Formula for success

The cosmetics market has always proven resilient in times of crisis. As L’OrĂ©al’s founder, EugĂšne Schueller, so philosophically put it, “Successes and failures are always fleeting.”

The young chemist and entrepreneur launched the company in 1909 with hair dyes that he developed, produced and sold to hairstylists in Paris. His first hair dye formula, l’AurĂ©ale, used a blend of harmless chemical compounds, which was groundbreaking at the time. Innovative, determined and ambitious, Schueller then set up a hair colouring school on Rue du Louvre in Paris, convincing Parisian hairstylists to use his dyes. He soon introduced representatives to sell his products throughout France, establishing a close relationship with hairstylists, which was an important element of his success.

It’s a far cry from Schueller’s kitchen 
in 1909 to L’OrĂ©al’s operation today, 
which includes 42 plants on all continents, distribution in 130 countries, 67,500 employees and 18 research centres. 
It seems that Schueller had a vision, 
but when he started out, peddling his product on the streets of Paris, could he ever have imagined that L’OrĂ©al would become so dominant globally?

Celebrating its centenary this year, the company owns more than 15 per cent of the world beauty market, with brands such as the Body Shop, LancĂŽme, Redken, KĂ©rastase, Shu Uemura, Garnier, Maybelline, Biotherm and Kiehl’s, along with fragrances such as Giorgio Armani, Ralph Lauren and Diesel, coming under the umbrella of the L’OrĂ©al Group.

As a beauty company L’OrĂ©al’s aspiration for the consumer is simple: 
to make the world a more beautiful place. L’OrĂ©al believes that every woman and man has the right to be beautiful every day. That might seem a little optimistic and misty-eyed, however, L’OrĂ©al is committed to its ongoing quest for innovation and quality, spending 3.3 per cent of total turnover on research and development – the largest percentage 
spent on research and development in the beauty industry – and employing more than 3200 researchers around the world.


In 2008 L’OrĂ©al registered a record 628 new patents, which is an impressive testament to the company’s ability to adapt its business model with realism so it continues to flourish despite the global recession.

“Over the past 20 years, we have been fortunate to enjoy steady growth to the point, at times, of taking it for granted. This cannot be the case. Today’s adversity encourages us to demonstrate qualities that form the core of L’OrĂ©al’s culture: staying power, inventiveness and a healthy dose 
of humility,” advises L’OrĂ©al’s chairman, 
Sir Lindsay Owen-Jones.

L’OrĂ©al’s close proximity to all distribution channels and its diverse product range across all price points will see the company continue to grow, certainly helped by its strategy of diversity.

The company is refreshingly up-front about its current trading strategies. Its focus is to avoid fragmentation and merge smaller brands into larger, more successful ones. With fewer launches planned, L’OrĂ©al’s aim is to target a wider consumer base, speed up its entry into untapped markets and set up subsidiaries. You can see from the recent launch of the innovative Garnier Caffeine Eye Roll-On, which retails for less than $20, and the acquisition of haute couture brand YSL BeautĂ© that the strategy is in place. Schueller would be proud.

It makes sense to ensure that newly acquired brands complement brands already owned by the group, based not only on turnover but also a consideration of what will add a new dimension to the existing brand portfolio. L’OrĂ©al’s acquisition of YSL BeautĂ©, the embodiment of French luxury, is very much a strategic one. “It has considerable international influence and is the perfect complement to our current brands, giving our luxury division a unique aura and dimension,” 
says L’OrĂ©al’s CEO, Jean-Paul Agon.


Tapping into contemporary popular culture with stars that are easily identifiable in the global market, the faces of L’OrĂ©al are always big names: BeyoncĂ©, PenĂ©lope Cruz, Eva Longoria Parker, Patrick Dempsey, 
Jane Fonda and newly signed Slumdog Millionaire beauty Freida Pinto.

At the same time, L’OrĂ©al focuses on creating global brands with a local approach and consumers have come to expect such innovation from this global French company. From colouring the thick, black hair of Mexican women to preventing African hair from breaking, giving Japanese women a porcelain complexion, taming European eyelashes and enhancing the lip colour of women from Paihia to Prahran, L’OrĂ©al has every corner of the market covered.

Beauty habits are influenced not 
only by customs and culture but also 
living conditions. “Individuals are inextricably associated with their geographic and cultural environment; 
this is the whole basis of geocosmetics,” 
says L’OrĂ©al’s director of international product evaluation, Fabrice Aghassian. “This relatively recent concept has developed along with globalisation and is now an essential tool in the markets that are still underdeveloped and little known, where it’s easy to make a misjudgment. We work with psychosociologists and ethnologists to observe consumers from 
a totally new angle,” Aghassian explains.

Through this constant research many facts are uncovered; for example, Chinese women remove their lipstick before eating for fear of swallowing the pigments, and deodorant sprays are not popular with Japanese women because the noise they make gives away how often they are used.


L’OrĂ©al Research has been examining hair types since the 1980s and it seems the traditional classification of hair according to ethnic group – Caucasian, Asian and African – is now obsolete.

So, beyond the obvious differences, does hair behave differently in terms of growth rate and density? Working on this in 23 countries, L’OrĂ©al has discovered there are considerable variations. African hair, for example, is the thinnest; Chinese, Korean and Japanese hair grows the fastest, and the record for thickness is held by European, Brazilian, Australian and Lebanese hair. As these are important factors when it comes to colouring, L’OrĂ©al can vary the amount of product in the bottle according to the particular markets around the world.

