BrandWatch by Michel Gutsatz

Health Works: Chinese traditional medicine serving health

In Hong Kong, one can find around twenty small boutiques in the subway, with the name Health Works - Chinese Urban Healing Tea; some of them with also a dining area.  Crossing their threshold one enters an extraordinary universe: food products based on traditional Chinese medicine.  You discover products based on herbal teas, herbs, fruits - guaranteed free of preservatives and artificial colouring - in “responsible” packaging. Prices range from 16 $HK to 56 $HK (1.6 to 5.6 €).
The products change with each season – because in Chinese medicine food requirements are linked to organs and seasons.  For example, the "spring" selection aims at facilitating the functions of the liver.

The boutique provides advice aplenty, and explains the origin of the products as well as the philosophy behind traditional Chinese medicine.  Their nutritional principles are described and the benefits of each product are written on the packaging. The approach is thus both educational and responsible.
Founded in 1989 under the name Tong Zhi Tang, the company changed it to Health Works(hop) in 2000.  Its products are also distributed in 1,500 sales outlets such as supermarkets and convenience stores.  I find this concept very interesting - very modern, one that might have been conceived in Europe or the USA: the brand has chosen an approach that is sustainable and responsible, positioning it at an affordable price and preferring a local distribution network.  At a time when there are very strong fears about food safety in China, and where the government supports the development of domestic brands, it is reasonable to believe that Health Works will grow rapidly in the continent.

Kellogg's called into question on “natural”

In October 2011, the Cornucopia Institute (an American activist organization) published a document entitled "Cereal Crimes" - warning consumers about the extensive use of genetically modified cereals and the presence of pesticide residues that are injurious to health in the breakfast products of major brands.

This report might have remained restricted to those concerned by the issue, except that last April, a supermarket in Rhode Island (Green Grocer) decided to withdraw one of the products named in “Cereal Crimes” from its shelves: Kashi cereals from Kellogg's.  Even if they are USDA certified, these contain GMOs.

The retailer placed a notice on its shelf explaining its decision:
"You might be wondering where your favourite Kashi cereals have gone. It has recently come to our attention that 100% of the soy used in Kashi products is genetically modified, and that when the USDA tested the grains used there were found to be pesticides that are known carcinogens and hormone disruptors."

This image quickly spread through the Internet: consumers posted comments on the Facebook page of the brand, used Twitter to condemn the fact that a brand that projects itself as “natural” and certified was not beyond reproach.  They also discovered that the brand is one of Kellogg's - information that cannot be found either on Kashi’s website or its packaging.

One can establish a parallel between this example and the information published by the Detroit Legal News: the growing number of suits filed against the "natural" claims of food brands in the U.S.A.  The most recent concern Ben & Jerry's, ConAgra, Frito-Lay, Kashi, Naked Juice, Snapple and Trader Joe's. The same article tells us that 95% of these complaints are squashed through a monetary settlement in favour of the complainants.
"Recent deceptive advertising suits that have settled include $550,000 paid by the maker of Nutella over claims that its hazelnut spread was a "an example of a tasty yet balanced breakfast" to a $2.5 million fund for a class of consumers who alleged Kellogg's falsely advertised that its Rice Krispies and Cocoa Krispies cereals could support the immune system."
One is able to take the liberty of making such farfetched claims in the U.S. for want of a legal definition of "natural", but the power of the Internet is now compelling food brands to rethink their positions: these examples illustrate the consumers’ growing demand for transparency.

China: headed towards organic and natural

On my recent trip to Shanghai, a visit to a new shopping mall, Joy City, convinced me that natural and organic products were set to grow rapidly in the Chinese market. Two new sales outlets have come up:

• An Organic+ boutique offering European organic beauty brands (Weleda, SoBio, Patyka, Planet Kid, and others). There are currently about ten Organic+ boutiques in China. The creator of the chain, Edward Lu, explained that the increase in health hazards for the Chinese (air pollution, food adulteration, etc.) is fast turning them towards natural and certified products.  In fact, during the month of January, the press was filled with alerts concerning the quality of air in Beijing and also Shanghai, presented the target of 10% in green buses in Shanghai by 2015, and denounced food scandals.
  
