Skin Care marketThe Trend in France, 20081Octobre 2009Benjamin Fouks – M2 SMC

SOMMAIREFrance and CosmeticsNew trends identificationStakes and opportunities2Octobre 2009Benjamin Fouks – M2 SMC

FRANCE AND COSMETICSFrance and CosmeticsNew trends identificationStakes and opportunities3Octobre 2009Benjamin Fouks – M2 SMC

FRANCE AND COSMETICSThe Cosmetic industry is one of the key elements of the national economy.In 2005 the French cosmetic industry increased its sales for the 39th year in a row and reached 6.5 billioneuros. The French cosmetic market is the most developed in the world. Since a decade its average annual growth is about 3,6 %. Cosmetic industry in France is:Composed of 80% of small and middle size companies (PME in France)450 sites (manufacture and research). It has never been haled to delocalize even for the products manufacture or even for the scientific research4Octobre 2009Benjamin Fouks – M2 SMC

FRANCE AND COSMETICSThe best asset in France remains L’OrealThe worldwide Number 1.3-Oct-0955Octobre 2009Benjamin Fouks – M2 SMC

FRANCE AND COSMETICSFrance has the highest proportion of premium product value sales in Western Europe. However, the mass market is also well established. The constant upgrading of brands such as L’Oreal, Gemey and Nivea, has started to blur the distinction between mass and premium brands, affecting the distribution through specialized perfume shops in a negative way. Hence, the mass market’s share in France has continued to increase. 6Octobre 2009Benjamin Fouks – M2 SMC

FRANCE AND COSMETICSCosmetics are sold through 4 majors distribution channels* : Retailers and selective distribution (55%):Department/Mass Distribution (28%): hypermarket, supermarket, mini market, discount store. Pharmacies (10%): products sold in pharmacies, parapharmaciesDirect sales (7%):*Datas given by the French Federation of Fragance, Cosmetics & Toiletries 7Octobre 2009Benjamin Fouks – M2 SMC

FRANCE AND COSMETICSSells progression differ according to the distribution channels* For the year 2006 :Retailers and selective distribution registered a fast expansion vive expansion (+6,5 %). Skin care products increased due to anti-age creams which have particularly registered good results.Department/Mass Distribution : +3,4 %.Pharmacies: (+1%) after 4 years of strong growth. Pharmacies showed great sales primarily due to increasing need for health care products as well as the availability of professional advice at the storeDirect sales: (-1,5%) but significant results for the export**Perfume and cosmetic products “made in France” are sold in 202 countries around the world. France’s top five main customers are Germany, United Kingdom, Spain, the United States, and Italy.8Octobre 2009Benjamin Fouks – M2 SMC

FRANCE AND COSMETICS*Datas given by the French Federation of Fragance, Cosmetics & Toiletries 9Octobre 2009Benjamin Fouks – M2 SMC

FRANCE AND COSMETICS16 majors French skin care brands: Biotherm,Carita,Nivea,Lierac,Sisley, L’Oreal Paris,Estee Lauder, Clinique, Matis, Shiseido, Caudalie, LRP, Lancome, Clarins, Avene, Sephora10Octobre 2009Benjamin Fouks – M2 SMC

FRANCE AND COSMETICS16 majors French skin care brands: Biotherm,Carita,Nivea,Lierac,Sisley, L’Oreal Paris,Estee Lauder, Clinique, Matis, Shiseido, Caudalie, LRP, Lancome, Clarins, Avene, Sephora11Octobre 2009Benjamin Fouks – M2 SMC

FRANCE AND COSMETICS16 majors French skin care brands: Biotherm,Carita,Nivea,Lierac,Sisley, L’Oreal Paris,Estee Lauder, Clinique, Matis, Shiseido, Caudalie, LRP, Lancome, Clarins, Avene, Sephora12Octobre 2009Benjamin Fouks – M2 SMC

