BEAUTY CARE

Coty, Piaggio Group to develop fragrances under Vespa name

BY Antoinette Alexander

NEW YORK — Coty and Piaggio Group, a European manufacturer of two-wheel motor vehicles, have teamed up for an exclusive partnership to create, develop and distribute a signature duo of fragrances for men and women under the Vespa name.

Vespa is one of Italy’s most iconic brands. A symbol of Italian style, creativity and technology, Vespa is not just a scooter, but an icon with more than 18 million scooters sold since its creation in 1946.

The duo Vespa fragrance line is expected to debut in May.

 

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NSF International launches cosmetics and personal care program to address safety, quality concerns

BY Antoinette Alexander

ANN ARBOR, Mich. — Global public health organization NSF International has launched the NSF Cosmetics and Personal Care Program to provide auditing, training, product testing, claim substantiation and certification services to enable manufacturers to improve the quality and safety of their products, and retailers to strengthen the oversight of their cosmetic and personal care suppliers, the organization announced on Friday.

According to NSF International, the program addresses the needs raised by new legislation, retailer-prohibited chemical lists and manufacturing-related quality issues that have driven rapid changes to the $300 billion global cosmetics and toiletries market. Consumer safety concerns also have fueled the initiative. In fact, a recent independent study conducted on behalf of NSF found that 48% of consumers are concerned about the quality and safety of personal care products. To help address these concerns, NSF International developed the NSF Cosmetics and Personal Care Program, which includes:

  • Good Manufacturing Practice Auditing: This program meets the growing demand for third-party verified compliance to cosmetic manufacturing GMP quality standard ISO 22716, which is recognized worldwide and mandated by European regulations. It also encompasses FDA guidance criteria for cosmetic production, laboratory controls and customer complaint handling, which is essential for cosmetics imported into the United States. Manufacturers earn a graded audit that retailers use to qualify and set standards for their suppliers, and that serves as a baseline for continual improvement.
  • Bundled Audits for Food, Personal Care and Dietary Supplements: Many facilities produce ingredients for multiple product categories spanning food, cosmetics and dietary supplements, each of which has its own set of specific quality and safety guidelines. NSF perform audits to multiple schemes and labeling requirements including dietary supplement GMPs, food safety schemes benchmarked under the Global Food Safety Initiative, ISO 9001 and ISO 14001 in addition to cosmetic GMPs. This eliminates audit redundancy and disruption to production operations while reducing costs.
  • Testing: This includes testing to verify label claims, including “free from” substances like Bisphenol A (BPA), PABA (p-Aminobenzoic acid), sulfates, parabens and many others. NSF also screens cosmetics for contaminants to verify their safety and quality. This is in addition to substantiating compliance to regulations in Europe and the United States (e.g., Proposition 65). Label reviews and physical, chemical and performance characteristic comparisons against national brands also are available for retailers that have concerns regarding their private label cosmetics and personal care product lines.
  • Product Certification: NSF certifies cosmetics to widely accepted programs, including the EPA’s Design for the Environment program, which verifies that cosmetic products and ingredients do not contain chemicals of concern such as known carcinogens or reproductive and developmental toxicants. NSF International also certifies cosmetics to either the USDA National Organic Program or the American National Standard for personal care products containing organic ingredients (NSF/ANSI 305) via NSF’s sister company QAI. These programs are important to safety-minded consumers in particular, as a recent independent study conducted on behalf of NSF found that 44% of consumers prefer products that are independently tested and certified.
  • Training and Consulting: NSF provides GMP training for professionals who are involved in manufacturing and distributing cosmetic and personal care products so they can stay apprised of the changing regulatory landscape and best practices in supply chain quality. Those professionals who know how to conduct gap analyses and identify regulatory non-compliances before they become an issue will add value to the manufacturing process and help minimize safety and quality risks. NSF can also provide expert consulting to evaluate a cosmetic manufacturing quality and safety system, help facilities resolve complex quality problems or guide companies through the proper procedures for responding to FDA warning letters.

