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Cosmetic Talc Litigation Media Coverage July 28, 2016
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Johnson & Johnson’s babycare blues
Jul 28, 2016 | Financial Times
By David Crow
The consumer giant has dominated the babycare market for more than a century. But as millennial parents embrace organic, natural ingredients, the company faces fresh challenges. -
Johnson & Johnson Defendants Say Conspiracy Claims in Talcum Powder Suit a ‘Legal Impossibility’
Jul 28, 2016 | Harris Martin Publishing
ohnson & Johnson defendants have attacked claims of fraud and conspiracy asserted in a talcum powder lawsuit, maintaining that such claims are a legal impossibility since a parent corporation cannot conspire with its wholly owned subsidiary. -
Okla. Talcum Powder Plaintiffs Have No Objection to Defense Motion to Sever
Jul 27, 2016 | Harris Martin Publishing
Talcum powder plaintiffs with claims pending in Oklahoma federal court have filed a response to a recent motion by the defendants to sever the multi-plaintiff suit, saying they have “no objection to the motion.”
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Johnson & Johnson’s babycare blues
Jul 28, 2016 | Financial Times
By David Crow
The consumer giant has dominated the babycare market for more than a century. But as millennial parents embrace organic, natural ingredients, the company faces fresh challenges.
When Alexis and Gabe Landes found out they were expecting their first child, they began preparing their apartment on the Upper West Side of Manhattan for the big arrival. The nesting instinct soon took the Landes couple beyond the nursery and into the bathroom, where they disposed of all the mass-produced toiletries they owned.
“Once my wife became pregnant, we thought a lot about what was going into her, and into the kid in utero, so we shifted all the high-volume, corporate stuff out of our home,” says 37-year-old Gabe, who works as a construction manager for a solar-power company. “It was already baked into our values. Even before Alexis got pregnant, we would eat a diet low in meat and buy our food from small, local farms.”
Isaac arrived 15 months ago, “adorable, and a ton of fun”, and his parents were showered — as many parents are, in hospital or via mailing lists — with free samples of baby products made by Johnson & Johnson, the world’s largest manufacturer of toiletries for infants. But they avoided the supermarket shelves stacked with J&J’s bottles and started searching for alternatives that contained fewer chemicals and more natural ingredients.
“We wanted to make the best decisions about everything we were putting on his skin, from shampoo to sunscreen,” says Gabe. They settled on a baby soap made by Dr Bronner’s, one of the early pioneers of natural toiletries. Rather than using Johnson’s baby creams or talcum powders for Isaac’s nappy rash, they opted for pure coconut oil.
The Landes family is not alone. An increasing number of parents in richer countries are eschewing J&J’s products in favour of premium or natural alternatives. The trend has resulted in a marked slowdown in sales of J&J’s baby products. After more than a century as the leading purveyor of infant shampoos, creams, talcum powders and lotions, the company is losing share to newer rivals. In the first six months of the year, US sales of its babycare products slumped to $197m, the first time they have fallen below the $200m mark since 2007.
Speaking to journalists in April this year, Dominic Caruso, J&J’s chief financial officer, attributed the decline to parents buying “premium, natural-type brands”, and promised shareholders that the company would relaunch its range to better cater to their tastes. But J&J faces a significant challenge in winning over younger parents, many of whom mistrust the big commercial brands so beloved by their own parents and grandparents.
The Landes and their friends are part of a generation that tends to be more suspicious of mass-produced food and cosmetics, and of big business in general. Many scour food labels for artificial ingredients, and believe that smaller is better, and organic better still. Their health-conscious attitude is creating problems not just for J&J but for many other brands too, from McDonald’s to Kraft — names that were once a staple of American family life.
. . .
J&J’s foray into the babycare business was unplanned. Founded 130 years ago by three brothers in New Jersey, the company was set up to capitalise on the theories of Sir Joseph Lister, the British father of antiseptic surgery. In 1867, Sir Joseph had published a series of case studies showing that sterile surgical procedures would save countless lives. His work was initially dismissed by surgeons, many of whom refused even to wash their hands before operating, but he found a convert in Robert Wood Johnson, the eldest of the three brothers, a trained apothecary. After attending one of Sir Joseph’s lectures at a Philadelphia medical conference in 1876, Robert joined his siblings in business and, in 1886, they started manufacturing stitches and dressings that were sterile and affordable, helping to bring survivable surgery to the masses.
The company quickly branched out, in 1888 pioneering the commercial first-aid kit to combat a spike in accidents in the increasingly industrialised workplace. It also found success with its medicated plaster, an adhesive patch of rubber that promised to deliver an infusion directly to the skin to soothe pain. Customers liked the product but soon started complaining that the sticky squares were irritating their skin. J&J responded by shipping the product with a tiny container of talcum powder to soothe irritation, prompting a raft of letters from people who found the powder also relieved nappy rash and other skin complaints.
And so the Johnsons launched “Toilet and Baby Powder” in 1894, the first in a series of products that would dominate the babycare market for more than a century. It came in a tin with an orange-and-white label, carrying a logo that has never changed: the family name in a style mimicking the handwriting of James Wood Johnson, the youngest of the brothers.
J&J went on to build a business that came to occupy a special place in the consciousness of mothers, its products closely tracking changes in maternal health. Around the time of the Baby Powder launch, J&J began selling maternity kits designed to improve the safety of home births, then the most common way of delivering a child.