FRANCE AND COSMETICS16 majors French skin care brands: Biotherm, Carita, Nivea, Lierac, Sisley, L’Oreal Paris, Estee Lauder, Clinique, Matis, Shiseido, Caudalie, LRP, Lancome, Clarins, Avene, Sephora.Identification of their the new products: 33 counted.Skin care franchises: Anti-Aging, Anti-wrinkle, Collagen, Hydration, UV protection, Purifying, Baby skin care, Shaving…Franchises Gathering : Anti-Aging= Anti-aging+Collagen,Anti-Wrinkle Hydration= Hydration+Purifying+Shaving Others= UV protection, Baby skin care13Octobre 2009Benjamin Fouks – M2 SMC

FRANCE AND COSMETICSOthers segmentation: 4 products – 12.12 %33 new skin care productsHydration segmentation: 13 products – 39.4 %Anti-aging segmentation: 18 products – 48.48%The current trend*: Most of the new products created belong to the Anti-aging segmentation.*In 2003, anti-agingcream french marketwasestimated to 166,4 millions of euros, whichrepresentedactually 35% of the entire French skin care market. 14Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDSFrance and CosmeticsNew trends identificationStakes and opportunities15Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDSFocus on the target : the French consumerFrench cosmeticindustryiscomposed of 5 categories of products: make up (12,3 % of the sales), fragrance (14,5%), hygienproducts ( 24,1%), hair care ( 24,2% ). Skin care actuallyrepresented 24,9 %of the sales in 2005. The universe of skin care products includes two types of products: natural and zen (jojoba, ginseng, etc.) on the one hand, active and technical (argenine, vitamines, etc.) on the other hand. Anti aging and hydration promises have bit by bit become standards to the entire range of products even for the youngest targets. 16Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDSFocus on the target : the French consumerThe French consumer isstill in quest of affordableproducts. He likes to have a large choice in the full range of products. He likes to make a selectionamong the product RTB, ingredients, packaging. The French consumer likesproductswhichofferimmediateprofessionnalresultsat home. In thisway a lot of professional salons and instituts have developedsome range of professional care. They have reached a compromise fitted to consumer. 17Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDSFocus on the product: Innovation and researchTransversability:transversabilityis a knowledge exchange between industries whichmaylead to innovations. For examplecosmeticsindustrytakesits inspiration fromother branches of industrysuch as Automotive, clothe manufacture, medecine. Thenitcontributes to thinking about new applicationswhichwillbehelpful for the development of new products. Taking inspiration fromotherfieldsis an efficient way to answer the continuous new consumer needs.18Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDSFocus on the product : opportunitiesThe bio skin care productsAvanceddermatologic careMen segment19Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS « A face whichappearslikereshapedfrominside, younger and fresher …»This is the current form of message or teaser used in advertising to promote the anti –aging products efficiency.Fine segmentation has become the key to survival in a highly marketed and maturing sector. The growing number of 'young seniors' (50-65 age group), keen to maintain a look of youthful vitality, remains a priority target due to the high disposable income of these consumers. 20Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDSIf in the 80’s facial surgery was a democratized habit, since 4 years the trend has changedRejuvenation, resurfacing, remodelling, revitalisationToday, the sameresults are possible without scalpel. Known for a long time in traditionalmedicine, mesotherapy or biostimulationisexecuted by injections (multiple little injections under skin, on the mesoderm) of active substances. For example the hyaluronicacid. The moleculeisused as a vitamined cocktail, nutritive and revitalizing for fightingwrinkles.21Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDSWith the injections there are two other significant dermatological interventions which have to be executed by a professionalPeelingMicro-Dermabrasion22Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDSPeeling: the aim is to remove the upper layers of epiderm to ensure the skin renewal. Peeling enhances the elastinfibres and collagen synthesis to reinforce skin thickness and tonicityThe method requires the application of a chemical substance based on Alpha hydroxy acids (AHAs) or glycolic acid.23Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDSMicro-Dermabrasion: is a mechanical peeling. It provokes the controlled destruction of the epiderm for the skin regeneration. The epiderm is rebuilt. Micro Dermbraison uses abrasive agents as micronized aluminum crystals24Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDSThe maximum concentration of active agents (as glycolique acid) authorized in thesespecific skin care productsis10%, whereasitis 20% to 70% in the solutions used by dermatologists. Chemical peeling: Resurface Peel from Lancôme, Line Peel fromBiotherm, Peeling MultiCorrexionfrom Roc…)Micro-dermarbrasion (Refinishfrom L'Oréal Dermo Expertise, Hydra maximazerfrom La Roche Posay).25Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS26Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS27Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDSSkin care market for men is expanding rapidly. In 2003, products for men represented 10.5 percent of the French market. French men are discovering the pleasure and utility of taking care of themselves. French cosmetic firms have responded with a wider line of products for this market segment. 28Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDSOn average, French men spend no more than 23 minutes in the bathroom and hence, are looking for efficient, easy to use products available at reasonable prices. French men are also becoming more and more frequent customers of spas and beauty salons.The popularity of men’s lifestyle magazines continues to boost consumers’ emphasis on their appearance. 29Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDSThe question of the environmentisatstakesince a few years in France. NumberRegulations and laws (Kyoto Protocol, REACH agreement..) have stronglyincreased in the same time as the sustainableenvironment orientation as a national and global trend.The French government - under the pressure of the European Union - encourages each protagonist of the economy to look for all kinds of behavior, new measures and procedures which can lead to a “green way”.30Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDSWhat is the “Bio”?31Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDSNoticing the general degradation of the industrialized food qualityNoticing the effect of the pollution, global warming and all the processes leading to a critical situation for the environmentBeing more and more aware of the health and body care as a key of a better lifePeople want something different, and have looked for a new products and new way of the consumption32Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS Bio and Food Bio and Energy Bio and Health33Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS1. Bio and Food Bio and Food Bio and Energy Bio and Health34Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS1. Bio and FoodThe reasons of the emerging of the “Bio” – industrialized agricultureIndustrialized agriculture accelerated the apparition of synthesis pesticides herbicides produced by the emergingpetrochemicalindustry. In most of the countries all over the world farmers have adoptedthesenew methodswhich have increasedtheirproductivity in a significantway.35Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS1. Bio and Food At the same time the people have started to eat more and more vegetables and meat. One of the most used method to answer to this demand has been the battery farms: surnumerous animals kept in coop generally above ground. That has lead to the soy and corn intensive agriculture designed to fatten birds farm and cattle. They have also used growth factor ingredients (Synthesis hormones and antibiotics) consistently integrated in the farm animals food.36Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS1. Bio and FoodConsequences of the industrialized agricultureAt the end of the 1960’s and more recently, doctors, nutricians and othermedicalprofessionals have started to worry about the possible harmfulconsequences of thesemethods on human’shealth. 37Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS1. Bio and FoodThe necessity of finding a new way of consumption has been encouraged by several massive crisis which have taken down the agriculture:bird flumad cow diseaseBut also with: the aphtous fever, and the apparition of tough bacteries resisting to the antibiotics.38Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS1. Bio and FoodThe emerging of new ways of food consumptionConsumers have started to demand more and more information and details about the daily food and products they use to eat. They have been interested in the production process, the origin of the vegetables and farm animaIs.People are asking for products which can provide them :tastier flavor, more nutritious, more ecologic39Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS1. Bio and FoodThe response: Biological agriculture (Organic farming)In order to obtain healthy food of quality, biological agriculture has been developed in particular in the last decade, a field with precise Regulations of the European Union and from national legislative provisions40Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS1. Bio and FoodBiological agriculture pursues "clean" agricultural and food- production, in perfect harmony with the nature. It is seeking to improve soil health by excluding the use, in the fields and the stables, of the chemical products of synthesis (pesticides, herbicides, fertilizers, antibiotics, etc.) while still maintaining yields and product quality.41Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS1. Bio and FoodBiological agriculture aims to:Produce food that conserve all their natural property* Raise healthy animals, respecting their well-being Recover the biodiversity Preserve landscaped integrity of the territory and its aspects. *healthy and vital ground is the corrected line of departure in order to obtain produced heals and vital. 42Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS1. Bio and FoodBiological agriculture in the world (2003)It has gained in term of acreage in the world:26 millions of hectares (ha) in 2003, it is 2 million more than in year 2002. Oceania (1st): 11.3 million ha (10 millions for Australia)Europe : 6.3 million ha: 1 million in Italy, 734 000 in Germany, 725 000 in Spain and 695 000 in UK.Central America Latina America: 6.2 million ha (Argentina 2,8 millions)North America : 1,5 million ha (930 000 in the U.S.A and 515 000 in Canada. Asia and Africa respectively: 736 000 and 435 00043Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS1. Bio and FoodBiological agriculture acreage* in the world (2003)North America: 5.66%Europe: 23.80%Asia: 2.70%Africa: 1.64%Oceania: 42.68% Central and Latina America: 23.42%*Total biological agriculture acreage in 2003: 26.471 millions ha44Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS1. Bio and FoodBiological agriculture in FranceIn december 2006*, 11 640 facilities for the cultivation of 552 824 ha (499 589 ha certified and 53 235 ha in conversion. This acreage represents 2% of the french agricultural acreage. In 10 years, the number of farmers from the bio culture has been mulitplied by three and the certified acreage by five. In 2006, 44 % of the bio facilities cultivate cereals. 65% own grazier acreages; 40 % have a cattle activity; 40% have a trucker and/or arboricultural activity. 13% have a vigne activity. 13 % have an aromatical or medicinal activity * Datas given by the Ministry of Agriculture and fishing – 28 january 200845Octobre 2009Benjamin Fouks – M2 SMCOctobre 2009

