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Speaking during the firm’s FY2021 earnings conference, president and CEO Masahiko Uotani revealed that Udé will join brands Drunk Elephant and Baum in its clean and sustainable beauty line-up.
“We spent two and a half years and established a sustainability team in Europe to explore development projects. And we will launch a brand called Udé from Spring this year which uses plant ingredients,” he announced.
Uotani added that the clean and sustainable beauty category has been growing for the company.
Drunk Elephant, a US-based clean beauty brand it acquired in late 2019, grew 11% in sales in 2021 as the firm accelerated its global rollout to markets including Japan, Korea, the Middle East, and travel retail.
Following this, Shiseido launched Baum in 2020. The sustainability-driven beauty brand upcycles wood offcuts from the furniture industry for its packaging and develops products that are more than 90% of natural origin based on the ISO16128 standard.
Baum was one of the brands Shiseido slated for an accelerated rollout in 2021. It made its international debut in the latter half of 2021 with its China launch, where the brand experienced strong sales during the holiday season.
The launch of Udé is part of Shiseido’s plans to strengthen its ‘skin beauty’ portfolio. In 2020, after dealing blows from the COVID-19 pandemic, the company refocused its strategy to tap into the consumer interest in skin health and wellness.
The business plan entailed a large focus on core skin care brands such as SHISEIDO, Clé de Peau Beauté, and IPSA.
Furthermore, the company invested in newer brands in emerging categories such as clean beauty, beauty devices and beauty supplements.
This led to the introduction of Baum, as well as the beauty device brand EFFECTIM and inner beauty brand INRYU.
“Based on this strong business portfolio, we will drive innovation. Skin beauty brands represented 64% [of sales] last year and it will grow to up to 75% or close to 80% which should contribute positively to profitability,” said Uotani.
Baum is one of the brands that will play a key role in Shiseido’s plans to improve profitability in China.
“While insights on consumers are changing, there’s an increasing consumer desire to select products that fit them,” explained Shiseido China CEO, Kentaro Fujiwara.
“We will incorporate that and sustainability into our marketing, which will gain significant importance in brand value in the near future. Specifically, our R&D team in China will send out information about efficacy and formula and we will engage in activities that foster a culture of refills with an aim to enhance brand value with Baum.”
For fiscal year 2021, Shiseido recorded net profit of JYP42.4bn (U$367.5m) after suffering a net loss of JPY11.6bn (U$101m) the previous year. Its annual net sales grew by 12.4% to JPY1.04tn (U$9.4bn)
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