The subtitle of Making Cosmetics 2014, held at the Ricoh Arena, Coventry, UK, from 25-26 March, was ‘Concept to consumer’. And with 70 exhibitors and over 70 presentations, as well as five 90 minute workshops on the subject, it was well chosen.
The presentations were grouped into different aspects of launching new cosmetic products onto the retail market. Whether informing budding entrepreneurs of the hurdles to overcome in turning a dream into reality, or offering advice to companies that already had taken those first steps and were now looking to increase their market share, there was something for everyone.
Before developing a new product idea, it is sensible to look at the current UK cosmetic market. This was the theme of an hour long presentation by Chris McLeod of Cosmetics Business. Drawing on figures obtained from Mintel and Euromonitor International, McLeod compared sales volumes and values of a broad range of products from 2011 to 2014, a period in which the UK beauty and personal care market grew 2.7% year on year to reach nearly £10.3bn at present. British department stores have been the stand-out success story of beauty retail with many reaping the benefits of recent investment in their beauty halls. However, online shopping now accounts for 14% of the market, and McLeod gave examples of both categories with comments from the buyers of leading beauty outlets.
Between 2008 and 2012, facial skin care grew by 20%, with prestige facial skin care products increasing by 9% in 2012. This stalled in 2013, however, and McLeod said by comparing sales volumes and values it is apparent that people are prepared to spend more if the product is exciting, new and innovative, and purchasers are more interested in product efficacy than price. New product launches and their ingredients were discussed and the final slide presented newly released figures for 2013, showing all areas of cosmetics – apart from sun care – have seen a retail value increase. The full report can be found on www.cosmeticsbusiness.com.
Having established the target market, it was time to get creative. Susan Hurst, owner of MiDAS Consultants, tackled this subject under the title of ‘Creativity is not just for the marketing department’. Hurst helps businesses with strategic and creative thinking and planning, and in managing and improving the new product development (NPD) process. She described the gulf that often arises between marketing and technical personnel before moving onto creative thinking. The creative thinker was summarised as a person who looks at the same thing as everyone else but sees something different; who desires success but embraces failure; is persistent but not stubborn; and who will listen to experts but know when to disregard them.
Shona Bear from Marks & Spencer, and Cordelia Johnson from Tesco Stores, gave insights into what major retailers look for in new cosmetic products and Simon Duffy, founder of Bulldog Skincare, shared his journey from initial concept to present day success, covering brand creating, retail development and marketing. Helen Miller of Helen Miller Consulting discussed how to build a profitable relationship with retail partners and Maleka Dattu, founder of Merumaya, said how important it was to distinguish a brand’s point of difference via brand positioning and unique selling points (USPs). Dattu’s presentation looked at some of the different ways this can be done and how these messages can be communicated.
A well thought out branding and packaging strategy is the key to success
The presentations by both Simon Duffy and Maleka Dattu were inspirational and many would-be entrepreneurs in their respective audiences must have been encouraged to further their dream. Notably, however, both presenters had impressive backgrounds in marketing before establishing their own successful brands. Those with less understanding of brand development should get expert help where necessary.
Juliette Goggin and Melanie Bond of Bond Design were good examples of said expert help. They stressed the importance of product design and development in creating a successful brand, and understanding and using trend information to pitch the brand at the right time and place. Part of this process is to work out the target market in order to correctly brief design and packaging to create a unique image and profile. Sourcing the right components can be difficult, but Duncan Briffett, CEO of Webpac Digital Media Group, described how his company has a database of thousands of different existing stock packaging components that can be searched in seconds. Briffett said that sending a request for a quote via the internet to packaging suppliers is a highly effective way of finding relevant vendors and iPads are rapidly replacing catalogues, effectively eliminating the need for printed marketing materials.
Getting the fundamentals of target market, product formulation, packaging design and total costs right was a recurring theme throughout the two days of the conference. This was neatly summarised by Steve Gibbons, co-founder of Dew Gibbons + Partners, who said: “A well thought through branding and packaging strategy in the very competitive cosmetics category is the key to success. A highly effective formulation is not enough. It is vitally important to think beforehand who the target audience is, what single-minded message is going to be heard by them, where does the design and packaging fit among competitors and how will the audience be captivated?”
