Host 1:
Welcome to Insight Exchange, presented by LEK Consulting, a global strategy consultancy that helps business leaders seize competitive advantage and amplify growth. Insight Exchange is our forum dedicated to the free, open, and unbiased exchange of the insights and ideas that are driving business into the future. We exchange insights with the brightest minds of the day, the most daring innovators and the doers who are right now rebuilding the world around us.
Host 2:
Consumers concerned about what they're putting into their bodies have similar concerns about what they're putting onto their bodies. In this episode, we'll look at recent food trends now converging on beauty that fall into three main categories. First, the rising importance of ingredients. Consumers are reading the labels. This is because the ingredients are increasingly influencing purchase decisions. Second, consumers are looking for specific health attributes in the products they use, for example, vegan or gluten free. Third on-the-go customer's value convenience, which has a major impact on packaging. This episode will explore each of these areas in greater detail, providing examples of how beauty companies are responding. Today, we welcome Maria Steingoltz, Alison Schilling and Anna Ondik to discuss illuminating a path for beauty.
Alison Schilling:
Hi everyone. Welcome. Before we get into the core of this podcast, why don't we take this opportunity to introduce ourselves? My name is Alison Schilling and I'm a managing director and partner with LEK Consulting. I've been at LEK for about 11 years now, and I focus on the consumer practice and the two areas I focus on are food and beauty and personal care. These two worlds converging is something I think about all of the time. Maria, why don't you go next?
Maria Steingoltz:
Hi everyone. I'm Maria Steingoltz. I'm a managing director at LEK and just like Alison, she and I work very closely together and we do work in food and beauty.
Anna Ondik:
Hi everyone. My name's Anna Ondik. I'm a senior engagement manager at LEK. I also work with Alison and Maria within the health and wellness practice.
Alison Schilling:
Great. I'm going to be the host talking to my two guests and colleagues on the topic. Let's really get into it. I think there's a few things that are happening right now that really make this interesting to think about. First, it's that health conscious consumer has gone mainstream, and so is that exacting consumer, and that's impacting how people are making purchasing decisions and what they're buying, not just in food, but also in beauty. This is old news for food.
We have seen the food industry respond to demands for natural ingredients, more transparent labeling, convenience with lots of new products, lots of new product formats, product extensions and packaging solutions that we hadn't seen before, but now consumers have their eyes trained on beauty with a focus on a lot of these same attributes. For players in the beauty space, I think studying some of the things that have been happening in food trends can provide some insight into some successful strategies for meeting some of these new consumer preferences and requirements. Maria, can you tell us more about some of the things that we're seeing along those lines?
Maria Steingoltz:
Well, it's a pretty fun time because wellness is really holistic now. It's not only about what we're putting in our bodies, what we're ingesting, but also what we're putting on our bodies. Skin and the body is a big biome and consumers have begun to recognize that themselves. You've heard this topic and the name of clean beauty, clean food. It's in both industries. There's a lot of great awareness around the importance of eating clean and cleaning yourself in a clean way and the beauty ingredients and products that you use. About a quarter of us adults are actually very aware of this topic now.
Alison Schilling:
Does this mean that the consumers are both looking for beneficial ingredients, things that help, but also are trying to avoid some of those things that they consider harmful?
Anna Ondik:
Absolutely. The health conscious consumer today is certainly not a passing trend. People are really aware of how what they put into their bodies can affect their health and wellbeing. Food really isn't the only category that's affecting this growing consumer mindfulness. If we think about some of the food ingredients, some of those have been disproven over time, but concerns over others such as MSG or sugar substitutes really have meaningfully impacted how the food industry thinks about the products. There's a similar trend within beauty. Beauty companies have been handed their own no-no list, if you will. Some of those ingredients that you're watching out for are things like parabens, paraffins, synthetic fragrances, sulfates, mineral oil, BHAs, plate-
Maria Steingoltz:
Phthalates.
Anna Ondik:
Oh, thank you. Thank you.
Maria Steingoltz:
You see, everyone, and Anna? This is why these ingredients shouldn't be within our products. No one can even pronounce them, so we should be absolutely excluding them.
Anna Ondik:
I totally agree with Maria. That was a particularly tough one, but we've seen in the industry, really, beauty companies have been quick to respond to avoid some of these ingredients. As a result, we see what we call the "free from" or clean labels. Both of those categories have outpaced the broader beauty and personal care category. Consumers clearly are speaking with their wallets and they want to see companies really get rid of some of these ingredients. Really beyond thinking about some of the things we want to avoid, Alison, as you noted, consumers are looking for certain benefits, so they want functions within their products. Think about gut health within the food industry.
Alison Schilling:
That's a really interesting point, Anna, and in food, which Maria and I and you look at all of the time. We've seen things become popular and then fade into the background. Has this really taken off into the beauty industry and do we think this is something that is going to stick around?
Maria Steingoltz:
It's pretty interesting. You think about an ingredient like collagen, for example. It started out very strongly within the food industry, and you think about the powders in a brand like Vital Proteins where we're ingesting the collagen and looking to get the benefit from the ingredient in that way. The collagen as an active ingredient, as a beneficial property, has really transcended and made the leap into beauty products, which is interesting because collagen is the natural component within our skin.
