Standards of beauty

How would you like to reduce the complexity of your business, improve product quality and increase speed to market in five easy steps? Coty's packaging standardization and simplification (S&S) program does all that and more.

The initiative began about five years ago when it was called "value analysis" and the main objective was to reduce packaging costs while still delivering the same quality consumer experience.

Coty beauty shot

Stephanie Martins, vp of packaging concept development at Coty, explains why it morphed into something more in 2009: "Most of our projects were brand-related, small-scale and with limited reapplication to a category level. We quickly realized that this was not enough. We had to take a different approach that would help us to improve our product quality, speed-to-market and manufacturing efficiencies, simplify our development processes and, overall, optimize the end-to-end supply chain."

Coty common neck

Now much broader in scope, the global S&S program involves marketing, operations and supply chain departments, as well as packaging. Martins says it has full support from Coty's commercial division presidents, Renato Semerari of Coty Beauty (mass-market and masstige brands) and Michele Scannavini of Coty Prestige (premium brands). And it's a critical way to manage business complexity, especially in light of the company's exponential growth over the last decade and recent wave of new licenses and acquisitions. For example, in 2010, this leading global beauty company acquired four new companies: Dr. Scheller Cosmetics, OPI Products, philosophy inc. and the Chinese skin care company TJoy. And in 2012, it plans to launch a new Lady Gaga fragrance and Calvin Klein Color Cosmetics.

The ongoing S&S program impacts most of the company's 100-plus brands and thousands of SKUs. Depending on the type of action, it could take six months or more to implement a given action. But Martins contends, "We have simplified the way we work. We have established a platform that allows us to develop our products faster, and this has also contributed positively to improve our gross margin overall."

Coty Rimmel mascara

Step by step
The S&S program encompasses five principles:

1. Standardize the packaging "design envelope" across brands—and without stifling creativity—to reduce downtime, waste, packing materials usage and inventory.

2. Optimize volume/material usage across brands to reduce waste and transportation.

3. Use "greener" materials/processes but keep the brand aesthetic, functionality and cost in mind.

4. Optimize supply chain design and transportation to reduce material waste, staging and transportation (CO₂ emission), while improving cost and time to market.

5. Challenge customization and market assumptions to reduce the number of SKUs and eliminate rework at distribution centers (DCs).

There's a third, silent "S" in all this: sustainability. It is something Martins developed a passion for at a young age and, serendipitously, is a main driver in packaging today. "When designing packaging, I have always been cautious not to ‘over package' things, but to ensure it is protective enough and delivers expectations from a consumer stand point," Martins says. "It is challenging at times, especially in the beauty industry where the packaging is a big part of your selling proposal."

That's why so many of the S&S packaging changes were done in areas that are invisible to the consumer. Martins explains, "To standardize our packaging while keeping the brand identity, we had to look at characteristics that are ‘non-consumer' perceptible or ‘below the skin,' as Thierry Moliere would say." Moliere, based in Paris, is global leader of packaging and quality assurance.

For example, Coty standardized the neck finish on all Sally Hansen nail polish bottles. The dimensional standardization reduces the number of changeovers so the company can gain production efficiencies. And, because the change is not perceptible to the consumer, it allows Coty to create a variety of looks and brand identity using the same format.

Designers can mix and match packaging components from a menu of choices to build unique looks, yet still customize where needed. "There are exceptions, where the designers are going out of the box to create something brand new-this might lead us to a ‘future standard.' We cannot constrain creativity, and our design envelope also needs to evolve with time," Martins admits.

One place where this is evolving is with Coty's push to use greener materials, as long as it makes financial sense. "We would like to develop partnerships with other industries using the same material so we can benefit from an economy of scale," Martins says. "For our mass-market brands, it is a real challenge to find cost-efficient green materials. Unless we are able to offset the cost premium with a redesign and material usage reduction, it is very challenging to implement. Our next step is to further develop partnerships with our suppliers to simplify commodity sourcing, and reduce cost and lead time."

