L’Occitane en Provence

At the very heart of our business are authentic products, anchored to their Provençal heritage. These products, a resilient business model and sustainable development have allowed us to achieve strong performance.

Sunday 2 June 2013, by Alba Garcia, Raquel Duerto Fàbregas, Silvia Soldevila Motta, XeniaG

7 inspired

A. The main facts about the activities of the company.

L’Occitane en Provence is an international retailer on the cosmetics industry, and has a wide range of body, face, and home products.
The company is based in Manosque, in south-eastern France and it was founded in 1976 by Olivier Bausann, a 23-year-old boy who started producing essential oils using its rudimental tools and recreating the traditions of his region. He developed skincare products and fragrances which were natural and authentic and, at the local markets, villagers appreciated them that much that Bausann continued producing and started expanding his business, with the first boutique opened in 1978 in Volx (Provence). This was the way l’Occitane, which means “woman from Occitania”, was created.

Thanks to its emphasis on the marketing strategies, the company was (and continues being) successful in its internationalization process. One of the pillars of that success has been the focus on the “country of origin” and that was the reason why the name of the company was changed to l’Occitane en Provence in the late 90s.
L’Occitane’s mission is to pass on the Provençal art-de vivre, maintaining traditions and providing high quality and efficient beauty products and along the same line, its vision is to become the worldwide reference for Mediterranean well-being, with unique products. Since its creation, the company has been nurturing the simple values of authenticity, respect, sensoriality and continuous improvement.

L’Occitane obtains the raw materials it uses from local producers who use traditional techniques, and develops all of its products in Manosque. Moreover, the company also purchases products from women’s groups in Burkina Faso.
The products are formulated with plant active ingredients, following the principles of phytotherapy and making use of local know-how. These formulas combine effectiveness and sensoriality, providing textures and fragrances inspired by the Mediterranean art de vivre.
There are four main product lines according to product type: skin care, bath&body, fragrance, hair care and men (each of them is constituted by a large variety of different products). However, the company also launches different lines according to the ingredients used, such as Verbena line, Lavender line, etc.
No animal testing is conducted during the production process and most of the products and ingredients follow the requirements of Ecocert (the organic certification organization).

In 2004, the company founded Le Couvent des Mimes, an association that has the aim to support local populations, promoting healthcare and children welfare in over 80 counties worldwide, and to which L’Occitane gives back 1% of its annual sales. Two years later, in 2006, the company founded la Foundation d’Entreprise L’Occitane.
In 2008, the company took another step towards its expansion with the acquisition of Groupe M&A Développement and its subsidiary, M&A Santé Beauté, owners of the organic and ecological cosmetic brand Melvita.

B. The Ethical challenges this company is addressing.

From the top of its supply chain, L’Occitane is committed to the preservation of traditional cultivation, particularly that of lavender and almond trees methods, and the preservation of certain rare species of flowers. For that, the company has developed partnerships with organizations supporting the development of aromatic plants using traditional methods. In order to ensure a sustainable production, l’Occitane has an especial team dedicated to strengthen the relationships with the current suppliers.

At the employee level l’Occitane carries out an active policy towards its human resources. It has many initiatives to ensure appropriate risk prevention in the workplace, the empowerment of the workforce and the equilibrium between the work life and personal life of workers. The company tries to encourage the values of respect, diversity and the integration of people with special disabilities.

Since its foundation in 1976, l’Occitane has been involved in initiatives with a social interest, and it created its Foundation in 2006 to support them. This organization is provided with a budget of 1 million euros per year and its main aim is to help the communities with which the company collaborates, promoting the economic emancipation of women and supporting people with visual disabilities, particularly in Burkina Faso. For instance, some particular products such as Shea butter are purchased directly from women’s groups in the country as Fair Trade with the Ecocert certification. Furthermore, L’Occitane Foundation has been involved in aid projects to promote the reconstruction of Japan after the 2011 tsunami.

The company also takes care of the environment and tries to keep its impact on it to a minimum throughout all the production process, going from the collection of the ingredients, to packaging, logistics, etc., following the guidelines of the ISO 14001 certification.

Finally, in order to give a recognized framework to the ethics policy of the company, l’Occitane has joined the United Nations compact and its ten objectives concerning the preservation of human and labour rights, the diminution of environmental impact and the fight against corruption.

C. What makes you believe this company is really ethical and why you trust it?

Authenticity, respect and sensoriality are the company’s core values; even though they may seem simple values it is very difficult for many firms to be able to align their economic interests with ethical concerns. Since 2011, the principles that the company has embraced are related to the areas of human rights, anti-corruption and labor standards. It is really easy to sell an image of a clean and respectful firm but at the end only a few companies are really capable of being transparent regarding their activities. While many companies carry out massive cost-reduction strategies to grow and try to be successful, l’Occitane prefers to give up some of its profits with the aim to construct a better, more equal and sustainable world.

L’Occitane has a strong commitment with its philosophy which has been reflected in all of their projects. L’Occitane Foundation is a clear exemplification of this commitment. We think that the company is really ethical as it carries out several effective social initiatives to benefit as much as possible the communities with which it collaborates, to promote their economic development and improve their social welfare, and very few companies operating in this business do the same.

