Álvaro Alonso, General Manager of Beiersdorf NA, seeks new ways to address the challenges posed by a new geographical market.
When Álvaro Alonso took over as General Manager for North America for multinational skincare giant Beiersdorf, he was in many ways ideally placed to identify and address the challenges posed by a new geographical market.
Alonso had previously held positions as General Manager in Spain and North Cone LATAM where he came to understand the differences between customer preference and needs in different regions of the world. Yet entering the hugely competitive—and incredibly diverse—US market represented his greatest challenge yet.
“When I first came to the US, the number one priority was to increase our household penetration, because we honestly believe in the quality of our products and our vocation, which is to enhance people’s lives by taking care of their skin,” Alonso told CEO Magazine in an exclusive interview (…) From my international background, I know that our penetration in the US is still below the average we have in the rest of the world, but even though the US market is more fragmented than others, I still believe that we can reach more people and provide them with the best products for their skin.”
Beiersdorf AG is a German multinational company headquartered in Hamburg that manufactures personal-care products and pressure-sensitive adhesives. Its brands include a number of household names such as Elastopast, Eucerin (makers of Aquaphor), Labello, La Prairie, Nivea, and Coppertone, the iconic sun care brand which Beiersdorf just acquired in August 2019. In 2018, Beiersdorf boasted global revenues of €7.2 billion.
“One of the unique elements of our company is that we’re 100% focused in skincare,” Alonso said. “In the last few years, we’ve done an incredible job to get the maximum support and commitment from our global and regional network while at the same time localizing our dialogue with consumers and retailers.”
A unique market opportunity
Alonso believes that the recent acquisition of Coppertone, along with other assets the company has added in the past few years, has given Beiersdorf significant momentum to conquer the US market given the range of American and global brands it now has at its disposal.
Furthermore, the company invests heavily in R&D to adapt its products to individual markets where different ethnicities face different skin problems— something particularly important to the North American market, where ethnic and cultural diversity is especially broad.
“A really unique case within Beiersdorf is that we have two American brands in our portfolio—Coppertone and Aquaphor— and two global brands in Nivea and Eucerin, which are also found locally within the US market,” Alonso explained. “We have around 1,400 people working in R&D, exclusively on skincare, around the world, which is the biggest R&D network dedicated 100% to skincare there is. We are in constant contact with our main laboratory in Hamburg, but also with the labs we have in Brazil, Mexico, and here in the US.”
“This is bringing diversity to our market view and skin solutions,” he elaborated. “If you look here in the US, because of the mix of skin types, weather conditions, and consumer habits, ranging from Florida to Seattle, and in between, everyone requires different skin care solutions. We communicate with 90% of the dermatologists across the country. We have the right set-up in our communication agencies with big regional hubs located in the US and some specialized localized agencies where they’re needed.
“And lastly, but certainly not least, there is our team. We’re consolidating talent and working on team capabilities development, and we have a mix of local talent and people like myself coming from abroad, which leads to a nice cultural mix for the most multicultural country and business market in the world.”
Connecting with customers
In an increasingly digitalized and interconnected world, Alonso believes that the personalization of both a company’s products and of its customer service are vital elements to penetrating any market, a fact that is especially true in the US because of the sheer size of the country and the vast ethnic diversity among customers.
“We’re personalizing our solutions more and more, offering different brands in different segments according to different skin needs, and that’s an area where the interaction and ability to connect with customers is especially important,” Alonso stated. “But we also want to learn from US consumers and the local market with a view to exporting our knowledge and contributing to global skincare expertise and leadership.
“This should enable us to grow at higher rates as a company, far ahead of the market performance, but also help us strengthen our position, which is also based on the quality of our partners and level of consumer trust.”
Continuous improvement
Beiersdorf continues to expand its North American portfolio. Having already established its leadership in the US body lotion market, another area in which Alonso was keen to see Beiersdorf expand its reach was the sun care segment—one in which the acquisition of Coppertone, the most trusted sun care brand in the country, is likely to give them tremendous leverage.
Yet Alonso still sees significant challenges ahead for Beiersdorf in North America, summed up by the goal of creating a continuous improvement mindset with regards to the company’s operating model. He gave numerous examples of how this process is taking place and his priorities with regards to the North American market.
“We’re pushing our continuous improvement drive from two directions,” Alonso told CEO Magazine. “One is supporting operations with the right quantity of resources to be successful. Creating the right capabilities, for example, in our factories in Mexico and Cleveland, Tennessee. We are trying to deploy the tools to facilitate our teams and get the right long-term partners and agencies to navigate this process with us. At the same time, we need to create the right management structure capabilities and tools to be able to operate the closest possible to our consumers.
“It’s important for us to establish a dialogue with them and work in a more integrated, community kind of approach. This is a progressive transformation that is already underway, not only to support our growth ambitions, but also to address the challenges of the reality of a super digitalized world.”
Win-Win Relationships
Alonso highlighted communications agencies and logistical suppliers as the main long-term partners Beiersdorf depends upon around the world to make its success possible, citing a dynamic of both local and global partners as something that makes the company unique in its space.
For Alonso, key to this dynamic is taking a win-win approach to such relationships in which both sides search for and work on solutions together.
“These solutions will change over time depending on factors like size, growth, market reality, and even cultural factors depending on the region of the world,” he stressed. “We are currently ending a process of redefining our logistic network in North America because of the acquisition of Coppertone. But we always look at how the partnership can benefit both sides, and it varies considerably depending on the country or market we are in.”
Alonso views the uniqueness of Beiersdorf as an organization as its strong purpose— enhancing the lives of its customers through skincare—and an adaptable approach to tackling each market in which it operates. Yet as a result of his wide-ranging experience in the skincare industry, he is under new illusions that both considerable and exciting new challenges lie ahead.
“Our company, as many other companies in this segment, is in the midst of a transformation process where we have to adapt to new market realities if we want to continue to be successful,” Alonso told CEO Magazine. “In the US, we have the special circumstance of just having acquired Coppertone, which is a very unique momentum for us, but independently of that, the market reality today requires different management and leadership skills and the ability to embrace the digital transformation taking place around us.”
“It’s not just about deploying digital tools, but also embracing the change in how people and consumers behave in the digital era,” he insisted. “It’s about having a different approach to empowerment, a different approach to developing talent, and that’s exactly what we’re moving towards as a company.”
