Johnson & Johnson to buy OGX shampoo maker for $3.3B
NEW BRUNSWICK, N.J. — Johnson & Johnson is looking to strengthen its position in hair care by agreeing to acquire Vogue International, a privately held personal care products company, for approximately $3.3 billion in cash.
J&J said the acquisition will include the OGX collection of shampoos, conditioners, treatments, styling products, body care and bath products, the FX line of hair styling products, and the Proganix and Maui Moisture hair care lines.
"Our acquisition of Vogue International's full line of leading advanced hair care products sold in the U.S. and in 38 countries will strengthen our global presence in this important category. Vogue International's commitment to quality, innovation, and consumer preference complement our Consumer portfolio, while also presenting attractive hair care category growth opportunities for Johnson & Johnson," said Jorge Mesquita, Worldwide Chairman, Consumer, Johnson & Johnson.
The transaction is subject to antitrust clearance and other customary closing conditions. The transaction is expected to close during the third quarter of 2016. Upon closing, the transaction is not expected to impact the 2016 sales or earnings guidance ranges that Johnson & Johnson announced on April 19, the company said.
Unilever, Henkel and L'Oreal had reportedly submitted first round bids for Vogue in the past few months, according to Reuters. Vogue International was founded in 1987 in Clearwater, Fla.
Milani Cosmetics: On target with millennials
Inspired by the art and culture of Milan, Italy, Milani Cosmetics embodies the style and essence of the city’s fashion and design heritage, with a high level of detail going into the formulation, packaging and shade of each individual product. But that’s only the beginning of the story.
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If ever a beauty brand resonated with the times, it’s Milani. In an age of increasing diversity and inclusivity, and a time when millennials and multicultural consumers have emerged as major buying forces, Milani is making the right moves.
“Milani is focused on continuing to work with retailer partners to serve the needs of the multicultural and millennial consumer. Cutting-edge analytics help direct engaging point-of-purchase displays, custom in-store events, digital marketing partnerships and event marketing that are designed to drive in-store traffic and market basket,” said Rhonda Baron, VP sales and business development.
And that approach is clicking on all cylinders. In the latest 52-week Nielsen period ended April 9, Milani’s sales growth rate is outpacing the category by more than three times, according to the company.
The product lineup offers hundreds of shades and high-tech, specialty store-level formulas that its audience demands — and all at an affordable pricepoint that appeals to this price-sensitive customer. Multicultural models help drive home its all-inclusive image, while celebrity clients and famous makeup artists give it credibility. As to the brand’s wide appeal, Milani delivers products that work on all skin tones. A strong social media presence allows the brand to speak directly to — and with — its consumers.
Milani has its ear tuned to the market — and that was a key reason the company was excited to participate in the DSN-Mack Elevation New General Market Forum. “Milani was excited to engage with key retailers at the recent New General Market Forum in New York City. We see a great opportunity to drive incremental sales in the mass cosmetic category via the millennial and multicultural consumer,” said Glenn McCloskey, VP sales. “We are committed to delivering fact-based merchandising solutions that significantly improve planogram productivity.”
To strengthen its positioning, Milani over the past year launched products with broad-based formulas that specifically target millennial and multicultural consumers. The brand also significantly boosted its digital marketing efforts and event marketing programs.
Millennials in particular rely on the opinions of friends and people they can trust, and Milani taps into this in different ways. Working with over 300 top social media beauty “influencers,” including such stars as @NikkieTutorials, the brand now reaches a combined network of more than 30 million beauty, fashion and lifestyle enthusiasts. Exposure on YouTube — over 105,000 videos featuring Milani products have been posted on the platform by beauty fans and key influencers — have made it a video star.
And that’s not all: In the branded and user-generated content that millennials value so highly, Milani has a total reach that exceeds 1 billion impressions. At the same time, the brand also racks up plenty of mentions in beauty editorial spreads, both in print and online, which help enhance its credibility.
In launching new products, Milani has a clear-cut goal: drive awareness, trial and demand. It utilizes a variety of methods, from content marketing (including filtering Instagram content to drive online sales) and social media to retailer relations and public relations. Thousands of products are distributed to its beauty influencer network to help build awareness and drive demand.
