• To understand the performance of J&Js top skin health brands, including their relative performance versus competition, how they are positioned given current category trends, and whether they have made a cultural impact. Additionally, there is interest in understanding whether J&J has made any recent acquisitions of skin health brands and whether they have recently changed the ad agencies responsible for the brands. This information will be used to provide background for an upcoming meeting with the J&J skin health division.

J&J Skin Health: Overall Performance

• J&J beauty segment demonstrated 3.5% YOY growth in 2019, attributed to the acquisition of the DR: CI: LABO brand, market and share growth for its Neutrogena and Aveeno brands, and fourth quarter trade investments for Neutrogena and Aveeno.
• Neutrogena's consumer health brands, which include brands such as Neutrogena, Aveeno, and Johnson's, reported $13.9 billion in 2019 sales.

NEUTROGENA

Brand Overview

• Acquired by J&J in 1994, Neutrogena offers safe, mild, premium quality skincare products, with a focus on "skin science." Having a strong relationship with the medical community, Neutrogena is positioned as the "#1 Dermatologist Recommended Skin Care brand."

• The brand is available in over 70 countries globally.
• Neutrogena offers skincare products in segments spanning moisturizers, cleansers, bath and body, anti-aging, acne, suncare and devices.
• The brand supports the LGTBQIA+ community, with an emphasis on "feeling comfortable in your own skin" and "accepting yourself for who you are." They currently support the company-wide CARE WITH PRIDE 'Donate a Photo' initiative, connecting consumers with non-profits to "make the world a better place."
• The brand also sponsors free cancer screenings in partnership with the American Society of Dermatologic Surgery (ASDS).
• Parent company, J&J, has announced support of efforts to eliminate HIV and TB by 2020.

Marketing and Agency Relationships

• Neutrogena launched its first global brand campaign in 2016, a digital marketing campaign to encourage females to "see what's possible." The brand leveraged brand ambassadors, such as Kerry Washington, Julie Bowen, and Jennifer Garner. The messaging encouraged women to "follow their dreams" and included a partnership with "Girls, Inc.", a non-profit that mentors girls, helps to improve their academic performance, and advocates for legislation to open up opportunities for girls.
• More recently, in 2019, Neutrogena designed a targeted YouTube video campaign to promote a makeup remover, increasing sales 14% and bringing in incremental consumers.
• In January 2020, Neutrogena opened a one-day "pop-up" store to promote their new turmeric-based, "Clear and Soothe" range.
• The brand uses targeted market advertising to drive awareness and sales, including a recent award-winning campaign (agencies: J3 Studios and Cadreon), leveraging multiple traditional, digital, and in-store channels, in Argentina. They also conducted a digital influencer campaign (agency: UM Bogota) in Colombia in 2019 and a "full-funnel" campaign (agency: Sunset DDB) in Brazil during Carnival.
• In 2020, Neutrogena launched "Skin 360", an AI-powered skin care app to encourage consumers to stick to a skin care regimen.
• Neutrogena spent over $100 million in digital, TV, and national TV in 2019.
• In 2018, J&J asked WPP and Omnicom, who appeared to be their agencies of record, to find 30% cost savings. The announced a consolidated creative relationship with these agencies in 2018.
• This 2019 "Bright Boost" TV commercial highlights DDB (a division of Omnicom) and J3 as advertising agencies of record.

Neutrogena Growth and Competitive Landscape

• According to Christopher DelOrifice, vice president of J&J investor relationships, Neutrogena grew 6% globally in 2019. Outside the United States, the brand grew 4%, driven by anti-aging and cleansing product innovation in EMEA and growth of hand and body moisturizers in Asia-Pacific.
• According to Numerator, brands most likely to be shopped by Neutrogena buyers include Maybelline, Cover Girl, Dove, and Suave.

• According to YouGov, who publishes public opinion surveys, Neutrogena is the 3rd most popular skin care and cosmetics brand in the US, and the 8th most popular. The brand is considered trustworthy, well-made, healthy, a "good value for the money" and useful.
• Brands liked by buyers of Neutrogena include Aveeno, Nivea, Maybelline, L'Oreal Paris, Eucerin, Olay, and Revlon. Of these brands, Olay is the 4th most popular and 3rd most famous, Aveeno is the 9th most popular and 8th most famous, Nivea is the 10th most popular and 17th most famous, and Maybelline is the 14th most popular and 6th most famous.
• BrandFinance recognized Neutrogena as the top beauty brand in 2020, with its "value" (a proprietary metric), reflecting its " loyal customer base, spurred by their ability to position themselves at the forefront of popular culture and adapt to online trends– using beauty influencers, celebrities, and targeted social media advertising in their global marketing campaigns. "

