Dive Brief:
- Beauty product maker L’Oréal Groupe opened last week a $160 million research and development facility in Clark, New Jersey, in a bid to strengthen its U.S. brands.
- The 250,000-square-foot site employs more than 600 scientists, engineers and researchers focused on creating, developing and testing “high-quality” and safe beauty products, according to the release.
- The company said the center will play an important role in sustaining and strengthening L'Oréal’s brands, including Maybelline, CeraVe, Redken and Kiehl’s, across U.S. markets.
Dive Insight:
The North America Research & Innovation Center will focus on tailoring products to various customer needs, skin tones, hair types and textures, as well as beauty self-expression, aesthetics and goals.
The center is L’Oreal’s largest research facility outside of France, according to a release. The company initially unveiled plans and broke ground for the center in 2022 as a way to replace existing facilities in the area that have been there for more than six decades.
In 2023, L’Oreal began hiring employees amid the construction of the facility, the company said in the release. Since then, the center has been working with academics, biotech companies and startups in the U.S. to design, invent and scale up ingredients and products that are more sustainable, inclusive and personalized.
Most recently, the skincare product maker began collaborating with computer software company IBM to leverage generative artificial intelligence technology in an effort to improve performance and consumer satisfaction in every cosmetic category and region worldwide.
The building includes a 26,000-square-foot modular laboratory and a consumer center for product testing and co-creation that accommodates up to 400 customers daily. The center also has an on-site mini factory to scale final formulations before full-scale production, according to the release.
Furthermore, L’Oréal installed 10,000 solar panels that power 70% of the facility’s needs as part of the beauty product maker’s 10-year sustainability commitment. The Paris-based company aims for all of its globally operated sites to utilize renewable energy by this year, according to L’Oréal’s 2023 sustainability report.
L’Oréal’s Q4 2024 sales in North America saw a 2.3% increase year over year with 2.9 billion euros ($3.1 billion), according to a Feb. 6 earnings report. In 2024, the cosmetic manufacturer’s North America sales saw a 5.9% increase YOY at 11.9 billion euros (approximately $13 billion).
The results were driven by the U.S. market, L’Oréal’s “number one” country, due to various channels targeting consumers and boosting products, the release stated. One example was the launch of Kiehl’s on Amazon in an effort to reach new consumers, Cyril Chapuy, president, of L’Oréal Luxe, said in an earnings call last month.
As a result, the luxury sector plans to double down on the U.S. market, Chapuy added.
L’Oréal also sees favorable and economic dynamics in the U.S. as it expects to see the country’s population grow by 12 million over the next five years, CEO Nicolas Hieronimus told analysts. The U.S. is also the cosmetic maker’s largest market, accounting for one-quarter of the company’s sales, Hieronimus added.
“We have a unique portfolio to conquer the U.S. market,” Hieronimus said. “It combines our 18 American brands. Three of them are part of our billionaire club.”
Still, Hieronimus said L’Oréal’s 37 global brands still have a lot of white space to fill.
“We have the right footprint to drive this expansion,” Hieronimus said. “Our six regional R&I hubs enable us to bring the right products to the region, but also from the region to the world, as we did with our Garnier Vitamin C Serum.”
Outside of the New Jersey location, L’Oréal has two U.S.-based R&D facilities in San Francisco and Redwood, California, according to its website. The company also has 37 manufacturing facilities, five of which are located in North America, according to a 2023 registration document.