  
  
  
• The COFCO (food and housing) conglomerate has set up an outlet selling natural products – offering assurances in terms of origin (production area), and quality certification (ISO 9001 / HAACP) ("Good Pomegranate / Good Region / Good Techniques / Standardized management). All products are sold under its own brand name (which did not exist as such until now).  As Patrick Yu, its CEO, says: "The core objective of COFCO's industry-chain development roadmap is to solve the problem of food safety, a problem which is the biggest headache for customers now".

These two initiatives clearly illustrate that the Chinese market is maturing very quickly and has some surprises in store for us – both in beauty and food distribution.

 

 

The Coca-Cola Bottle

Posters urging us to discover "the new legendary bottle" from Coca-Cola have invaded Paris.  It is a powerful pitch.  But does reality live up to the promise?
One of the essential factors that contribute to the brand's aesthetics is quite evidently the "Contour" bottle, and it is interesting to recall the original brief: "We want a bottle that can be recognized even blindfolded" ... and which, "is recognizable even when broken".  The bottle was made of glass until PET arrived on the scene:  None of the PET bottles so far (especially the large sizes) resembled the original.  The last 2-liter bottle is a woeful example.



We have become familiar with a major innovation from Coca-Cola over the last few years:  it created a new iconic bottle in aluminium - a replica of the "Contour" bottle, but decorated by famous designers (Nathalie Rykiel, Karl Lagerfeld, 8 fashion designers from Italy, Daft Punk, and others).

These bottles were created at the initiative of the French and Italian subsidiaries - thereby instating Coca-Cola as a "trendy" brand, inscribing it in the fashion world.  They are a far cry from the supermarket shelves where the very unsightly PET bottles reigned supreme.
But now, on the occasion of its 125th anniversary, Coca-Cola is launching a series of sales strategies relating to the bottle. They can be divided into two groups:

• The "exclusive" back to basics:  In the U.S. Coca-Cola is offering collectors limited editions of the "Contour" bottle in crystal or gold plated, and in Europe, a series of 4 iconic bottles (the 4 original designs, including the "Contour"), sold at Colette in France and Selfridges in Great Britain (costing 50% more in France!).
  
  
  
  
• A return to its origins for the general public:  A new 1.25 litre bottle (costing less than $1 in the U.S.) has been launched - a replica of the "Contour" shape in PET.  The commercial for the launch shows, with humour, how the brand has accepted the fact that the previous inelegant bottle had to be reinvented.

This initiative has two positive effects:

• It will give new meaning to the brand by placing great emphasis one of its iconic emblems.
• It will counterbalance the very recent and very European movement that was drawing the brand towards the fashion world - something that is quite contrary to Coca-Cola, a brand that is a symbol of popular American culture (and which has nothing in common with European fashion and trends).  The brand might wish to ask itself the question of how to reinvent the bottle as an icon of popular culture, taking a page from the French initiative:  have the aluminium bottle decorated by popular rap stars, for example.

Kenneth Cole and Nestle fall into the trap

It all began on February 3.  On Kenneth Cole's Twitter feed, a tweet, signed by the creator himself (or, at least, "an authorized person"), read:

We were in the midst of the Egyptian revolution. Tens of thousands of protesters gathered daily in Tahrir Square demanding true democracy ... and in the thick of it, the American fashion brand diverts this movement for its own marketing. This tweet travelled around the Internet, prompting both outraged comments, and messages of approval. Suddenly the virtual world was split: On one side were those that said the tweet was in the worst possible taste, criticizing the irresponsible brand, on the other were fans (mostly American), who found the message amusing and reaffirmed their commitment to the brand.

Kenneth Cole, after admitting (half-heartedly) that he did not wish to offend the Egyptians, finally posted an apology (just as discreetly) on Facebook -

March 2010: a year ago there was another battle between Nestle and Greenpeace (the story is well related and analysed on ReadWriteWeb in French). In this instance, Nestlé showed an appalling un-professionalism. For a long time Greenpeace had been denouncing the attitude "of Nestlé sub-contractors who, to produce palm oil essential for food processing, do not hesitate to ransack Indonesian forests and destroy the habitat of many protected species". Faced with the silence of the group, Greenpeace launched a Web "attack" by deflecting the KitKat logo, creating minisites and posting a film on You Tube.
Nestle's (or their PR agency's) reaction was very careless: they summoned them to withdraw the film, arguing that it infringed their intellectual property rights. This was what triggered a form of general mobilization on the Internet and attracted media attention: Nestlé was accused of censorship. Greenpeace, simultaneously orchestrating a media campaign, called on its militants to post messages on Nestlé's Facebook page by replacing their profile photo by that of the altered logo:

