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“Made in France” luxury beauty drives L’Oréal growth

Driven by an increasingly affluent middle class in emerging countries like China, South Africa and Brazil, the luxury industry is prospering, with figures equalling those prior to the financial crisis and has been posting a healthy growth for the last 2 years that contrasts with the difficult world economy. L’Oréal takes full advantage of these dynamics, thanks to the prestige of its Made in France products of course, but also to its state-of-art industrial organisation.

If L’Oréal’s global growth was stronger than that of the worldwide cosmetics market in 2012, it is partly due to the Group’s luxury division. In 2012, L’Oréal Luxe posted the group’s finest performance with growth of 8.3%.

According to the group, this growth higher than that of the selective cosmetics sector at 6.3%, stands on an “in-depth understanding of consumers and a portfolio of prestigious brands, most of which affirm their ‘Made in France’ attributes, synonymous with luxury around the world.

Emerging markets

The largest share of fragrances and cosmetics sales now comes from export. While several emerging countries like South Africa, Indonesia and a number of Central Asian countries have become players on the luxury market, China is where it’s really happening. Chinese consumers accounted for one quarter of luxury purchases in 2012. A large affluent middle class (estimated at 280 million households by 2020, or twice that of 2011) and the luxury groups’ recent development of retail networks explain this phenomenon.

The Middle East is also a market with strong growth potential for luxury brands, cosmetics in particular, and the American continent also shows promising results, especially in fragrances.

However, the growth of the global luxury market and its diversification imply to adapt industrial resources. The key issue, according to L’Oréal, being to satisfy a variety of consumer desires for luxury goods all over the world that meet the same quality standards. “This approach targets excellence from the design phase to the point-of-sale in an environment of increased buying power driven by the emergence of a clientele seeking ultra-luxury goods,” explains the group.

Short and long series

To meet this growing demand for luxury goods around the world and to satisfy aspirations for unique, exceptional products, the L’Oréal Group combines artistic craftsmanship with industrial excellence.



The advanced technology used in its facilities enables the L’Oréal Luxe division to steer and control the design of its products. © Mario Fourmy

Most often, the challenge is to succeed in combining image with quality and a concern for detail with mass production. The Lancôme fragrance “La Vie est Belle” illustrates this control: its pack alone required 5 phases for a launch production of 2.6 million units.

However, L’Oréal must also satisfy the expectations of a demanding clientele looking for products that are constantly more precious and unique. This segment is characterised by very limited series and may be comparable to hand craftsmanship; Armani’s “La Femme Cristal” fragrance, produced in 100 unique, engraved, numbered pieces, is a perfect example. Each bottle, selling for 5000 euros, was produced by the Cristallerie Royale de Saint Louis which truly demonstrates the extent of its talent here: a hand-blown crystal droplet containing the perfume inserted into a hand-chiselled 10-faceted crystal shell crafted by the Meilleurs Ouvriers de France masters.

Industrial optimisation

This dual market reality is why L’Oréal Luxe uses Operations as an essential advantage in serving the growth of its brands and their ambitions. The European industrial and logistics excellence centre was created for this purpose in 2009 in the North-Picardie region. With their specialisation by technology, the three sites that compose it are genuine “excellence centres”.

Its organisation is based on the specialisation of each of the three production plants that compose it. The Sicos site (Caudry) specialises in emulsion technologies for skin care products, mascara and foundation. In Fapagau (in Gauchy, Aisne dept.) production is dedicated to fragrances. While the Lassigny plant in the Oise department produces anhydrous make-up (Lipstick, Gloss, Powders and Varnish) and custom-made fragrances. According to L’Oréal, “this specialisation by technology ensures the level of expertise and innovation required to meet the demanding brand standards and this strategy is why L’Oréal Luxe is one of the highest ranking in the cosmetics industry.

1500 new products

Each year, L’Oréal Luxe technical development creates 1500 new products for the Lancôme, Armani, Yves Saint-Laurent, Biotherm, Helena Rubinstein, Diesel, Cacharel, Victor & Rolf, Stella McCartney and Maison Martin Margiela brands. This centre and its staff of 80 play the role of “orchestrator” in the Division’s product development process.



The L’Oréal Luxe division features an agile organisation to be able to produce both mass series and ultra-luxury products. © Mario Fourmy

Regarding packaging development, as far as the Luxe divison is considered, L’Oréal has opted for in-house control. Thirty-five dedicated experts ensure the industrialisation, design, development, certification and specification of all of our finished products and packs. Over 200 new moulds are created each year. All techniques are used, from glass to metal to a variety of plastics. To satisfy the highest aesthetic standards, various perfecting techniques are reviewed, from galvanisation to interior lacquering, for instance. Close collaboration with suppliers selected from among the finest in the profession enables us to meet the most innovative technical challenges.

Source: L’Oréal

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