Coty has made good progress already in standardizing and simplifying its diverse packaging elements. More projects are in the works, but here are some recent examples of how the company has implemented these S&S principles:

Coty tubes

Tubes
For fragrance ancillary products (such as body lotions, shower gels and shave creams), Coty previously used many different tubes—such as 50mL, 75mL, 100mL, 125mL, 150mL, 200mL and different diameters, cap styles and tube structures. For its core business, it now uses just two standard sizes: a 75mL tube for promotions (gift sets) and a 200mL for the regular business line. The company has also defined a range of standard caps and tube structures. Tube supplier Tupack helped with the streamlining process.

Pumps
Fragrance bottles, like the nail polish bottles, now have standard neck finishes. By doing this, Coty was able to simplify the number of different pumps to gain efficiencies in ordering, inventory and production.

Coty is now using two standard bottle finishes: 13mm and 15mm FEA (the European standard). Why two? Because the neck needs to be proportional to the overall bottle size. If it's too wide or too narrow, the aesthetic is off. These two widths look good on the company's myriad bottles.

A standard neck finish includes a standard lip which, in turn, means a standard size for the sprayer's ferrule (the material that is crimped down around the lip to hold it on the bottle). From there, Coty was able to also standardize the sprayer's collar, which covers the ferrule. With help from Arthur Braun, sales manager at supplier Aptar Beauty + Home, Coty was able to narrow down the number of options for the pump's collars from more than 20 to just four: 13 or 15mm wide; smooth or beaded; gold or silver (custom color is another option here). Collar heights are now all the same (7.4mm).

Coty went so far as to even standardize the beaded collar to hold caps that use a Surlyn inner sleeve. A bead (indentation) is needed on the collar because the coefficient of friction won't keep Surlyn on a smooth collar. Coty specifies that the bead be in an upper, inner position.

Stephanie Martins, vp packaging concept development

Cartons
At Coty, folding cartons—a component with which the packaging department can implement changes rapidly—have seen many recent improvements.

• Bernard Quennessen, vp of packaging, Coty Prestige, led the change from E-flute to thinner N-flute board for Calvin Klein CK one and CK be folding cartons to reduce material and weight.

• Nikolay Nikolayev and Irene Kou from Coty Beauty led the project to stanadardize the folding cartons for multiple brands for the annual Christmas stocking stuffer program. The company now offset-prints them in a combo-run for substantial savings.

• The European team of Candice Jagut, David Bayard and Corinne Fugier-Garrel replaced the OPP lamination on folding cartons for Chloe fragrances with a UV varnish. According to Martins, "This improved the machinability of the folding cartons on our automated lines, improved the quality of gluing and coding, and reduced our supply chain lead time while giving the same exact visual for our consumer."

• Adidas Moves Christmas folding carton changed from metallic laminated board to regular SBS board printed with metallic inks while maintaining the brand's image. "We have made this packaging recyclable," Martins says. "Some of our licensors, such as Adidas, are really keen on sustainability and encourage this movement."

• For the 2009 launch of Nautica Oceans, an innovative water-based fragrance, Coty matched the eco-friendly product with appropriately green packaging. The bottle uses the standard neck finish and standard pump. The carton supplier, Curtis Packaging, uses 24-pt SBS board certified by the Forest Stewardship Council (FSC) as being sourced from sustainably managed forests. 

Cartons are printed in a linen pattern with multi-level embossing using metallic silver ink and other UV inks in a facility powered by 100 percent renewable and carbon-offset energy. Following the FTC's Green Guidelines, the eco claim on Nautica Oceans is specific: "Carton is manufactured using wind power in a carbon-neutral facility." Three logos also appear on the back panel to tout the packaging's credentials: carbon neutral, wind power, FSC certified. But Don Droppo, Jr., president/CEO at Curtis, explains that its third-party certification doesn't add much to the cost of the board (only about a 1 percent upcharge) because the company has long-term contracts with a U.S. paper mill that is FSC certified.

