Natural beauty
By : Anna Kocinska
Marketing cosmetics that tout a natural base so far has not been big business in Poland. But pharmacist and aroma-therapist Mary Agnelli has designs to change all that.
This year, Agnelli launched Polish firm Sense Philosophy to produce a wide range of cosmetics from soaps and creams to bath oils. Her chief marketing theme is a "hands-on" approach to selling natural products by distributing samples in stores such as essential oils to prove her point that natural beauty is truly deeper than skin.
"Not only do they help the skin but also ease pain," Agnelli said about essential oils. "You can use my cosmetics not only to moisturize your skin, but to get rid of insomnia or headaches."
Agnelli is not the first producer in Poland pitching the natural-products line. In fact, most cosmetics firms here and abroad boast naturally based products. But Agnelli said she was taking the idea a step further, pushing a test-it-yourself sales strategy. That approach generally follows The Body Shop model, which British owner Anita Roddick has used to build a billion-dollar, global business over the last two decades.
But in Poland, where the prevailing retail principle is "look but don't touch," it remains to be seen whether the "hands-on" concept will survive or thrive. Moreover, Agnelli faces stiff competition from domestic and international firms.
Business is picking up in the cosmetics scene. After a sluggish start in the early 1990s, the cosmetics market in Poland is growing at a brisk clip, about 25% annually. And with cosmetic production here estimated at $1.5 billion a year, there just might be room for a fresher, friendlier, "touchy, feely" approach to building consumer loyalty.
To showcase her Sense Philosophy product line, Agnelli this fall set up a gondola-like stand with help-yourself testers on the groundfloor cosmetics stage of the newly opened Galeria Centrum, formerly Domy Towarowe Centrum department store. She has a similar stand in Wroclaw's Galeria Centrum, she said. But that's only the beginning. Her business plan calls for opening her own shops in shopping malls as early as next spring, Agnelli said. She also produces many of her products in Poland.
Agnelli is no newcomer to the cosmetics scene. She had a cosmetic store in London, where she lived before coming to Poland three years ago and tailored products for individual customers, she said.
Au naturel
So far, in Poland, Agnelli's current offering includes natural soap as well as grapefruit, lavender and coconut oils, face creams, tonics and bath powder. Agnelli plans to produce face masks made with fresh ingredients that also have a longer shelf life, and to introduce a massage bar, such as a tablet of coconut butter, "which can be massaged into the very dry areas of your skin." She also wants to add essential oil burners, which in her opinion are much more effective in use than, for instance, incense.
"The concept behind stuff like mine is that we make it from as many natural ingredients as possible," she said. "Natural" is a key word in Agnelli's vocabulary and she tries to follow old-fashioned recipes. "When I first started making cosmetics, I would look at old recipes and remove ingredients I didn't like. So sometimes I was left with two ingredients," she said. "Eventually, I would modify the formula until it really worked."
When she produces soap, for instance, she doesn't remove the glycerin. Glycerin naturally separates in the soap-making process, but Agnelli mixes it back into the product while most producers use it for other cosmetics. "That's why you don't need to use a moisturizer after using my soap," she said.
Agnelli is not, however, a forerunner of natural-based cosmetics and hands-on marketing. Entrepreneur Anita Roddick took the concept to market in a big way with The Body Shop. Founded in 1976 in a small Brighton shop on Britain's southern coast, The Body Shop now has 1,500 outlets in 47 countries with revenue totaling £604.4 million last year. Among The Body Shop's best sellers are Vitamin E Cream, Tea Tree Oil, Banana Shampoo and Aloe Vera Lotion. A principle sales feature is the hands-on approach, where customers can spray or rub the products into their skin before buying them.
Testing the market
Such touchy, feely cosmetic shops are in vogue. And the more bulk, the better. In London, for instance, in the Lush chain store network, fresh-made strawberry and avocado face masks are sold from buckets while soap is sold in bulk.
Agnelli said she planned to follow the Lush approach here in her Warsaw shops. "We want our shops to be really hands-on, so that people will be able to smell and try our products," she said. Lots of testers will be provided, "as their lack is a weakness of traditional Polish cosmetics companies," she said. "It's a good opportunity to try to bring out our products because traditional cosmetics have been here for a long time and new products arouse curiosity."
