Billion Dollar Babies: Who's the next beauty behemoth?
Billion Dollar Babies: Who are the Beauty Behemoths of tomorrow?
Silicon Valley gave us the word ‘Unicorn’ to describe the fast-growing start-ups that got to a valuation of $1Bn+. Today I offer you the term ‘Billion Dollar Babies,’ to describe the beauty companies that have managed to get to over $1Bn of global sales revenues (and standalone valuations usually well in excess of $1Bn). Despite what you might think, there are surprisingly few of them.
To reach that impressive landmark of over a billion dollars of sales, you need to have cracked the secret of going global. It’s incredibly difficult to do that unless you have one of the giant groups like L’Oreal, ELC or LVMH behind you. They bring deep pockets and access to global supply chain networks and marketing offices in important, but complex to enter, markets like China, Japan and the US.
But even with those resources behind you, it’s hard. For every Jo Malone or Kiehl's that’ve made it, there are dozens of famous names stuck with success in a few markets and never able to crack the global code.
Occasionally, someone unexpectedly appears - as if from nowhere - and hits the magic number ... even without a big group to ease the path. Like L’Occitane for example. Privately owned, with a name no-one outside of France can pronounce and often described (by the Parisian French, in my hearing at least) as ‘that funny little brand from Provence – do farmers make it in their sheds?’ But L’Occitane went all the way when so many other contemporary, natural brands with a sense of place have failed to do so.
It's interesting to hypothesise why that was. What is the secret sauce that enables some brands to reach that exalted top table and be a Billion Dollar Baby?
In L’Occitane’s case, I’d suggest:
1. A rich, emotional brand with a 'pannier' of very special, early products - Shea Butter hand cream et al - created by a genuine genius – Olivier Baussan
2. A brand that benefits from a strong, authentic connection to a place that is aspirational for the whole world – Provence
3. A culture of entrepreneurship that ran right through the organisation that attracted people with brains, but also drive, high levels of accountability and a determination to win. (And dear reader, I confess – with all humility – I was one of them for 10 years).
Other brands may have some elements of '1 & 2', so perhaps the real difference - the difference between half a billion and the whole billion - was that hard driving entrepreneurial culture..?
What about Aesop? Well, you might imagine that Aesop is already a Billion Dollar Baby – especially as L’Oreal paid Natura $2.5Bn for it! But it isn’t. The last time I checked it was around halfway there, although clearly L’Oreal’s mighty machine will accelerate progress in the coming years. In my opinion it is without doubt going to be part of the next wave of ‘BBDs’!
In contrast to L’Occitane, Aesop is:
1. An incredibly rigorous brand with strong codes in design and communication – much ‘colder’ than L’Occitane, but with a voice that speaks powerfully to a certain kind of person
2. Australian – benefitting from that country’s reputation for healthy, natural and ‘good for you’ - but perhaps without the same sense of place as L’Occitane
3. Many very good, early products, with addictive scents. Even if they were only fragranced by the essential oils in the formulas, it was done so well it created real love with its early adopters.
4. Stylish distribution - especially the signature stores: created with taste and real flair.
Totally different in so many ways from L’Occitane – and that’s before we even get into the cultural differences! So there isn’t only one way to do this. And what about The Ordinary, LUSH, Charlotte Tilbury, or my latest hot tip – maybe you never heard of it - Aromazone?
In a series of future posts, I’ll give my detailed thoughts on some of those brands and tell you who I am tipping to be in the next class of Billion Dollar Babies.