“It was everything in a box that the doctor or midwife would need to ensure a safe delivery for mother and baby,” explains Margaret Gurowitz, a softly spoken life-long employee at J&J who is now the company historian. “Sterile drapes, sheeting and sutures — and anti-bacterial soap with a nailbrush, so that the birth attendants could wash their hands.” The kits were packaged with small booklets containing tips and advice for young parents.
As childbirth moved into the hospital setting, rendering home maternity kits increasingly redundant, J&J started to develop a range of products to care for babies at home — a nappy-rash cream in the 1910s, a soap in the 1920s and a moisturising oil and lotion in the 1930s and 1940s. Then, in 1954, it started selling its famous baby shampoo, which promised there would be “No More Tears”.
One of the first newspaper advertisements for the product showed a baby girl positively beaming as she had her hair washed — a far cry from the tears and tangles that had hitherto dominated bathtime. “Won’t burn or irritate the eyes,” it promised. “Pure. Gentle. Safe.” The product, then 59 cents a bottle, was a near-instant hit and would go on to become synonymous with bathtime for millions of children across the generations.
“I grew up with a bathroom full of the stuff,” recalls Catherine Everett, the 32-year-old mother of two young girls, three-year-old Lyra and eight-month-old Nina, who lives in Bridge of Allan, a small town in central Scotland. “I vividly remember my parents washing my hair with J&J baby shampoo, before being showered head to toe in J&J baby talc. The smell still conjures up memories of Sunday-night bathtime.” She still washes her daughters’ hair with it because, “I know it won’t sting their eyes, as I used it for years myself.”
Even after the birth rate started to decline in the 1960s in the wake of the postwar baby boom, sales of J&J’s infant shampoo continued to rise. The company had started marketing the product to adults, arguing that if was mild enough for babies, then it would be gentle on their hair, too. In the late 1960s, it enlisted advertising agency Sullivan, Stauffer, Caldwell & Bayles to record a series of radio adverts aimed at one of the last groups of holdouts: teenage boys who had ditched the crewcut hairstyles of their fathers’ generation for the mop-tops of The Beatles. It worked: by 1975, the shampoo outsold all other adult and baby brands in the US.
The success of its baby range is the foundation on which J&J built one of the world’s biggest consumer products businesses, with a range including sanitary towels, toothbrushes and over-the-counter painkillers. By 1970, the company’s hygiene and babycare lines were generating more than $280m in annual sales. A decade later, revenues had swelled to $1.8bn, making it the most lucrative part of J&J’s business. In 2010 they hit a peak of $10bn.
. . .
For the past six years, however, J&J’s consumer business has been struggling, in part because of lacklustre sales of the baby range. The company sold roughly $2bn of babycare products last year, about 10 per cent less than in 2010. In April, it announced that it would relaunch the range after US sales in the first three months of 2016 fell to $95m, their lowest in more than a decade. Caruso said the company was losing out in the battle for “millennial mums”, who have been switching to organic, natural products.
Catherine Everett is one such parent. While she uses the company’s shampoo, she actively avoids its other products. “These days we are advised by health visitors not to put too much product on [babies’] skin, as it is so sensitive,” she says. “If I use anything, I look for products with fewer chemicals than J&J.” In an age when healthcare brands are tripping over themselves to market their products as natural or organic, she interprets the lack of any such claim on the Johnson’s bottles as a sign of “how potent the stuff must be”.
In Washington DC, Robyn Pashby does not buy J&J products for her 16-month-old daughter Alexa, preferring instead to use independently made products from local farmers’ markets near her home. “For many years we’d been shopping at our local farmers’ market for our food anyway, and I started to realise that if we’re going to be so careful about what goes in her body, then we should be careful about what goes on it too,” says the 39-year-old Pashby, who adds that she is keenly aware that not all parents can afford to make the same choice.
Pashby is particularly put off by the fragrances used in J&J’s ranges — “The scents just smell so fake” — and the long list of ingredients. “I became disillusioned by products made with things I can’t pronounce. I’m meant to put that on my baby’s skin? When it’s so fragile?” It is not just that Pashby is picking alternatives to J&J but that she is using fewer products altogether. “I don’t really use powders or lotions. I might use coconut oil and buy an all-in-one natural soap,” she says, citing Tom’s of Maine (owned by Colgate-Palmolive), which lists its ingredients on its website and also their source.
Pashby says she took her cue from medical experts. “When Alexa was in the neonatal intensive care unit at the hospital after she was born, they just used cotton wipes with water, and that worked fine. The hospital using only water was a big eye-opener for me. My paediatrician said unless she had irritable skin I should not over-bathe her.”
J&J contends that healthcare professionals recommend its baby products more than any other brand. The company says it does more research into infant skin than any other company and that its mild products help to prevent moisture loss.
Dr Jon Hanifin, a professor of dermatology at Oregon Health and Science University, points out that the company distributes many free samples through hospitals. “What happens is they dump tons of it on to nurses, who give it to patients, and then the parents go home and use it,” he says. “Putting all kinds of fragrances on the skin can lead to irritation, and J&J has a lot of fragrance in their products, which doesn’t help.”
His advice to young parents is to bathe their babies no more than three times a week and then to try to lock moisture into their fragile skin with a fragrance-free lotion such as Cetaphil and CeraVe. Such recommendations, however, might not satisfy those who see their avoidance of J&J as a rejection of big business. Cetaphil is made by Nestlé, the Swiss food giant that has been plagued by controversy for years for promoting its infant formula as an alternative to breast milk. CeraVe is owned byValeant, a Canadian drugmaker that has been in the headlines for the past year for sharply raising the price of its drugs.