And it just might be the right time to enter the fray. Since 1995, sales of cosmetics and fragrances have more than doubled in zloty terms and grew about 45% in dollar terms, according to figures presented by the Central Statistical Office (GUS). Overall, cosmetics production in Poland has increased more than threefold and the producers market is now valued at $1.5 billion, according to market researcher Red Square Trade Information in Tarnow, which cited a survey by magazine Poznanski Magazyn Targowy.
With that growth strong brands are in the making, researchers said. In 1998, Eris and Ziaja were market leaders in facial cream production, according to research compiled by AC Nielsen, with 15.6% and 11.3% market share by quantity, respectively. At the same time British Pond's, reintroduced to Poland in 1998, was the only foreign brand on the list of leading companies, outpacing Polish producers Soraya, Oceanic and Hydrosystem.
Distinctly artificial
So far, no domestic company has tried to break into the luxury end of the market, which is dominated by French and American brands. But domestic firms are making headway in niches such as hypoallergenic cosmetics and products based on specific extracts or oils such as goat's milk and tea tree oil.
Ziaja, for example, is a mid-size company that focuses on inexpensive, quality products. The Gdansk-based firm began with one face cream, Oliwkowy, in 1989 and now has 116 cosmetic lines, said Aleksandra Ziaja, pharmacist and co-owner.
"Our recipes come from the time when we made cosmetics for friends at the pharmacy, so we still try to keep them simple," Ziaja said. According to Ziaja, a smaller number of ingredients lowers the risk of allergic reactions. She wouldn't call her cosmetics totally natural, though, but based on as many natural ingredients as possible. "To a certain degree it's an illusion that natural cosmetics exist," she said.
Many industry watchers agree. The "natural" distinction is a bit artificial and hard to define, they said.
"There is practically no definition of a natural cosmetic or criteria that can be used to describe it," said Jacek Arct, a lecturer in the chemistry department of Warsaw's Technical Institute. "Artificially produced and naturally extracted vitamin C cannot be distinguished in chemical terms."
Although defining the essence may be elusive, it's clear that claiming a natural heritage is good marketing, Arct said. "When Pollena launched a new cosmetic line based on flax, it was a good marketing trick, but the ingredient itself had no real significance," he said.
Cosmetics sold in shops always contain synthetic ingredients, said Barbara Smietanka, pharmacist at Panstwowy Zaklad Higieny (PZH), the state hygiene control office. "(Natural) is a term, which in my opinion is being abused, and it's overused because natural cosmetology is in vogue," she said. Moreover, real natural cosmetics, such as hair masks from olive oil and yolk, can be made at home, Smietanka said. "Preservatives are a must if you want to guarantee microbiological purity in the product."
So-called natural cosmetics were first fashionable abroad, and now they're making their way into the Polish marketplace, Arct said. "It's a trend that will continue," he said. "While naturally based cosmetics are neither better nor worse than synthetically enriched cosmetics, it's good we have them. It provides variety on the market."
Soft sell
And consumers are buying it. "Surprisingly, our most simple cosmetics, such as Oliwkowy, sell the best," Ziaja said.
Agnelli, who now produces cosmetics on a small scale, is also satisfied with sales. "Since the opening in Warsaw in September, we have had new orders at least once or twice a week," said the owner of start-up Sense Philosophy. "It's surprising considering that everything is still sealed on the stand, which is only one of many other stands (in Centrum Galeria)."
Following the Polish market, Sense Philosophy is offering products in a range of prices, for example, bath salts range from zl. 2.90 to zl. 29.80. Popular foreign brands of good quality but not at the luxury end of the market, are usually more expensive, Agnelli said.
In addition to opening new shops and developing the hands-on marketing schemes to successfully compete in the growing cosmetics business, developing new products is key to growth. But costs associated with new products are a significant hurdle, especially the various microbiological and dermatological tests that must be performed, Agnelli said.
"You have to do it every time when a new basis for cosmetics is made," she said. All new products have to be approved by the state hygiene control office (PZH), she said.
"Rules in Poland are stricter than they are in England," Agnelli said. "You need certificates for every new product so I can't produce cosmetics designed especially for one person, something I used to do in London."
Every product in Poland must come with a precise list of ingredients and a recipe that is checked and tested, said Smietanka of PZH.
"But, all that might change, because Poland is aspiring to put its law in line with European legislation," she said. "I expect that in the future producers won't be obliged to get their products approved by PZH."
But that doesn't necessarily mean a freer market, Smietanka said. "On the other hand, controls at shops will be stricter and more frequent."
