BEAUTY CARE

Dr. Bronner’s announces move to fair trade, organic ingredients

BY Antoinette Alexander

ESCONDIDO, Calif. Dr. Bronner’s Magic Soaps has announced that by December 2007 all major ingredients in its soaps will come from certified fair trade and organic sources.

Over the course of the 2006-2007 period, the company has reorganized how it sources its major raw materials, including organic coconut, palm and olive oil. They account for more than 95 percent of its raw material purchases.

In addition, the company has outlined the following fair trade program:

  • It purchases all major materials directly from sources that provide collective power to growers and workers and are good partners in implementing community development products.
  • It guarantees farmers a price, which covers cost of production and a decent return, even when market prices collapse, with an organic premium paid on top. Pricing is transparent to farmers and payments will be on time.
  • It ensures that fair wages are paid to farm and factory workers, the rules of the International Labor Organization on worker representation and work hours are followed, and physical working conditions are more comfortable.
  • It pays an extra Fair Trade premium, 10 percent of the price of materials and labor. Depending on local needs, the premium either goes directly to growers to improve their income or into a fund for local development projects such as education, day care and health care programs; sanitation improvement; organic fertilizer provisions to small growers; and funding for small businesses.
  • For ongoing inspection and certification of its program, the company is engaging the Swiss organic certifying organization IMO. Concurrently, it is working with the Fair Trade Labeling Organization to develop product specific standards for its major materials.

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P&G’s Freda to head Estee Lauder

BY Antoinette Alexander

NEW YORK Estee Lauder announced on Friday that Procter & Gamble executive Fabrizio Freda will join the company as president and chief operating officer, and it is anticipated that Freda will become chief executive officer within 24 months—a move that at least one industry observer believes could lead to expansion into mass beauty or new distribution channels as the boundaries between mass and prestige increasingly blur.

“We believe investors will react favorably to Estee Lauder’s chief executive officer succession plan. Despite the obvious risks, the appointment of an outsider with mass consumer goods experience implies significant and necessary change is likely,” stated Morgan Stanley analyst William Pecoriello in a research note.

The move is part of a succession plan created by Estee Lauder chief executive officer William Lauder, who will step down in two years.

Until recently Freda served as president of global snacks at P&G. At P&G he spent a decade in positions of increasingly responsibility in the health and beauty care division. Freda also directed marketing and strategic planning for Gucci SpA from 1986 to 1988.

Reporting to Freda in his role as president and chief operating officer will be many of the company’s key global brands, including Clinique, as well as the specialty brands such as Bobbi Brown, La Mer, Jo Malone, Darphin and the Aramis and Designer Fragrances divisions, which will continue to be led by group president Patrick Bousquet-Chavanne; the company’s international business, which accounts for more than 50 percent of sales, under the continuing direction of group president international, Cedric Prouve; global operations; research and development; and packaging.

As part of the plan, chief operating officer Dan Brestle will be named vice chairman and president, ELC North America. In this newly created role, Brestle will continue to oversee the Estee Lauder, MAC, Prescriptives and Tom Ford Beauty brands, which will continue to be led by group president John Demsey and the BeautyBank division on a worldwide basis.

“Although Dan Brestle’s focus on NA could be a positive, will he stay?” stated Pecoriello. “Will the discipline Freda imposes, based on 23 years at P&G, lead to a more structured environment for the personalities that drive the fastest growing brands like MAC?”

In addition, group president Philip Shearer will take on new responsibilities, leading the strategy and new business team, and focusing on mergers and acquisitions. He will continue to lead the Aveda, Origins, Bumble and bumble and Ojon brands, as well as the online business.

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Physicians Formula appoints Jeff Berry to board of directors

BY Antoinette Alexander

AZUSA, Calif. Cosmetics company Physicians Formula has appointed Jeff Berry to its board of directors. Berry replaces James Lawrence, who stepped down due to the demands on his time as the new chief financial officer of the Unilever Group.

The company also announced that current board member Zvi Eiref will assume Lawrence’s role as chair of the audit committee.

Berry is currently vice president and treasurer of Del Monte Foods. He started his career with Bain and Co. and spent six years with McKinsey and Co., where he advised several consumer products and retail clients in the areas of strategy, branding and marketing.

“Jeff is a very strong addition to our board and brings a wealth of public company and long-term planning and strategy experience with branded consumer companies. We look forward to his input as we continue to build upon our distribution platform,” stated Ingrid Jackel, chief executive officer of Physicians Formula. “I would also like to thank Jim for his valued guidance and contribution over the past year and wish him all the best in his new position.”

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