2023 trends: The dual benefit of localising supply chains

By Jo Allen | Published: 30-Dec-2022

More brands will bring manufacturing back home to both mitigate risk and resonate with conscious consumers

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As the beauty industry braces itself for what is expected to be another turbulent year of supply chain disruption – China’s zero-Covid policy, the war in Ukraine and transportation bottlenecks are continued risk factors according to Euromonitor – companies will be ramping up efforts to build resilience.

“There’s going to be a lot of disarray on the product side for a long time – Covid just kicked the supply chain party off,” says Tev Finger, President and CEO of beauty brand incubator Luxury Brand Partners (LBP). “We’ll see a lot of companies buying deep on inventory to protect themselves from all the chaos, but overindexing also brings problems, because what do you do with all the extra stuff?”

With many brands looking to longer-term strategies to manage their supply chains, a growing trend will see more businesses look to localise elements of their supply chain. Finger says: “While it used to be cheap to get shipments from China it made sense to do that, but now this is changing, there’s going to be a lot of manufacturing coming back home now,” adding that LBP has been meeting with a lot of suppliers within the US.

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