German distributor and brand incubator New Flag has planted its flag in the United States.
Under the direction of Anthony Melzi, who began as CEO of North America in 2019, the company has been building a serious business in the country step by step. At the outset of his tenure, his first steps were to erect operational infrastructure in the U.S. and strengthen the American position of Invisibobble, a tentpole brand in New Flag’s portfolio of owned brands that made some U.S. retail progress before Melzi came on board. Ulta Beauty, Target, SalonCentric, Sally Beauty and many more retailers stock the hair accessories brand.
The subsequent step was to introduce additional owned brands to the U.S. The brands New Flag has recently brought stateside are Foamie, a plastic-free haircare bar brand carried by Target and CVS; Urban Alchemy, a customizable professional haircare brand that’s rolled out to Sally Beauty, Cosmo Prof and The Salon by InStyle Inside J.C. Penney; and Natucain, a natural hair growth offering targeting women available on Amazon and set to launch soon on Target’s website. Along with persistent efforts on the earlier initiatives, New Flag is poised to evolve in the U.S. to distribute brands, too.
“I was employee No. 1 for New Flag North America as the CEO,” says Melzi, formerly EVP for global sales and marketing at JD Beauty, the company behind Wet Brush that merged with Goody Products to become Beauty By Imagination. “Fast forward three years later, we have a great team with boots on the ground here, full operational departments inclusive of product development, planning, logistics, sales and marketing, and we are in around 35,000 to 40,000 doors of distribution. We’ve worked with Sephora, Sally Beauty, Cosmo Prof, SalonCentric, BSG, Target, CVS, Walgreens and Meijer. We have pretty vast distribution coverage across all the different channels.”
Privately held New Flag reaches more than 80 countries, has 325-plus employees and, according to Melzi, yields in excess of $200 million in annual sales. It’s headquartered in Munich, but has 10 offices spreading its tentacles throughout Europe and into the U.S. Melzi says the U.S. office, which has 12 full-time employees, is responsible for the largest growth of any office outside of Munich. In his inaugural year with the company, the U.S. division registered nearly 200% growth. Last year, it notched 35% growth, and it’s on track to hit almost 30% growth this year. By year five, the plan is for the U.S. business to generate slightly under $100 million in sales.
In 2010, Niklas Epstein started New Flag when he was 21 years old with his friend Daniel Haffa. In 2012, Haffa’s brother Felix Haffa, who joined New Flag’s management in 2016, founded Invisibobble with his then girlfriend Sophie Trelles-Tvede. One evening, she was attending a “bad taste” party and used an old telephone cord to tie up her hair as part of a silly costume. She noticed it was comfortable to wear and decided to develop Invisibobble with hair ties emulating the telephone cord. In 2019, Trelles-Tvede also joined New Flag’s management. In the decade since its founding, Invisibobble has sold over 100 million hair ties.
“In the next 24 months, our goal is to establish Urban Alchemy as the leader in customization for salons, and Foamie as the leader in sustainable solid haircare in the professional and mass marketplace.”
Abroad, New Flag kicked off with distribution prior to assembling an owned brand portfolio. It distributes roughly 15 brands in Europe, including Pulp Riot, Olaplex, Kristin Ess, Florence by Mills, Color Wow, Vita Coco and Beautyblender. In the U.S., New Flag has pursued the reverse course by kicking off with owned brands prior to diving into distribution. Currently, its U.S. focus is largely on haircare personalization and sustainability with the brands Urban Alchemy and Foamie.
Melzi says, “In the next 24 months, our goal is to establish Urban Alchemy as the leader in customization for salons, and Foamie as the leader in sustainable solid haircare in the professional and mass marketplace.” He continues, “As opposed to an item-driven business, we want to become a brand house.”
Urban Alchemy is sort of like Function of Beauty for hairstylists. Its system consists of three bases—shampoo, conditioner and hair mask—stylists mix with two to three boosters or what the brand calls alchemies formulated for shine, color protection, repair, hydration, volume, density and scalp care. The shampoo, conditioner and hair mask are each $10 for 7.1 ounces while the alchemies are $5 for 10 milliliters. There are pre-filled bottles customers can buy for at-home use that they customize with pumps of the alchemies.
Melzi is bullish on personalization and Urban Alchemy’s concept delivering it. Speaking of personalization, he says, “I personally think this is going to be the biggest message over the course of the next two to three years in haircare. She [the consumer] wants everything as fast as she can get it and personalized for her in regard to her skin tone, hair type and age. We are at a time where we are breaking down all those barriers for her, and hopefully New Flag is able to provide solutions.”
“I don’t think solid haircare is a trend. I think it’s emerging today and will be coming on fast and furious like a freight train.”
The U.S. division of New Flag tweaked Foamie’s packaging to suit American haircare consumers. “We wanted to show an elevated, but fun and inviting storyline while reenforcing claims centered on inclusivity for all hair types. The brand and the products can be used for all hair types,” says Melzi. “It’s 50 SKUs. There’s no other brand in the solid haircare market with such a robust line.” On Foamie’s site, its bars are priced at $10.
Melzi acknowledges solid haircare bars aren’t the easiest products to sell because they require consumers to modify their habits. “Our entire lives, we’ve bought liquid shampoos and conditioners out of plastic bottles,” he says. “The solid haircare market is changing both of those. It’s the elimination of plastic, and it’s also changing the delivery system of the actual product.”
However, he’s confident solid haircare will take off in the U.S. because it’s done so in Europe. “The market in Europe is experiencing hockey-stick growth,” says Melzi. “I don’t think solid haircare is a trend. I think it’s an emerging today and will be coming on fast and furious like a freight train. I just think we’re 24 months ahead of it.”
New Flag has other owned brands that could appear in the U.S. Melzi mentions Neqi, a brand that premiered in 2020 with hand cleansing gel, and Free Eve, an imminent female intimacy brand. The challenge for New Flag is designing brands that make sense for several countries. “Not all markets are the same,” says Melzi. “Americans tend to look at Europe as one big continent with everyone playing together, but it’s not always that way. What works in Italy may not work in France or Spain or the U.S. When we create brands, we try to keep in mind the idea of being able to customize them for all markets, inclusive of the United States.”
For its distribution arm in the U.S., New Flag is interested in partnering with both international and domestic brands. Melzi emphasizes its distribution deals aren’t merely about sales support. “We take a holistic approach,” he says. “We support marketing, the operational component and product development. We really do become an extension of the brand, and that’s different nowadays to what brands are accustomed to. We are very judicious about who we work with.”
Melzi points out the long-term objective for New Flag is “establish ourselves as a destination in the market for owned brand innovation and a product development pipeline as well as distribution.” In the U.S., he says, the company wants to “play next to any of the juggernaut holding companies and public companies.”
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