The company announced in late 2021 plans to split its personal care brands into a separate company to create more targeted growth strategies. A press release said the new company, which will include Aveeno, Band-Aid, Listerine, Neutrogena, Tylenol, Johnson’s and Dr.Ci:Labo, will separate from J&J in 2023.
According to the press release, the name comes from the work “ken,” meaning knowledge, and “vue” referencing the word view. The concept behind the company will be “Realize the Extraordinary Power of Everyday Care.”
“Today’s announcement is another milestone for the Consumer Health business,” Joaquin Duato, CEO of J&J said in the release. “Kenvue is poised to thrive as a standalone company with a leading portfolio of brands consumers love and trust. I’m confident in this team and excited to see what the future holds.”
Once the company separation has been completed, Kenvue will be selling in more than 100 countries. The press release said more information on the company will be released at a later date.
Click through to read more about the split and J&J’s place in the market.
Personal care titan Johnson & Johnson (J&J) will split out its consumer health business to create a new publicly traded company, part of its wider plan to pursue more targeted growth strategies.
Announced last week, the move would see the major spin off its consumer health unit, made up of core brands like Neutrogena, Aveeno, Listerine and OGX, into a standalone business. Whilst far smaller than J&J’s pharmaceutical and medical device units, consumer health contained four billion-dollar megabrands and was expected to generate €13.2bn ($15bn) in the full-year 2021, the company said.
The split was expected to be completed by the end of 2022 following various legal requirements, including consultation with works councils and employee representatives and a final nod from J&J’s board of directors.
Pharmaceuticals and consumer health – ‘each financially strong and leaders’
J&J said the split would create “two global leaders” in consumer health and health care, enabling the company to invest in innovation that unlocked value for all its stakeholders in both fields.
Personal care major Johnson & Johnson (J&J) has reported a rise in first half (H1) sales for 2022 despite a dip in pre-adjusted profits and consumer health sales hit by COVID-19, input costs and supply issues.
Last week, Johnson & Johnson (J&J) reported sales of €23.7bn ($24bn) for Q2 2022, up 3% on the previous year, along with first half (H1) sales of €46.6bn ($47.4bn), up 4%. Net earnings or profit across the group, however, declined by 23.3% to €4.75bn ($4.8bn) in Q2. Adjusted net earnings for the quarter, excluding after-tax intangible asset amortization expense and special items, sat at €6.79bn ($6.9bn), up 4.3%.
Sales in J&J’s consumer health division – containing its oral care and skin health portfolio, soon to be carved out into a standalone business – were down 1.3% for Q2 at €3.74bn ($3.8bn) and down 1.4% for H1 at €7.27bn ($7.39bn). Jessica Moore, VP of investor relations at Johnson & Johnson, said results in this division had been “negatively impacted by regional COVID-19 mobility restrictions”, particularly the skin health and beauty franchise.
Beauty and skin care facing macro headwinds
Joseph Wolk, executive VP and CFO at Johnson & Johnson, told analysts the company’s beauty and skin health portfolios were also particularly exposed to industry-wide “macro headwinds” such as supply constraints and inflationary pressures around input costs. Though Wolk noted the former had already started to ease in Q2.
Estonian beauty technology firm Haut.AI is aiming to expand its AI skin analysis tool in the Asian region, particularly in China, South Korea and Indonesia.
Haut.AI was established in 2018. It started out developing software for laboratories and recently shifted towards consumer-facing technology in 2020.
“Even before the pandemic, it was obvious that omnichannel was the future,” said Anastasia Georgievskaya, co-founder and CEO of Haut.AI.
Speaking to CosmeticsDesign-Asia, Georgievskaya said the company observed more beauty brands trying to bridge the gap between offline and online by including new tools like chatbots to mimic the engagement consumers would experience in a brick and mortar.
A group of beauty majors have kickstarted an EcoBeautyScore Consortium, set to establish a brand-agnostic and transparent global environmental impact scoring system by the end of this year.
The beauty majors initially announced plans to form the consortium back in September 2021, with Henkel, L’Oréal, LVMH, Natura &Co and Unilever spearheading the formation. Executives from each company at the time told CosmeticsDesign-Europe developing an industry-wide environmental impact system was critical for the sustainable future of cosmetics.
Now made up of 36* large and small companies and associations spanning four continents, the founding brands said the consortium was “truly global and inclusive”, though hopes were that even more companies and associations would join in time.
“The Consortium is open to all cosmetics and personal care companies, regardless of their size or resources (...) All companies will benefit from the pre-existing work and are invited to contribute with their own experience.”
Personal care major Unilever has split out its operations into five distinct business units to create a more category-focused company, breaking up its largest division beauty and personal care.
Unilever’s mega beauty and personal care division, worth €21.1bn in 2020, had now been carved into two distinct units: beauty & wellbeing and personal care. Home care, nutrition and ice cream made up the remaining three groups under the split, with each division set to be “fully responsible and accountable” for strategy, growth and profit globally.
‘Crystal-clear accountability for delivery’
Alan Jope, CEO of Unilever, said the new organizational structure had been developed over the past year and was designed to continue the “step-up” the company had seen in performance during this time.
“Moving to five category-focused business groups will enable us to be more responsive to consumer and channel trends, with crystal-clear accountability for delivery,” Jope said.
