Kevin Gallagher, industry consultant with Kevin Gallagher Consulting LLC and formerly of ingredients supplier Croda, here gives expert insight into how he feels the industry is currently failing to protect its own supply chain properly, and this can be tackled.
“The most important thing is for the entire industry to work constructively together,” suggests Gallagher.
“Beauty companies need to accept that chemical ingredient suppliers are important to innovation, and the future of the beauty industry, and even their individual companies. This is easy to say, but maybe not so easy in practice.”
One supply chain: ingredients suppliers need support
One trend that Gallagher flags that he has seen over the decades is that beauty companies increasingly rely on ingredient manufacturers for ingredient and performance innovation, and regulatory support.
This has allowed the beauty marketers to concentrate more of their talents and energies in the downstream market, which Gallagher thinks is a good thing.
“They focus on making great beauty products and creating brands with strong emotional connections to consumers. This is great, and in my opinion, has helped to accelerate innovation and business success.”
However, he suggests that to keep up this level of innovation, the rest of the industry should aim to support these ingredients suppliers and respond to their needs.
“Maybe the downside of this increasing division of responsibilities and focus is that the beauty companies may be less sensitive to the need of the ingredient makers for support, particularly in the face of increasing regulatory pressure,” he suggests.
“Focus is great, and has continued to make our beauty products better, and brands stronger, but we need to remember that we all share the same concerns, and protecting the supply chain, and particularly protecting our ability to create successful new ingredients is crucial.”
Gallagher explains that in Europe, we have a situation where the beauty companies are represented by Cosmetics Europe, and the ingredient companies are represented by EFfCI.
This division, he believes, does not provide the strongest positions or the best outcomes for support of supply chain, and preventing overly restrictive legislation that could prevent ingredient innovation.
“There was at least one situation, a few years ago, where EFfCI took legal action to protect their position, and Cosmetics Europe was strongly against it, because it had other consequences for the beauty companies,” he explains.
“It would be better, in my opinion, if one organization could represent both beauty companies and their supply chain.”
What about in the US?
Gallagher suggests that the the Personal Care Product Council (PCPC) in the US has a better model than its European counterpart, because does represent both beauty companies and the supply chain.
“The work done by PCPC to better align and harmonize with Cosmetics Europe on global issues (a very positive goal), risks reproducing the divided representation of ingredient suppliers and beauty companies that will lead to weaker supply chain protection and support,” he suggests.
Working together: a plea for collaboration
Gallagher emphasises that he would like to see the Cosmetics Europe body working more closely with the supply chain behind the household beauty brands and SMEs at the front end of production.
“Abraham Lincoln said “A house divided against itself, cannot stand”. We are stronger when we work together,” he says.
“Beauty companies may not feel as though they have a lot in common with chemical manufacturers, but they do.
“While ingredients represent a small fraction of the cost of most beauty products, they deliver much of the value and performance.”
He concludes by suggesting that innovation is essential for beauty’s continued success, and it should be promoted and protected across the supply chain.
“The desire of consumers to look younger, and appear more attractive is unlimited. It creates the consumer needs that drive innovation, and the continued creation of better beauty products, and more powerful and important consumer brands,” he says.
“Let’s make sure that we preserve this innovation, and the future business success that will come with it, by working together and protecting ingredient innovation.”