Nestlé removed the posts and responded haughtily - without any attempt at dialogue with Internet users. The uproar was such that it ended up by apologizing:

This "commando" operation by Greenpeace was successful:  a month later at the shareholders general assembly Nestlé announced a programme to combat deforestation and Peter Brabeck, Nestlé's Chairman, sent a letter to Greenpeace with details of the group's commitments.
These two interesting examples, like all the others listed by Jeremyah Owyang, show that brands cannot escape the notice of Net surfers and that they have to professionalize their Web administering by:

• Equipping themselves with a genuine "social contract" to handle their relationship with the Web
• Appointing a Community Manager, responsible for communicating with Internet users … therefore paying them real attention, and
• Being willing to apologize when a mistake is made

They will thus prove themselves as responsible, give no reason for criticism – and even forestall the attacks… that (surely) will happen one day or another.

Beauty: more Exclusive Private Brands

In the report drawn up in 2010 for Eurostaf ("Private Label Beauty Brands": see details in the left column of BrandWatch), I identified four strategies among beauty private labels - one of which seemed to me the most promising: creating exclusive brands. Two recent launches in the U.S. show that this strategy is forging ahead.

1. Walmart launched geoGirl in February - a makeup brand designed for the 9 to 12-year age group (!!): this exclusive brand (69 references) has two major characteristics:
   • It presents itself like a "Green Living" brand: packaging that is recyclable, natural ingredients, free of parabens, phthalates, artificial colours and synthetic perfumes (is this really possible??!!).
   • GeoGirl is owned by Pacific World Corp. - a company that manufactures beauty products (mostly artificial nails) for the mass-market, either under its own brand name (Nailene) or for international brands (Revlon).  Walmart will distribute this brand exclusively for at least a year.
     
2. Walgreens has launched Borba (which was distributed exclusively by Sephora for a while) - a brand of cosmeceuticals and food supplements ("Inside-Out Beauty Solutions"), created by Scott Vincent Borba in 2004 and built around "superfruits".  Banking on the acquisition of Duane Reade in 2010 (that referenced Borba), Walgreens seeks to penetrate the premium beauty segment:  one may wonder if it is not Borba too that is repositioning itself as more "mass-market": Crystalline (a 'beauty' drink) was sold at $100 for 60 (or $ 1.67 each) by Sephora, and $ 7.19 for 7 (or $ 1.03 each) at Walgreens – a whopping 38% less! (the packaging has also changed – definitely less premium).
   

Beauty: Naturals Develop in Mass

Mass-market beauty brands which, up to now (with the exception of Lascad with its Ushuia Bio, Mixa Bio and Narta Bio-efficacité), viewed the development of organic and/or natural products from a distance, are now launching natural collections:

• Nivea has just launched Pure & Natural - a collection of body care, baby care, anti aging and make-up references (only 11 in France), which claims to contain 95% of natural ingredients no parabens or silicones with PVC-free packaging.  It is interesting to note that the anti-aging products are distributed exclusively at Boot's in the UK and that Nivea does not really push this line on its website - except in the UK where a page describes the philosophy behind the collection on the Internet... 
  
  
• In the USA, Neutrogena launched a line called Neutrogena Naturals (naturals.neutrogena.com) - with a very interesting emphasis on its ingredients, the scientific approach and its experts, together with recyclable packaging and "post consumer recycled content". This range is available at Target, Rite Aid and CVS.
  

Unlike L'Oreal, which has chosen the organics and certification path, Nivea and Neutrogena have preferred to highlight the "free of" (parabens, phthalates, silicones, etc.): here we see an illustration of the two major strategies I spoke of at the recent Natural Beauty Summit. I am still convinced that the latter addresses a much wider world market than the former.

L'Oreal's Hairdressing Salon Concepts

In early November, at the Mondial Coiffure Beauté 2010 event, L'Oréal Professionnel introduced – together with its product lines (including the breakaway Inoa - Innovation No Ammonia) - a series of ... concept hairdressing salons!