. . .
In fact, many of the best-known premium babycare brands are controlled by large multinational companies, despite their homey packaging and cute names. Aveeno is the largest, with a 15.5 per cent share of the US baby and infant skincare market, according to Euromonitor. Created in 1945, the brand (whose mission statement declares, “We believe nature has the power to make life beautiful”) was bought by J&J in 1999, helping to hedge against stalling sales of J&J’S own-brand product. Another leading premium brand, Burt’s Bees, is made by Clorox, best known for household cleaning products including bleach (the company name is a portmanteau of chlorine and sodium hydroxide).
The biggest independent manufacturer of natural babycare products in the US is California Baby, founded by Jessica Iclisoy two decades ago. “We position ourselves as for mums who want a natural focus, with no sulfates or parabens,” she says, referring to two of the ingredients most disliked by health-conscious consumers. Sulfates, contained in many shampoos and often listed on the label as sodium laureth sulfate, are chemical detergents that have been linked to skin irritation, while parabens — which some believe affect hormone levels — are used to suppress bacterial growth in cosmetics.
The products are not cheap. A 19oz (roughly 500ml) bottle of California Baby’s “super-sensitive-shampoo” costs around $24 on Amazon, whereas a slightly larger bottle of Johnson’s No More Tears formula is two-thirds cheaper at about $8.
California Baby is a private company and does not publish its revenue figures, but Iclisoy says an increasing number of parents are making the switch despite the higher prices. “Today, more than ever, consumers are becoming more educated, and we are seeing a major changeover. Originally, the demand was from niche consumers interested in health and wellbeing but now we’re seeing customers switching over in Walmart.”
Iclisoy’s main competition is not necessarily the big corporations but rather the ranks of independent players who make their wares in small batches and sell them online and at local farmers’ markets. More than three-quarters of the $300m US market for premium babycare brands is controlled by companies with a market share of less than 2.5 per cent, according to Euromonitor; many of them are “mom and pop” outfits that run their operations out of a spare bedroom.
Patricia Butter started dabbling in babycare products seven years ago, after her second daughter Evelyn developed eczema, an ailment that had plagued the family for generations. She found that the toiletries she was buying in the supermarket only exacerbated her daughter’s condition. “Everything I bought at the store actually made it worse,” she says. Around the same time, she had started growing calendula flowers on a small vegetable patch in the back garden of her holiday cottage in the Catskills mountains. She soon noticed that her own chapped, irritated hands were much improved after picking the blooms.
“I was able to work out how to extract the flower into an oil and it helped immensely, and then I tried to blend it with butter so it could be turned into a balm,” Butter recalls. “Evelyn was a thumb-sucker, and I was concerned about things ending up in her mouth, so I worked only with things you can eat.”
Butter now sells three products through her Buttercup Naturals brand: a calendula oil for eczema, a balm and a skin cream. She runs the company from her home in Pleasantville in upstate New York, and sources her flowers from a friend, Shannon Algiere, who grows them on a nearby communal farm, Stone Barns. She sells through Etsy, the digital marketplace, and the farm’s gift shop.
The business could be bigger, she says, but she has chosen to keep things small to balance work with family life. She believes, though, that demand for the sort of products she sells will only increase in the coming years. “It’s part of a bigger shift away from the chemical age, the postwar excitement about using artificial for everything. Now people are going back and looking at these ingredients more carefully,” she says.
In Butter’s view, J&J’s babycare business will have to adapt if it is to survive. “As consumers shift to organic, I can see J&J having to change the formula to address parents’ concerns. They will be under constant pressure to do that.”
. . .
In another era, the decline of Johnson’s baby business might have posed an existential threat to the entire company. But J&J, the world’s largest healthcare group with a market value of $336bn, is a very different business from the one that was founded all those years ago. The group now makes the vast majority of its revenues and profits from selling prescription drugs and medical devices such as replacement hips.
Just one of the company’s drugs, for example, the arthritis injection Remicade, generated $3.6bn in sales in the first six months of this year — versus sales of $950m for all its baby products combined. Revenues from all of J&J’s prescription drugs were $16.8bn compared to $6.6bn for the entire consumer business, which includes not just baby products but well-known brands such as Listerine and Neutrogena too. These days, financial analysts who monitor the company for investors spend little time tracking babycare sales and rarely mention the division in their reports.
Yet the numbers belie the real importance of babycare to J&J. The late James Burke, chief executive of J&J between 1976 and 1989, once said that the products had built a “reservoir of trust” in the company. “There is no greater trust than between mother and child. So there’s an element of trust built into everybody’s attitude towards J&J that’s not built into many other companies.”
The same is true today, according to Alison Lewis, the chief marketing officer for J&J’s consumer business. “It’s the first entry point of J&J into a person’s life, because we’re talking about children and young mothers, and that’s the beginning of the J&J relationship,” she says.
Lewis is one of the executives tasked with reviving sales of the company’s baby products. “It’s fair to say that our Johnson’s baby business over the last few years has not been where we want it to be in performance,” she says, adding that there have been 25 new competitors in the premium part of the market since 2005. “We’re still learning as a big iconic brand how to connect with millennial mums who have different demands,” she says. “We need to make sure we are addressing their concerns around natural and organic.”
Yet Lewis, who recently returned from a research trip to the townships of South Africa, also stresses that the switch to premium products is far less pronounced in developing countries. “There are 135 million babies born every year, and 75 per cent of those are in emerging markets, so to say that all millennial mums can afford a product like California Baby is a problem,” she says.
