From a small base in
the Midlands, Simple Health and Beauty 
is using its IP
to
compete with some of the world’s biggest brands
To become a leading brand in skincare in the UK, you normally expect to have two defining characteristics: an army of anti-ageing experts in an exotic research centre working on the next wonder chemical and a £10 million ad budget fronted by a well-toned movie star.
Simple has neither. Yet it sells more skincare by volume than anyone else in the UK and after overtaking Nivea in 2008 is the third brand by value, and making up ground fast on L’Oreal.
Based in Solihull, it maintains the proposition on which it was founded 50 years ago as a specialist for sensitive skin: no colour, no perfume, just kind. Since then it has expanded under a number of owners into cleansers and moisturisers. Last year, sales were up 11 per cent to £61 million - compared to overall growth in the skincare market of two per cent.
Simple’s message resonates well with consumers at a time when they are looking for natural ingredients and are worried about their spending. “We are at the value end at the end of the scale, rather than the premium end,” says Peter Hatherly, Simple’s finance director, who is responsible for Simple’s IP.
“If people do trade down a price point to our brand, we hope they will find the same, if not better, results and will stay with us after the recession. Of course, we are nervous like everyone else, although our sales growth is continuing in double digits.”
In 2000, Hatherly led a £140 million buyout of the business from Smith & Nephew with his partner, Geoff Percy. Since then, they have re-positioned themselves as brand owners, rather than manufacturers, focusing on two main assets: their people and their IP.
Everything else is outsourced. A factory in Corby was sold in 2003 and production is carried out under contract. Research is also conducted externally. Simple’s 60 employees are mainly involved in managing Simple’s brands and the 140 products within its different ranges.
Ideas for new products are developed in response to the market, rather than by Simple’s own scientists. Their three technicians spend their time on assuring quality. Instead, brand managers pick up signals from consumers and send product briefs to external researchers. A new range for very dry skin using plant extracts, not chemicals, has just been launched, for instance, which was all created locally in the Midlands.
Any outcomes from the research are contractually assigned to Simple, but any chemist could get close to its formulation, particularly as the ingredients have to be printed on the label. The real protection for Simple lies in the trust that consumers have in its brand.
The Simple name is registered in all leading markets round the world. Although it is a descriptive term, Hatherly is generally able to argue that the use of associated words such as ‘simply’ will confuse consumers as well.
In the UK, which still accounts for 85 per cent of sales, new products tend to be protected using a combination of terms, such as ‘Simple Repair’. Hatherly registers logos and design rights for the shape of Simple’s bottles. He is hoping to protect a new measuring system for ingredients on the label as well.
In building sales, Hatherly uses trade marks to define how distributors are able to use the brand and when they have to ask for clearance. They also give him the basis for talking to retailers about any attempts to pass off the Simple brand.
“We are the most trusted brand on the market and we are in well over 90 per cent of the shops in which we should be,” says Hatherly. “As a brand for sensitive skin, we take any attempts to confuse consumers seriously. It is usually a one-off import from overseas sold as a short-term promotion. We have a conversation if something comes too close and it tends to disappear quickly. We look for damages if necessary and a promise not to do it again.”
Looking forward, Hatherly sees two sources for extra growth at Simple: growing its range of moisturisers to match its strength in cleansers and building up its international sales.
‘Even though we don’t have the heritage of the brand in the UK on which to draw, Simple translates well into other languages’ says Hatherly, who is in negotiations with distribution and manufacturing partners in the US.