“The cosmetics industry is becoming increasingly scrutinized as consumers seek safer products and retailers step up to meet this demand,” said Casey Coy, manager of NSF International’s Cosmetics and Personal Care Program. “With this new program, NSF International has applied 70 years of technical and scientific expertise to develop specialized auditing, testing and certification programs that support retailers in improving their supply chain oversight and cosmetic safety. This program also helps manufacturers demonstrate compliance to retailer requirements and U.S. and European regulations.”

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Coty posts Q2 results, looks to top-line growth in second half

BY Antoinette Alexander

NEW YORK — Coty faced a challenging second quarter as revenues declined, partially due to U.S. market softness in the mass fragrance and nail categories. Despite the challenges, company executives expressed optimism during Friday morning’s conference call, and looks to return to top-line growth in the second half.

“The key market trends and business dynamic that impacted our first quarter results continued into the second quarter. This was largely anticipated, and the quarterly results came generally in-line with our expectations,” Michele Scannavini, CEO of Coty Inc., told analysts.

Net revenues during the quarter ended Dec. 31 totaled $1.32 billion, down 4% on a like-for-like basis and as reported relative to the prior-year period.

Net income decreased to $82.5 million from $123.2 million in the year-ago period. The company attributed the decrease primarily to lower operating income partially offset by lower tax expense.

Scannavini said that the fragrance market in the United States reported negative growth in the quarter, with a high-single digit decline in the mass channel. In fragrance, revenues declined 2% on a like-for-like basis, reflecting the timing of new launch activity, the impact of expired licenses and high promotional activity during the holiday season, especially in the mass channel.

The mass color cosmetics market also faced a decline, driven by a decline in nail. In the United States, the nail category at mass declined 6% in the quarter following a 4% decline in the first quarter.

“As a reaction to this consumption slowdown, retailers have rapidly adjusted their inventory level. This destocking continued into the second quarter, however, to a lower extent compared with the first quarter. Now, we believe a big part of the inventory reduction should be over,” Scannavini said.

Scannavini added: “As we have previously discussed, much of the growth in the nail category in the last couple of years was driven by the special effects subcategory — a new fashionable trend that pushed the whole category consumption up strong double digits month after month. … Now, the wow effect of this trend is progressively fading and the category is declining at a fast rate. … Going forward, we are focusing most of our future innovation on enhancing the performance of our core main products.”

Looking ahead, the company will remain focused on restoring growth in its color cosmetics segment, stemming the decline in nail and fully leveraging the strength of its Rimmel brand. Furthermore, in its Sally Hansen brand the company is implementing a 360-degree program to increase competitiveness and bolster market share gains. This program will include a modernization of the brand image through a new advertising campaign and in-store fixturing, Scannavini said.

In OPI, the company is targeting robust growth in the second half. As part of the effort, it is working on a special collection developed in partnership with Coca-Cola, which will be supported by a digital plan. The brand also is expected to benefit from new distribution with Sally Beauty in the United States.

In mass fragrance, Coty is currently launching a new perfume from Beyoncé, called Beyoncé Rise. It also recently partnered with singer and songwriter Enrique Iglesias to develop his own line of signature fragrances. The partnership with Iglesias is expected to expand its fragrance business, particularly in Brazil and to the Latin population, which is gaining an increasing share of total fragrance consumption in the United States, Scannavini told analysts.

In skin and body care, the company is targeting growth in the second half as it expects Adidas to progressively gain momentum with the launch of a World Cup-inspired line, as well progressive expansion in emerging markets, he noted.

“Market conditions will remain challenging in several markets around the globe, particularly in the mass channel. Despite this uncertainty, we keep targeting to return to top line growth in the second half thanks to a competitive innovation plan, the increasing impact of our new structure in the emerging markets and continued marketing investment to support our power brands,” Scannavini said.

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