Key to its efforts is the brand’s “Beauty Identity Digital Campaign,” which focuses on celebrating individuality in a way that supports new product launches and the brand’s message of diversity. The campaign has a weekly theme that spotlights 12 different beauty looks or “identities,” pairing each “identity” with the new products needed to get each look. It uses the identities to give content for how the products can be used for different looks. It also has a tie-in to a social media contest — a popular feature that encourages the type of feedback and interaction with the brand that its target audience responds to.
On the event side, Milani offers consumers a unique experience via its participation in “Generation Beauty by ipsy.” The event brings together leading online beauty, fashion and lifestyle gurus, top beauty brands and devoted fans for a weekend of inspiration, networking and fun.
Generation Beauty attracts Milani’s sweet spot: 75% of the approximate 3,000 attendees at the 2015 Los Angeles event were between the ages of 18 and 34 years, and nearly all are socially active, particularly on Instagram and Facebook.
#BadassPlan: Authenticity, open communication, community pay off for Vogue International
How can marketers successfully target and engage millennial customers in the New General Market? For Vogue International’s OGX brand, the secret to catering to the female New General Market consumer is to “remain authentic, foster open conversations with her and create a community she can engage in that provides the opportunity to create the brand she wants are really the linchpin of success,” according to Courtney Connelly, senior brand manager for North America.
(Click here to download the full New General Market report.)
“The New General Market — millennials — is and has been our core consumer, so we’re constantly evaluating and improving our interaction with her to provide her a strong community and a brand she can believe in,” Connelly said.
Such interaction provides valuable insight into what OGX customers would love to see, from the introduction of new fragrances into its hair and body care lines to assistance in battling confidence issues. OGX’s Badass Hair Day campaign underscores its commitment to leveraging that insight. “We created Badass Hair Day because we kept hearing [our customer] say, ‘I’m having a bad hair day’ — but we completely disagreed, and we wanted to empower her to believe in herself as she is instead of living up to unrealistic expectations,” Connelly explained.
Under the Badass Hair Day umbrella, consumers were invited to “put an end” to bad hair days by experiencing how different OGX products can fuel their Badass Hair Day, embracing their natural beauty and participation in an OGX sweepstakes. One grand prize winner and their “bestie” took home a year of free OGX products and a $1,000 gift card, while 20 women received a one-year supply of OGX for themselves and another for a bestie as well.
The company also depends on social influencers. Engaging with these social influencers and encouraging them to try the company’s products plays an important role in cultivating customers because it “allows consumers to obtain an objective, authentic point of view” on all of OGX’s hair care and body care offerings, according to Connelly.
Continuing to innovate and drive trends, so that its target consumer can “discover within [the OGX] brand no matter what her need,” comprises another initiative for OGX as it strives to maintain its strong foothold in the New General Market, Connelly noted. She cited the 2016 OGX 02, Bamboo Fiber-Full and Niacin3 & Caffeine hair care lines as examples. OGX 02 incorporates oxygen liposomes and cloudberries; a power-packed form of vitamins A, C, E and B; calcium; magnesium; and other potent antioxidants to “help hair swish and shine with every strut.” Bamboo Fiber-Fill is the first suite of hair care products to use real bamboo fibers, which attach to hair strands to help “create thick, full and voluptuous tresses, along with a fresh and spicy scent.” Niacin3 & Caffeine is a “fallout-busting formula” blend designed to aid in exfoliating and stimulating the scalp while combating hair loss.
Connelly said partnering with retailers that are willing to tell stories in an industry that has historically been function- and benefits-driven is where success lies for these new products, as well as for the entire OGX brand. “We provide [retailers with] tools to promote our brand stories, engage the consumers with emotional benefits in-store and drive our consumer back to the shelf by sharing insights,” she noted.
Retailers, Connelly concluded, would do well to further target the New General Market consumer and improve the in-store experience with on-shelf educational tools so “she can read about ingredient stories and benefits, and discover on her own or through knowledgeable beauty staff. These are small pieces that can be implemented without major overhaul to improve experience in store.”