The carton was also right-sized from the beginning to maintain a tight product-to-package ratio. Coty even sent a Nautica Oceans bottle to Curtis to help them design the carton with little to no headspace to minimize the amount of paperboard. The benefits snowball down the line: Optimizing the cubic volume directly relates to efficient shipper size and pallet patterns. But Martins says making these decisions can be a compromise: "Our main challenge is to keep a good shelf presence while optimizing the product-to-package ratio."

Coty gift sets

Gift sets
Coty creates a number of promotional gift sets for its brands. Before the value analysis program, there were 49 different formats. It's now down to 17, with the goal of getting to just five.

Martins recalls the process: "One day, we had all of them laid out in a conference room. With my team, and the creative and marketing people, we started to regroup them by ‘family' of similar sizes. When we designed the new formats, we made sure they were perfectly optimized from a printing layout standpoint. We also looked at the optimization of PDQs [point-of-purchase displays] and pallets. Once we optimized the dimensions of the outer carton, we conducted the same exercise on our vacuum-formed trays."

Within a gift set format, the cartons share the same dimensions and weight-from 18 to 24 pts, depending on the number of pieces and how heavy the set is. Cost savings came from the size optimization and caliper reduction, as well as from improved printing processes. Foil cartons were replaced with metallic ink; and the two-step printing process (4-color process plus 2-color background) was simplified to one-step (4-color process).

Additionally, Coty eliminated the insert cards from the gift sets and replaced them with inside printingor inside hot stamping. This saved more than 40 tons of board, while keeping a similar design and the same shelf impact.

Martins says they optimized the gift sets for two pallet dimensions: 800 x 1,200 (U.S.) and 800 x 1,000 (European Union). They also worked from two angles, keeping the pallet dimensions in mind, but also measuring the outside dimensions of all the different bottles and tubes used in the gift sets. For prestige fragrance gift sets specifically, they reduced the number of formats to five basic dimensions, each with two depths: one for small/medium bottles, and one for large/very large bottles.

Equal attention to the inside vacuum-formed tray netted substantial gains. Coty cut material by 15 percent by optimizing the sheet layout to reduce waste and redesigning the structure to also lower the gauge.

Modular tooling allows Coty to use a standard frame and just change the product inserts as needed. This reduces lead-times of the aluminum tooling by 50 percent and substantially lowers their cost.

Steven Hasselbach, Jr., president of CMI Plastics Inc., Coty's vacuum-formed tray supplier, says this standardization helps save them time and money, too, by streamlining their just-in-time (JIT) manufacturing processes and allowing them to buy material in greater volumes.

Coty took this opportunity to introduce renewable material for one product. For the Christmas 2010 Adidas Moves Pulse Cologne gift set tray, Coty used Pentaform TerraPET from Klöckner Pentaplast, which delivers the same cosmetic clarity as standard APET material, as well as the same consumer and manufacturing performance properties.

Pentaform TerraPET is made with 30 percent plant-based materials, using the same technology that Coca-Cola uses for its PET PlantBottle. Regular PET is made from 30 percent monoethylene glycol (MEG) and 70 percent purified terephthalic acid (PTA). Klöckner Pentaplast is using Brazilian-sourced sugarcane to make the ethylene part.

Substituting plant-based material that far up the manufacturing process has proven to be, as Chris Findley, director of sales and marketing, Klöckner Pentaplast/Americas, says, "an absolute drop in." Hasselbach at CMI Plastics confirms that the new rollstock runs well and that there were no tweaks or modifications needed to the tools or equipment.

As far as costs, Findley says Pentaform TerraPET is slightly more expensive than traditional APET, but economies of scale may lower costs in the future. 

Coty generic bottom label

Supply chain improvements
One rule of efficiency for any action is to only touch an item once. Coty found that much of the packaging rework at its distribution centers was unnecessary. "This is a complexity that creates inefficiency in our process and does not add any value to the end customers and consumers," Martins says.

