How do you approach changing culture and consumer centricity in a company as large as Edgewell?
Changing a company's culture is a complex endeavor, especially when dealing with individuals who have found success in established methods. The rapid pace of change in today’s business landscape necessitates adaptability. At Edgewell, we recognized the need to focus on consumer centricity. The challenge is to balance the scale and resources of a large company with the agility and innovation of a startup.
On one hand, we have our giant competitors, characterized by extensive resources, deep consumer insights, and substantial R&D investments. On the other, we face nimble disruptors who, though lacking in scale, excelled in consumer insight and agility. Edgewell, positioned between these extremes, has made a strategic decision to emulate the disruptors. We prioritize speed, agility, and digital investments, and recruit talent to drive this. With our existing scale and resources, we aim to combine the best of both worlds, ensuring a competitive edge in the market.
In our journey to be more consumer-centric, we’ve learned from both established corporations and new disruptors. While other large consumer products companies offer valuable insights from their vast resources and experience, the agility and innovation of startups cannot be underestimated. At Edgewell, we’ve found our niche by leveraging our scale and resources while prioritizing speed, agility, and consumer insights akin to disruptors in the industry. This balanced approach positions us uniquely in the market, enabling us to adapt and thrive amidst rapid changes and intense competition.
How have you become a disruptor through your M&A activity, and how do you utilize the strengths of the companies within your portfolio synergistically?
In my experience, M&A often focused heavily on cost synergies, sometimes at the expense of the unique value that a brand brought to the table. However, after being on the receiving end of acquisitions, I appreciated the importance of preserving the essence of a brand while leveraging synergies. Our approach at our Edgewell is different; it emphasizes both cost synergies and the intrinsic value of the brands we acquire. We focus on long-term value creation and maintaining the special characteristics that make each brand unique.
Our acquisitions of brands like Bulldog, Jack Black, CREMO, and Billie were strategic and focused on learning and expanding our consumer base. Bulldog introduced us to the consumer-centric approach of founder-led businesses, while Jack Black exposed us to the prestige category. CREMO highlighted the power of brand activation, and Billie offered insights into building a successful direct-to-consumer business. Each acquisition was a learning opportunity and a chance to expand our portfolio strategically, moving us closer to our consumers and enhancing our market presence.
Given the changing demands of consumers, how are you adapting your route to market and responding to new product trends?
The route to market is increasingly digital. Although not all brands need their own direct-to-consumer (D2C) channel, being present on platforms like Amazon and retailer sites is crucial. We have seen our online business grow from 3% to 12%, and although brick and mortar will remain dominant, the importance of online presence is undeniable. Our strategy is to be agnostic regarding where consumers choose to buy, ensuring that we are available and visible across all touchpoints.
The consumer is changing rapidly. Real-time connectivity with them is essential, moving away from traditional deep dives into consumer insights, and into more dynamic methods like scraping online reviews and social listening. We constantly adapt to meet evolving consumer needs, such as the shift towards health and wellness and the increase in at-home grooming routines spurred by the pandemic. By staying attuned to these trends, we are able to innovate and meet consumers where they are, with products like our Schick HydroSilk Dermaplaning Wand and the HydroSilk Wax Roller leading the market.
How has the introduction of dermaplaning and wax rolling contributed to the growth of your women's system shave brand, HydroSilk, during the pandemic?
HydroSilk has been a leading brand in the women’s system shave category, and during the pandemic, we witnessed a significant growth. When it comes to the non-traditional formats the brand offers, some were barely existent 5 years ago but make up almost 40% of our business now.
These innovations responded to the evolving grooming needs of our consumers who were looking for effective at-home solutions. The success of these products underscores our commitment to innovation and aligns with the changing consumer behaviors, especially in the realm of self-care and grooming.
The pandemic has not only changed the way people live but also the way they care for themselves. With more people staying at home, there was a noticeable shift towards products that facilitate self-grooming. Our dermaplaning and wax rolling products met this demand effectively, offered consumers professional-grade grooming solutions in the comfort of their homes. This adaptability to changing consumer needs has been pivotal in driving the brand's growth amidst the pandemic.
What are your commercial, product, and acquisition plans for the next three years, considering the ambitious sustainability targets set for 2030?
As we look ahead, the focus is shifting from acquisitions to organic growth. We believe we have the right brand portfolio and global scope to build our brands significantly. The current economic climate, characterized by higher interest rates, has also influenced this shift. The cost of capital is higher, making acquisitions less economically viable unless they are nearly perfect. Our strategy is rooted in building our existing brands, making them more relevant and attractive to a global consumer base.
Our eyes are set on segments like men’s grooming and skincare, which have shown robust growth. The intersection of our portfolio with consumer habits is aligning well, especially in the context of the increased focus on health and wellness. With the prevalence of skin cancer and increased outdoor activities, our sun care products are positioned for significant growth. Additionally, our commitment to social responsibility and sustainability is not just an ethical stance but a strategic imperative to attract consumers, retail partners, and the next generation of talent.
Given the shifting focus to organic growth and sustainability, how is Edgewell positioning itself to be attractive to the next generation of consumers and employees?
Being socially responsible is integral to our brand identity. We focus on three pillars: people & communities, our brands, and operations & supply chain. We are fostering a workplace where everyone, regardless of their background, feels included and valued. We aim to attract not just seasoned professionals but the younger generation by aligning our values with their aspirations. Our purpose, values, and behaviors, launched at the beginning of the pandemic, are consistent with our 2030 sustainability goals, designed to appeal to both contemporary consumers and potential employees.
Retailers and consumers are increasingly concerned about the environmental impact of products. We’re addressing this by reducing virgin plastic in our packaging, focusing on recycled and recyclable materials, and making bold commitments to reducing carbon emissions. These initiatives are not just about “being good” – they are strategic imperatives. To continue being relevant and competitive, we have to align with the values of our consumers, retail partners, and prospective employees, ensuring that Edgewell is a brand they want to associate with, whether for purchase, partnership, or employment.