NEW TRENDS1. Bio and FoodBiological agriculture in the economy.In 2007, foodmarketfrombiological agriculture wasvaluedat 1,9 billion of euros (Tax not included) The Food market has registeredsince the year 1999 a 9.9% growth*Print tagline: Bio and local it’s perfect!46Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS1. Bio and FoodFrench consumer seems to express a “bioneed”. As a response to the new demand measures have been taken to urge farmers to develop this activity : Michel Barnier, Minister of Agriculture and Fish plans to double the acreage for the organic farming toward 2012. 47Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS1. Bio and FoodThe “Bio” behaviorFrench consumption indicator* for bio products reveals that 42% of French people are convinced by these products and they tend to increase their purchases. This survey is destined to record the French people motivations which urge them to the bio consumption or the obstacles to this eventual food reconversion. *Survey conducted by the French polling Institute CSA – January 200848Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS1. Bio and FoodToday there are 1.800 shops and retailers specialized for the Bio products sales.49Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS1. Bio and Food77%of the French people think that Bio products are a new way to establish a more ecologic world. They also believe that these products are synonymous of a sustainable environment. The Bio products consumer acts for his well-being but also for the preservation of the planet. The hold of ecological consciousness is a stimulation for the French bio culture. “We can not consume without taking a look into the future”Didier Perréol, President of French Bio Agency50Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS1. Bio and FoodIn 2007, more than 4 out of 10 French people consumed at least 1 bio product each month. There are 87% who are attracted by the naturality of the bio products because they do not contain any synthesized ingredients51Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS1. Bio and FoodFrom the Biological agriculture to the “Bio” behaviorFor the consumer: 1. Buying “bio” means: I am aware of my choices and I really do trust them”I participate in the development of an agriculture seen as a life source and struggle against the destruction of the environment. I refuse the hyper consumption model. I respect animalsI take care of my own health52Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS1. Bio and FoodThe “Bio” behavior“I take care of myself, think and act for tomorrow”53Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS2. Bio and energy Bio and Food Bio and Energy Bio and Health54Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS2. Bio and energyThe term Bio-energy includes all the procedures and measures using new energy who can lead to a preservation and the protection of the environment following the aim of a sustainable environment.55Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS2. Bio and energy56Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS2. Bio and energyThere are several types of Bio-energy which are used today.Wind power Solar powerBiomassHydropowerTidal PowerGeothermalWave power57Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS2. Bio and energyBio-energy and fuel combustible consumptionTo face the global warming issue, induced by the greenhouse gas emissions as Co2, especially coming from motorized vehicules, governments, organizations* and researchers have been looking for new ways and processes to limit the dependence with the petroleum energy.*The European Agency for the Environment is one of these organizations who impulse in the E.U and so in France, the strategy and solutions on this field. 58Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS2. Bio and energyBiofuel(if cultivated, then also called agrofuel or agrifuel) can be broadly defined as solid, liquid, or gas fuel consisting of, or derived from recently dead biological material (Biomass), most commonly plants. *The European Agency for the Environment is one of these organizations who impulse in the E.U and so in France, the strategy and solutions on this field. 59Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS2. Bio and energyOne of the greatest technical challenges is to develop ways so to convertbiomassenergy specifically to liquid fuels for transportation. To achieve this, thetwo most common strategies are: 1.To grow sugar crops (sugar cane, and sugar beet), or starch (corn/maize), and then use yeast fermentation to produce ethanol (ethyl alcohol). There is a new sugar crop for Ethanol production - Sweet sorghum (see here) 2. To grow plants that (naturally) produce oils, such as oil palm, soybean, algae, or iatropha. When these oils are heated, their viscosity is reduced, and they can be burned directly in a diesel engine, or the oils can be chemically processed to produce fuels such as biodiesel. 60Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS2. Bio and energyEmerging of Eco-Labels for car models These labels are used to differentiate the cars which are the most respectful of the environmentEco² for RenaultAirDream for CitröenBlue Lion for Peugeot*The European Agency for the Environment is one of these organizations who impulse in the E.U and so in France, the strategy and solutions on this field. 61Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS2. Bio and energy3 conditions must be respected* to gain a place in the selective green group:CO²emissions under or equal the 130 g/km rate for vehicles using fossils combustible . 158 g/km pour those designed for the biodiesel. 200 g/km for vehicles using the E85. Manufactured in an automotive factory certified ISO 14001 (Regulation for the environmental management).Designedto be valuable (recycling and energy evaluation) up to 95% until the end of life.*E85 is an alcohol fuel mixture that typically contains a mixture of up to 85% denatured fuel ethanol and gasoline or other hydrocarbon62Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS2. Bio and energyThere is a strong movement for the democratization of these new combustible. Authorities have urged people to act in this “green way”.Advertising Business has taken the lead and has used the Bio-energy argument to promote the current car models for most of automotive brands.Examples of tagline for famous car brands promoting the bio green behavior Change the world without change the planet (Lexus) Behave for the environment (Renault) Pleasure is a renewal energy (BMW) The engine’s breathing respire (Range Rover) 63Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS2. Bio and energyBio-food, Bio-energy, Bio-behavior The “Bio” tends to be everywhere and now it has integrated another unexpected new field: Body and Health care.64Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS2. Bio and energyTwosurveys, one lead by the IFEN*, the other by the ADEME** have shownthat the influence of the national green way action have conducted a positive evolution of the french peoples’ environmentalbehavior. But thisevolutionaffectedessentially the middle and upper class.« The environmentalbehavioremerges more in the ownerhousehold living in couple and where the referencepersonis more than 30 yearsold and graduated » highlighted the survey. Age, degree of education, living place and incomeare the three major criteriawhichdetermine the environmental and bio behavior.*IFEN: French Institute for the Environment**ADEME: French Environment and Energy Managment Agency 65Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS2. Bio and energyIn thatway, « the probability to adopt an environmental and bio behaviorisless important in a householdwhere the referencepersonisunder 30 thanitis if the personisbetween 41 and 50 yearsold ». Householdsthat are more involved are owners, who live outside of Paris and the French capital area. They live in small- or middle-sizedagglomerations.Further, the working professionis relevant: « executives, people withliberal professions, intellectual professions and most of the graduatehouseholds (referenceperson has an equivalent of 3 or 4 years of universitydegree) are thosewho have a stronger green and bio behavior, consuming bio products and following the actions for a sustainableenvironment. 66Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS3. Bio and health Bio and Food Bio and Energy Bio and Health67Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS3. Bio and healthThere is the renownedGreen Chemistry revue. The Green SustainableChemistryannualgongress.A short time ago, the Pro-Xylaneconceived by L’Oreal, was the first skin care productconceivedfollowing the green chemistryprinciples. 68Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS3. Bio and healthPro-Xylanebenefits: In the chemicalprocessonly 2 steps are neededinstead of 5 for the usualprocess. In the production: only 13 kg of waste per kg are produced. Ordinarychemistryproduces up to 50 kg of waste/kg. Pro-Xylanewastesconsists in majority of water whichisits essential solvant.In itsingredients: Pro-Xylaneisbiodegradable and based on renewablevegetable. Pro-Xylan Production cost is about 50% less than standard chemical process69Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS3. Bio and healthSkin care marketbenefitsthrough the advancedcosmeticresearch for innovation leading to a green chemistry. This is an extraodinarynew field to explore for the market in terms of target, production, and communication opportunities.70Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS3. Bio and healthAccording to a recentsurveyconducted by Mintel* Cabinet, France is the country where the bio cosmeticproductsmarket has the fastestgrowth. The survey has shownthat 260 productswerelaunched on the French market in 2006. This numberishigherthan in othereuropean countries. U.K and Germany, for example, onlycreated 75 new Bio productsduring the sameperiod.