Synergy CHC, which markets and distributes primarily health and wellness products, got into the personal care business this month by purchasing a 50% ownership stake in Hand MD.
The move reinforces the beauty industry’s ongoing convergence with the wellness and fitness industries.
New niche
With life-long skin care users aging more gracefully and younger women opting to preserve their smoother skin now rather than strive to restore it later, the anti-aging category has cause to shift focus.
Synergy CHC aims to leverage its latest acquisition to do just that, putting the new anti-aging niche to the test. “Thanks to advancements in anti-aging, our face no longer reveals our true age but our hands do,” explains Hand MD co-founder Kara Harshbarger in a media release about the deal.
“Hand MD is clinically proven to rejuvenate aging hands and through our collaboration with Synergy, we are bringing the ultimate hand solution to the forefront of the marketplace," she adds.
Deal details
Under the agreement, Synergy has omni-channel rights to sell, market, and distribute the hand care products globally. The company will pay Hand MD $1.5m as well as three years of royalties.
According to the media release, Synergy will “pay minimum yearly royalty payments in year two of $250,000 and minimum yearly royalty payments of $500,000 in year three….Royalty payments are calculated based on 5% of net sales.”
Industry insights
Changes in the anti-aging category are reflected industrywide, in advertising, market research, ingredient development and more.
The new #FaceForward campaign from Clinique is a good example, as is the NetBase 2015 Brand Passion Report. “NetBase data on Olay reveals a significant trend emerging for the skin care business: consumer interest in anti-aging is dwindling,” reports Cosmetics Design.
That brand has long been a “strong driver of conversation…on anti-aging,” affirms NetBase, a social listening solutions firm that uses proprietary technology to measure the meaning of consumer posts. Even so, “there was one decrease attribute area [for Olay] in terms of Net Sentiment in the past year: Anti-aging dropped from 91 to 85.”
Anti-aging facial skin care isn’t going away as consumer needs shift, but it is getting more specialized. In recent months Lucas Meyers launched SW-7, the latest anti-aging ingredient in its portfolio (since then, IFF acquired the personal care ingredients maker). And algae, an increasingly popular skin care ingredient, is at the heart of Algoid Technologies new skin-rejuvenating product line.