It starts in our skin. It went into our ingesting into food, and then now, it's back into beauty with products like the Olay collagen peptide moisturizer or Charlotte Tilbury has a collagen face oil as well. Collagen is this great example, but you think about other food products and food ingredients that have actually made it into the beauty industry. Ingredients like eggs or kale or spinach, avocados, oats. Of course, all of us have grown up eating those foods, but then at the same time, we're also now using them within our products to exfoliate or to moisturize or other active reasons to be incorporating them into the beauty products we use.|
Alison Schilling:
Got it. Not only are we looking and using some of the same functions, we're using actually some of the same ingredients now. Another thing that strikes me when I walk down the food aisle these days is all of the proliferation of claims on packaging; vegan, non-GMO, gluten-free, one that I appreciate since I am gluten-free, but we're actually starting to see this now in beauty as well. I see these similar types of claims on a growing number of beauty products. Anna, what's your thoughts on this?
Anna Ondik:
We've seen, as you mentioned, in the food aisle and walk in the grocery store claims are just something that consumers have come to expect and a wide range of different claims, and it's been very interesting to see those same claims now within our beauty products. This is something consumers are looking for, not only as we noted, things you put in your bodies, but things you put on.
In some of our beauty brands, we're seeing vegan products, those products containing no animal derived ingredients, we see cruelty-free, which is similar to the cage-free within the food. It's indicating no product testing done on animals. We have gluten-free products within beauty as well and plant-based, which we've seen on the food side has just been a huge recent trend across the food category. We're seeing this also spill into beauty. Consumers are really showing support across both food and beauty for brands that are able to meet some of these claims.
Alison Schilling:
Got it. There's another trend that I think is pretty interesting in food and it's been going on for a while, and that's convenience. We've seen the rise in snacking, we've seen the rise in single-serve products, we've seen the rise in on-the-go. Especially before COVID when people were leaving their houses more, and now, as we get back to normal, consumers are looking for those things that they can take with them, that they can consume quickly. Do you think that consumers are looking for similar flexibility in their beauty products or is this one of those transcending trends as well?
Maria Steingoltz:
Well, I do. We're all, as consumers starved on time and are looking for products that can deliver on multiple solutions and ones that we can use on the go as well. One of my favorites is the MAC cream color base. It's one product, but you can use it as a blush, you can use it as an eye color, you can use it as a lip color. One thing does three different jobs, and that's pretty great and easy to use for those of us with really busy schedules and busy lives.
Another one is just around the format of the product. You think about the stick format. Cocokind matcha stick is a great example. You'll probably hear it in the name. It's got that great food ingredient in it, matcha, that we were just talking about. We're most familiar with that as part of our teas, but now it's made its way, because of great healing ingredient properties, into the beauty product as well. This Cocokind matcha stick, you can use it on your lips, under your eyes, on dry skin, but the important thing, I think, what's interesting for me is it's in the stick format.
It's really easy. Throw it into your purse or your backpack or your handbag. You've got it and it's ready on the go. No longer, are you, for your beauty routine, tied to your vanity where that's the only place where you can get ready and everything has to last you throughout the day. Here you've got great products that allow you to keep fresh, looking great all throughout the day because of this great convenient format.
Anna Ondik:
Maria, that reminds me too of the sunscreen sticks. I know I use those for my kids. Quick, easy on, so much quicker to hold and keep on me personally. Love those as well.
Maria Steingoltz:
Great example.
Alison Schilling:
Yeah, that is a great example. For some of us that put on makeup with our sunscreen, there's also many formats of sunscreen powder where you can now reapply quickly over your makeup and still maintain your protection from the sun. Lots of examples of really cool convenience coming out in the beauty industry as well. This is what I'm hearing overall from these trends. Our body is really one big biome.
Consumers are really concerned with not just what they're putting in their bodies, but what they're putting on them and what as well. Beauty brands need to be innovative in the way that they deliver their products to our more discerning consumers, whether it's through convenience, whether it's through quality ingredients. Maria, what do you think are some of the ways that beauty companies can best position themselves to take advantage of these trends? What should they be thinking about?
Maria Steingoltz:
There's a few things that beauty brands should consider. The first is that food is a great area to gain inspiration from. We can see what's trending with consumers, what's appealing to them, and repurpose those trends and bring them into the beauty market as well. A second thing to do is to be quick and nimble. Think about the innovation process and how those capabilities are set up. You want to be able to react in a quick way if you're a beauty brand. Third, ultimately, you also have to be authentic.
That's an important theme. Not one that we're covering today, but a very important one in both the food and beauty market and authenticity, bringing these ingredients and these trends into your own business, innovating around them, but doing so in an authentic way. Can you harness marketing, packaging to further message and communicate all of these great benefits and ingredients. It doesn't mean slapping every single label on your front packaging, but really owning and identifying the elements that are authentic, relevant to you as a brand. Owning them, embracing them, and messaging that to the consumer as well.
Alison Schilling:
Great. Lots to think about. Well, we appreciate you guys coming here today and sharing your insights with us. This was a fun conversation. I personally see lots of these trends every day and I love putting them into context with you all. Thank you so much for coming in and thanks everyone for listening with us today.
Maria Steingoltz:
Thanks for having us, Alison.
Anna Ondik:
Thanks, Alison.
Host 1:
Thank you, our listeners, for joining us today at the Insight Exchange presented by LEK Consulting. Links to resources mentioned in this podcast can be found in the show notes. Please subscribe or follow for future episodes wherever you listen to your podcast. Also, we encourage you to submit your suggestions for future insights online at lek.com