* Mintel International Group is a privately owned, London-based market research firm 71Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS3. Bio and healthIn 2007 the interest for bio cosmeticproductsgot to a higherlevel in France with the launch of 350 new products. The « Bio »representsonly1,5 % of the beauty sales of 150 million euro in the end of December 2007. But the “Bio” is the new trend and itsgrowthshouldbeexpectedverysoon.* Mintel International Group is a privately owned, London-based market research firm 72Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS3. Bio and healthIn 2006, L'Oréal acquiredSanoflore, a French company. This companycouldbecome the first Bio brand with a global presence. *Sanoflore which employs 147 people, will achieve sales of about 15 million euro in 2006, including 20% outside France. Sanoflore became part of L’Oréal’s Active Cosmetics Division. 73Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS3. Bio and healthClarinstook a 10% participation in Kibioat the end of the year 2006 which has seenits turnover multiplied by 13 to reach 1,8 million euro. Itsfounder, Pierre Cabane aimedat 10 million euro in 2008 due to the international activity. 74Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS3. Bio and healthRetailers are alsoseduced by the « Bio».Naturalia, a french brand namespecialized in Bio beauty openeditsthird shop in France last January. Marionnaud* another french brand name plans to widenits bio beauty offers in 2008 according to itsManagingDirector Laurence Paganini *Marionnaud: 1231 Shops in Europe – 566 in France 8 million of fidelity card– owners in France usually increase their expenses by 20%75Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS3. Bio and healthBut this trend has shown a restriction: the price for Bio productsishigherthan the one for usualcosmetic and skin care products. For example, a certified bio hydratingcream pot costs about 25 euros for 30 ml versus about 10 euros for 50 ml of a similarconventionalproduct. 76Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS3. Bio and healthNutricosmetics :Nutricosmetics(or skingestibles) promote the concept of beauty through a healthy skin and body. Nutricosmetic products have active ingredients, which offer a vital link between the health and cosmetic properties of nutritional ingredients.* Datas given by Frost and Sullivan - 25 May 2007 77Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS3. Bio and healthNutricosmetics, two main categories:Drinkablenutricosmetics – taken in liquid form or yoghurts, fortified with minerals and vitamins, for better skincare and body health. Some popular products available as drinkable nutricosmetics include Borba and their skin balancing water. Danone’s recently launched beauty yoghurt, called Essensis and Coca Cola’s Lumae, a tea based drinkable nutricosmetic are marketed for their skin care properties. Oralnutricosmetics – ingested as pills for purposes such as anti-ageing and skin care. Some popular brands in this category include, Inneov by L’Oreal and Nestle, Imedeen by Ferrosan and Procter & Gamble’s Olay line.* Datas given by Frost and Sullivan - 25 May 2007 78Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS3. Bio and healthNutricosmetics and ingredientsThe major ingredients that are currently used in nutricosmetics are soy isoflavone proteins, lutein, lycopene, vitamins (A, B6, E), omega-3 fatty acids, beta-carotene probiotics, sterol esters; chondrotin and coenzyme Q10. They act as antioxidants and have recently been promoted for their skin care properties. These antioxidants control free radicals produced as a by-product of biochemical reactions. Nutricosmetics nullify the effect of free radicals, which are the primary cause of premature aging of the skin. These products also have anti-inflammatory action that protects the skin against UV radiation.* Datas given by Frost and Sullivan - 25 May 2007 79Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS3. Bio and healthThe Following chart gives the revenue share of different sectors of the cosmetic market*, which reveals the dominant postion of the skin care segment, leading with 27 per cent of the total revenue.*Source: Incosmetics Magazine, April 2006 80Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS3. Bio and healthWith an increase in pollution and ozone depletion, the incidence of skin ailments has doubled. Consequently, consumers want to take every precaution to protect their skin and maintain it healthy and young. Some important factors driving the market growth include the "baby boomer population“. They are a part of society which is keen to root out the primary causes of aging and maintain a youthful appearance. * Datas given by Frost and Sullivan - 25 May 2007 81Octobre 2009Benjamin Fouks – M2 SMC

