Premium Beauty News - What challenges do groups like Albéa deal with on a daily basis?
François Luscan - It may sound trite to say so, but our market speeds up the number of launches, the development time, lead times, the emergence of new trends… it all goes faster. For all of us manufacturers, it requires strengthening basics, in particular in terms of operational performance, but also accelerating, simplifying, and making all our processes more efficient when it comes to decision-making, purchase, planning, processing, manufacturing, and innovation. Although we all tend to highlight technologies, in particular digital technologies, which are incredible levers, I am more than ever convinced that it is actually men and women, thanks to their creativity, adaptability, values, and commitment, who will make a real difference and secure their companies’ reputations and the industry’s future. The opportunities of Industry 4.0, the talent war, the importance of training, and environmental protection are all challenges we need to address today.
Premium Beauty News - You last expressed your views on Premium Beauty News a little less than two years ago. In the meantime, your group changed shareholders. What are the consequences?
François Luscan - Let’s say a few words about PAI Partners, Albéa’s new partner. It should be emphasized that this company was founded in 1872 and contributed to France’s industrialization in the late 19th century and early 20th. Today,PAI Partners’ industrial investment vision is based on long-term goals and focuses on highly specialized sectors. They clearly assert their desire for growth.
With our former partner, Sun Capital, our top priority was industrial optimization through investment to go faster and be more efficient, more modern. As a matter of fact, this period also helped us purchase and integrate seven companies, the latest being metal component manufacturer Covit in February 2018.
With PAI, we opened a new chapter in our history: now, we focus on both organic and external growth. Our strategic plan is solid. It was validated with our shareholder and it benefits from our customers’ and teams’ support.
Premium Beauty News - In two years, your group has kept investing not only in its industrial tool, but also in acquisitions, to capture new market shares.
François Luscan - Generally speaking, it should be reminded that our industrial investments kept reaching about 80 million dollars a year, which helped us innovate, get automated, integrate new production lines to boost our capacity and performance, and acquire new manufacturing processes.
As regards acquisitions, I would like to put an emphasis on Covit, the Spanish metal component manufacturer, and on a site specialized in laminated tubes in Levice, Slovakia. You know metal parts are “critical” components for flagship products in our portfolio, like lipsticks and pumps. Covit was one of our strategic suppliers in Europe, and we already had a site in the US and capacities in China. With this acquisition, we contribute to the development of a solid global metal supplier that is recognized on the market. We also develop our expertise together, while preserving independent management techniques.
As for the purchase of the Levice site, it strengthened our position on the tube segment in Europe and helped us integrate a new business model combining key accounts and smaller customers with a very entrepreneurial operating mode.
It makes it possible to emphasize our vision in terms of acquisitions, but also joint ventures and partnerships. I believe in flexible systems that contribute to developing know-how, combining financial means, and increasing industrial capacities through total or partial integration approaches, for example when it comes to preserving freedom of entrepreneurial action or only purchasing industrial assets.
Premium Beauty News - Nowadays, digital technologies, the environment, corporate social responsibility, and full-service offers are more than ever major requisites. How do you adapt? What means do you use to assert your differences?
François Luscan - To me, Albéa can be proud of its historic CSR commitment – we started taking action in 2004 and still have the same beliefs today. It is a growth lever that boosts our reputation and attractiveness in the short- and long-term. As a matter of fact, we won the Luxepack in Green award in 2016 for the approach we adopted. But obviously, the context changes quickly. CSR keeps gaining importance to our major customers. International regulations increasingly tackle this issue. It also matters for our “employer brand”, our employees and future recruits, in particular Millennials, who are even more committed than the previous generation. And of course, environmental protection is a major challenge for all States and international associations.
At Albéa, our approach is based on four pillars.
First, the people. The idea is to guarantee the safety, wellness, and societal compliance of our activities, but also to develop the know-how at the core of packaging trades.
The second has to do with our operations and will to reduce our carbon footprint – our energy and water consumption.
The third focuses on the products we make. We need to actively contribute to the development of a high-performing circular economy in the field of hygiene-beauty, in relation to the importance of primary packaging and in line with our customers’ commitment.
The fourth concerns all our partners: customers, suppliers and associations. Actually, we launched a “Materiality Analysis” among our internal and external stakeholders. This Matrix will help us define a new four-year CSR plan by identifying, prioritizing, and committing to the right stakes for Albéa. As usual, we will ensure we align with our ecosystem and get our teams involved. The results are expected by the end of the year.
As for the boom of digital technologies, it is a fact that it changes the way we consume products, communicate, share data, and interact with consumers, brands, and suppliers. Digital technologies make influencers, e-shops, and indie brands emerge and contribute to connected beauty. They also help innovate on more collaborative and cross-disciplinary terms with both agility and speed.
Digital technologies contribute to the Industry 4.0 challenges we are addressing. We must adapt to an ever-more complex, volatile, uncertain, and ambiguous world – a world that is getting increasingly more digital and interconnected, and which also keeps speeding up. As far as we are concerned, Industry 4.0 covers 3D prototyping, digital printing, robotics, artificial intelligence, but also open innovation, creativity, human intelligence… Industry 4.0 is based on the development of skills and teams, the acquisition of new talents within a global context of talent war, and the simplification of industrial and administrative processes. There is quite a lot to do!
