Loïc Armand - We are extremely positive about the prospects for our industry! We can now say the crisis is over in Europe. The market showed a growth rate of +0.5% in 2014, compared to the -1.4% decline we experienced in 2013. Some countries are still suffering and remain in recession, but on the whole, the European market is picking up again, and even in the countries where this upturn was slower, it is getting better. The cosmetics industry in Europe represents 4,500 companies, including over 4,000 SMEs, and 1.5 million direct jobs, including 25,000 scientific jobs (+5.3% since 2004).
The other reason why we are optimistic is that we have been performing well on global markets. The European industry is the largest cosmetics exporter in the world. In the next 15 years, 1.5 billion people in the world will become part of the middle class. This is an extraordinary opportunity for our industry, which is taking action to participate in satisfying the needs of these new consumers.
Premium Beauty News - What actions are actually taken?
Loïc Armand - First, we have decided to focus on research and innovation. We are foreseeing a real change of paradigm, in particular with a revolution in the customer relationship, and also many environmental challenges. The digital revolution and social networks are transforming both distribution networks and the relationship between consumers and brands. Supply is getting more and more personalized, and brands have entered into a closer dialogue with consumers. Cosmetics are all the more sensitive to this phenomenon since they bear a strong intimate dimension. It is not trivial to apply a product on one’s skin.
Premium Beauty News - What about the environment?
Loïc Armand - The cosmetics industry is perfectly aware of the challenges related to the increasing demand on the global level. As a collective, the European industry has volunteered for the Product Environmental Footprint project managed by the European Commission to develop a harmonized method for calculating the environmental footprint. For technical reasons, our project on rinse-off products has not been selected among the Commission’s pilot projects, but we have worked on it on a voluntary basis and we are hoping to get applicable results in 2016.
Beyond the projects supervised byCosmetics Europe on behalf of the whole industry, companies strongly commit to ambitious projects designed to reduce their environmental impact on an individual basis. For example, L’Oréal has undertaken to reduce its CO2 emissions by 60% in absolute value by 2020. Other companies like Unilever and many of our members have defined their own objectives.
Premium Beauty News - Regulatory harmonization is also one of Cosmetics Europe’s main objectives.
Loïc Armand - I would rather talk about convergence. The cosmetics industry has had this objective in mind for a very long time, and it makes perfect sense with the ongoing development of global markets and e-commerce. Online sales might actually reduce the States’ ability to control their own markets.
Convergence is an important challenge for the European industry, as it is a major exporter. We consider the European regulatory model as one of the best in terms of consumer and environmental protection. It is based on scientific risk assessment, and it is according to this principle that we have been promoting it around the world.
In practice, we are one the safest industries in the world, and we think we deserve to be trusted by regulators.
Premium Beauty News - Could you give us an update on the negotiations regarding the Transatlantic Trade and Investment Partnership (TTIP) in the field of cosmetics?
Loïc Armand - The TTIP represented a unique opportunity to solve significant regulatory divergences between Europe and the United States, in particular the definition of cosmetics, which differs a lot on each side of the Atlantic. We have to admit there is no political will to put the most important diverging elements on the negotiating table. Cosmetics Europe has worked with its American counterpart, the Personal Care Products Council, on a list of divergences we intended to solve. The list was forwarded to the authorities in charge of the negotiations, but obviously, they did not wish to go that far. However, if Europe and the United States had agreed on a regulatory model, their influence would have been considerable throughout the world.
We have not completely given up moving in this direction, but right now, the TTIP negotiations are focused on more technical issues like the mutual recognition of the lists of UV-filters recognized as both safe and efficient, or the mutual recognition of the alternatives to tests on animals validated by the OECD.
That being said, we are convinced the next transformations in the cosmetics market, in particular the rise of online sales, will encourage this convergence.