NEW TRENDS3. Bio and healthBesides, the eco-friendly nature of nutricosmetics are immediately popular as an effective compliment to synthetic cosmetics.The climatic shifts due to global warming have caused the temperatures in the European countries to dip further. Such cold climates have resulted in burgeoning consumer demand for tanning products. Nutricosmetics offer healthy nutritional solutions to address this need. One of the major challenges faced by the market is the high pricing of nutricosmetic products, which is bringing down the potential demand in volume. However, with increasing entry of new participants in the market would certainly witness competitive pricing scales. * Datas given by Frost and Sullivan - 25 May 2007 82Octobre 2009Benjamin Fouks – M2 SMC

OPPORTUNITIESFrance and CosmeticsNew trends identificationStakes and opportunities83Octobre 2009Benjamin Fouks – M2 SMC

OPPORTUNITIESNutricosmetics*Source: Cosmetics Trade Magazine, January 2004 84Octobre 2009Benjamin Fouks – M2 SMC

OPPORTUNITIESNutricosmeticsIn the European Union (EU) nutricosmetics have been relatively well accepted. A nutritional ingredient intended to be used as nutraceuticals or nutricosmetics without health claims needs to be approved through the Novel Foods Directive, Novel Foods Regulation (EC) No 258/97. This regulation has been extended from genetically modified foods to cover novel foods which were not on sale prior to 1997. This is because nutricosmetics fall belong to the category of dietary supplements even though their final objective is that of a traditional cosmetic. Also, the EU is soon going to adopt average price levels across the European Economic Area (EEA). These regulations would help regulate the prices of nutricosmetics which at present are available at premium pricing.* Datas given by Frost and Sullivan - 25 May 2007 85Octobre 2009Benjamin Fouks – M2 SMCOctobre 2009

OPPORTUNITIESNutricosmeticsL'OréalDermatological Research and Nestlé Nutritional Research have joined forces* to create Innéov specialized in cosmetic nutritional supplements.*50/50 Joint Venture between L'Oréal and Nestlé,86Octobre 2009Benjamin Fouks – M2 SMC

OPPORTUNITIESNutricosmeticsL’Oreal GroupLuxeMassProfessionalActive CosmeticHelen RubinsteinLancomeCacharelRalph LaurenBiothermDieselViktor & RolfShuVemurKiehl’sGiorgo Armani….L’Oreal ParisGarnierLe club des creatifsMaybelline New YokSoftsheen. Carson…RedkenKerastaseMatrixMizaniLa Roche-PosayVichyInneov87Octobre 2009Benjamin Fouks – M2 SMC

OPPORTUNITIESNutricosmeticsLes laboratoires innéov have decided to supply the scientific proof thatdiet has an impact on the beauty and especially on the beauty of skin.The products are designed for daily use and the dosages have the form of pills, unit doses or innovative galenic shapes to improve the health and beauty of skin, hair and nails.88Octobre 2009Benjamin Fouks – M2 SMC

OPPORTUNITIESNutricosmeticsInnéovFirmness: it was the first nutritional supplement from the Laboratoires INNEOV presented at the European Dermatological Congress (EADV) in october 2002 .InneovFirmess launched in March 2003 is the first re-densifying nutritional supplement for face and body whose ingredients act from within the body, globally and in-depth.The principal active ingredient is Lacto-lycopene™, a highly bio-available form of tomato lycopene, combined with soy isoflavins and Vitamin C. 89Octobre 2009Benjamin Fouks – M2 SMC

OPPORTUNITIESNutricosmeticsInnéovFirmness is intended for women aged over 40, concerned by the loss of cutaneous firmness.Its efficacy has been demonstrated in a double blind trial conducted vs. placebo, on 90 menopausal women, not taking hormonal replacement treatments and the tests showed an improvement in dermal density and skin micro-texture.The results were presented by Pr Brigitte Dreno*, during a symposium at the congress.*Dermatology department, Hôtel-Dieu, Nantes 90Octobre 2009Benjamin Fouks – M2 SMC

