The big one?
So… is it the big one crisis or just a severe slowdown? “There’s no doubt, the market is really bad,” comments the manager of a big brands marketer. But the development manager of one of its competitors suggests a very different outlook. “So far the market remains stable, and at a quite good level,” he says.
“Should we compare this crisis to periods of strong slowdown, such as 2001 or 2002, the impact on the economy should not be exaggerated,” states the manager of a European glassmaker. “However, it’s true that our order backlog is at a low level (two months) and that the rhythm of new orders has been particularly low since the beginning of the year”.
“As far as I am concerned, the few contacts I had with big customers, such as Britain-based Body Shop, for instance, do not lead me to pessimism, on the very contrary,” explains the sales director of a manufacturer of airless designs. “We have a significant number of new developments in our pipes, we do not really perceive any slowdown yet,” confirms the boss of a French plastic injection firm.
Cardboards: the great purge
The cardboard industry is probably one the more rapidly and harshly impacted. However, “the rot had already set in" explains an industry insider. “Too many factories, too many big machines, excessive production capabilities, and a short-term vision from most of the big paper and cardboard manufacturers,” comments the same expert.
Numerous closures of cardboard factories in Northern Europe are leading to an unprecedented drop of production capacities. Actually, the demand dramatically decreased in some sectors. However, several cardboard and paper producers told Premium Beauty News that the perfumery and cosmetics businesses remain healthy, while the pharmaceuticals market is even more dynamic.
Broadly speaking, cardboard producers share the opinion that it was necessary to reduce production capacities. Eventually, this purge appears as much needed but it has painful and largely unpredictable consequences.
Where’s the way out?
Should we believe most of the beauty insiders we interviewed: 2009 will be an extremely harsh year and many producers will meet severe difficulties, and several closures are expected. Hopefully, they say, the price of raw materials dramatically decreased!
So, how to cope with the crisis? Some interviewees recommend to “focus on niches” or to “preserve margins”. Others are on the opinion that “innovation” is the only way out. A latter strategy that some brands have been implementing for several years: with some success considering their relatively good results on the fourth quarter of 2008. Apparently, they do not intend to slowdown the path of their new developments. A very good idea, according to their suppliers!