New product developments are constant and local in nature. Knowing that some women in Brazil were not rinsing conditioner out after shampooing – in an attempt to weigh down their thick, curly hair – led to the development of L’OrĂ©al Paris Elvive Liss Extreme, an anti-frizz range. Research teams in South Africa discovered the men were using dishwashing liquid to keep their hair shiny and control oil, which led to new product ranges for the local market.


The approach to skin colour has also changed significantly and is no longer confined to a simplistic geographical classification. Sixty-three shades divided into six groups have been identified worldwide. Using this knowledge L’OrĂ©al offers a wide range of foundations to cater more fully for all skin colours.

Uneven pigmentation (particularly 
in Asian women), darker skin colours, uneven skin tone and scars are other important considerations. In the Asia-Pacific region L’OrĂ©al identified a consumer priority for products with sun protection, formulating its UV Perfect SPF 50 especially for that market.

Research is also looking at defining 
the different types of eyelashes, eyelids and lips, which is essential for developing formulas tailored to specific needs. 
The most unexpected discovery has 
been the irregularity of eyelashes, 
which has contributed to the success, particularly in Asia, of the launch of LancĂŽme’s VirtuĂŽse mascara, which gives the eyelashes a curved shape.


The global drum of being committed to sustainable development beats loudly at L’OrĂ©al, where they take that responsibility seriously and feel they must lead by example. Since 2005 the company has reduced water use per finished product by more than 13 per cent and CO2 emissions by 11.5 per cent. L’OrĂ©al’s current aim is to halve its greenhouse gas emissions, water use and wastewater by 2015.

Though there is no manufacturing in New Zealand,  L’OrĂ©al New Zealand applied a global principle at a local 
level and has reduced paper usage by 
40 per cent (by setting photocopiers to 
double-sided) and waste by 60 per cent 
(by replacing individual office rubbish bins with smaller bins).


L’OrĂ©al’s first female managing director, Frances Stead (L’OrĂ©al New Zealand) is hands-on, tenacious and driven. Her competitive edge translates to the equestrian field, another of her passions. Her office off the reception area is that of a busy executive. Family photos, industry awards and a plaque signifying more than 20 years’ service to L’OrĂ©al adorn the walls.

“Beauty has become more holistic to encompass wellbeing, inner beauty and self-confidence. The beauty market remains buoyant. The world will always need beauty; it is universal and a fundamental human aspiration,” Stead says.

“With new markets emerging in men’s beauty and with baby boomers ageing gracefully, we will continue to expand into these new sectors to attract new customers,” Stead adds. “L’OrĂ©al’s solid financial situation, limited debt and strong credit will keep us in good shape.”

So, what is the secret behind the company’s success, both locally and internationally? “We are loyal to our origins, being focused on beauty products, which accounts for 98 per cent of our turnover and enables us to maintain 
our core values of innovation, excellence and attentiveness to individual beauty needs,” Stead says.

“L’OrĂ©al also attracts diversity in nationalities. With just fewer than 200 employees in the L’OrĂ©al New Zealand office we have around 30 nationalities.”

With L’OrĂ©al’s 100th birthday comes the worldwide launch of 100 Citizen Projects. L’OrĂ©al New Zealand has partnered with the New Zealand Family and Foster Care Federation to provide workshops for vulnerable children in foster care that empower them to make decisions about their future.

Five minutes with: Greg Murrell

You recently celebrated Ryder’s 10th birthday. What significant changes have you seen in hairdressing over the last decade?

Training systems have improved significantly over the past 10 years but the biggest change for me has been the connection to the fashion industry that salons such as Ryder have built. Working with fashion has had the effect of moderating the work of hairdressers as well as making it more real and relevant.

How does Ryder differentiate itself from other salons?

The quality of our training, the passion of our staff and a very unique and relaxed environment sets us apart. We impress upon our trainees that hairdressing is a craft and that it will take time to learn and become proficient in.

We don’t train people in a rush, everyone proceeds at a rate that is right for them. We teach haircutting as a technical skill.

Once this is mastered we teach them about connecting with the true character of hair, giving trainees the ability to really work in an individual way on each client.

Along the way they are taught fashion dressing techniques at the many shows and shoots that we’re involved in. When hairdressers stay interested in the creative side of their careers it keeps them alive and interested in their work.

Our salon environment is very relaxed and spacious. In my experience, it is difficult to be creative when you are stressed and under pressure. Going to the hairdresser is an escape from your life so it needs to feel very comfortable and unhurried.

What do you prefer – to cut or colour – and why?

Cutting and colouring are the core of our business. The two go hand in hand. My speciality in salon is as a haircutter, but colour is also important in my work. I prefer a subtle approach with colour.

I have always loved to cut hair. From there I progressed to really learning how to dress hair.

What “look” are you loving right now?

I am really interested in exploring all the possibilities with wave, curl and the almost frizzy, dry hair looks.

What trends are coming through for this coming spring and summer?

At the recent fashion shows around the world, there are a lot of “up” hair looks. This is interesting as these styles have been on the sideline for a while now. Translating that to the consumer, it has a relevance for spring and summer in that this is a time when we are outdoors more and want fuss free options for our hair.

What are your three essential hair tips?

1 When you have washed your hair, never rub your hair in an upwards motion with your towel. Just squeeze the hair in the towel and always in a downwards motion. If you do this, you will reduce the frizz factor in the finished result.

2 If you have flyaway or troublesome hair, try a cool rinse after you have conditioned the hair. This will help the cuticle layer of the hair to lie down in a smoother way.

3 Invest in a salon quality hairdryer. This will be a great investment and will last for years. You will have much more control over temperature and speed settings and it will work much more efficiently than a low quality one.