L’Oréal CEO: ‘Hair care has become the new skin care’
Last week, international beauty major L’Oréal reported a net profit surge of 22.6% to €6.05bn for the full year (FY) of 2022. Its active cosmetics division led growth, up 30.6% for the year, with Latin America the highest-growth region, up 34.1% on 2021.
Speaking to analysts during the company’s earnings call, L’Oréal CEO Nicolas Hieronimus described 2022 as “another grand slam year”, noting a few surprises in category performances.
“Two categories came as post-COVID good surprises: fragrance and hair care,” Hieronimus said.
Fragrances and hair care interest booming
L’Oréal’s fragrance business grew 23%, driven by a return to regular social life but also consumers investing in what they perceived to be an “affordable luxury aspiration”, he said. And this trend was “bound to last”, he added.
The CEO previously highlighted fragrances as a key category back in August during the company’s first half (H1) results, acknowledging a “new appetite” amongst consumers in the space, fuelled by interesting in wellbeing, mood and seduction.
But as the full financial year closed, he said hair care had also proven to be a critical growth space offering plenty of future opportunity for L’Oréal.
“Hair care, where we grew at plus 12%, well above the market, has become the new skin care,” Hieronimus said. “We see longer hair, more diverse types of hair. And great hair is increasingly a sign of health.”
'Premium hair care is becoming a luxury category'
According to the CEO, consumers shopping this category had an increasingly “strong appetite” for professional products and premium-mass products, with engagement shifting towards the more premium side of the market.
L’Oréal’s Kérastase brand, for example, had grown 16% in 2022 to join the company’s “exclusive billionaire brand club” – a hair care brand situated at the premium side of the market, operating under its Professional Products division.
“Following the COVID period, we see a strong appetite of consumers investing more in the premium hair care category and sophisticating their hair care routines,” he said. “Premium hair care is becoming a luxury category.”
Alexis Perakis-Valat, president of the L’Oréal’s Consumer Product division, agreed and said hair care had certainly been a “highlight” in the business division, particularly on the premiums side.
“We specialise in beauty categories with high potential to premiumize and inspire new consumer habits. Skin care, premium hair care, make up, and hair colour, are key markets in which people seek innovation and desirability, not just utility. That makes these categories ripe for new products and segments,” Perakis-Valat said.
The launch of the company’s Elvive Hyaluron Plump hair care line in 2022, for example, had proven hugely successful, bringing a “highly effective salon solution” to the mass market with its offering of shampoo, conditioner, moisture spray and serum.
Beyond hair care, L’Oréal also reported a 4.6% growth of its hair colour business worldwide.