Concerning the internal structure of the firm, it cares about their human resources in many ways. They are open to integrate people with disabilities within their team; they encourage their employees to express their ideas and aspirations in order to make them feel part of the all organization while growing as an individual. Moreover, they try to apply proactive policy based on safety and ergonomics in order to prevent labor accidents. All of these create a friendly and comfortable atmosphere that allows the cooperation between members and a life balance.

With respect to the purchase of raw materials, l’Occitane tries to preserve the environment avoiding any kind of biopiracy and sustain a strong relationship with the supply chain. They support local producers and when they have the possibility to buy the certified, organic and/or P.D.O. ingredients such as Pivoine, Angélique, Lavande, Cade and Verveine. In addition, they control the overexploitation of wild plants and to work under a sustainable development, limiting environmental impacts. Some of the actions that they are following in order to achieve this are:
-  Avoid using phthalates in fragrances since 2005
-  Slowly trying to withdraw parabens
-  Substitution of plant oils rather than mineral oils
-  Limiting the use of silicones
-  Creating eco-designed packages
-  Reducing energy consumption, water usage and the amount of waste produced
-  Using environmentally friendly materials such as paints, LEDs, lime, minerals or lumber in their boutiques.

L’Occitane is a clear example of a business which is able to fulfil its main objectives related to ethical practices even though it represents a huge investment in social responsibility practices they are willing to sacrifice part of its profits in order to behave ethically.

D.The possible challenges facing the company in the future and how you think this company may improve.

Until now, l’Occitane has been able to follow an ethical path attracting people that value this characteristic.
But nowadays, due in part to the financial crisis, attracting clients has become a primary objective for every firm if it wants to survive and so one of l’Occitane’s main challenges is to improve the way it attracts people.
In order to do so there are some challenges the firm should overcome.

First of all, regarding the distribution channels, the firm should focus on improving its internet sales as currently there is a high tendency on sales done through this channel which is why the firm should try to improve the way it sells via internet. One way of doing so could be to make its website more interactive, giving relevant importance to the clients’ reviews to motivate other consumers to buy and linking the webpage to the physic store, allowing the possibility of picking up the product there in order to reduce costs for the client.
Aside from improving the online experience, it would be a good idea to find other ways of reaching consumers such as snail mail, which is usually more appealing than email, or campaigns looking for consumers’ interaction.

Secondly, as for the brand transmission, l’Occitane should make potential client get to know better its ethical qualities as there are a lot of people that know about the company but not about its ethical side. In order to do so, the firm’s marketing campaigns should give more importance to its ethical characteristics.
L’Occitane has also been able to recognize that many consumers suffer from email overload, which has diminished returns as email frequency increased. To avoid this decline of customer engagement through email, the company should improve its emails quality and decline their frequency so it can stand out among other companies using the same channel to attract new clients.

Furthermore, the company may face some challenges trying to reach consumers out of the European market and so the firm should work to try to advertise itself harder outside Europe.
And last but not least, one of the main challenges of l’Occitane relies on the ability of keeping competitive prices while not giving up on its ethical side and when doing so it’s important that the firm doesn’t decrease its products quality.

In conclusion, l’Occitane may be facing some challenges in the upcoming years so it is important that the firm stays in touch with its consumers so it’s able to react to demand changes and adapt itself to the new era consumers.

Bibliography

Website: http://www.loccitane.com
http://www.youtube.com/watch?v=Bdiul-mEv5g&feature=share&list=PLB0F9035E89F30838
http://en.wikipedia.org/wiki/L’Occitane_en_Provence
Annual report (FY 2012):
http://img.loccitane.com/OCMS/Group/doc/pdf/EN/20120730_2012_AnnualReport_EN_2.pdf
http://www.dailymail.co.uk/news/article-2181468/Big-beauty-brands-dropping-cruelty-free-animal-testing-policies-sell-products-China.html
http://www.mediapeta.com/peta/PDF/companiesdotest.pdf
http://uk.loccitane.com/occcares_purchasing_ethic,83,1,35563,353706.htm
http://perfumesecrets.com/perfume-manufacturers/loccitane-en-provence/
http://foundation.loccitane.com/nos-projets,1,2,20,24.htm
http://guide.ethical.org.au/company/?company=5023

Location: Manosque (France)

Sector: Wholesale and retail trade

Official website: http://http://www.loccitane.com/

Key figures:

Figures from Fiscal Year 2012
• Annual Revenue of 913,448 thousands of Euros (increased by 18.3% from 2011 to 2012)
• Annual Profit of 124,191 thousands of Euros (increased by 21% from 2011 to 2012)
• Total assets valued at 910,478 thousands of Euros (increased by 15.9% from 2011 to 2012)
• Earnings per share equal to 0.082 (increased by 20% from 2011 to 2012)

Other interesting figures
• 6,600 employees all over the world in 2013 (1,000 of them in Manosque)
• Shops in 100 countries in North and South America, Europe, Asia and Australia
• A total of 2,082 retail locations
• 200 new formulas each year
• 14 patents registered since 2001
• More than 500 safety and efficacy tests
• Over 300 plant-based ingredients

Nbr. visits: 6346

Nbr. inspires: 7