Narrow-Moat Beiersdorf's Mass Market Brands Fare Well in a Challenging Environment

Beiersdorf’s strategy, C.A.R.E.+, focuses on three key growth drivers: skincare prioritization, white-space penetration, and an acceleration of digital transformation. Vincent Warnery, the new CEO appointed in May 2021, has emphasized his continued support for the strategy, having been part of Beiersdorf’s executive board at the time it was introduced in 2019. In the past few years, Beiersdorf has put the strategy into action by focusing its innovation program on the skincare category, with an emphasis on facial care, as the fastest-growing subcategory. We believe this strategy is wise, given that the facial care segment features both faster growth and higher margins than the body care segment, in which Beiersdorf, and its flagship brand Nivea, have been historically over-indexed.