L'oreal: Conquer the Market of Shampoo

FROM SCIENCE TO BEAUTY

L'Oréal's research facilities in France, the USA, and Japan bring together more than 3,000 scientists and research staff. Their discoveries are published in leading scientific journals. L’Oréal’s innovations are patented, creating some 586 patents in 2004 alone.

Our methodologies for evaluating the safety and efficacy of ingredients and finished products, product evaluation and claim substantiation are recognised by the international scientific community.

L’Oreal Paris products are the result of the following research, development and evaluation process:

1. The benefits offered by our products are supported by the scientific and customer evidence gathered at 13 research centres, 13 evaluation centres and through collaborations with leading independent research institutes around the world.

2. L’Oréal Paris products are validated by independent cosmeto-clinical studies under dermatological control to assess their efficacy and safety. The sample size of these cosmeto-clinical studies is in line with the industry’s standards.

3. In addition, L’Oréal Paris conducts consumer studies to assess the products’ efficacy and satisfaction rate before they are launched. These tests are conducted by independent research companies and performed on a statistically significant number of women and men.

4. Moreover, customer satisfaction surveys are carried out after the products are launched. These involve interviewing a statistically significant number of people who have bought and used the products for several weeks to assess their level of satisfaction and to help us to continually improve our products.

RESEARCH AND DEVELOPMENT

L’Oréal was founded by a chemical engineer, Eugène Schueller, and our commitment to research goes back to the very beginnings of the company.

Today we draw on the expertise of some 3,000 staff members working in 14 research centers on three continents to continually enhance our offering. The R&D budget was 496 million Euros in 2005, 3.4% of the Group’s turnover.

It takes years and the contributions of experts in some 30 scientific disciplines to transform newly acquired knowledge of skin and hair into new cosmetics. Acquisition of knowledge is vital to our future, and we earmark a full 1/3 of our R&D spending for fundamental research.

The Group’s advanced research capabilities have enabled it to develop more than 120 new molecules over a period of 40 years.

HUMAN DIVERSITY-FROM NATURAL DIFFERENCES TO CULTURAL DIFFERENCES

Our research teams benefit from on unparalleled knowledge of the different types of skin and hair found around the world. The L’Oréal Institute for Ethnic Hair and Skin Research in Chicago USA, plays a vital role in better understanding the specific characteristics of the hair and skin of people of African descent. In addition to an existing facility in Japan, the Group has opened a research centre in Pudong, China, in order to study Chinese hair and skin.

Our approach to ethnicity also draws on research conducted in the field by 13 evaluation centres around the world to identify the impact of climate, environment and culture on beauty practices.

We call this global approach, “geocosmetics”, and it reflects our concern for human diversity. This approach enables us to perfectly match products to consumers needs and in some cases contributes to the emergence of new trends.

RIGOROUS STANDARDS FOR PRODUCT SAFETY AND EFFICACY

All new products and ingredients are subject to rigorous tests to ensure that they are safe and yield the desired benefits.

The same criteria apply at every stage in the process, with methods and technologies including statistical analyses, in vitro and in some cases in silico testing, non-invasive in vivo measurement, sensory analysis, and clinical trials under the supervision of external dermatologists.

We have played a pioneering role in reconstructed skin technology, and since the early 1980s have had human epidermis and dermis models allowing assessment of product safety and efficacy. One such model, Episkin, has been approved as an alternative to animal testing.

PRODUCTION AND TECHNOLOGY

4 PRINCIPLES THAT THE PRODUCTION’S KNOW-HOW BASED ON:

CONSISTENT QUALITY WORLDWIDE

94% of output from the group’s factories is certified to comply with ISO 9001/2000. The L’Oréal Quality systems (conception and conformity) ensure that the same strict standards are complied with at all the production sites in all parts of the world.

Quality is monitored by internal audits and external audits conducted by organizations such as the Food & Drug Administration in the USA. Each step in the manufacturing process is monitored: reception of raw materials, manufacturing and packaging processes, and before dispatch of finished products.

WORKPLACE SAFETY AND ENVIRONMENTAL STANDARDS

Safety, Industrial Hygiene and Environment are of the utmost importance to us.

We publish aggressive goals each year to improve our high level of safety and health and decrease our impact on the environment.

A monthly Safety, Hygiene and Environment report covers more than 100 key indicators at our sites. Water and energy consumption as well as waste and waste recovery are among our main concerns.

Most of our factories are ISO 14001 certified for the environment and OHSAS 18001 or OSHA VPP for safety.

MAKING OUR OWN PRODUCTS LOCALLY

Quality and safety are our priorities at all times, and direct production gives us the control we need to guarantee the highest standards.

Our own workforce and our own sites account for 94% of our total production.

Our production policy is based on local manufacturing : the number of units produced in each of the world’s