Implications for the BPC industry
These are nontrivial changes for the industry to make, a sign that the sustainability trend is here to stay. What are the implications for BPC brands? Here are five that come to mind.
1. Sustainability is becoming table stakes. One sign is the increasing emphasis on cosmetics with plant byproducts or disposable agronomical wastes versus artificial chemicals. Even some natural ingredients have come under fire. Palm oil, for example, is efficient to produce and has a number of beneficial properties — but it’s also highly correlated with deforestation and habitat destruction.
Sustainable products and business practices are likely to become even more important as younger consumers replace older ones in the marketplace. At first, consumers will look for sustainable products to add to their bathroom shelf, but eventually they may ignore products that deprioritize sustainability altogether. For brands, key focus areas include transparency — especially online, where most buyers do their research — and alignment with influencers who promote mindful consumption. Other initiatives, such as recycling programs, can also come into play.
2. A minimalist mindset is emerging among BPC consumers. Some of that is a desire to reduce their consumption, as evidenced by the roughly 20 million online videos featuring “shop your stash,” no- or low-buy, and anti-haul challenges. But there’s also growing consumer interest in the fresh-faced, no-makeup look of Merit, Jones Road and other brands. As a result, consumer discussion of intricate and bold looks is waning. In 2019, for example, social media posts about festival makeup and winged eyeliner declined 6% and 9% respectively.
Minimalism has sent consumers in search of more bang for their beauty buck. Beauty detoxes (e.g., skin “fasting”), streamlined routines and multifunctional ingredients (e.g., hyaluronic acid and peptides) are expected to continue their fast-growth trajectory. Products with temporary results or limited efficacy are expected to drop off along the way.
3. A fragmented regulatory environment favors sustainable practices. Consider the use of plastics, which are subject to a spectrum of regulation in the U.S. At one end are the “ban preemption” laws that some states have enacted to keep localities from regulating plastic. At the other end are states and municipalities that have cracked down on plastics more broadly. The result is a regulatory patchwork where, in the interest of risk management, many brands will adapt their practices to the most restrictive regime.
In any case, government stakeholders are responding to constituent concerns. As demand for sustainable corporate practices goes up, regulatory activity may follow. Staying abreast of it all will require coordination across functions like procurement, manufacturing and shipping. It may also require ongoing updates to everything from supplier relationships and ingredient procurement to marketing, research and development.
4. Industry heavyweights aren’t waiting for regulators. Ulta says that half of the packaging in its product assortment will be recyclable or refillable, or consist of recycled or bio-sourced materials by 2025. Sephora’s chemicals policy includes a list of ingredients to be reduced or eliminated among the third-party brands it carries. In addition, Sephora has joined other retailers like CVS, Walmart and Target on the Green Chemistry & Commerce Council, which promotes the use of safer and more sustainable chemical solutions.
Some brands are taking a similarly collaborative approach. A recent example is the effort among beauty giants L’Oréal, Unilever, Henkel, LVMH and Natura &Co to develop a scoring system that allows consumers to evaluate the environmental impact of BPC products. Responses like this one are an implicit acknowledgment that BPC brands will have to meet the sustainability demands of not only consumers but retailers as well if they want to get their products on the shelves.
5. Brands that take the initiative will have the advantage. For BPC brands, sustainability is a sweeping and often confusing set of expectations. Interpreting them in ways that are meaningful and resonate with consumers is no small strategic challenge. In the absence of industrywide standards, leading companies are defining for themselves what sustainability looks like, rather than wait for the competition or government to do it for them.
Unilever’s Dove, for instance, introduced a refillable, aluminum-free deodorant. Garnier rolled out a skin serum packaged in recycled material and manufactured in a plant that mostly runs on renewable energy. L’Oréal has committed to targets for its use of plastic, including having all of its plastic packaging be reusable, recyclable or compostable by 2025. And a host of brands, from major players to emerging upstarts, have played up their efforts to go carbon neutral.