Mark Wuttke, Author at Global Trade Magazine

When COVID-19 hit, most industries were forced to adapt and make significant changes. The beauty industry was no exception. Before the pandemic, for example, many cosmetic consumers shopped for their beauty products in brick-and-mortar stores. Now, a lot of beauty purchases are made online. We have also seen the shift to a minimalist approach to beauty, focusing on skin health and wellness as a beauty regimen in lieu of a heavy makeup look with searches such as “minimalist makeup looks” and “foundation with sunscreen” trending still today.

All of these changes necessitate innovation. What many beauty brands forget, however, is that innovation and industry disruption begin with the manufacturer. If you are trying to innovate in the beauty space right now, it’s crucial for you to partner with a manufacturer that can help you develop new ideas based on changes in consumer demographics and behavior. Most importantly, your manufacturer should be able to respond to new trends with speed and agility — getting products to market despite supply-chain issues.

It can be easy to limit the involvement of your manufacturer based on preconceived notions. If you want to outperform competitors in the beauty industry, however, you need to shift your perspective and see them as a key industry partner that can help your brand innovate and adapt.

How Manufacturers Help Beauty Brands Innovate

If there is one key takeaway from how the pandemic has impacted the beauty industry, it is that today’s beauty buyers are more educated than ever before about the beauty products they consume and what they want from the companies they engage with. Gone are the days when customers purchased products for the sake of “looking great.” Modern consumers want to feel good about their purchases from the inside out, and they want products that make them look and feel their best. This is part of the reason we have seen so many beauty brands zeroing in on clean beauty.

One of the most important lessons you can learn as a beauty brand is that your manufacturer can either make or break your ability to effectively innovate. Manufacturers that have worked in the beauty industry for a long time can help brands identify new trends and produce products that align with those trends. Also, manufacturers can help brands keep a pulse on industry influencers and the conversations consumers are having that can inform the direction of your next move. Manufacturers touch more products across all brands, making them a great source of knowledge.

Considering the fact that innovation and newness represent 20-25% of all new growth each year, it’s crucial to partner with your manufacturer to drive innovation. Innovation builds revenue, improves brand recognition, and positions your brand to outperform competitors in a saturated market. If you don’t partner with your manufacturer in innovation, you risk falling behind in the market or, even worse, disappearing completely.

How to Choose an Innovative Beauty Manufacturer

If you are hoping to work with a manufacturer to innovate in today’s beauty marketplace, it can be difficult to know which qualities to prioritize in your search. After all, you need a manufacturer that is a good fit for your brand and can help you distribute products quickly to respond to consumer trends.

Here are some of the most important qualities to look for in your manufacturing partner:

The manufacturer focuses on research and development.

If you are struggling to find new ways to innovate, you need a manufacturer that understands market research to identify opportunities for your brand. Manufacturers can help you with white space mapping to figure out customer needs that are not being met and help you develop products with those needs in mind. If your brand is not in a position to create new products, your manufacturer may be able to help you find ways to add innovation to your existing portfolio. Also, if you have seen a decline in business recently and want to uncover new ways to reach customers, your manufacturer can use custom formulation to innovate your brand’s collection and find the best way to move forward.

The manufacturer prioritizes speed to launch.

How quickly your brand can respond to shifting trends largely depends on your manufacturer’s ability to help you create new products. If new trends develop and your brand can’t distribute a product to meet that trend, you will miss the innovation window. A true manufacturing partner can help equip your team with the tools to help you respond to trends, adapt your products, innovate, and create game-changing products that people will love.

The manufacturer works outside of the “comfort zone” and stays open to new trends.

Your manufacturing partner should never be afraid to move outside of your brand’s comfort zone to discover new trends. In fact, one way to ensure that your brand stays relevant for a long time is to innovate when possible, especially if you have market research to support changes. Importantly, innovation doesn’t require you to create new products all the time. Rather, you can innovate by adding value to consumers through improved digital experiences, improving product packaging, or re-imagining a current product.

If you are hoping to reach more of your audience or find new ways to engage your customers in the beauty industry, start with your manufacturing partner. A manufacturer can help you innovate in new ways or find existing opportunities to disrupt the beauty industry. Once you find the right beauty manufacturer, your brand will be able to discover new trends, improve your products, and outperform competitors in a rapidly changing space.

Mark Wuttke is Chief Growth Officer at Cosmetic Solutions; founding Alumni Advisory Board member of the Global Wellness Summit; founding Beauty Initiative Chair of the Global Wellness Institute; founding editorial advisory board member of Organic Spa Magazine; and mentor and regular industry leadership speaker at Florida Gulf Coast University and Cornell University.

