An Insiders Look: The Business of Ingredients

I spent twenty years in the cosmetic ingredient business, most specifically in the naturally-derived, natural, specialty, premium space and the entire experience was eye-opening.  Between my on the job experience and the skin biology and ingredient chemistry courses I took, I learned a ton.  It wasn’t until stepping out of the business (we sold the business in January 2017 to global specialty powerhouse Azelis) that an entirely new level of clarity hit me. And that clarity fueled my desire to launch products that were purposeful, effective and used the best that science and art had to offer.

Fifteen years ago, when the natural trend really started to pick up speed, our company was more than ready to meet the demand.  The overwhelming majority of our ingredients were naturally-derived (or 100% natural) so we were fortunate to see business start to really boom.  We had excellent alternatives to sodium laurel sulfate and parabens, and witnessed our ingredients make it out of the niche (we now call them indie) brands to mainstream premium cosmetic and personal care brands.  While it was wonderful to experience this kind of business growth, it was sometimes came at the expense of logic and science.

You see, we knew natural didn’t necessarily mean better.  Sometimes, yes.  But sometimes, no.  It was complicated.  Look at this article from the National Institutes of Health (the NIH). Even in medicines, natural does not always mean safer...or better.

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But, as the internet continued to become more dominant, and blogs and such gained popularity, it became a little too easy for consumers and even brands to spread misinformation, which often lead to consumer fear. The court of public opinion proved to be too strong, and while not usually scientifically-based, the opinions started to drive the business. In fact, several companies have made adding to what they don't include in their products their key strategic differentiator!

In the last twenty years, I witnessed the ingredient side move from a strictly science-based engine producing quality and performance ingredients to one in continuous reactive mode – scientists trying to innovate around a growing “no no” list.  I was in meetings with scientists, lunches and dinners, where often the conversation was one of concern – what is becoming of the chemistry? Of logic?  And there were whispers of worry “my wife bought XYZ product and I had to tell her to toss it”. 

You see, on the ingredient side we get a unique view into how brands formulate and manufacture.  And folks, it may be the beauty business but it isn’t always pretty. I’d cringe as friends would tell me they only use natural products, or would rave about some new natural oil that was going to save the universe (ok, I exaggerate a little here).  I cringed, not because they were using natural products, but because I knew that more often brands were using natural as a marketing tactic, not as brand ethos.  And often times, they were putting unstable, often irritating ingredients on their skin with very little safety data. 

The reason why these brands went to market with very little safety data is because they were small companies who likely couldn’t afford to spend $3,000-$10,000 per sku on safety/clinical testing.  Or maybe they just didn’t want to know the results!

Essentially, “the court of public opinion” versus actual science was the driver of innovation.  At the time, I saw that as a shame.  I saw that as a loss for science, for quality, for truth, for performance.  Though, as mentioned previously, the desire for natural ingredients provided a catalyst for extreme growth.  But now, as I look back at the shift over a twenty year span I realize that so much progress has been made.  Chemistry is not dead, and it definitely took time for scientists to come up with higher performing natural ingredients, but it is has happened and continues to happen.

It’s unfortunate that along the way, brands launched products that were not always the best products but in the end it helped drive innovation.