Many of Johnson’s recent product launches have been aimed at parents in poorer countries, such as an extra-large baby wipe intended to take the place of a bath when there is no access to clean water. Far from a cheap product, Johnson’s is regarded by many families in emerging markets as a premium western brand that is worth paying more for than domestic alternatives, according to Lewis.
Even so, J&J’s baby products are not doing particularly well outside the US. International revenues in the first six months of the year were $754m — about $200m lower than five years ago and their lowest since 2007.
In the US, the company has launched a new marketing campaign intended to appeal to millennials, with one TV advert featuring two gay fathers — a nod to the rapidly changing image of the American family. But Lewis is aware that the company needs to do more to repair its reputation on Twitter and Facebook, where many parents swap scare stories about Johnson’s products.
“That’s the way in social media — boom, and the flick of a few fingers — and it’s not always the most educated point of view. It’s a feeling, and it’s a legitimate feeling, but let’s put the facts out there and then let people decide,” she says. “There’s a lot of internet hyperbole out there, a lot of myths, and a lot of ‘mom and pops’ creating stuff in their bathtub.”
Josh Ghaim, chief technology officer in J&J’s consumer division, adds that the company is pushing regulators to implement stricter rules on how baby products are labelled, which he believes could help the Johnson’s brand while hurting its competitors.
“We believe there should be standards, especially when it comes to babies,” he says. “It’s interesting when you hear people say, ‘We don’t use fragrances, we use essential oil.’ Nobody realises that essential oil actually has 40 different ingredients in it. Nobody knows what they are, or whether they are safe.”
The term “natural” is ill-defined. The US department of agriculture stipulates that companies who claim their products are “made with organic ingredients” must be at least 70 per cent organic, but there is no equivalent rule for the term “natural”. Indeed, the vast majority of babycare products that claim to be “natural” use an artificial preservative, such as sodium benzoate, to stop bacterial growth.
Ghaim says that more than 80 per cent of the ingredients in Johnson’s products are “naturally sourced”, but concedes that the way in which they are processed often involves artificial chemicals. One option under consideration is being more transparent about what is in the company’s various lotions and shampoos.
“That’s a big area of focus for us. We believe that every ingredient that’s in the product should actually be on the label or on our website, so you can choose.”
July 28, 2016 5:00 amJohnson & Johnson’s babycare blues
David Crow Share Author alerts Print Clip CommentsThe consumer giant has dominated the babycare market for more than a century. But as millennial parents embrace organic, natural ingredients, the company faces fresh challenges
©Sam Armstrong/Black Dog Represents; Daisy Ellen Floral Design
When Alexis and Gabe Landes found out they were expecting their first child, they began preparing their apartment on the Upper West Side of Manhattan for the big arrival. The nesting instinct soon took the Landes couple beyond the nursery and into the bathroom, where they disposed of all the mass-produced toiletries they owned.MoreON THIS TOPICJ&J to buy Vogue International for $3.3bnJ&J to relaunch baby businessLex Activist investors — hard drugsJ&J to use $18bn pile for acquisitionsIN FT MAGAZINECentral banks are not the enemyWhy food is at the centre of Spanish lifeHow I learnt to love the economic blogosphereFossil fuels have had an aeon’s head startGet your essential guide to the impact of the UK-EU split every day by email.
Exclusive to FT subscribers.Sign up now“Once my wife became pregnant, we thought a lot about what was going into her, and into the kid in utero, so we shifted all the high-volume, corporate stuff out of our home,” says 37-year-old Gabe, who works as a construction manager for a solar-power company. “It was already baked into our values. Even before Alexis got pregnant, we would eat a diet low in meat and buy our food from small, local farms.”
Isaac arrived 15 months ago, “adorable, and a ton of fun”, and his parents were showered — as many parents are, in hospital or via mailing lists — with free samples of baby products made by Johnson & Johnson, the world’s largest manufacturer of toiletries for infants. But they avoided the supermarket shelves stacked with J&J’s bottles and started searching for alternatives that contained fewer chemicals and more natural ingredients.
“We wanted to make the best decisions about everything we were putting on his skin, from shampoo to sunscreen,” says Gabe. They settled on a baby soap made by Dr Bronner’s, one of the early pioneers of natural toiletries. Rather than using Johnson’s baby creams or talcum powders for Isaac’s nappy rash, they opted for pure coconut oil.
The Landes family is not alone. An increasing number of parents in richer countries are eschewing J&J’s products in favour of premium or natural alternatives. The trend has resulted in a marked slowdown in sales of J&J’s baby products. After more than a century as the leading purveyor of infant shampoos, creams, talcum powders and lotions, the company is losing share to newer rivals. In the first six months of the year, US sales of its babycare products slumped to $197m, the first time they have fallen below the $200m mark since 2007.
Speaking to journalists in April this year, Dominic Caruso, J&J’s chief financial officer, attributed the decline to parents buying “premium, natural-type brands”, and promised shareholders that the company would relaunch its range to better cater to their tastes. But J&J faces a significant challenge in winning over younger parents, many of whom mistrust the big commercial brands so beloved by their own parents and grandparents.
The Landes and their friends are part of a generation that tends to be more suspicious of mass-produced food and cosmetics, and of big business in general. Many scour food labels for artificial ingredients, and believe that smaller is better, and organic better still. Their health-conscious attitude is creating problems not just for J&J but for many other brands too, from McDonald’s to Kraft — names that were once a staple of American family life.
. . .