‘Turning an idea into a reality’ was the title of the presentation
by Roger Barr from RB Consulting, and it was a good overview of the
difficulties faced when creating a new brand. Cuross Bakhtiar, CEO of
Harley Street Cosmetic, showed his audience how to avoid the pitfalls
of NPD. He first defined NPD as a process that is designed to develop,
test and consider the validity of products that are new to the market
in order to ensure the growth or survival of the organisation.
Unfortunately, the majority of ideas leading to NPD never reach a
launch date. Successful ones provide a unique or superior product to
satisfy consumer needs, avoid markets with satisfied customers and are
not highly priced without technical advantage.
Rules & regulations
The area that most start-up entrepreneurs in cosmetics must find the most daunting, and perhaps where expert help is most needed, is that of regulatory affairs. An hour long presentation by CTPA’s Emma Meredith and Amanda Isom discussed problems caused by failure to adhere to the EU Cosmetic Regulation (1223/2009) and gave an update on notification issues. Details about all cosmetic products on sale within the EU must be notified via the Cosmetic Products Notification Portal (CPNP); records must be kept about serious undesirable side effects and these reported via the CPNP; and claims of effect must meet the common claims criteria established by EU Regulation No 655/2013.
For those who missed the regulatory session on the first day, Lauren Sudlow, also from the CTPA, gave a talk that highlighted the basics of current cosmetic legislation and outlined some of the key points that must be taken into consideration before starting to make or import cosmetic products. Fortunately help is available, and a talk entitled ‘All you need to know about Product Information Files or PIFs’ by Anthony Dweck of Dweck Data showed just how much is needed and how Dweck Data can assist clients through such a minefield. The presentation is available online at www.dweckdata.co.uk.
Claims made for cosmetic effect must then be substantiated, and Joyce Ryan of Joyce Ryan Consultancy showed her audience how claims for hair products are tested at her consultancy. First the nature of the claim needs to be clarified; if it is a simple descriptive one then reference to the product ingredients coupled with in vitro data and ingredient suppliers’ literature may be sufficient. Stronger claims regarding performance require user trials and in vivo testing with expert trained panels, and for measuring efficacy these trials need to be expanded to include instrumental analysis.
Ryan discussed common pitfalls when making claims, which include inadequate study design; no placebo control; inadequate ingredient data or using ingredients below their proven level of efficacy; or using data on ingredients to imply finished product benefits. In summary, Ryan stated that a cosmetic claim is any public information on the content, the nature, the effect, the properties or the efficacy of the product. Claims must not be misleading and the benefits delivered should be consistent with reasonable consumer expectations.
However, regulations don’t stop with PIFs, safety assessments and claim substantiation. REACH regulations are aimed at avoiding potential environmental effects and protecting workers’ exposure from the manufacturing and use of cosmetics. This topic was covered by Richard Roy, Technical Advisor at REACHReady, who said that if cosmetic ingredients or formulations are supplied at any stage before they are in the finished state, there may also be labelling requirements under the CLP Regulation. Manufacturers, importers, downstream users and retailers of cosmetic products all have some responsibility under these regulations, which were discussed together with potential impacts of REACH and CLP on the cosmetic industry.
There are regulations about fragrance allergens, as presented by Anne Connet, Regulatory Manager at CPL Aromas, and product manufacture must conform to established GMP (Good Manufacturing Practice), a topic addressed (separately) by both Andy Martin, Director of BM Consulting, and Mark Crawley of Laleham Healthcare.
From lab to factory
Every product starts with an idea, which is translated into a product through the NPD process. The ingredients must comply with REACH and have undergone a COSHH assessment and the final formula checked for compliance with all current regulations. It now needs to be scaled up from laboratory bench to manufacture and a talk by Russell Cox, Technical Innovations Manager at Stephenson Group, illustrated the basic requirements of successful scale up, which included checking materials for availability in suitable minimum order quantities (MOQ), material lead times and alternative suppliers, should the first choice prove unsuitable.
