Promoting the opening of the new R&I Center, Nicolas Hieronimus, CEO of L’Oréal, spoke to CNBC’s Charlotte Reed about the importance of innovation and how it stimulates the consumer’s interest in new products in an exclusive interview.
“People don’t tell you that they need a new glossy lipstick or a new hair color that shines—they need to be stimulated. The demand needs to be stimulated by innovation,” Hieronimus explained to Reed on CNBC International Live.
Ten to fifteen percent of our business comes from new products—and so you have to constantly surprise and delight the consumer,” he said.
Hieronimus mentioned that CeraVe, one of L’Oréal’s largest global brands, is manufactured in the U.S. CeraVe’s new hair care line was developed in the labs at L’Oréal’s R&I Center in New Jersey.
Is L’Oréal concerned about the potential impact of U.S tariffs?
When CNBC’s Reed mentioned the new U.S. tariffs, Hieronimus said tariffs are never good for business. “And in the end, they’re not good for the consumer—because it’s the consumer that ends up paying one way or another…as far as L’Oréal’s concerns, considering the information we have today, because it is changing regularly, I’m not overly concerned.”
Tariffs aren’t likely to significantly affect L’Oréal because more than half of the products the company sells are produced in the U.S. “Actually, we’re a net exporter from the U.S.—we sell more outside the U.S. than we import,” Hieronimus said. “We manufacture some of our products in Mexico and Canada, but overall, in Mass, it is mostly U.S. manufacturing.”
L’Oréal ‘s luxury fragrances are imported from Europe, but Hieronimus notes that at the moment there is no tariff on fragrance products. “Should there be one, we will work around it. There is pricing power, there’s also the currency effect—the dollar is stronger, so I think it is manageable, as long as it doesn’t become a global tit-for-tat tariff scenario.”
Watch the video embedded below.
Read Next
L’Oréal Sells Carol’s Daughter
