It’s All About Trust

Another common trend across the food, drink and supplements and cosmetic industry? Consumer trust in large corporate brands is low. When UK consumers were asked to consider several leading brands, on average, only 30% of them agreed with the statement ’is a brand I trust’. [1] This is especially important with US Millennials who make it clear that they care if brands align with their values.

In the personal care market, the need for increased traceability is not only influenced by food and supplement trends, but also resonates with the overall natural transformation that the industry has faced over the past decade. Defining “natural” in the beauty industry has always been a challenging task, from the 70’s when the movement for “greener” products started until now, in 2020, where educated consumers are balancing ingredient safety, environmental concerns and societal impact. Beauty users are using an increasing amount of information to navigate product labeling and certifications. But to be able to rely on the information listed by a brand on their packaging, there needs to be trust. For brands, it creates an incentive for transparency and better communication around the sourcing and processing of the ingredients, from the farm to their formulation.

Traceability Solutions

The formulation of a cosmetic product is a complex process that involves many stake-holders along the way. In that respect, using natural ingredients only increases this complexity. Natural ingredients are sourced from botanicals, grown on a farm or harvested in the wild. Farmers usually sell their crop directly to cooperatives or brokers, who consolidate harvests from different farms. These crops then need to be processed (for extraction, separation, transformation). Ingredient suppliers usually purchase these transformed compounds for further formulation (dilution, additional refining, blending, etc.) before they can finally be sold to a cosmetic manufacturer. Very often, the formulation is outsourced to a third-party manufacturer before the product can be labeled with its final brand and eventually reach the shelves. In this context, both major brands and new indie brands face their own challenges. The shear size of large, multi-national brands dictates larger volume requirements of ingredients, which likely mean that they must source from multiple locations, blurring traceability. Flexible indie brands can easily pinpoint specific origin for their ingredients, but have less in-house manufacturing capabilities, meaning that they need to have outsourced steps in their production process.

Because traceability has been a major challenge for the food industry for years, many solutions have been created to help brands and manufacturers keep track of the origin of their products. The cosmetic industry has, however lagged and relied on less tools.

Certifications: Many brands rely on certifications to communicate around their environmental and societal impacts, but most of these certifications do not have ways to track the raw materials used in a formulation. There are no systems in place to follow an ingredient across its life cycle and guarantee the actual origin of a natural ingredient. The Roundtable on Sustainable Palm Oil Blockchain (RSPO) is one exception, as they have worked to create a traceable network for the supply-chain of palm oil and its derivatives, to promote and grow the use of sustainable palm oil products.

Blockchain: Companies have started looking into blockchain technologies. IBM Food Trust for instance was designed to create a more efficient and transparent ecosystem between producers, suppliers, manufacturers and retailers. Such solutions have not penetrated the personal care space so far, mostly due to the level of investments and resources required.

Deep integration: this latest model is gaining favor among manufacturers as it reduces how many people are involved in the supply of ingredients. In this model, an ingredient supplier owns and operates the farms, handles the harvest and transformation of the crops, as well as the purification and further transformation of the natural compounds in order to sell them directly to a beauty brand. This structure considerably improves transparency and working conditions for farmers.

The Case of Jojoba Oil

Jojoba oil is one of the major natural oils used in the cosmetic industry and its unique skin and hair care benefits, as well as its robustness in formulations, have propelled the desert oil in almost every single personal care category.

Back in 2012, Vantage™ started its From Farms to Formulations™ initiative to provide total transparency of the supply chain of jojoba oil, by acquiring the Desert Whale company, in Arizona. This was the first of a series of acquisitions that ultimately led Vantage™ to become the largest, global jojoba oil and jojoba derivatives supplier. With farms in Argentina and USA, Vantage™ has developed a strong expertise to offer organic, golden and colorless grades to its customers. Jojoba seeds are pressed, and the extracted oil is refined at Vantage™ facilities in the USA. Vantage™ recently inaugurated its new oil extraction facility in Tucson, AZ, in order to meet the growing demand for jojoba oil.

Jojoba oil can be used as is, but its unique chemical structure creates many opportunities to create innovative ingredients as well as address today’s beauty consumer’s needs. From hydrating and melting butters, to surfactant and even plastic-free exfoliating spheres, jojoba oil derivatives provide a wide variety of sustainable solutions.

This unique integration has given Vantage™ and its customers complete transparency over the origin of jojoba crops and how they are transformed into traceable and environmentally-friendly cosmetic ingredients.

Jojoba oil is a perfect example of how brands can leverage supplier’s deep integration to build more trust with their customers and remain relevant in the era of information and transparency.

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