‘A leapfrog forward’: €60m Beiersdorf tech centre to sharpen competitive edge, says senior exec

Announced late last year but in the planning for four years, Beiersdorf’s €60 million investment would see the completion of a technology centre built at its Hamburg site by the end of 2024 – providing existing R&D, production, packaging and marketing teams a space to collaborate and the means to fast-track innovation.

The tech centre would be focused on formulation upgrades, including switching out preservatives, using more natural ingredients, working more with actives, and developing formulas that targeted the skin microbiome. But it would also be sharply focused on packaging re-design and innovation with sustainable and recycled materials, as well as dedicated to incorporating the latest digital technologies in all stages of production.

Beiersdorf tech centre to provide end-to-end manufacturing, collaboration and digital thinking​

Speaking to CosmeticsDesign-Europe about the tech centre, Harald Emberger, senior VP of supply chain and member of the executive committee at Beiersdorf, said the over-arching goal of the development was “severalfold.”​

“The first aspect is really [to ensure] the best possible end-to-end industrialisation of our product and ideas and outcome of the research work we have with our consumer insights. And I really say end-to-end for the capability needs; to go from process to filling to packing to shipping, especially in modern times,”​ Emberger said.

“The second aspect is to collaborate, work and have the facilities and space to collaborate with suppliers, customers and consumers to work on new concepts and superior concepts. And the third aspect is to take us into the digital space; to provide the capabilities and the space to work with robotics, AI and other technologies for future process development and aspects which we can’t do at the moment.”​

One-third of Beiersdorf tech centre will be ‘collaboration space’​

The centre, he said, had been designed in such a way that one-third of the total space was dedicated to collaboration – a move especially important in today’s beauty and personal care category.

“In the future, we will not be able to fulfil all the changes, requirements, fashions and trends by ourselves, so we will have to rely more and more on our suppliers, customers and consumers to get insight or ask them to help. So, we’ve purposely designed that in.”​

Whilst Beiersdorf already extensively collaborated with its suppliers and other partners, this dedicated space within the tech centre would enable collaboration to become a deeper part of business operations and build talent where and when it mattered, Emberger said.

Encouraging more outside and internal collaboration would then see Beiersdorf ultimately able to create “a new horizon on the way we make product”.​

‘Future-proofing’ Beiersdorf for rapid beauty and retail change ​

Emberger said the technology centre was about “future proofing”​ Beiersdorf in a rapidly changing beauty and personal care market where the pace of innovation was speeding up drastically and the retail environment morphing.

It would enable the company, for example, to cater to rising needs in an increasingly digital retail environment, he said. “Especially with the rapid change in the e-commerce market in markets like Asia where you have product moving literally every week, these sorts of capabilities are critically important.”​

Catering to the boom in beauty e-commerce, which was worldwide, he said, required more frequent product news, lower volumes, but more personalised offerings. “For us, time to market is very critical. And the more capabilities and capacities you have, the faster you can be.” ​

The new ways of working within the tech centre, Emberger said, would also see the company transition from “a very sequential way of working to a parallel way of working” ​– accelerating the concept-to-product, therefore “bringing a competitive edge”.​

Typically, in the beauty and personal care space, he said fundamental innovation happened every three or four years; Beiersdorf wanted to half that timeline via this new tech centre.

‘A leapfrog forward’ – added consumer benefits and better brand building ​

The centre would also help steer Beiersdorf away from its traditionally formulation-heavy R&D focus, he said.

“In our history, we focused more on the formulation itself and so for us this is a leapfrog forward in having end-to-end capability. Sometimes the consumer benefits are not about the product itself, but the packaging or how you apply it or the way you recycle it – there are different consumer benefits to a product.”​

Sustainability, he said, was one core focus the tech centre would enable Beiersdorf to consider from concept to product more closely – either via the formulation, packaging, processing or otherwise.

Emberger said that, overall, Beiersdorf would also be better placed to expand and edge into emerging beauty markets once the tech centre was up and running.

“Especially in emerging markets, it’s about brand building. How do you build a brand in a new market? How do you position them in the right way? There’s a lot of incremental changes to the product positioning that you can do quicker through the tech centre, so it will help us build the brand globally and defend the market share of the brand in existing markets because we can be faster with new innovations.”​

“…It’s about competitive edge to hold market share and gain market share,”​ he said.

Stefan De Loecker, CEO of Beiersdorf, described the investment in the centre as a “strong signal”​ that demonstrated the strength of the company to continue its success through innovation.