Cosmetic News In Brief: J&J Incurs Third Talc Trial Loss; Lauder Acquires BECCA; More
This article was originally published in The Rose Sheet
Executive Summary
J&J again failed to convince a St. Louis jury that available evidence does not support alleged links between its Johnson’s Baby Powder and cases of ovarian cancer, marking the third costly loss in the Missouri circuit court this year; More cosmetics news in brief.
J&J Loses Again On Talc In St. Louis
Firm says it will appeal an Oct. 27 jury finding in Missouri’s 22nd Circuit Court, which awarded nearly $71m to a woman claiming to have developed ovarian cancer as a result of decades-long use of Johnson & Johnson talcum powder products for feminine hygiene purposes. According to a same-day blog post from Courtroom View Network, which webcast the trial “gavel-to-gavel,” J&J has been ordered to pay plaintiff Deborah Giannecchini $67.5m in punitive damages and $2.57m in compensatory damages in the third costly verdict against the firm in the St. Louis court this year. This time, J&J’s talc supplier Imerys Talc America also was found partially responsible, which puts it on the hook for covering 10% of the compensatory damages and $2.5m of the total punitive award, the CVN post notes. J&J maintains the safety of Johnson’s Baby Powder, telling CVN that it is “guided by the science” in its plan to appeal.
Thousands more suits have been filed against the firm, primarily in Missouri and New Jersey courts. The latter have proven favorable to J&J to date, with a Jersey state court dismissing a pair of talc cases in September due to plaintiffs’ failure to present a convincing causation theory. (Also see "J&J Talc Suit Dismissals: Plaintiffs Lack Causation Thread For Proof Quilt" - HBW Insight, 8 Sep, 2016.) Reportedly, J&J is arguing at the appellate level that cases heard in St. Louis should be refiled in a different court because plaintiffs’ attorneys tainted the jury pool through millions of dollars’ worth of advertising, among other contentions.
CSC: Kids Face Paints Still ‘Pretty Scary’
The Campaign for Safe Cosmetics updated its 2009 “Pretty Scary” report on face paints for 2016, testing 48 Halloween face paints ordered from a Halloween store, a number of which were packaged together in kits. Lab analysis detected heavy metals such as lead, arsenic, cadmium, chromium and mercury in 21 of the samples, the group says, attributing the findings largely to contaminated color additives. Further, CSC tested 65 kids makeup products and found that 20% contained at least one volatile organic compound, such as toluene, styrene, ethylbenzene or vinyl acetate. “The results of this study clearly indicate the need for strong, health-protective federal cosmetic safety reform to reduce children’s exposure to chemicals from products that on the surface seem playful, but upon scientific analysis pose a dangerous threat to children’s health and well-being,” CSC says. In its original report, 10 out of 10 face paints tested contained traces of lead at levels up to 1ppm. Trace lead amounts identified in the “Pretty Scary 2” report are higher, ranging from 1.2ppm to 3.9ppm. Last year, Sen. Chuck Schumer, D-N.Y., called on FDA to study novelty cosmetics and face paints and take enforcement action against companies peddling products contaminated with heavy metals. (Also see "Halloween's Approach Resurrects Face Paint Concerns, Specter Of Lead Poisoning" - HBW Insight, 23 Oct, 2015.) The agency says seasonal face paints are a factor taken into account in its inspection prioritization work. (Also see "FDA Divulges Cosmetics Enforcement Data, Notes Hair Loss As ‘Serious’ AE" - HBW Insight, 3 Nov, 2016.)
BECCA Cosmetics
Lauder Acquires BECCA Cosmetics
The Estee Lauder Companies makes its first M&A move in the color cosmetics space since its 2010 buy of Smashbox Cosmetics with the acquisition of BECCA Cosmetics, announced in late October. Headquartered in New York, BECCA specializes in color products designed for a wide range of skin tones, with a line comprising primer, concealer, foundation, blush and highlighter “that use the beauty of light to enhance the complexion.” Products are sold at Sephora, Ulta, select department stores and online. Lauder aims to grow BECCA’s presence in Southeast Asia, Europe and the Middle East. “We see terrific growth opportunities for BECCA as it expands globally and continues to cultivate its online and digital expertise,” says Lauder CEO Fabrizio Freda. Lauder Executive Group President John Demsey will oversee the brand. Terms of the deal, expected to close in November, were not disclosed. Lauder’s makeup business drove its fiscal 2016 results, growing 9% reported, or 15% in constant currency terms, for the year. (Also see "Lauder Projects Skin-Care Acceleration While Continuing To Ride Makeup Wave" - HBW Insight, 31 Aug, 2016.)
J&J Reports Jump In US Skin Care
Strong skin-care sales helped buoy Johnson & Johnson global consumer business during the fiscal 2016 third quarter. The marketer of Aveeno and Neutrogena reported 18.9% and 2.3% gains in its US and international skin-care sales for the quarter, respectively, to total $517m and $438m. The performance was offset by the firm’s struggling baby-care business, which fell 6.8% to $96m in the US and 8.2% to $370m internationally. The firm currently is battling litigation in the states alleging a link between its talcum powder products and cases of ovarian cancer, which potentially has weighed on the Johnson’s reputation. The firm’s Women’s Health unit also saw declining sales in the quarter, while oral-care sales rose 1.3% worldwide to $383m on the strength of Listerine and its OTC business was roughly flat compared with the prior-year period. Global consumer sales dipped 1.6% overall to $3.26bn, reflecting 1.1% growth in the US that helped to compensate for international challenges.
‘Tangible Beauty’ Driving Prestige Sales
The NPD Group’s Global Beauty Industry Analyst Karen Grant says demand for “tangible beauty” – which she characterizes as “immediacy of results in appearance and experience” – is merging the roles of skin and makeup and fueling growth in the prestige cosmetics segment. Third-quarter sales of prestige cosmetics totaled $3.5b, up 8% from the same period a year ago, the market research firm reports. Face makeup sales rose 14%, brow product sales increased 37% and lip color sales grew 21%, while the nail color market continues to fall from prior-year levels, with sales down 17% for the quarter, according to NPD.