The acquisition trail began at the start of the year as the company looked to boost its prestige skin care offering with the purchases of REN in March, and then Kate Somerville Skincare in May, with the aim of helping to build Unilever’s prestige products portfolio both in the US and abroad.
The Anglo-Dutch consumer goods giant followed this up by acquiring global professional skin care Dermalogica, and then adding Murad this month, its second professional brand acquisition, continuing its strategic expansion.
According to Kline, these acquisitions will allow Unilever to make a dent in channels such as prestige, specialty, and professional, which until now were not the firm’s forte.
“In 2015, the trend towards acquiring successful up-and-coming, innovative brands continues. Some of the most notable headlines in the beauty industry in recent months are about who is being acquired by whom,” says Carrie Mellage, Vice President Consumer Products.
“More importantly, these acquisitions feature a new generation of competition for the leading companies—indie brands.”
The trend of acquiring independent brands is not new to the beauty industry, but Mellage explains that ‘indies’ have become highly desirable targets for M&A activity by leading beauty companies because of their digital savvy, innovation, and problem-oriented offerings that resonate well with today’s consumer demands.
Indeed, for Unilever, these brand have given Unilever a great opportunity to expand into the prestige skin care sector with well-established brands, meaning it doesn’t have to start from scratch.
It isn’t the company’s first journey into the prestige beauty business. In 2000, the firm sold its prestige fragrance business, including Calvin Klein fragrances, and in 2005 the company divested Elizabeth Arden.
“One thing is clear—Unilever wants to create a prestige skin care business and plans to do it through acquisition,” adds Mellage.