From head to toe, J&J is trying to reconquer the baby-care market

It’s a high-stakes corporate gamble, full of peril: Johnson & Johnson has turned its iconic, golden-hued baby shampoo clear. The move is part of a sweeping plan to overhaul the company’s struggling namesake franchise. J&J has remade its Johnson’s baby product line, cutting out chemical dyes and adding natural ingredients like coconut oil. It has updated its packaging and rolled out a new digital marketing campaign. And it’s trying to reconquer the baby-care market it has dominated for more than a century.

In recent years, that market has changed. Many new parents, millennials looking for natural ingredients, have come to view Johnson’s as old-fashioned and chemical-laden, according to current and former employees and industry officials. Younger rivals like California Baby, Honest and Earth Mama have been able to gain a foothold with young parents, building up sales in part by leveraging the growing influence of parents online who recommend organic brands.

Johnson’s baby products have lost more than 10 percentage points of share in the U.S. over the past five years, according to Nielsen. Johnson’s now has a market share just under 37 per cent—still the largest in the market, but down significantly from its heyday. Johnson’s—J&J’s flagship baby products line—accounts for only about $1.5 billion of the company’s $76.5 billion in yearly sales. J&J gets most of its revenue from its higher-margin prescription-drug and medical-device businesses. But Johnson’s significance extends well beyond the revenue it generates.

Johnson’s is the only product line in the US that carries the company name. Many consumers come to know—and trust—J&J through the brand. That trust spurs sales of other products. Some J&J employees in other parts of the company refer to Johnson’s as the “trustmark”.

Johnson’s baby is nearly as old as J&J itself, a side-effect of one of the fledgling medical-supply business’s first products. The company, founded in 1886, sold medicated plasters—bandages that delivered medicine through the skin—which were painful to peel off. So the firm’s chief scientist sent powder to customers to soothe their irritation. Soon, parents discovered another use: diaper rash. Shortly after, in 1894, the young company launched Johnson’s Baby Powder.

In the decades following, J&J created more baby products, including a lotion to comfort a newborn’s skin and a shampoo that wouldn’t irritate a child’s eyes. Johnson’s popularity spread further in the 1960s, 1970s and 1980s, as J&J brought the franchise to emerging markets like China and adults began using the products, too.

“If you ask what does J&J mean to you, the majority would tell you it’s Johnson’s Baby,” says Jorge Mesquita, who runs the company’s consumer-health business. “This brand is the face of the company. So for us, it’s incredibly important to restore its relevance and preserve its image.”

Now, J&J is trying to catch up. To regain its baby-care perch, the company will need to overcome a risk-averse corporate culture that has been slow to embrace change. It will need to take on its smaller, nimbler rivals. And it must get better, fast, at marketing and selling its products online, an area in which the company has lagged.