The area that most start-up entrepreneurs find the most daunting, and where expert help is most needed, is that of regulatory affairs
Formulation within the laboratory should be undertaken with knowledge about the available factory equipment in order to avoid unnecessary capital expenditure. Cox said that this includes taking into account tank capacities and mixing volumes; the availability of different types of mixer; and heating and cooling rates. An alternative to in-house manufacture is outsourcing, but the need for comprehensive ingredient and product specifications remains, and process parameters must be fully described.
Quality assurance ensures that the final product is meeting expectations and this aspect was covered by Louise Cruickshanks, Group Development Director of DCC Health & Beauty Solutions, who explained what all the various accreditations mean in order to assist outsourcing a suitable contract manufacture.
Other speakers on the critical process of scaling up included Stacey Irving of Stacey Irving Consultancy, who described in some detail the issues likely to occur during the scale up process and the factors and variables that need to be taken into account. Judi Beerling, Head of Technical Research at Organic Monitor, gave a 90 minute workshop on the subject with a focus on organic and natural products, while Bob Hefford, Director of Independent Cosmetic Advice, followed on with another 90 minute workshop under the same title, ‘From kitchen to market’. Hefford set the scene with a short presentation before dividing the attendees into groups to discuss business plans, costs, where to manufacture the product, what raw materials to use and label compliance.
There were several interesting presentations about cosmetic manufacture. Mohamed Soyeb Manga of the University of Leeds discussed membrane emulsification, which is a drop-by-drop technique for the fabrication of micro- and nano-particulates that have defined particle sizes and narrow size distributions. The ability to produce fluid droplets, microcapsules and solid particulates with this technology allows the potential to improve product quality or fine-tune product properties, said Manga.
Gül Özcan-Taskin of the BHR Group introduced the process of incorporating powders into liquids during cosmetic manufacture. She described different mechanisms and performance evaluations based on the findings of independent research carried out at BHR Group in collaboration with the industry. Jeff Price of JPA discussed new approaches to the manufacture of cosmetic emulsions and how relatively minor changes in processing or equipment can produce significant, consumer perceivable product changes.
Despite attention to regulations and safety assessments, stability and microbial challenge testing, products can still become contaminated by microbial organisms. This subject was covered by Jenni Tranter, Business Development Manager at Synergy Health. Despite the safety assessment and clinical trials, a consumer may still develop an irritant or allergic reaction. Peter Dykes, CEO of Cutest Systems, described the common types of skin reaction as irritant, allergic or urticarial. He noted that irritant contact dermatitis is most frequently caused by bar and liquid soap products and by alcohol based hygiene gels. Allergic contact dermatitis involves the immune system as well as skin cells and is usually apparent after repeated contact: causative examples are nickel and hair dyes. Irritation manifests itself as itching, dryness, stinging or burning sensations. Urticaria is an immediate type of skin reaction that usually disappears within a few hours; potassium sorbate and benzoic acid are known to be responsible in some cases. Dykes discussed ways of avoiding possible reactions by predictive patch testing and talked about what to do in the event of a customer complaint.
Mind the niche
Various niche markets were discussed over the two days including anti-ageing and natural products, Halal cosmetics and products for women of colour. McLeod of Cosmetics Business gave a presentation about the latter group, defining the ethnic market as one relating to a population sub-group within a dominant cultural group with a common cultural tradition. In the UK, a survey in 2009 showed that ethnic beauty products represented 2% of the total market for women’s hair care, skin care and cosmetics. That sector was worth £7m and a 6% growth year on year was expected. Growth in Africa and Asia is phenomenal and global brands are established in many areas, but local brands are also doing well. In summary, McLeod suggested that developers need to be aware of the needs of different skin types dependent on their ethnic heritage; the marketing of the product being colour and necessity specific; and to supply according to local demographics.
There were many more presentations that the author was unable to attend, but it is hoped that this overview gives a flavour of a very interesting event.