Why Beauty Brands Are Struggling to Develop New Products | The Business of Beauty, BoF Professional

NEW YORK, United States — The “what’s new” spot on the beauty store shelf might soon look a bit bare.

Beauty brands and retailers rely on a steady drip of new products to keep customers coming back to stores and e-commerce sites. But the products debuting today were set in motion well before the pandemic. Once those run out, experts say, the chaos caused by Covid-19 at every link in the beauty supply chain will start to sink in, with shortages of key ingredients and even packaging snarling up the research and development process.

So while brands may be itching to roll out new products geared toward the realities of Covid living, from maskne-tackling creams to soothing face products and blue-light-blocking skincare, securing the right supplies might be difficult. Many companies are focused on keeping their existing products in stock.

“From a product development/launch standpoint, there is certainly less momentum versus years past,” said Daniel Granatell, managing director of Grant Industries, a company that develops and manufactures ingredients used in personal care products. “Most brands are still producing hero [and] best-selling products, but with the focus being on preservation mode and not new product innovation growth mode.”

Many beauty and grooming companies have moved product debuts to 2021, which means the key end-of-year shopping season will be light on splashy launches. Jessica Richards of Shen Beauty, a retailer that focuses on up-and-coming and luxury brands, says most of the holiday launches she was expecting have been cancelled.

Brands that do want to get new products in front of customers during the pandemic are having to get creative. Formulators are finding new uses for ingredients used in heritage lines to help close the gap. Think adding a “Tropical Twist” scent option to an existing body wash line. Refreshing a formula or adding an ancillary product in an established collection is a way to offer something “new” without having to source novel ingredients or materials.

Others are shaking up how they make and package their products. The skin care brand Retrouvé was able to go forward with its Dermal Defense Hand Cream by thinking outside the box, so to speak, forgoing its outer packaging and shrink-wrapping the container.

“My new mantra is, ‘Just get it done,’” said co-founder Jami Morse Heidegger.

Trouble in the Supply Chain

Mandated shutdowns and the need for germ-killing goods created a perfect storm for the beauty supply chain. Take packaging: when every retailer rushed hand sanitiser into production, they created shortages of pumps, bottles and other containers needed for other products, said Charlene Valledor, product developer and president of LA-based incubator SOS Beauty.

The coronavirus also hit at a time when many raw materials are typically harvested.

“Covid-19 striking in spring disrupted the cultivation efforts of many specialty ingredients used in high-performance beauty products,” said Jared Reynolds, a cosmetic chemist and founder of two hair-loss-targeting brands, Zenagen and Actiiv.

He explains this had a domino effect for companies that are now finding themselves having to compete for limited supplies, particularly from China and Europe, which face longer lead times due to travel and importing protocol. One example of this was an ingredient used in his Zenagen line, a green tea extract harvested in Asia. “[It] was unable to be produced due to the supplier being shut down. When the facility began processing fragrances again, the lead time was tripled.”

Other manufacturing elements have been impacted as well. Joanna Vargas of Joanna Vargas Skincare ran into a problem sourcing a component for her Magic Glow Wand, a massaging facial device, earlier in the year. She opted to delay the product’s launch by three months rather than attempt to find new suppliers.

“Relationships with our manufacturers, vendors, and partners are very important to us,” she said. “We didn’t want to pivot to new [ones] just to expedite our bottom line by a month or two.”

Getting It Done

Big brands have advantages during a shortage. They are better able to pay higher prices for ingredients and can jump to the front of a manufacturer’s queue by placing a large order.

Plus, they often have more runway to work with. Estée Lauder-owned Aveda has its launches planned for the next 12 months, giving the brand some wiggle room, said Christine Hall, vice president of research and development.

“We are also building in more time to our timelines” so Aveda can ensure a regular flow of new products, she said.

Small brands have flexibility on their side. When haircare brand Seen was unable to secure enough of the pumps it planned on using for its fragrance-free shampoo and conditioner, it went with a different colour at the last minute. A bigger company might not have been able to make a switch like that so quickly.

Brands that source locally have a leg up as well. Bradley Ryan, founder of the men’s grooming brand Undercover Man, credits his recent success to the use of locally-sourced ingredients pomegranate oil and beeswax.

Credo doesn’t foresee a dip in the launches coming into its stores in the coming months. That’s partly because the retailer carries “clean” and sustainable beauty brands, which founder and COO Annie Jackson calls “nimble” because they don’t rely on fancy packaging and they “tend to source domestically and don’t have to factor in long transit times and other restrictions that can be currently impacted by Covid.”

Expect Fewer Claims

Testing is another obstacle. Safety standards must be met before a product hits the market — but clinical testing needed to make claims such as “90 percent of users say they see a reduction of fine lines” has slowed due to the pandemic.

That means brands will have to wait longer before they can tout their new products’ benefits, a particular conundrum in skincare, where the promise of innovation is a key selling point for many brands.

“Most third-party testing facilities closed — and the one that was open in the US had a very long waitlist,” said Tamerri Ater, product development director at Versed Skin Care. “We’ve identified back-up testing facilities and padded our timelines accordingly as best we can.”

The situation led cosmetic chemist and Founder of BeautyStat Cosmetics Ron Robinson to launch his new “Universal C Eye Perfector” in early June without the clinical testing to prove its efficacy, a move he called “frustrating.”

“We had completed our safety testing as well as in-house performance testing prior to launch so we knew the product was safe and effective … [But] we wanted that third-party validation,” he said. A four-week test involving 31 subjects was completed in late July, and the product’s messaging was updated to include several claims, including that “90 percent showed improvement in the look of crow’s feet, fine lines and wrinkles.”

Help Is On the Way

Experts see many of these issues resolving themselves as the pandemic is brought under control. The boom in sales of certain products is also likely to spur investment in the resources needed to speed up the pipeline.

“There has been such a renewed interest in wellness, self-care, and sustainability — I think you will see real innovation in the next year,” said Dan Langer, president of the hair-care brand R+Co.

Vargas predicts the dips in R&D will end up bouncing back, and that the industry can make do until it does.

“It’s not time to reinvent the wheel for marketing’s sake,” she said. “I think good quality, efficiency and simplicity will win in the end.”

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Compiled by Rachel Deeley