AVEENO

• Aveeno is an ingredients-focused skin care line. The brand highlights their clinically-proven "probiotic oat" formula, that is "microbiome balanced" and creates healthier skin.
• The brand offers body, face, hair, sun, and baby products.
• As the 9th most popular skin care brand (among US consumers), Aveeno is considered healthy, helpful, reliable, unique, and expensive. Nivea, Neutrogena, L'Oreal, Revlon, and Eucerin are other brands liked by those who are "fans" of Aveeno.
• With the global body lotions market poised to grow 11.4% in 2020, Aveeno is mentioned as a leading player, along with Cetaphil, Olay, Alba Botanica, and Avalon Organics.
• Recent TV campaigns highlight Jennifer Aniston, such as this 2020 "Get Healthy" TV spot, by J3 agency.
• Aveeno may be able to capitalize on trends, such as the growth in the global probiotic cosmetics market and the global organic skin care market, with the brand mentioned as a key player in both categories.

INDUSTRY TRENDS

Connected Beauty Systems and Smart Beauty

• "Connected Beauty Systems" is a top beauty industry trend for 2020, including mobile apps, skin scanners, and smart mirrors. Neutrogena has "leaned into" this trend with the launch of their Neutrogena 360 skin care app and 3D-printed face masks, which leverage their Neutrogena MaskiD technology.
• Some Neutrogena competitors have also launched products that capitalize on this trend. Sheiseido launched an IoT-powered app that leverages AI to detect users' skin conditions and provide personalized results. L'Oreal has developed wearable devices to detect skin damage due to sun and measure skin pH levels.

Beauty Tech Incubators and Acquisitions

• As smaller "indie" brands are growing, there has been an increase in both internally-developed "incubation" brands and acquisitions of smaller brands by larger beauty companies. Larger beauty companies are continuing to develop and acquire more targeted skin care brands to compete with indie brands and maintain market share.
• Revlon's "Flesh", L'Oreal "Seed Phyonutrients", and Unilever's "Skinsei" are three examples of brands resulting from internal efforts.
• Acquisitions included Sheiseido's purchase of "clean clinical" skin care brand "Drunk Elephant", L'Oreal acquired "virtual try-on" company Modiface, and Colgate-Palmolive purchased anti-aging skin care brand, Filorga.
• In January 2019, J&J acquired Japanese health and beauty firm Ci:z Holdings, which includes brands such as Dr.Ci: Labo, Labo Labo, and Genomer. The acquisition was designed to increase their presence in japan and strengthen their offering in science-based innovative skin care.

Growth of Inclusive Beauty

•  Inclusive beauty is a trend that involves catering to underserved demographic targets, such as males, gender-neutral individuals, older consumers, and people of color.
•  Gender-neutral products have been launched by companies, such as Asos, Calvin Klein, and Clinique, as well as startups, such as Context. Maybelline and Covergirl have announced "male brand ambassadors."
• Other inclusion-focused brands include Urban Skin Rx and Live Tinted.
• Women are also seeking more beauty products geared toward menopausal and peri-menopausal women.

Evidence-based Skin Analysis and Personalization

• Leveraging tech to provide scientifically-based skin analysis and personalized recommendations is a beauty industry trend, which seems to dovetail nicely with Neutrogena's focus on science-based skin care.
• Some less well-known brands are launching products in this space, including Proven, which leverages machine learning algorithms to develop personalized skin care regimens and Atolla, which leverages AI, a monthly, at-home skin test, and a mobile app to develop a skin health profile.
•  Probitotics-based skin care brands are also continuing to grow as part of a movement toward personalized skin care systems.
• In February 2020, Neutrogena launched its turmeric-based "Clear and Soothe" range to tap into the medicinal and healing properties associated with turmeric.

Summary of Early Findings Relevant to the Goals

• In this early research, we were able to provide an overview of Neutrogena, its messaging, advertising (to understand their current ad agency relationships, as well as recent marketing efforts), identification of key competitors, how Neutrogena and its competitors are "leaning into" skin care trends, and several social/cultural efforts related to the brand.
• We also were able to provide some initial insights on Aveeno, as well as identify Aveeno and Neutrogena as key drivers of J&Js consumer health and beauty segment portfolio growth in 2019.
• Our next steps propose research that allows for more in-depth detail on additional J&J beauty brands, as well as a more complete analysis of Aveeno.