarah Jessica Lovely—there’s a masculine component to it—and I’m not embarrassed to admit it.”
