Coty Inc. is betting big on its skin care brands and says it wants to double its skincare sales by fiscal 2025. The company shared details on its planned strategy during an investor event held on Wednesday inside a Monaco R&D site where it manufactures Lancaster products.

The beauty giant—No. 9 in Happi’s 2022 Top 50 Report—plans include leveraging its robust intellectual property (IP) and in-house skincare knowledge and returning two longstanding brands back to their roots.

According to CEO Sue Y. Nabi, Coty’s skincare portfolio is one of the most exciting growth areas in its business, with revenues on track to double to $500-$600 million by FY25.

She said the company’s strategy is underpinned by world-recognized brands serving key white space opportunities and consumer needs, 75-years of scientific innovation and leadership, superior patents and distinct intellectual property, and a large and growing team of skincare experts across the organization.

“Coty is already successful in skincare,” the CEO told those in the audience at its Monaco Skincare R&D and Manufacturing Center of Excellence. And, she provided a blunt assessment as to why skincare had not been a priority at the global beauty company.

“Prior leadership were not familiar with skincare, “Nabi said. “We have the right tools to assess the strength of the Coty’s IP in skincare. They didn’t have the playbook to win in this competitive market.”

Nabi, who took over as CEO in September 2020, insisted that her background, and the team that’s in place now, now have equipped Coty to  “unleash a winning skincare strategy.”

She said Coty can be successful in both prestige and mass skin care, $45 billion and $100 billion markets, respectively.

Nabi said Coty continues to grow its staff, and has approximately 200  dedicated skincare experts across various functions, including marketing, sales, consumer research and R&D.

R&D Effort

According to Nabi, as an “emerging challenger” in the competitive $150 billion global skincare market, Coty has “carefully chosen focus areas” to maximize its efforts in skincare.

“Rather than targeting all areas of skincare market—and there are many– we are concentrating on scientific advantages and focusing on areas where Coty excels with distinct, patented and superior technologies,” she said.

Those key areas include full-light protection, oxygen delivery, retinol vectorization, DNA repair, and bio-fermented blends.

Research and development is under the guidance of Dr. Shimei Fan, who joined Coty in January of this year as chief scientific officer. The 30-year beauty veteran came to Coty from Shiseido. Prior to her time at the Japanese-based company, Dr. Fan was VP of global R&D at Beiersdorf and global R&D director at Johnson & Johnson’s consumer division. She started her consumer products R&D career at Unilever, where she spent 22 years.

“The heart of skincare is science,” Dr. Fan told attendees in Monaco and others who were online streaming the investor presentation.

Dr. Fan noted Coty’s steep history of innovation in skincare which dates back 75 years to the launch of Lancaster in the late 1940s.
Lancaster launched one of the first retinol skincare creams in the market and was awarded one of the first retinol patents for cosmetic application of this “gold standard” raw material.

Dr Fan also pointed to Coty’s IP that includes 50+ active skin care patents, 85+ published scientific studies, 25+ research programs with universities and hospitals, and 120+ dedicated skincare scientists.

And, Coty has more than 80 innovations in pipeline, too.

“Winning in skin care is about delivery superior products,” said Dr. Fan

Dr. Fan discussed the key areas Coty will leverage to meet its ambitious growth plan:

Full Light Protection: Coty launched its first full light protection product in 2016, and has full light biomimetic technology that is patented until 2027.

“We are still the only player, to my knowledge, among large beauty companies that offer full light protection,” Dr. Fan insisted. 

Further, Dr. Fan said Coty has filed a patent for what she called breakthrough technology for full light repair.

Oxygen Delivery:  Dr. Fan discussed Coty’s patented oxygen delivery technology that can carry 400x more oxygen than water and delivers both short and long term antiaging benefits. Patented until 2028, this technology can have an impact on collagen synthesis too, said Dr. Fan noted.

Retinol Vectorization: While Lancaster’s history as one of the first brands first to file a retinol patent, Dr. Fan noted that this ingredient—while still considered a gold standard decades later—still can cause skin irritation. To that end, Coty’s retinol vectorization, which uses a cationic liposome carrier, is patented until 2032. t allows for much greater intercellular penetration with no irritation, she said.

DNA Repair: Fan also highlighted the company’s patented DNA repair technology which addresses damage induced by UV light, oxidative stress and mental stress. First pioneered by Coty in 2003, the unique cocktail of four DNA repair enzymes targeting multiple biological pathways is patented until 2028. Lancaster 365 product is great example of this technology out in the marketplace, according to Dr. Fan.

Bio-Tech Actives: Dr. Fan called She called bio fermentation the “dawn of a new skincare age.” Through research over the past five years, Coty has created 25-plus proprietary skin bio-fermented blends that are pushing the boundaries of efficacy. During ger presentation, Dr. Fan called results she has observed as “unprecedented, showing clinical skin improvement after just four weeks.

“We believe efficacy with kindness to skin is the future of skin care of the future, “said Dr. Fan.

Winning Textures, Too

In addition, Dr. Fan discussed another important component in skincare success in 2022—product texture.

According to Dr. Fan, delightful product texture drives compliance and superior clinical efficacy.

“Just like sugar makes medicine taste better, the right texture can transform consumer experiences,” she said.

Dr. Fan noted, however, that developing wining textures is a complex task that needs deep understanding of both formulation science and consumer preferences.

In addition, Dr. Fan said Coty is building a huge database and is using AI to accelerate discoveries in this area.

Brand Strength Revisited

Constantin Sklavenitis, chief prestige brands officer, discussed Coty’s strategy for the prestige skincare, which includes emphasizing its most venerable brands and expanding newer lines.

For example, Coty is returning Lancaster to its roots as innovator in skincare science.  A similar approach will be taken with Philosophy.

The company will also focus on Orveda, the ultra-premium beauty brand that was added to the Coty portfolio through a licensing accord announced in Q4 2021. CEO Nabi was a co-founder of this specialty vegan brand that sells products formulated with high concentrations of active ingredients.

Lastly, Coty expects to grow its prestige skincare portfolio through expansion of its newest brands—Kylie Skin and SKKN by Kim.

“Our five prestige skincare brands each offer their own sense of purpose, technology, and cater to a specific market segment that shows great potential,” noted Sklavenitis.