Despite its rich portfolio of brands, the L’Oréal Group realized that there were markets around the world that were under potentialized and the company recently added a new business unit to its structure designed specifically to build select brands in these areas. The world’s leading beauty group has launched L’Oréal International Distribution, familiarly known in the company as LID.
According to Annie Grégoire, General Manager of LID’s North American zone, the concept was initiated by L’Oréal’s current CEO, Nicolas Hieronimus, back in 2019, while he was still Deputy CEO in charge of Divisions.
“Hieronimus was looking at ways of accelerating the growth of the Group apart from acquisitions – even as we are very active in the acquisition world– looking at how we could generate growth from the portfolio of brands that we already have,” explains Grégoire. “Basically, he built a chart and put all the brands we had on the X axis, and then placed the countries where we were present on the Y axis. And in between the two axis we found all these white spaces: the opportunity was substantial.”
The L’Oréal Group has just come through several very successful years— “We bounced back into 2021 going twice the speed of the market. And in 2022, we had a grand slam, meaning that every single division and every single category beat the market,” said Grégoire.
L’Oréal generally credits the strength of its portfolio for its ongoing success.
The company currently has 62 active beauty brands, each with a distinct brand identity, notes Grégoire.
“The main reason for our recent achievements — apart from the people that work in the company –is our portfolio of brands, which are so complementary. We have 62 beauty brands that are live right now, including the Group’s 36 international ones, as well as more than 87,000 employees in 150 countries. But still, we have a lot of white spaces out there. So this is the reason why LID was created.
“And our mission as a company, as a worldwide citizen, is to offer each and every person around the world the Best of Beauty by creating the beauty of the world. The L’Oréal Group’s purpose is to create the beauty that moves the world.
“So LID was created as a brand building entrepreneur with the mission of accelerating the conquest of the white spaces. And the notion of brand building is of key importance. We are not just blanketing the world with products, we’re protecting their brand equity positioning, and ensuring the brand identity,” she explains.
To do this, LID has been divided into five zones which are complementary to L’Oréal’s existing geographical zones: North America; Latin America; Europe, which includes Middle East/North Africa & Sub-Saharan Africa; North Asia and South Asia Pacific. Some of these include travel retail to some extent.
Accelerating growth in white space requires a whole new set of approaches, skills, and ways of working, says Grégoire.
“We at LID have an agility and speed of movement and decision-making that I’ve never seen in the last 20 years that I have been part of the Group. This independent structure allows us to have smaller committee decisions and to move quite quickly. And with the zones we address opportunities by region rather than from a country by country point of view,” explains Grégoire.
North America zone targets specific brands
The North American zone, which is based out of Miami, also covers Canada and the Caribbean, as well as Travel Retail America for some of the brands, which creates efficiency and agility at the same time.
“We have one team to manage all that, whereas at the local affiliate level –which is the traditional go to market of L’Oréal — you’d have Canada, the U.S., the Caribbean and travel retail,” she says.
LID’s North American portfolio is currently smaller than that of most of the other four zones because it complements the local U.S. and Canadian affiliates, which are both very mature.
“Together, we all complement each other, and we work hand-in-hand with affiliates to complement their product offering,” says Grégoire.
The new venture is so successful that it has quadrupled its business in 4 years, with future projections that are continually revised upward, says Grégoire. “And every year I’ve been in this beautiful venture we’ve been over delivering.”
Re-building classic brands
LID’s North American portfolio currently consists of four fragrance brands: Guy Laroche, creator of L’Oréal’s legendary Drakkar Noir fragrance for men, Paloma Picasso, Cacharel, and Diesel. These are handled through distribution partnerships. LID works with Parlux Holdings in the U.S., with Prestilux in Canada, and Travel Retail is handled through Actium, a new partnership that was signed last November.
“It’s quite an exciting time as the integration of these brands within the LID portfolio has put them on an accelerated growth trajectory. And we’re seeing the results coming through. Distribution partnerships are at the heart of everything we do, but we’re emphasizing the notion of brand building,” says Grégoire.
“We are establishing ourselves within the Group as being the authority in terms of managing distributor partnerships, and exports. We don’t just distribute to sell, we distribute to build brands. So the notion of partnership is quite important. When we select the partner to go to market, we ensure that we have 360 degree support from them going from traditional sales, to trade marketing to marketing. We do PR with them, we do social media with them. We go 360 degrees.”
In 2023, LID expanded further by creating an online hub for direct-to- consumer distribution. The hub currently distributes two major skincare brands: Biotherm, for distribution in the U.S. and shu uemura, for distribution in the U.S. and Canada. The online hub is being handled by THG Ingenuity, the commerce division of THG plc, with whom LID signed a DTC management deal last October.
The Hut Group is the owner of the LookFantastic website in Europe, which is the number one pure player of beauty in Europe, says Grégoire.
“L’Oréal International Distribution’s mission is to build brands in the North America zone in an agile and efficient way, leveraging the expertise and manpower of external partners to amplify the acceleration of our portfolio’s brands. This partnership with THG Ingenuity is the perfect example of that mission coming to life within a DTC environment as we will be benefitting from their fully integrated services and their personalized, consumer- centric e-commerce expertise.”
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Broadening distribution opportunities
Another advantage of the LID mandate is that it enables the company to take advantage of a broader range of distribution opportunities as a way to fill some of the empty white space.
“LID is a new business unit in the L’Oréal Group,” says Grégoire. “It’s complementary to the affiliates in the region and to travel retail. We work in close partnership with travel retail and we are very excited about our new partnership with Actium for our brands.”