Despite the hindrances the pandemic put on it, the global beauty industry is worth an estimated $511 billion. That persistent growth continues despite an environment where global manufacturing has declined, traffic has piled up, and workforces have been slashed. While still thriving, beauty brands are just one of many industries left vulnerable to these disruptions — and this may be why you’re waiting months for an item to restock or why store shelves lay empty.

To be sure, most industry supply chain issues aren’t just pinned to one specific barrier. They’re a combination of factors, from ingredient sourcing and manufacturing to employment shortages and importing issues. Supply chain disruptions have impacted countless brands’ packaging and ingredient needs, resulting in companies having to scale back on new product launches, change their timelines, and alter their order quantities. In some cases, brands are running out of product and being forced to order much larger quantities than usual to ensure they’re fully stocked to meet customer demand.

Thus, supply chain management in every industry requires agility. Companies that plan accordingly and use fresh data to adjust their methods and procedures are the ones that will continue to thrive.

How Industry Supply Chain Challenges Impact Business Operations

The challenges faced by the cosmetics industry in the supply chain mirror those of just about every other industry and have the potential to be endless. Mismanaged supply chain and fulfillment issues impact business operations in a plethora of ways.

First is the obvious result — companies having too much or too little of the products they need. Then, there’s the aforementioned pushing back (or complete forgoing) of product launches due to delayed packaging or ingredient shipments caused by those backed-up supply chains.

Companies such as Meraki Organics Inc. had to list items as “sold out” on its website due to such ingredient shortages and packaging issues — not great timing, considering it was around Black Friday and Cyber Monday. Peak selling seasons are integral for companies, so it’s extra important to plan during those times for any supply chain hiccups. A lack of proper preparation could seriously impact revenue in negative ways.

A way to properly plan ahead is to list out all materials needed to create and package your products. Keep a keen eye on the news to monitor supply chain issues so you can anticipate delays and shortages before they directly impact your company. For example, during peak Covid times, there was a shortage of glass bottles since they were in high demand for vaccine producers. This inadvertently affected many sustainable beauty brands that rely on glass for their products.

Supply Chain Strategies to Stay Ahead of the Curve

The industry supply chain can create many challenges for just about any business on earth. For companies to stand the test of time and thwart any curveballs thrown their way, they must have a comprehensive plan to deal with problematic supply chain issues. Here are three tips for leaders in all industries that rely on steady manufacturing and an efficient supply chain on how to do just that.

Get proactive.

Track product sales and usage to forecast when you need to put in orders to restock. Sales cycles will vary across different companies, so it is important you track your company patterns closely so you can identify instances when you’ll likely require more product than usual.

To do this, choose a time frame that makes sense for your business. It could be over the course of a month, quarter or year. Then, choose what you will measure. Are your clients buying more skincare-related products or makeup? Are they buying moisturizer with sunscreen all year round or only during the sunny months?

As you are keeping tabs on your sales, simultaneously track factors that may be affecting your final conclusions, such as inflation on raw materials, internal changes, new competition in the market, etc. Tracking outside factors will give you a better grasp on what is affecting the purchases of your consumers and help you better forecast for the future.

Sales predictions can be a good indicator for investors when making important business decisions. It is always best to estimate your numbers conservatively — the old “underpromise and overdeliver” mantra. Keep in mind all the factors that can impact your products’ sales, such as industry competitors, economic variables, material issues, and overall market indicators.

Work with a transparent contract manufacturer.

Companies are increasingly realizing the importance of tracing their products in the supply chain. This requires strong relationships with the manufacturing companies you work with. It is crucial that your CM be transparent with you about what is being delayed and for how long, as this is vital for your planning purposes.

Remember the two Ts: traceability and trust. When you have trust, you can trace — and thus you can plan appropriately when unavoidable delays arise.

Have a backup plan.

If a product or collection can’t launch or will be delayed, it’s crucial to have a Plan B (or C) in place. You never know what issues might arise and catch you flat-footed when urgency is key.

Let’s say your CM is low on an essential ingredient. Make sure this partner has other vendors it works with so you have other options at your disposal. That way, if they run out of an ingredient, they can try to source it from elsewhere. Different products obviously require different technical skills from research and development and different machinery for production.

As company leaders, you must prepare for crises such as shortages and industry supply chain issues. Your ability to manage these supply chain issues not only helps your company stay afloat but it also further solidifies your reputation in a market where consumers are looking for reliable brands. Utilize these tips to give your brand breathing room when supply chain challenges inevitably affect your business.

Mark Wuttke is the Chief Growth Officer at Cosmetic Solutions Innovation Labs, a globally recognized contract manufacturer and innovation partner that offers the operational excellence of large-scale contract manufacturers with the proactive leadership and flexibility to help brands grow on their terms.

3 Ways Your Manufacturers Can Impact Innovation

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