J&J’s foray into the babycare business was unplanned. Founded 130 years ago by three brothers in New Jersey, the company was set up to capitalise on the theories of Sir Joseph Lister, the British father of antiseptic surgery. In 1867, Sir Joseph had published a series of case studies showing that sterile surgical procedures would save countless lives. His work was initially dismissed by surgeons, many of whom refused even to wash their hands before operating, but he found a convert in Robert Wood Johnson, the eldest of the three brothers, a trained apothecary. After attending one of Sir Joseph’s lectures at a Philadelphia medical conference in 1876, Robert joined his siblings in business and, in 1886, they started manufacturing stitches and dressings that were sterile and affordable, helping to bring survivable surgery to the masses.
The company quickly branched out, in 1888 pioneering the commercial first-aid kit to combat a spike in accidents in the increasingly industrialised workplace. It also found success with its medicated plaster, an adhesive patch of rubber that promised to deliver an infusion directly to the skin to soothe pain. Customers liked the product but soon started complaining that the sticky squares were irritating their skin. J&J responded by shipping the product with a tiny container of talcum powder to soothe irritation, prompting a raft of letters from people who found the powder also relieved nappy rash and other skin complaints.©Jessica Barthel
Gabe Landes, New York, with his 15-month-old son Isaac
And so the Johnsons launched “Toilet and Baby Powder” in 1894, the first in a series of products that would dominate the babycare market for more than a century. It came in a tin with an orange-and-white label, carrying a logo that has never changed: the family name in a style mimicking the handwriting of James Wood Johnson, the youngest of the brothers.Once my wife became pregnant . . . we shifted all the high-volume, corporate stuff out of our home
- Gabe Landes, New YorkTweet this quote
J&J went on to build a business that came to occupy a special place in the consciousness of mothers, its products closely tracking changes in maternal health. Around the time of the Baby Powder launch, J&J began selling maternity kits designed to improve the safety of home births, then the most common way of delivering a child.
“It was everything in a box that the doctor or midwife would need to ensure a safe delivery for mother and baby,” explains Margaret Gurowitz, a softly spoken life-long employee at J&J who is now the company historian. “Sterile drapes, sheeting and sutures — and anti-bacterial soap with a nailbrush, so that the birth attendants could wash their hands.” The kits were packaged with small booklets containing tips and advice for young parents.
As childbirth moved into the hospital setting, rendering home maternity kits increasingly redundant, J&J started to develop a range of products to care for babies at home — a nappy-rash cream in the 1910s, a soap in the 1920s and a moisturising oil and lotion in the 1930s and 1940s. Then, in 1954, it started selling its famous baby shampoo, which promised there would be “No More Tears”.
One of the first newspaper advertisements for the product showed a baby girl positively beaming as she had her hair washed — a far cry from the tears and tangles that had hitherto dominated bathtime. “Won’t burn or irritate the eyes,” it promised. “Pure. Gentle. Safe.” The product, then 59 cents a bottle, was a near-instant hit and would go on to become synonymous with bathtime for millions of children across the generations.
“I grew up with a bathroom full of the stuff,” recalls Catherine Everett, the 32-year-old mother of two young girls, three-year-old Lyra and eight-month-old Nina, who lives in Bridge of Allan, a small town in central Scotland. “I vividly remember my parents washing my hair with J&J baby shampoo, before being showered head to toe in J&J baby talc. The smell still conjures up memories of Sunday-night bathtime.” She still washes her daughters’ hair with it because, “I know it won’t sting their eyes, as I used it for years myself.”©Johnson & Johnson
J&J advertisement for surgical dressings (1950)
Even after the birth rate started to decline in the 1960s in the wake of the postwar baby boom, sales of J&J’s infant shampoo continued to rise. The company had started marketing the product to adults, arguing that if was mild enough for babies, then it would be gentle on their hair, too. In the late 1960s, it enlisted advertising agency Sullivan, Stauffer, Caldwell & Bayles to record a series of radio adverts aimed at one of the last groups of holdouts: teenage boys who had ditched the crewcut hairstyles of their fathers’ generation for the mop-tops of The Beatles. It worked: by 1975, the shampoo outsold all other adult and baby brands in the US.
The success of its baby range is the foundation on which J&J built one of the world’s biggest consumer products businesses, with a range including sanitary towels, toothbrushes and over-the-counter painkillers. By 1970, the company’s hygiene and babycare lines were generating more than $280m in annual sales. A decade later, revenues had swelled to $1.8bn, making it the most lucrative part of J&J’s business. In 2010 they hit a peak of $10bn.
. . .
For the past six years, however, J&J’s consumer business has been struggling, in part because of lacklustre sales of the baby range. The company sold roughly $2bn of babycare products last year, about 10 per cent less than in 2010. In April, it announced that it would relaunch the range after US sales in the first three months of 2016 fell to $95m, their lowest in more than a decade. Caruso said the company was losing out in the battle for “millennial mums”, who have been switching to organic, natural products.
Catherine Everett is one such parent. While she uses the company’s shampoo, she actively avoids its other products. “These days we are advised by health visitors not to put too much product on [babies’] skin, as it is so sensitive,” she says. “If I use anything, I look for products with fewer chemicals than J&J.” In an age when healthcare brands are tripping over themselves to market their products as natural or organic, she interprets the lack of any such claim on the Johnson’s bottles as a sign of “how potent the stuff must be”.©Jessica Barthel
Robyn Pashby, Washington DC, with her 16-month-old daughter Alexa
In Washington DC, Robyn Pashby does not buy J&J products for her 16-month-old daughter Alexa, preferring instead to use independently made products from local farmers’ markets near her home. “For many years we’d been shopping at our local farmers’ market for our food anyway, and I started to realise that if we’re going to be so careful about what goes in her body, then we should be careful about what goes on it too,” says the 39-year-old Pashby, who adds that she is keenly aware that not all parents can afford to make the same choice.I became disillusioned by products made with things I can’t pronounce. I’m meant to put that on my baby’sskin?