This is the first time the brand dares to create salons, and at the same time, take advantage of the work the group has been doing over the years in the domain of consumer expectations. The result is surprising - and presented some very interesting trends. L'Oreal thus created:

• 3 "Green" salons
  • Eco Recycling – equipped with recycled products;
  • Eco Zen - where water is recycled and air purified;
  • Eco Nomic - produced from recycled packaging, allowing it to dispose of a low-priced "green" salon. 

         

• A "Men Only" salon – the Sports Grooming Bar, with LCD screens to watch sports programmes, video games, touch screens.
  
• An "Express" Salon - the Style Minute Lab - for women on the go, no haircuts, just styling and blow-drying. A single price policy: 10 minutes, 10 €, 20 minutes, 20 €.  This salon is in the form of a carousel, and can be installed in a train station, an airport, a shopping mall or a business district.
  

This did not happen by chance: it demonstrates how L'Oreal (which has already created a L'Oreal Stores concept in the USA) reflects on the evolution of retail. Faced with a very conservative profession - where innovations regarding service are very rare - the brand is positioned as innovative and as a determining force. I cannot help but draw a parallel between this case and the efforts made by millers in France about 20 years ago wishing to restore the good taste of bread – and proposed special baker shops, new baking methods, special flours, to bakers. "Paul" was conceived in this way.

 

Responsible packaging grows in strength

One after the other, Whole Foods, Procter & Gamble and Unilever (among others ... I could add Stonyfield Farm, KFC, Odwalla in food, to the list...) have announced major initiatives in terms of sustainable development - all of which relate to product packaging.

• In early September, Whole Foods Market released its new "Sustainable Packaging Guidelines", applicable to all cosmetic products and food supplements. "The guidelines mandate that suppliers reduce the use of plastic in product packaging, encourage the switch to glass when possible, limit acceptable packaging materials to those that are easily reused or recycled, and/or feature the highest percentage of PCR content.  Suppliers were given one year to transition to more eco-friendly packaging".  These guidelines were drawn up in collaboration with 25 Whole Foods'  suppliers and are currently applied to the private label of the brand: the volumes of food supplements of 365° are entirely of recyclable PET ... and the brand has adopted a pictograph that guarantees it.
• Procter & Gamble will increase the volume of plastic made from sugarcane (100% recyclable - supplied by Braskem, a Brazilian company) for its brands - Pantene, Max Factor and Cover Girl. Natura Brasil will also be using the same material.
• Unilever finally announced its "Sustainable Living Plan" - which aims to halve the environmental impact of the group by 2020.

Two different approaches should be distinguished:

1. The PCR approach (post consumer recycled) implemented by Whole Foods for its private labels: it consists of using recycled materials.
2. The "cradle to cradle" approach, much more sophisticated – adopted, for example, by Kiehl's - and accorded a certification (C2C) which measures the toxicity of ingredients used, the extent of recycling, the energy and water used, the social accountability of the company.

All these initiatives are particularly interesting: although they are dispersed, with very different approaches from one company to another, they illustrate the growing importance of sustainable development strategies in beauty.

 

 

 

 

Patagonia - a responsible brand

In 2005, Patagonia launched a programme of recycling - "Common Threads" - for a part of their garment collection.  In 5 years they say they have recycled 6 tons of clothing and recovered even more.  This program was based on three pillars: "Reduce, Re-use, Recycle" … the brand asks its customers to bring back their old clothes - they are either recycled or restored: "We stress to our customers the value of "Reduce, Reuse, Recycle." To be sustainable, clothing should be functional, timelessly beautiful, and of enduring quality. It should not be disposable fast-fashion. Old garments that are still wearable should still be worn, which might mean wearing it when doing dirty-work or donating it to people who will use it. But finally there comes a time when a garment needs to be tossed out".

This programme has taken a whole new dimension since 15 November: it is now based on five pillars, "Reduce, Repair, Reuse, Recycle, Re-imagine." Patagonia will fix tags on all its products and POS in its stores, encouraging customers to:

• Purchase the product only if they actually need it: "Don't buy this jacket unless you really need it";
• Systematically mend it (with the help of the brand);
• Send one's unused clothes to others (with the help of the brand);
• Not throw away your old clothes.

Patagonia is etching out a long-term approach – as a responsible brand, in keeping with the new expectations of consumers - especially the young. Its founder and CEO, Yvon Chouinard, stated last week that this non-standard programme... has enabled him to increase his market share!