Kao is #11 on this year's list of Top Global Beauty Companies.
Below is a look at the company’s 2018 highlights, recent acquisitions, best-selling brands, and latest innovations.
(FY 2017 Beauty Sales: $5.3 billion)
- Michitaka Sawada, president and chief executive officer
- Katsuhiko Yoshida, Toshiaki Takeuchi, Yoshihiro Hasebe, senior managing executive officers
- Masumi Natsusaka, Motohiro Morimura, Yasushi Aoki, Hideko Aoki, Kozo Saito, Tomoharu Matsuda and Shigeru Ueyama, managing executive officers
- Sofina, Kanebo, Molton Brown, Bioré,
- Jergens, Asience, John Frieda,
- Goldwell, and Oribe
- Sofina iP base essence
- Est the Lotion
- Oribe Dry Texturizing Spray
- Molton Brown Fiery Pink Pepper Eau de Toilette
Kao Reports Sales & Commits To An Eco-Conscious Packaging
The penchant for Asian skincare and beauty products in the Americas and Europe–especially those featuring natural ingredients—is a momentum Kao is hoping to capitalize on. Already boasting a No. 1 share in North America with its Jergens brand lotions, Kao has its eye on positioning its Biore and John Frieda brands similarly. The company’s global haircare presence was significantly bolstered with the acquisition of Oribe Hair Care brand in late 2017, which Kao plans to grow by expanding the brand’s availability outside of the 40 international market distribution channels it’s currently sold in.
Fiscally speaking, Kao’s consumer product sales slipped 2.1%, however the company’s overall sales increased 2.6%. Sales gains were made in China and Indonesia, and Asia ranked as the company’s most profitable region with sales posting gains of 7.1% over the previous year. In the Americas, sales jumped 5.5%, but European sales dipped -1.5%.
Kao’s beauty care business sales dipped 2.6%; however operating incomes climbed 6.5 billion yen, and the operating margin grew 1.3%. The company said sales of its cosmetics declined 4.8% year on year but were up 2.1% on a like-for-like basis. Outside of Japan, sales were solid in Asia but decreased slightly in Japan. The company pointed to beauty bright spots such as the successful rollouts of Sofina iP in Asia, Kanebo in Japan, Asia and Europe, and the boost to its prestige brands Suqqu and Est The Lotion added in Japanese store sales channels.
On the packaging front, Kao doubled down on its commitment to environmentally-conscious packaging with the development of Raku-Raku Eco Pack Refill. The new film package is the culmination of four years of R&D and resembles a bottle but features a gusseted top and bottom plus a cap for easy pouring into the package that’s being refilled. According to Kao, the package uses about half of the plastic of conventional refill products.
Last year the company also developed Smart Holder, which elevates the Raku-Raku Eco Pack Refill to a primary package. The refill is simply popped into the Smart Holder and the cap is swapped out with a pump for easy dispensing. The developments, according to Kao, are examples of how the company plans to innovate while reducing its environmental impact, with the goal of ultimately developing products and technologies with zero environmental impact.
News of Note in 2018
E-commerce and tourism sales in Japan positively jumpstarted first quarter 2018 sales. The company’s total net sales climbed 1.6%.
With Kao’s K20 Mid-Term Growth Strategy (for 2017-2020) chugging along promisingly, the company implemented a long-term plan for 2030, with goals including sales of ¥2.5 trillion (with ¥1.0 trillion coming from outside Japan), plus a 17% operating margin and a 20% return on investments. For the beauty and skin/haircare segments, the company forecasted 2018 net cosmetic sales to grow 2.3% to ¥273.8 billion, and 7.1% to ¥356.2 billion, respectively.
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