Premium Beauty News - At the peak of the crisis, Aptar Beauty + Home remained reactive by providing their customers with everything needed to manufacture emergency products, like hand sanitizers. How was that possible?
Marc Prieur - Aptar is a global group which owns plants all around the world, in particular in China. These sites were the first impacted by the appearance of the new coronavirus. The sanitary measures taken by the group in Asia (social distancing, disinfection…) were naturally copied and improved in Europe. As a result, we were able to react at the right time, quickly comply with regulations, and protect our employees, which is essential.
In Europe, we decided to remain open throughout the crisis, but with very contrasted situations depending on the different sites. There were very significant declines in our activities related to certain product categories, while the demand rose for others. That is how some sites ran at full capacity to deliver packaging pieces for sanitizers (pumps, closures, and valves…). As a result, we were able to deliver our products to customers who were not specialized in this trade, like LVMH.
As regards logistics, our regional business model, which involves local supply chains, was a real advantage. Long before the crisis, we had implemented a double sourcing system and security stocks. We demonstrated how solid our supply chains are. We did not experience any significant disruption, whereas some of our suppliers temporarily ceased operations.
Premium Beauty News - What is the current situation at the different Aptar Beauty + Home sites around the world?
Marc Prieur - Our sites are at different phases of the pandemic. Generally speaking, all our plants are operational, but not all are running at full capacity, of course. At certain sites, demand has decreased and we had to rely on technical unemployment solutions where authorized.
In China, operations have resumed and things are almost back to normal. In Europe, we are only starting to see the end of the crisis. The situation is less clear in North America, but it is a very resilient market which, for us, is mainly oriented towards personal care, so demand remains strong.
Latin America was affected later, so now they are in the middle of the pandemic. The situation is handled much differently depending on the countries. A few of our customers very well-established on the perfume segment have been seriously impacted, although direct selling networks, in particular online sales, have mitigated the impact of the lockdown period. Generally speaking, we have noticed that our customers in Brazil and in the rest of this area are getting organized for fast recovery. It could be achieved soon. But of course, the purchasing power should decline, especially in countries where the social safety net is weaker.
Premium Beauty News - The situation is also much contrasted for the different product categories.
Marc Prieur - Fragrances - both prestige and mass - are really struggling. It is the most impacted category, ahead of makeup. As for skincare, the situation varies according to product types. On the other hand, personal care and home care, which represent half of our global turnover, are doing well. Of course, sun care and hair styling have declined, but that was offset by the rise of hygiene.
In Asia, operations have resumed. There are new projects and real dynamics, and it seems the demand will remain stable.
In Europe, it will take some time before suppliers see the effect of consumers going shopping again. Some of our customers closed their offices for almost two months. They are now making an update on their portfolios and stocks.
Although this crisis is like no other, we believe brands will first focus on stock reduction, and then, all of a sudden, we will need to deliver faster and faster, in an emergency. That is why it is so important to have very agile regional supply chains!
Premium Beauty News – What do you think the market will be like in the short term?
Marc Prieur - Again, it is an unprecedented crisis. People spent less money during lockdown, and those who benefit from good social systems did not lose all their revenues. Recovery plans are underway, but we still do not know anything about their content. Reality will vary a lot from one continent to another, even from one country to another.
Premium Beauty News - What are the group’s advantages in this new environment?
Marc Prieur - First, our portfolio diversity. The Beauty + Home market was impacted, but the Food + Beverage market is about to make a good year. As for Pharma, consumption remains stable.
Secondly, the crisis revealed both our supply chains’ solidity and our regional organization’s agility. We are an essential supplier for major global brands. Today, as everyone is talking about relocation, we cannot but notice that, at the end of the day, our business model is perfectly adapted to new expectations and emerging trends.
Lastly, our innovation capacity. We are already working on new market trends and beauty product types which will emerge from the crisis!
In addition, if environmental protection and sustainability were somewhat marginalized during the crisis, these issues will regain importance. The crisis might even boost change, because it was an opportunity to really become aware of those matters. Aptar invested a lot in this field, so we will de facto be well-positioned.
Premium Beauty News - In conclusion, what would you like to tell your customers?
Marc Prieur - Our trade will recover from this crisis, just like it did after the previous ones. But a mutual partnership between suppliers and brands will be the best way to deal with turmoil. Everyone needs to make the efforts needed. And we are delighted to see that there is a real constructive dialogue and everyone in our trade helps each other!