Brand image is pivotal to how health and beauty companies differentiate their products. Their brands hold tremendous value. Brand Finance, a respected valuation firm, estimates the L’Oreal brand is worth $7.7 billion, comprising 34.6 percent of the company’s market cap. Revlon’s brand is worth $922 million, generating about half of Revlon’s total company value.
Understandably, health and beauty companies go to great lengths to protect their brands. Increasingly, they’re mindful of brand vulnerabilities that could be accidentally introduced by suppliers. While brand damage occurring through the supply chain is not new—think of apparel companies’ recurring sweatshop scandals—brand risks are rising fast, given today’s globalized business world and the rapid spread of information enabled by social media.
My company Poly-Version has built our business by being good stewards of our health and beauty customers’ brands. Specifically, we’ve carved out a specialized niche printing instruction sheets with plastic gloves attached to them for hair coloring kits. Our instruction sheets appear in hair coloring products sold in the U.S. and Canada, including those made by Clairol, Garnier, L’Oreal, Revlon and Soft Sheen Carson.
The hair care market has globalized, and Poly-Version faces fierce competition from companies in China and Mexico. Poly-Version gained an early market advantage by patenting an automated, heat-sealed process for adhering and folding plastic gloves on sheets of printed paper. Our New Jersey manufacturing facility has four offset printing presses and 36 custom machines for heat-sealing gloves. Each machine is capable of producing approximately 30,000 pairs of gloves and instruction sheets per 10-hour shift.
Our manufacturing assets, however, cannot protect us from foreign competition. Competitors have developed technology and methods similar to ours. Although their machines and processes may be less efficient, their labor costs are much lower. Poly-Version cannot, of course, match China’s or Mexico’s low labor costs (nor would we want to). Instead, we must be operationally lean to compete with our foreign competitors.
Just being cost-competitive, however, cannot sustain a business long-term. In addition to operating very efficiently and innovating continuously—Poly-Version owns eight U.S. patents—our company must do more to sustain and grow our position in the hair care market.
In serving high-value brands, Poly-Version has found sustainable advantage in ensuring our products and business practices reflect well on the companies we do business with. This means not just making sure that customers’ instruction sheets look like they should and arrive at customers’ factories on time, but also that we demonstrate corporate citizenship on par with—and preferably even beyond—what’s required by our customers.
Implicit in working with Poly-Version is the promise we will not tarnish our customers’ brands. It’s supply chain assurance taken to a higher level. We believe this is one of the things that keeps customers coming back to us, despite proliferating options from foreign suppliers.
- Part 2 (March 28): Conserving Natural ResourcesPhil Goldschmiedt is the owner of Poly-Version, Inc. (formerly a division of Tyco International), a New Jersey manufacturer of disposable gloves laminated to printed instruction sheets. Poly-Version supplies companies such as L’Oreal, Revlon and Clairol. He is also owner of YATZ Properties. Prior to Poly-Version, Phil spent 15 years in the music business as Production VP of the record label Audio Fidelity, which produced and distributed globally various genres of music. Phil received his BA from Queens College and graduate studies at St. John’s University.