The story of the Milan-based Luigi & Felice Castelli shows how complicated it is for a distributor to succeed in the cosmetics arena; having to pay attention to a number of different factors ranging from a constant research for new products and active principles to a growing demand for services. When Luigi & Felice Castelli started their business in Milan, Italy as nowadays we know it wasn’t even born, having the ultimate war for independence concluded just three years later. Now that the company, whose specialization is providing producers with a large offer of cosmetic ingredients, has broadened its customer base all over the Peninsula, its management is planning to launch new initiatives on the other side of the Alps by facing a series of previously unexplored markets. In his interview, Luigi & Felice Castelli’s Ceo Aldo Ravanelli tells Kosworld how.
First of all, Mr Ravanelli, would You briefly describe Your company’s major prerogatives?
The establishment of Luigi & Felice Castelli dates back to the 19th century since the brand was founded in 1868. Throughout its history the company has developed a strong specialization as a distributor in two major sectors. The first one is obviously represented by cosmetic items and this is where the company has been playing a prominent role since the very beginning. The latter is the food and beverage industry, in which Luigi & Felice Castelli can be considered a newcomer. As a dealer in the cosmetics arena Luigi & Felice Castelli can today serve hundreds of customers on the entire Italian peninsula: producers with whom we created solid forms of partnership over time.
What are the milestones of Luigi & Felice Castelli’s activity and how did Your portfolio evolve with time embracing new products and solutions to better satisfy Your customer base?
Since 1987, when Luigi & Felice Castelli was acquired by the present management, the company has been concentrating its efforts on widening its entire product line. We kept and still keep a very strong focus on cosmetics’ specialties and innovation is definitely a keyword for the firm’s business. Our product portfolio has been broadening with time, in order to include nearly every category of cosmetic ingredients, from silicone to pearls and then again ranging from jelling agents to active principles, special surfactants and, last but not least, polymers. In very recent times Luigi & Felice Castelli signed a couple of important partnership deals that could result in new market opportunities. The first one with Innospec, a special surfactant, emollient and conditioner global producer. The other one with the Japanese Iwase Cosfa, whose offer is mainly based on a number of highly innovative raw materials and whose brand has been on the market for more than 80 years.
What is today the food and beverage segment’s market share in Your overall portfolio?
As I previously said, we added the food and beverage business to our entire product line in very recent times and thus it does only represent a minor share of our business. 90% of our revenues, so far, originate from the cosmetics arena; whilst food holds today a 10% share but fast growing.
What are the major key-elements for succeeding in the cosmetics distribution business?
At Luigi & Felice Castelli we believe that distributors who deal with cosmetics must have very specific skills to allow a wider research for better products and innovative solutions. Also, to be able to deliver our customers the products they need in a correct way and thus facilitating a formulator’s duty definitely represents a competitive advantage in a challenging scenario. From these points of view Luigi & Felice Castelli is very well prepared, having hired professionals with 20 years of experience in the cosmetics business at least. Service is another distinguishing and differentiating aspects. And to us service implies the capability to provide immediate answers to customers’ requests together with fast deliveries and an always updated technical documentation. That’s also one of the reasons why we invested a relevant budget in our warehouses where we keep a large amount of stocks to better and faster fulfill the customers’ needs and orders.
What are the most critical issues Your company is nowadays to face on the global markets?
Of course the economic crisis, both in Italy and worldwide, is heavily impacting on cosmetic producers’ commercial strategies. The global market thus appears divided and polarized with big brands and names on one side, strong enough to succeed with their product portfolio; and on the opposite side the small and medium firms that strive to compete with a price-based policy most of all. But another aspect I would like to point out is that finished products stocks are decreasing worldwide and this forces our customers to speed-up their production processes and cycles when orders come in; on the other hand avoiding the risks of an overstocking. This is one of the reasons why a distributor needs to have a wide range of raw materials at hand in its warehouses: distributors must in fact be ready for immediate deliveries of ingredients to their customers.
Are You planning to develop new strategies to compete on the international markets as well?
Two years ago Luigi & Felice Castelli decided to invest in the food and beverage market, which together with cosmetics represents one of our country’s main specialties, by hiring a series of experienced professionals in the segment. Results are so far proving us right, since we have already seen an important increase of our revenues in the sector and signed a few distribution agreements with first-class players in the arena. Besides that, together with a local partner we also established a new company in France, dubbed Ingratech, focused on distributing cosmetic ingredients in the country. In the next future we are planning to expand our product portfolio in the République.
What kind of strategies You have in mind to evolve and increase Your revenues in the future?
We have no revolution in mind, but we do aim at a constant evolution instead. This means Luigi & Felice Castelli’s target is to become even more specialized with time than we are today; paying attention to such issues as customer services and flexibility, to manage any kind of event. What we do not have in mind is to hire new specialized employees: for the moment our team is complete and perfectly running.
From the 19th century to the new millennium
Luigi & Felice Castelli was founded in 1868 and since then it has always been active in the marketing of chemicals providing the highest quality service. Headquartered in the centre of Milan – in the very heart of the world-renown via Brera, famous for its Italian-style boutiques – and with its warehouse just a few kilometres away from the city center, Luigi & Felice Castelli offers a variety of services to satisfy even the most demanding customer. The company has been specialising for many years in the distribution of raw materials and active ingredients for the cosmetic, pharmaceutical, fragrances and flavour industries. UNI EN ISO 9001 certified, Castelli employs three qualified salesmen with an excellent technical background as well as a deep knowledge of the market acquired throughout the years. Thanks to this qualified sales force and a single agent working in the Lazio region, Castelli can guarantee a thorough assistance on the whole Italian territory where the company has more than four hundred customers and many other contacts with potential customers. Castelli’s staff is able to assist customers giving them all the answers they may need thank to a state-of-the-art computer system and to the help of consultants who add the already numerous information the suppliers give the company with technical information and formulations. The steady increase in the number of the customers and the growing interest of new manufactures willing to choose Castelli as their distributor prove the appreciation the market grants the firm.
Cosmetics distribution
Three are the guidelines that Luigi & Felice Castelli has chosen to describe the way the Milan-based company has always carried its business on, on the pages of its official institutional Internet site:
Distribution: Establishing commercial relations with those producers interested in operating on the market on a long-term basis; selling only products of the suppliers we represent, with products always kept in the original packaging which prevents altering them; exchanging technical and commercial information with producers to create a team that operates on the market with a shared commercial policy.
Specialisation: Castelli chose to concentrate its activity on few fields with exceptional results which has led the company to develop a deep knowledge of them.
Customer service: A deep knowledge of the above mentioned industries and well-established trade relations with leading suppliers are a major asset to offer top quality service.
by R.Carminati