As for the full-service concept, I would like to highlight what was recently pointed out by Xavier Leclerc de Hauteclocque, our Director for our Beauty Solutions activity, which weighs almost 100 million dollars. It guides the market towards turnkey solutions. We have recruited new skills, in particular as regards formulas – not to do our formulators’ job, but to anticipate formula trends and the impacts on packaging, so we can help our customers gain time! We will collaborate with formulators to get their own expertise and offer brands adapted project management. In addition, we will develop our supplier and partner ecosystem, in particular with strong quality and CSR requirements. And of course, we will structure our value proposition to meet the needs of each customer type. We also believe in the value of an ecosystem when it comes to full-service!
Premium Beauty News - Will 2018 be a good year for Albéa? What is your forecast for 2019?
François Luscan - I have no crystal ball, but the market is growing all over the world, in particular in the selective network, and on almost all segments. Overall, I can say the first quarter 2018 is encouraging and this year should be another positive year, with the 3% or 4% growth rate we aim for. But for this to happen, we must provide our trusting customers with some peace of mind. Our teams are mobilized accordingly.
That being said, if you look further ahead, you can see our market changes fast. As far as customers are concerned, there are major groups, but also smaller and smaller brands. They have different needs, especially if you carry out an accurate segmentation. Most of them are growing with very diverse business models. Our challenge consists in supporting the growth of these different markets at the same time, with adapted offerings.
Now, as for products, innovation should be faster and more personalized. So, we must implement an agile organization with efficient governance between the local and global levels, between trendy design and disruptive innovation, between the animation of our existing ranges and the novelty arms race, and between standard and specific products: on the market, we are recognized for our process solidity and technical experts’ quality.
Premium Beauty News - You talk a lot about the issue of environmental protection.
François Luscan - We are all affected by the recent changes in plastics regulations! Of course, Albéa is concerned, but so are our suppliers, our customers and their own consumers. The most visible part of this is the end-of-life of products and plastic packaging, in particular single-use packs. As a matter of fact, mathematically, the consumption of such products increases with urbanization, demographics, the crowds… All sectors are concerned, from supermarket bags to crisp packets, water bottles, detergents… and hygiene-beauty.
Basically, the challenge consists in giving up single-use packs and going for recyclable and recycled solutions. It involves the collecting sector and its territorial coverage, the treatment sector (landfilling activities, incineration… and recycling) and its environmental efficiency in the short-, medium-, and long-term, and of course, the regulations on authorized plastic materials for such or such application. Also, the tax system implemented for collecting and waste treatment companies should favour new economic balances.
For the cosmetics industry in particular, given the low overall volume and the small size of packs, their image (they are beautiful objects before being plastic packs), and their functionalities (multiple components and materials are often used), today, the main challenge concerns the development of a high-performing circular economy throughout the value chain: how can we set up adapted collection systems? How can we make tax, environmental, but also public health regulations change to support this transition? And how can we manufacturers and suppliers keep integrating eco-design (fewer components, fewer materials, less plastic…), or even circular design to make our packs reusable or recyclable and use recycled (Post-Consumer Recycled) or biosourced raw materials?
It is a real challenge for the whole industry, but I strongly believe we will successfully meet it with our customers, suppliers, and competitors.
Premium Beauty News - Is it easy today to be a packaging supplier, with all the industrial constraints it involves, in a world where everything is going fast, sometimes “too fast”, and where industrial and technical legitimacy is no longer measured at its fair value?
François Luscan - I am fascinated by the cosmetics industry and proud to be a manufacturer in this sector. As a matter of fact, several managers who had started out in the car industry joined us. They tell me that the cosmetics sector goes faster and is more unpredictable and exciting due to the countless challenges we face on a daily basis.
To me, the industry is men, sites, territories, a history, and rare skills. It is not a constraint, it is a value – hence the importance of CSR for my group. I am always eager for challenges: today, we must make the industry agile and bank on boldness, creativity, and digital technologies.
Premium Beauty News - Your vision has always involved predicting an acceleration of industrial merging. Your group is a leading player in this field. Do you think this will keep going?
François Luscan - Yes, there will always be merges. The market has changed a lot, with the notion of time-to-market, digital technologies, the importance of speed and agility, the buzz of turnkey solutions… There are many people coming in, many new business models. Whether small or big, old or new, all players will have to quickly adapt.
As far as I am concerned, as I have already said, I strongly believe in partnerships. In our complex world, we need to find win/win opportunities. We must associate in a specific region or in the world, on a segment or a market. Basically, I think any financial operation, whether it be an acquisition, partnership, joint venture, or disposal of assets, is aimed to keep serving our customers better and better. Value compatibility is essential, and so is the quality of our teams. I want to expand my family, not eliminate competitors or launch trying restructuring processes that will slow down my group’s growth.
Premium Beauty News - What are the main new launches your group will showcase in the weeks to come, in particular at the Luxe Pack Monaco show?
François Luscan - The 2018 Albéa stand will be designed as a pop-up store, where visitors will enjoy a real retail experience: products that can be touched, like in a store, personalized areas, digital features, trends... They will also discover corners adapted to their own brand’s positioning, in particular a green area filled with innovative, environmentally friendly solutions, as well as a formula bar showcasing our turnkey “pack + formula” solutions.
Our flagship products will include tubes and foam pumps made of biosourced PE and Post-Consumer Recycled Plastic - some will be competing for the Luxepack In Green Award, and we will highlight multiple new features in our broad range of standard solutions for all brands, applications, and regions – from oval tubes to airless packs, from astonishing decorations to new mascara brushes, masks, and even comprehensive makeup lines…