OPPORTUNITIESNutricosmeticsInnéov's European goal in strong growth markets Innéov'sEuropean subsidiaries, all belonging to the LaboratoiresInnéov, have been settled in a certain number of markets : Germany, Belgium, Spain, France and Portugal. Nutritional supplements, whose status is from now on governed by a recent European directive, represent a market with strong potential: 15 to 20% of European women are regular consumers of nutritional supplements*, and the rates of growth of this market range from 7 to 30% depending on the country**The Laboratoires INNEOV are targeting the pharmacy channel in order to develop the cosmetic nutritional supplements market*Source IPSOS 2001 (3) Germany (120 M€, +7%), Belgium (17 M€, +10%), Spain (35 M€, +29%), France (210 M€, +18%), Italy (74 M€, +19%). **Source IMS Health Pharmacy 2001 91Octobre 2009Benjamin Fouks – M2 SMC

OPPORTUNITIESNutricosmetics92Octobre 2009Benjamin Fouks – M2 SMC

OPPORTUNITIESNutricosmeticsIMEDEEN® has been a global leader in internal skincare since 1991. Developed by the Danish healthcare company Ferrosan, IMEDEEN internal skincare works from within to improve overall skin quality, structure and appearance. The range of cutting-edge, all-natural formulations is designed to enhance the benefits of a regular beauty routine. IMEDEEN internal skincare tablets are distributed in more than 50 countries and are used and loved by women worldwide. Ferrosanis a Danish healthcare company - a world leader in internal skincare solutions with scientifically proven results. Ferrosan has been developing pharmaceuticals, innovative lifestyle products and medical devices since 1920. Today Ferrosan is represented in more than 70 countries. 93Octobre 2009Benjamin Fouks – M2 SMC

OPPORTUNITIESNutricosmeticsIMEDEEN® skincare tablets offer innovative internal skincare, with a line of products that work below the surface of the skin – from within – to help create smooth, supple and beautiful skin. IMEDEEN® works in the deeper layers where topical creams and lotions cannot reach, to improve the skin’s overall quality, structure and appearance. Add IMEDEEN® to your current skincare routine and enjoy the benefits of anti-ageing working from the inside. 94Octobre 2009Benjamin Fouks – M2 SMC

OPPORTUNITIESForecastCredibility and referenceThe continiousgrowth of the skin care market in France isexpected. But due to the wideness of the range of products, brands must focus their efforts to increasetheirvisibilty and preservetheircredibility.Credibility Issue: reinforce the medical surety for skin care products and prove their efficiency through studies and clinic tests. Improve its reference in pharmacy to reach this dynamic distribution channel. 95Octobre 2009Benjamin Fouks – M2 SMCOctobre 2009

OPPORTUNITIESForecastInnovation – Competitors and Target Maintain a strong innovation products policy – products diversification, chemical research.Targets widening with the anticipation on the 35-50 years market and men segment.Face to a new competition: competitors which sell food and nutritional supplement and want to extend their range of products – for example Inneov* created after a joint-venture Nestle/L’OrealOn the opposite, dermo-cosmetics leaders specialized on the anti-aging segment have invested in the food and nutritional supplements market.96Octobre 2009Benjamin Fouks – M2 SMC

OPPORTUNITIESForecastIn 2011, it is forecasted that the skincare market value will have increased by 17.8 per cent and the market volume increased equally by 16.7 per cent for the same period. The skincare industry is expected to see a compound growth of 3.3 per cent from 2006 to 2011. 97Octobre 2009Benjamin Fouks – M2 SMC

OPPORTUNITIESForecastEnvironmental concerns are of prime importance to cosmetics companies in France. The industry is continually looking for new ways to make their products and product processing environmentally friendly. Focus areas include recycling, biodegradable products and packaging, and replacing harmful ingredients. Furthermore, customers are becoming more 'ethically conscious' and lthey are looking for brands who act with a sense of moral responsibility.98Octobre 2009Benjamin Fouks – M2 SMC

Skin Care marketThe Trend in France, 2008Benjamin Fouksbenjamin_fouks@yahoo.fr+336 48 26 57 6499Octobre 2009Benjamin Fouks – M2 SMC