As Supply Chains Continue To Falter, Sustainable Beauty May Be The Unexpected Answer

There’s a reason why some of the beauty products you love always seem to be sold out. Over the last two years, COVID has played a role in bringing supply chains near to a halt. Factory shutdowns in various parts of the world, particularly in China — which houses approximately 30% of global manufacturing — have limited the availability of products we use every day. American ports are also facing what can only be described as traffic pile-ups as workforces are slashed, leaving time-sensitive materials waiting at sea for weeks or months at a time. While disruptions touched the entire industry, sustainable beauty brands seemed particularly vulnerable.

Recyclable and biodegradable packaging is more difficult to come by, making companies using these options seem more susceptible to supply changes. Additionally, eco manufacturing methods come at a premium price. With supply chain freezes dramatically driving up the cost of goods, you might expect the brands already forking up more dollars to face another steep bill.

As the effects of the pandemic continue on, TZR asked beauty brands with sustainability at their core how they keep to their values under pressure. Surprisingly, it seems that a sustainable-forward business approach may be the necessary step to pad conventional production methods against disaster.

Sustainable Beauty Packaging Investments

Whether sustainable or not, longer shipping times triggered most beauty brands to massively increase order quantities of ingredients, packaging, and finished product in an attempt to get ahead of the problem. “We have to order products, say, three months in advance of when we would typically,” says Laney Crowell, founder and CEO of Saie, which develops clean cosmetics with a robust commitment to sustainability. Unfortunately, this overall surge in demand from brands put additional strain on manufacturers working at a lower capacity. “It’s been harder to get recycled glass due to all the glass that was sucked up by the Covid vaccination,” says Jessica Clark, CEO of sustainable-forward skincare brand Susanne Kaufmann. “And recycled [cardboard] is harder to get because now everyone wants to use it.”

For Saie its initial investment in sustainable packaging became a boon during this time. “We invest in much more expensive components,” says Crowell. “Our components are different than other brands, so we haven’t come [across other brands bulk ordering the same pieces].” Though the ultimate goal is to create higher demand for packaging with a smaller carbon footprint, Saie’s willingness to increase its initial production costs protected it against shortages in the long run.

Supplier Location Matters

Some beauty brands simply got the short end of the shut-down stick due to the severity and length of factory closures in certain locations, but both hyperlocal and extremely diverse sourcing practices helped these brands push through relatively unscathed.

Everyday Humans, a pro-planet beauty brand specializing in sunscreens, has a highly diversified supplier network that allows for crucial flexibility when in need. “We diversified our sourcing and have many other options so we could be closer to our end user locally,” says Charlotte Chen Pienaar, founder and CEO of Everyday Humans.

This same approach made Saie nimble when some of their best-sellers became unavailable due to factory closures. “We would just focus on another one of our products that was made in a different part of the world,” says Crowell. “We may have had things out of stock in one product but then we would focus our marketing around [a different] product [made in a different location] until we were able to get a resupply.”

On the other hand, keeping ingredient sourcing and manufacturing extremely close to home kept Susanne Kaufmann out of the weeds over the past few years. “We produce locally and will continue to produce locally. All of our products are made in the Alps of Austria, our ingredients are local, and our manufacturers have their own energy supply with solar panels,” says Clark. “Through COVID, we didn’t slow down because of our keep-it-local approach to the brand. Our warehouse, manufacturing and product development team are all 20 minutes from each other. We weren’t worried about transiting stock across Europe.”

Innovative Ingredient Sourcing

Upending standard ingredient sourcing has also been an important part of avoiding traditional supply chain pitfalls.

The majority of raw materials used in Susanne Kaufmann products are grown near its manufacturing headquarters, permitting high levels of accessibility at all times. In the same vein, Everyday Humans has ventured into upcycled ingredients that lean on the “throwaway” pieces most brands aren’t scrambling for. Focusing on the inevitable byproducts of ingredient extraction simultaneously creates a new supply and reduces what ends up in a landfill. “[Sustainable packaging] is relatively easy to control. I think that’s not the end of the journey, so you need to start with the raw ingredients inside of the product,” says Pienaar. “We’re about to launch a new sunscreen where the star ingredient is actually upcycled rose oil distilled from exhausted rose petals. Most importantly, it has a sustainable process. We’re able to extract more and lower our carbon footprint.”

Sustainability Inherently Means More Planning

Supply chain disruptions forced companies to crack down on logistics, but brands operating through the lens of environmental impact found they needed less adjustment. “In order to have supply chain sustainability you have to plan a lot. So if you plan, you’re able to plan [for] the bad moments,” says Pienaar. “If you want to ship sustainably you have to ship slower so you have to plan ahead.” (Shipping by boat has a lower carbon footprint but takes significantly longer than via airplane which has faster and more precise shipping times.)

Although Susanne Kaufmann first launched sustainable initiatives over 20 years ago, the brand used time during lockdown to completely overhaul its packaging. The planning process was tedious, but ultimately produced three SKUS with refillable packaging and significantly increased their percentage of recyclable products. “[During COVID], we’ve been able to dig into the planning of our supply chain,” says Clark. “We've been told [by our suppliers] that they’ve never seen anything so well organized and so well planned.”

Although meticulous organization may be a common denominator amongst sustainable brands, this is an accessible takeaway for the industry as sustainability becomes a cornerstone of beauty.

A More Sustainable Future For Beauty

Personalized hair care brand Function of Beauty offers one of the most unique solutions to supply chain squeezes. “We are vertically integrated so we control the chain from concept idea to research and development,” says CEO Alexandra Papazian. “We have our own labs all the way down to the production plant. That gives you flexibility when it comes to sustainability. It gives you more control with these decisions and they are easily implemented.”

Vertical integration sustained near-normal operation for Function of Beauty during the height of the pandemic and also allowed the brand to quickly pivot towards hand sanitizer in order to support communities in need.

The business model seeks to transform not only how we bring beauty to market, but also how consumers engage with products. Every Function of Beauty product is made-to-order, relieving the need to manage product inventory. The bespoke product also addresses all your hair concerns at once, ideally eliminating the need to buy multiple products. “What I’m passionate about is positive sustainability,” says Zahir Dossa, co-founder of Function of Beauty. “Not just minimize harm, but create a better society from an economic perspective and make that part of the core of your business and the DNA of your company.”

As the beauty industry grapples with continued supply obstructions as well as the growing demand for green products, investing in low-impact packaging remains an introductory initiative. Prioritizing entirely new methods such as upcycled ingredient sourcing and cutting down on production middlemen are required for real sustainability. “One piece is true innovation in products,” says Dossa. “There has to be room for new companies to come and disrupt the establishment whether that's waterless products or personalized.” The other piece, Dossa notes, is managing consumer expectations on what kind of sustainability commitments are achievable and effective.

Of course, more consequential sustainability practices will require consumers to adapt to a new face of beauty. “Because we built the brand with the mindset [of sustainability], I'm not gonna drop 100 products a year,” says Pienaar. “We made that choice that we are going to be thoughtful [about] the amount we put out there, so we’re only going to do three or four launches a year.” In addition to dampening the constant industry buzz around new launches, using sustainably made products will likely look and feel different. “When you go with [an eco-friendly] bottle, you don't have the same experience visually,” says Dossa. “You have to accept some compromise.” Despite the discomfort, ongoing pressure from customers for more green-forward beauty can encourage both brands and consumers alike to make the necessary adjustments that contribute to a better future.