- Robyn Pashby, Washington DC, shown above with her 16-month-old daughter Alexa
Pashby is particularly put off by the fragrances used in J&J’s ranges — “The scents just smell so fake” — and the long list of ingredients. “I became disillusioned by products made with things I can’t pronounce. I’m meant to put that on my baby’s skin? When it’s so fragile?” It is not just that Pashby is picking alternatives to J&J but that she is using fewer products altogether. “I don’t really use powders or lotions. I might use coconut oil and buy an all-in-one natural soap,” she says, citing Tom’s of Maine (owned by Colgate-Palmolive), which lists its ingredients on its website and also their source.
Pashby says she took her cue from medical experts. “When Alexa was in the neonatal intensive care unit at the hospital after she was born, they just used cotton wipes with water, and that worked fine. The hospital using only water was a big eye-opener for me. My paediatrician said unless she had irritable skin I should not over-bathe her.”
J&J contends that healthcare professionals recommend its baby products more than any other brand. The company says it does more research into infant skin than any other company and that its mild products help to prevent moisture loss.
Dr Jon Hanifin, a professor of dermatology at Oregon Health and Science University, points out that the company distributes many free samples through hospitals. “What happens is they dump tons of it on to nurses, who give it to patients, and then the parents go home and use it,” he says. “Putting all kinds of fragrances on the skin can lead to irritation, and J&J has a lot of fragrance in their products, which doesn’t help.”
His advice to young parents is to bathe their babies no more than three times a week and then to try to lock moisture into their fragile skin with a fragrance-free lotion such as Cetaphil and CeraVe. Such recommendations, however, might not satisfy those who see their avoidance of J&J as a rejection of big business. Cetaphil is made by Nestlé, the Swiss food giant that has been plagued by controversy for years for promoting its infant formula as an alternative to breast milk. CeraVe is owned byValeant, a Canadian drugmaker that has been in the headlines for the past year for sharply raising the price of its drugs.
. . .
In fact, many of the best-known premium babycare brands are controlled by large multinational companies, despite their homey packaging and cute names. Aveeno is the largest, with a 15.5 per cent share of the US baby and infant skincare market, according to Euromonitor. Created in 1945, the brand (whose mission statement declares, “We believe nature has the power to make life beautiful”) was bought by J&J in 1999, helping to hedge against stalling sales of J&J’S own-brand product. Another leading premium brand, Burt’s Bees, is made by Clorox, best known for household cleaning products including bleach (the company name is a portmanteau of chlorine and sodium hydroxide).
The biggest independent manufacturer of natural babycare products in the US is California Baby, founded by Jessica Iclisoy two decades ago. “We position ourselves as for mums who want a natural focus, with no sulfates or parabens,” she says, referring to two of the ingredients most disliked by health-conscious consumers. Sulfates, contained in many shampoos and often listed on the label as sodium laureth sulfate, are chemical detergents that have been linked to skin irritation, while parabens — which some believe affect hormone levels — are used to suppress bacterial growth in cosmetics.
The products are not cheap. A 19oz (roughly 500ml) bottle of California Baby’s “super-sensitive-shampoo” costs around $24 on Amazon, whereas a slightly larger bottle of Johnson’s No More Tears formula is two-thirds cheaper at about $8.©Johnson & Johnson
Advertisement for baby shampoo (1954)
California Baby is a private company and does not publish its revenue figures, but Iclisoy says an increasing number of parents are making the switch despite the higher prices. “Today, more than ever, consumers are becoming more educated, and we are seeing a major changeover. Originally, the demand was from niche consumers interested in health and wellbeing but now we’re seeing customers switching over in Walmart.”
Iclisoy’s main competition is not necessarily the big corporations but rather the ranks of independent players who make their wares in small batches and sell them online and at local farmers’ markets. More than three-quarters of the $300m US market for premium babycare brands is controlled by companies with a market share of less than 2.5 per cent, according to Euromonitor; many of them are “mom and pop” outfits that run their operations out of a spare bedroom.
Patricia Butter started dabbling in babycare products seven years ago, after her second daughter Evelyn developed eczema, an ailment that had plagued the family for generations. She found that the toiletries she was buying in the supermarket only exacerbated her daughter’s condition. “Everything I bought at the store actually made it worse,” she says. Around the same time, she had started growing calendula flowers on a small vegetable patch in the back garden of her holiday cottage in the Catskills mountains. She soon noticed that her own chapped, irritated hands were much improved after picking the blooms.©Jessica Barthel
Patricia Butter, founder of Buttercup Naturals, at Stone Barns Center for Food and Agriculture, upstate New York
“I was able to work out how to extract the flower into an oil and it helped immensely, and then I tried to blend it with butter so it could be turned into a balm,” Butter recalls. “Evelyn was a thumb-sucker, and I was concerned about things ending up in her mouth, so I worked only with things you can eat.”
Butter now sells three products through her Buttercup Naturals brand: a calendula oil for eczema, a balm and a skin cream. She runs the company from her home in Pleasantville in upstate New York, and sources her flowers from a friend, Shannon Algiere, who grows them on a nearby communal farm, Stone Barns. She sells through Etsy, the digital marketplace, and the farm’s gift shop.
