L’Oreal, Nestle Beauty-Pill Joint Venture Inneov to Enter China

Inneov, the maker of beauty pills owned jointly by L’Oreal SA and Nestle SA, plans to enter China next year and may also expand in Latin America as more people turn to dietary supplements to treat skin and hair conditions.

“There is a huge opportunity in Asia,” said Brigitte Liberman, head of L’Oreal’s Active Cosmetics unit, which operates Inneov. Nutritional supplements for skin and hair, or nutricosmetics, are “part of the routine of Asian women.” Inneov may enter Chile and Argentina, she said in an interview in Paris, declining to say when.

L’Oreal, the world’s largest cosmetics maker, gets about a third of sales from markets such as Asia and Latin America and aims to increase that proportion to as much as 60 percent in 10 years. Asia accounts for about 1 billion euros ($1.33 billion) of nutricosmetic sales, or half the world’s total, while Europe and the Americas each generate around 500 million euros, Inneov estimates.

Entering new markets is essential if nutricosmetics are to become more than a niche product, according to Ewa Hudson, an analyst at Euromonitor International. European consumers have been slow to adopt beauty supplements because they don’t understand what the ingredients can do for them, she said.

“In Asia it’s a very different story,” Hudson said. “There are loads and loads of beauty-from-within products.”

Saggy Skin

L’Oreal, based in Paris, and Nestle, the world’s largest food company, formed Inneov in 2002 as “an alliance of expertise,” Liberman said. The joint venture, whose treatments include Fermete pills for wrinkles and saggy skin, sells in 16 European countries, plus Brazil and Mexico. Liberman declined to provide revenue and profit figures, citing company policy.

Inneov, which competes with Sanofi Aventis SA’s Laboratoire Oenobiol, introduced an anti-dandruff treatment last month to add to its arsenal of 12 clinically tested products, which are priced between 20 euros and 30 euros a packet. The company’s sales are climbing as much as 10 percent in some countries in Europe, Liberman said, declining to specify which.

About 20 percent of women in Europe use beauty pills for conditions such as cellulite and hair loss, Liberman estimates. That compares with 5 percent to 10 percent of men, she said. Overall, demand for nutricosmetics is increasing as people become more health conscious, the executive said.

Tomato Diet

A decade ago, only 20 percent of women in Europe were aware nutrition had an impact on their beauty compared with 80 percent now, Liberman said. “It’s a very positive trend for us.” Half the world’s population now lives in cities, leading to more “imperfections” such as oily skin, while pollution is causing more allergies, she said.

While Inneov’s products are derived from natural sources, like the lycopene found in tomatoes, the dosage of ingredients required to generate results makes it hard to do so without a supplement, Liberman said.

The executive declined to say which product Inneov would introduce first to China. Fermete and the Hair Mass range, which aims to counter hair loss and thinning hair among women, are Inneov’s best-selling products.

Sales at L’Oreal’s Active Cosmetics unit, which includes the Inneov, Vichy, La Roche Posay, Skinceuticals and Sanoflore brands, climbed 8.3 percent to 1.08 billion euros in the nine months ended September. The unit should have a “decent” fourth quarter, Chief Executive Officer Jean-Paul Agon said Oct. 21.

To contact the reporter on this story: Andrew Roberts in Paris at aroberts36@bloomberg.net.

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net.

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