Michael Kuremsky is a 30-year brand and marketing veteran. He has extensive brand building, large-scale innovation, and leadership experience. Michael worked for 23 years in Brand Marketing and General Management with Procter & Gamble, specializing in the Beauty and Personal Care businesses. During his tenure as P&G’s Global Vice President and Brand Franchise Leader of Skin Care, he led Olay to become the #1 facial moisturizing brand in the world. He has earned more than 200 awards for his work from multiple advertising and marketing professional associations. As a Brand Strategy Consultant, he has advised many companies, from Fortune 500 to small businesses. Michael also works as a Professor of Brand Strategy at Xavier University in Cincinnati, Ohio. In 2021, he became an Advisor at CannGoods where he continually guides the firm in the right direction with conversations like the following.
What excites you the most about the CBD industry? And do you see any parallels with other industries and trends?
The CBD industry is a provocative one, and that’s exciting to me. CBD is a conversation starter unto itself because of its link to cannabis. My experience tells me that an ingredient that has people talking is one with great potential.
Many new ingredients come and go, and you don’t know what is going to stick in the consumer’s mind and heart. I think one of the things about CBD is that it has real potential to stick. If it can be connected to clear benefits for the consumer, I expect it to do well in the market. A lot of consumers already use it, then claim how much they like it. It has already shown the ability to generate a cult following. CBD wasn’t just a flash in the pan for one or two years, so I think that bodes well for a lasting impact in the industry.
What I know the best is skincare, especially facial skincare. Some skincare ingredients that have stood the test of time have grown into mega-iconic technologies and continue to be what consumers look for. The consumer knows the reputable and effective technologies in skincare like vitamin B3, retinol, or hyaluronic acid to name a few. These ingredients have been well proven with numerous studies, research, and credibility behind them, so they have stood the test of time. Consumers are still looking for them, 25+ years after they debuted on the market. I think CBD could have that same performance-oriented clout if the industry treats it seriously and understands its ability to improve the skin and/or offer important skin benefits.
What opportunities do you see in the nascent maturing industry for brands, based on your beauty and personal care industry experience?
I don’t know if any of the big brands have actually launched a CBD-infused product yet or not, but the retailers that sell those big-name brands have now started to get into it. I have seen CBD products in Kroger, for example, and other retailers. I do believe that the big brand companies are interested in CBD, but they have to figure out how to do it right. One important area will be the regulatory side of the equation and watching how the FDA treats this emerging area. Understanding what the beauty/cosmetic benefits of CBD are will help leading beauty brands determine how best to position it in the beauty market while steering clear of regulatory issues. I think the market-leading companies in beauty, like L’Oreal, P&G, J&J, Estee Lauder, will continue to be cautious because they have a lot more to lose than small brands.
I believe the breakthrough for CBD will be the identification and proof of a tangible, cosmetic benefit for the consumer that he/she wants and then can experience. Conducting testing and working to publish relevant data as to the ingredient’s benefits can be the springboard that will push technology into the mainstream. But having said this, given CBD’s health-oriented profile, companies will want to be sure they have identified cosmetic benefits to commercialize.
Let me give you an example. One of the benefits that are often talked about with CBD is the reduction of inflammation in the body. A claim to reduce inflammation is in the health and drug-related space, and as such, the FDA is going to be interested in products that make that type of claim, especially if it comes from a big, influential brand.
A mainstream beauty brand is likely to steer clear of the inflammation space but instead might be able to show that a CBD ingredient cocktail can reduce the appearance of puffiness on the skin. “Puffiness” is a skincare word; consumers might say “my skin or eyes look puffy.” So an approach like this could be interesting for a facial skincare brand.
Also, there is a huge market for sensitive skin products. More and more products are being made with natural, organic, and clean ingredients that help reassure the consumer that they will be easy on the skin, especially sensitive skin. Consumers these days are much savvier and discerning about what they will put on their skin. There are higher standards now. So can CBD be one of the answers to this trend; eg., calming to the skin, being gentle, soothing, helping improve skin in a natural way, or helping skin to not react as much to some of the chemicals that are in products? I think these routes could be very interesting to explore.
I see a big opportunity for a company like CannGoods to become a provider of consistent high-quality formulas and products in this space – products that are highly credible and can prove a level of trusted quality which meets the high standard specs of big brands while always operating within any relevant regulations and industry best practices.
How does the mature brand think through the development and innovation process for the long term to succeed?
I think mature brands really need to be investing for the long haul. They can significantly benefit from step-change innovations, ones they’ll be working on for three to five years before they bring it to the market. For example, they could be working on a meaningful new molecule that will give noticeable improvement when the consumer uses it. This new technology “chassis” can spin off all sorts of new products for the five years following. So if mature brands invest in harnessing CBD for meaningful consumer benefits, and if they figure out how to commercialize CBD in a way that consumers will embrace it and pay a premium for it, then there is long-term potential.
I do think there are other ways to innovate without the need for a step-change in performance. Clean ingredients/labels are a newer innovation space for consumers who prioritize clean, more sustainable lifestyles. This consumer group does not want to use chemicals or products with “unnatural toxins” on their skin, and they want products to have a simple and shortlist of natural ingredients. So this is another space CBD could be part of because it is a natural ingredient.
What is your advice for small brands looking to stand out in a crowded market or when the big brands start to get into the market?
There are a few things. For one, they need to build a whole brand story instead of just focusing on the technology or product ingredients. They need to bring distinctiveness to their brand experience, to become known for something unique. As small brands, they can be a bit riskier in staking out a differentiated position vs. big brands.
The second thing is taking advantage of the way they go to market. Anyone can be in business these days. Small brands can take advantage of resources such as influencers and scaled e-commerce to create a viable business. Being flexible and nimble within the digital marketplace with the right influencers and easy online buying can give a small brand the leg up. The speed with which small brands can get to market is also of note. Smaller brands can go much quicker to market than the big companies can, and they can use that time to their advantage. Big brands need to get the big retailers on board, convincing them to dedicate the needed shelf space while also readying a high-quality supply chain and building launch inventory. Small companies with nimble capabilities simply don’t have those complicated hurdles and can move quicker.
Small brands do need to avoid certain pitfalls. While the speed to market is key, they need to be careful that they are not skipping the most important steps on the way. In terms of cosmetics, if a product is going in your hair or on your body, the whole experience of how it smells looks or feels, is incredibly important to the consumer. Something sad but true is that so many products go to waste. You have probably heard of the Product Graveyard. What I’m referring to is that drawer or cupboard full of once or twice-used products that the customer doesn’t think worked well or fast enough (maybe it didn’t feel good on her skin or they didn’t like the smell, etc.) Customers love to try new things, but as soon as they notice, “Oh, this feels sticky,” that’s it. They are not going to use it again.
The bigger brands have much more sophisticated capabilities to prepare for a launch. So small brands can’t just go to market with a product that is just good enough. Small brands have to figure out their suppliers, supply chains, and who the right partners are to make consistently high-quality products. You have to build your network and protect it so you have the right relationships, systems, and legal departments in place to support your product line.
In the end, if a small brand can organically grow big enough, one of the big players may want to scoop it up and acquire the business. If you can get to the $20+ million range then your business becomes interesting to companies like L’Oreal, Estee Lauder, or P&G.
For part 2 of the interview click here