The business could be bigger, she says, but she has chosen to keep things small to balance work with family life. She believes, though, that demand for the sort of products she sells will only increase in the coming years. “It’s part of a bigger shift away from the chemical age, the postwar excitement about using artificial for everything. Now people are going back and looking at these ingredients more carefully,” she says.
In Butter’s view, J&J’s babycare business will have to adapt if it is to survive. “As consumers shift to organic, I can see J&J having to change the formula to address parents’ concerns. They will be under constant pressure to do that.”
. . .
In another era, the decline of Johnson’s baby business might have posed an existential threat to the entire company. But J&J, the world’s largest healthcare group with a market value of $336bn, is a very different business from the one that was founded all those years ago. The group now makes the vast majority of its revenues and profits from selling prescription drugs and medical devices such as replacement hips.
Just one of the company’s drugs, for example, the arthritis injection Remicade, generated $3.6bn in sales in the first six months of this year — versus sales of $950m for all its baby products combined. Revenues from all of J&J’s prescription drugs were $16.8bn compared to $6.6bn for the entire consumer business, which includes not just baby products but well-known brands such as Listerine and Neutrogena too. These days, financial analysts who monitor the company for investors spend little time tracking babycare sales and rarely mention the division in their reports.
Yet the numbers belie the real importance of babycare to J&J. The late James Burke, chief executive of J&J between 1976 and 1989, once said that the products had built a “reservoir of trust” in the company. “There is no greater trust than between mother and child. So there’s an element of trust built into everybody’s attitude towards J&J that’s not built into many other companies.”©Johnson & Johnson
Brothers James Wood Johnson, Edward Mead Johnson and Robert Wood Johnson, who founded the company in 1886
The same is true today, according to Alison Lewis, the chief marketing officer for J&J’s consumer business. “It’s the first entry point of J&J into a person’s life, because we’re talking about children and young mothers, and that’s the beginning of the J&J relationship,” she says.
Lewis is one of the executives tasked with reviving sales of the company’s baby products. “It’s fair to say that our Johnson’s baby business over the last few years has not been where we want it to be in performance,” she says, adding that there have been 25 new competitors in the premium part of the market since 2005. “We’re still learning as a big iconic brand how to connect with millennial mums who have different demands,” she says. “We need to make sure we are addressing their concerns around natural and organic.”
Yet Lewis, who recently returned from a research trip to the townships of South Africa, also stresses that the switch to premium products is far less pronounced in developing countries. “There are 135 million babies born every year, and 75 per cent of those are in emerging markets, so to say that all millennial mums can afford a product like California Baby is a problem,” she says.
Many of Johnson’s recent product launches have been aimed at parents in poorer countries, such as an extra-large baby wipe intended to take the place of a bath when there is no access to clean water. Far from a cheap product, Johnson’s is regarded by many families in emerging markets as a premium western brand that is worth paying more for than domestic alternatives, according to Lewis.©Johnson & Johnson
The company’s first factory, in New Brunswick, New Jersey
Even so, J&J’s baby products are not doing particularly well outside the US. International revenues in the first six months of the year were $754m — about $200m lower than five years ago and their lowest since 2007.
In the US, the company has launched a new marketing campaign intended to appeal to millennials, with one TV advert featuring two gay fathers — a nod to the rapidly changing image of the American family. But Lewis is aware that the company needs to do more to repair its reputation on Twitter and Facebook, where many parents swap scare stories about Johnson’s products.
“That’s the way in social media — boom, and the flick of a few fingers — and it’s not always the most educated point of view. It’s a feeling, and it’s a legitimate feeling, but let’s put the facts out there and then let people decide,” she says. “There’s a lot of internet hyperbole out there, a lot of myths, and a lot of ‘mom and pops’ creating stuff in their bathtub.”
Josh Ghaim, chief technology officer in J&J’s consumer division, adds that the company is pushing regulators to implement stricter rules on how baby products are labelled, which he believes could help the Johnson’s brand while hurting its competitors.
“We believe there should be standards, especially when it comes to babies,” he says. “It’s interesting when you hear people say, ‘We don’t use fragrances, we use essential oil.’ Nobody realises that essential oil actually has 40 different ingredients in it. Nobody knows what they are, or whether they are safe.”
The term “natural” is ill-defined. The US department of agriculture stipulates that companies who claim their products are “made with organic ingredients” must be at least 70 per cent organic, but there is no equivalent rule for the term “natural”. Indeed, the vast majority of babycare products that claim to be “natural” use an artificial preservative, such as sodium benzoate, to stop bacterial growth.
Ghaim says that more than 80 per cent of the ingredients in Johnson’s products are “naturally sourced”, but concedes that the way in which they are processed often involves artificial chemicals. One option under consideration is being more transparent about what is in the company’s various lotions and shampoos.
“That’s a big area of focus for us. We believe that every ingredient that’s in the product should actually be on the label or on our website, so you can choose.”You should expect a complete reinvention of every product line
- Jorge Mesquita, Johnson & JohnsonTweet this quote
Going much further than that could prove difficult for a company as large and complex as J&J. When the group committed in 2012 to removing two chemicals that have been linked to cancer in animal studies, formaldehyde and 1,4-dioxane, from more than 100 babycare products, the process took the best part of two years.
“It’s not just about better marketing. If it’s done correctly, it means a totally different formulation. That takes time. Even a small change to a formula can take years,” says Iclisoy.
