Beiersdorf's anti-aging products sales rocket

Related tags La prairie Germany Beiersdorf

Europeans may be living longer, but they do not want to look older,
and are willing to pay any price to attain this goal, as
Beiersdorf's results show.

The desire to stay looking young led to significant sales growth in Beiersdorf's high-priced anti-aging products in the first half of 2004.

This growth stood out from the weak overall financial results of the German company, which blamed hesitant economic recovery in Europe - where Beiersdorf sells more than three quarters of its products - for the downturn.

However, the company saw a slight recovery compared to its weak performance of 2003, with growth of three per cent, taking sales to €2364 million. Operating profit was up four per cent to €257 m euros. The La Prairie brand with its age-fighting products was the growth leader with a sales increase of 21 per cent. However, the company is still a long way off the results of 2001 and 2002.

"The hesitant economic recovery in Europe and particularly in Germany, as well as continued muted consumer demand, dampened growth in these markets", said the company report.

But people apparently do not care much about the economy when it comes to the way their skin looks and are willing to pay as much as it takes to look better.

In spite of La Prairie's upmarket prices, the brand's sales have accelerated over the last few years. In 2002 La Prairie brand sales grew six per cent, last year La Prairie continued its positive performance with sales growth of 10 per cent, and in the first half of 2004 this growth more than doubled.

In comparison Nivea, the world's biggest skin and personal care brand, known by Beiersdorf as "the mother of all modern creams since 1911", has shown a decline in sales growth during the same period. While between 1999 and 2001 the Nivea sales grew about 17 per cent a year, in 2002 they were up seven per cent, last year and the first half of 2004 sales increased by approximately only five percent.

A recent ACNielsen study, looking at the fastest and largest growing categories within personal care around the world, pointed to the aging population as one of the key trends emerging in personal care.

For example, "the growth in the aging population, linked with product developments, contributed to a nine per cent growth in face and eye moisturizers", said the report by ACNielsen. This sector is now worth an impressive $348 million.