Unilever is preparing the second major U.S. line extension this year for Dove as it launches facial and body moisturizers backed by what retail executives expect will be more than $50 million in marketing support.
The moisturizer launch, slated for June, comes less than five months after Dove began its $110 million U.S. hair-care launch. It's the latest in a series of extensions in the past decade into body wash, antiperspirants, shampoo, conditioner and now moisturizers that helped Dove cross the $2 billion threshold in global sales last year for the first time, according to Unilever. Sales have increased tenfold since 1990, when Dove was a relatively sleepy North American bar soap brand.
Dove's strength has apparently given Unilever resolve to sit out any efforts to acquire Beiersdorf, owner of the $2.4 billion global Nivea brand and a rumored target of Procter & Gamble Co. last year before talks apparently broke off. Asked earlier this month whether Unilever has any interest in Beiersdorf, Unilever Co-Chairman Antony Burgmans said, "Why would I want Nivea when I've got Dove?" according to Deutsche Bank Securities analyst Andrew Shore.
A spokesman for Unilever said Mr. Burgmans recently declined to comment about any interest in Beiersdorf, as is Unilever's practice regarding possible acquisitions, disposals or rumors. The spokesman did, however, recall Mr. Burgmans having made such a statement regarding Nivea and Dove during a press briefing in the Netherlands earlier this month.
P&G declined to comment.
Unlike hair care, moisturizer isn't such a leap for a Dove brand whose heritage began in the U.S. in the 1950s as the first synthetic cleansing bar, containing "one quarter moisturizing cream."
Dermatologist recommendations have been an important source of Dove's strength in bar soap and body washes in recent years, according to Unilever executives. Part of the moisturizer launch will be a major public relations effort directed at physicians via independent Edelman, New York, according to an executive familiar with the matter. WPP Group's Ogilvy & Mather Worldwide, Chicago, handles Dove advertising.
Despite Unilever's recent surge and moisturizing heritage, however, retail buyers are skeptical about the brand's prospects in moisturizers. One reason is the deluge of new moisturizer products in recent months, such as L'Oreal Body Expertise, which followed only by six months its launch of a youth-positioned Pure Zone skincare line.
One buyer described Dove's entries as "me-too offerings" poorly differentiated from their competition by anything other than the brand name. "I'm sure it will do well initially, because it will have a lot of advertising support," she said. But she was less certain of the staying power, or the degree to which it will cannibalize Unilever's own Pond's brand, which she said has had inconsistent support in recent years.
She contrasted it to P&G's $45 million launch of Olay Regenerist, which hits stores next month. Though Regenerist creams and lotions, at around $19, will be priced as much as two to three times Dove's, Regenerist's "amino-peptide complex" and performance could pit it successfully against much pricier department-store brands, she said.
P&G is looking to Regenerist to help Olay cross its own milestone of $1 billion in global sales this year.