Jorge Mesquita, who was hired from Procter & Gamble in 2014 to lead J&J’s consumer business, says the company is planning a major overhaul of the babycare business but he is tight-lipped about the timing and details because he doesn’t want to tip off the competition. “You should expect a complete reinvention of every product line and every element,” he says. “It’s going to be a total reset of our business.”
Mesquita believes there is everything to play for — people are becoming parents all the time and J&J is still, he points out, the global leader in infant skincare, with far-reaching consumer research operations and massive marketing budgets. J&J’s plan, he says, “is to transform the business we have today”. The company’s ownership of Aveeno gives it a stake in the natural market, and it recently acquired Vogue, an adult natural haircare company, for $3.3bn.
“One of the things we can learn from them is about the sourcing of products created around natural ingredients,” says Mesquita.
But from the sound of it, J&J is not planning on turning its baby products into an all-natural range. “That’s very important for a subset of our overall consumer group,” says Mesquita, “but we are going to address the needs of all our consumers.”Read the label:
Johnson’s baby shampoo vs the independent organic brand California Baby
Johnson’s Baby Shampoo Ingredients: water (eau), cocamidopropyl betaine, PEG-80 sorbitan laurate, sodium trideceth sulfate, PEG-150 distearate, phenoxyethanol, sodium chloride, glycerin, citric acid, sodium benzoate, tetrasodium EDTA, polyquaternium-10, ethylhexylglycerin, sodium hydroxide, potassium acrylates copolymer, Yellow 6, Yellow 10, parfum
California Baby Shampoo & Bodywash Ingredients: water, decyl glucoside*, lauryl glucoside*, quillaja saponaria extract (soap bark), vegetable glycerine USP*, calendula officinalis flower extract (calendula), viola tricolor extract (pansy), yucca schidigera extract (yucca), aloe barbadensis leaf juice (aloe vera), simmondsia chinensis oil (jojoba oil), hydrolyzedquinoa protein, xanthan gum USP, panthenol (vit B5), pure essential oils of lavandula angustifolia (French lavender) and salvia sclarea (clary sage), phytic acid (rice origin), gluconolactone** (and) sodium benzoate; * = sustainable palm fruit kernel and/or coconut; ** = sourced from corn (non-GMO)A baby-powder lawsuit
The reputation of J&J’s baby products was dealt a significant blow in February 2016, when a jury in Missouri required the company to pay $72m to the family of Jacqueline Fox, whose ovarian cancer had been linked to her life-long use of the company’s Baby Powder.
Lawyers for Fox — who died aged 62, four months before the verdict — said J&J had neglected to inform customers that its talc-based products could cause cancer. Her case is one of roughly 1,000 lodged in Missouri, while a further 200 have been filed in New Jersey.
Before she died, Fox told her lawyers she applied the powder to her genital area regularly, something that is not recommended by J&J, which warns on the label that it is for external use only. Her lawyers argued that the group should have gone further in making consumers aware of the risks, which have been highlighted in more than 20 scientific studies. J&J argues that the studies are based on unreliable data, and points to other research that has found no direct link.
The company has said it will appeal the verdict but, even if it wins, it will be hard to undo the reputational damage. All the parents interviewed for this piece had seen coverage of the trial, and cited it as one of the main reasons they would avoid Johnson’s products.
“There have been concerns raised by mothers — if you go on social [media] feeds, you’ll see that,” says J&J’s Alison Lewis. “What we’re doing is providing the facts that are consistent with the safety of this product and the standards that we have had in place for over 100 years.”
http://www.ft.com/cms/s/0/f919110e-5379-11e6-9664-e0bdc13c3bef.html
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Johnson & Johnson Defendants Say Conspiracy Claims in Talcum Powder Suit a ‘Legal Impossibility’
Jul 28, 2016 | Harris Martin Publishing
COLUMBUS, Ga. –– Johnson & Johnson defendants have attacked claims of fraud and conspiracy asserted in a talcum powder lawsuit, maintaining that such claims are a legal impossibility since a parent corporation cannot conspire with its wholly owned subsidiary.
In a July 21 motion filed in the U.S. District Court for the Middle District of Georgia, defendants Johnson & Johnson and Johnson & Johnson Consumer Inc. further maintained that the complaint “improperly lumps together both Johnson & Johnson defendants –– thereby failing to identify any specific act of misconduct by either….”
Plaintiffs Cammy and Michael Marchetti filed the underlying action, ...
Subscription required, for full story: http://harrismartin.com/article/21147/johnson-johnson-defendants-say-conspiracy-claims-in-talcum-powder-suit-a-legal-impossibility/
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Okla. Talcum Powder Plaintiffs Have No Objection to Defense Motion to Sever
Jul 27, 2016 | Harris Martin Publishing
OKLAHOMA CITY –– Talcum powder plaintiffs with claims pending in Oklahoma federal court have filed a response to a recent motion by the defendants to sever the multi-plaintiff suit, saying they have “no objection to the motion.”
The three-page response was filed on July 19 in the U.S. District Court for the Western District of Oklahoma.
In their original complaint, plaintiffs Mary Robb and Melissa Ann Aguilar argued that the developed ovarian cancer as a result of using talc-based powder products manufactured by Johnson & Johnson.
The plaintiffs said they used Baby Powder and Shower-to-Shower products to dust their perineum
Subscription required, for full story: http://harrismartin.com/article/21144/okla-talcum-powder-plaintiffs-have-no-objection-to-defense-motion-to-sever/
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