In some cases, Coty invested in equipment to handle the changes in-house at the manufacturing plants; in others, it negotiated with its retail partners to eliminate special secondary packaging SKUs.

Coty invested in its current equipment, making slight tooling modifications to be able to bundle Rimmel packs by two for U.S. retailers, instead of by three, as it had been doing. "This was not a large investment and it quickly paid off, since Rimmel did very well during challenging economic times," Martins says.

In the case of Adidas, Coty was bundling shower gels in multiples of six at the factory on high-speed lines, but later removed the shrink film and repacked them in multiples of three for customers in Canada. "Our supply category planner, German Alonso, was able to reach out to our Canadian sales team and convince them to order the shower gels by six, therefore eliminating the need for rework and reducing our supply chain cost and time," Martins says. "So in this case, we did not have to change our equipment, we just needed to challenge market assumptions on their order multiple."

Not done yet
Coty's S&S initiative continues, working off these five strong principles and replicating good ideas across brands and regions. "Developing our creativity and building new innovation based on a robust chassis provides us with the agility that the market needs," Martins says.

All this contributes to the tangible business benefits of efficiency gains and cost savings, the directive of the original value analysis program. The future will see more economies of scale, too. In 2010, Coty organized its worldwide procurement teams with global commodity leaders. Packaging and procurement people work together to define long-term material needs and appropriate sourcing strategies, which consider the security of supply, product quality, service and overall value.

It's collaboration like this that's critical to getting the job done fast—and getting it done right. When packaging proposed to replace a window carton and vacuum-formed tray with a closed carton for a masstige fragrance, marketing resisted because they felt the product was not properly showcased, and the consumer needed to see the bottle. "They did a consumer test and they were right-on. The consumer was indeed attracted and more prone to buy our fragrances in a window carton rather than in a closed one," Martins admits.

Proving, in case there was any doubt, that the beauty consumer is still queen.

Aptar Beauty + Home, 815-477-0424. www.aptar.com
CMI Plastics Inc., 877-395-1920. www.cmiplastics.com
Curtis Packaging Corp., 203-426-5861. www.curtispackaging.com
Klöckner Pentaplast Group, 540-832-3600. www.kpfilms.com
Tupack Verpackungen GesmbH, +43-664-80760-0. www.tupack.at

COMMAND AND CONTROL
Coty has six standardization and simplification teams around the world, organized by business: Coty Beauty Fragrances & Toiletries, Coty Prestige Fragrances and Coty Beauty Color Cosmetics. For each type, one team is based in Europe and one is in the United States.

These S&S leaders manage cross-functional teams: Candice Jagut, European Prestige Fragrances; German Alonso, European Beauty Fragrances; Andrew Granick, European Cosmetics; Dana Witt, American Prestige Fragrances; James Bautista, American Beauty Fragrances; and Marisa Toic, American Cosmetics.

A global list of all S&S ideas is maintained in an Excel document on a shared computer drive so anyone on the team can access it. And packaging groups share best practices on monthly conference calls. Martins says, "We also work hand-in-hand with our worldwide procurement commodity leaders who help us to drive further economy of scale on a global level."

New ideas are generated through regular brainstorming sessions and are then evaluated based on their potential benefits versus investment, time of implementation, product value and consumer impact. "More and more, we are striving to implement these ideas in the up-front process," Martins says, "right in the conception phase of new products rather than after the fact."

The global packaging concept development (PCD) teams are based in New York and Paris, working with global marketing, new product development and R&D to create all primary and secondary packaging for new launches and promotions. Martins leads the PCD Beauty group in New York. Thierry Moliere, global leader of packaging and QA, oversees the teams in Paris and New York.

PCD teams lead the conception and evaluation phase of the development. Execution is then turned over to local technical packaging development (TPD) teams, mostly located at the plants.

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