The rise of ingredients-led beauty: COSSMA

In addition to manufacturers, consumers are also becoming increasingly concerned with the ingredients used in cosmetic products. Kayla Villena knows how this trend came about and how it affects the use of functional ingredients in formulations.

Today’s beauty consumer is smarter than ever, increasingly researching beauty products online to find the most efficacious products. Euromonitor’s Beauty Survey found that in 2021, 17% of global respondents were influenced by ingredient formulation when purchasing skin care and when purchasing hair care, while 11% were influenced when purchasing colour cosmetics. Ingredients are playing a more critical role in consumers’ journeys, directly tied to the evolution of wellness and self-care trends that encourage consumers to experiment with new routines and improve their mental and physical states.

The Covid-19 pandemic accelerated an existing and growing consumer distrust in ‘natural’ claims, contributing to the rise of ingredient-led beauty.

Natural in demand?

While ingredients have always been a focal point in consumer journeys, the trend of consumers searching for particular ingredients accelerated due to the Covid-19 pandemic in 2020. With beauty research increasingly taking place online, consumers were able to become ‘skintellectuals’ during periods of home seclusion, studying the benefits of ingredients to circumvent the ambiguity of ‘natural’ claims in beauty and personal care.

‘Euromonitor International’s Product Claims and Positioning’ database found that ‘natural’ claims in online Stock Keeping Units (SKUs) of skin care products in the US rose 8% in 2020 and 11% in 2021. On the consumer end however, the number of US respondents looking for ‘natural’ or ‘organic’ in skin care fell from 14% in 2020 to 13% in 20211, suggesting a disconnect between what companies and consumers perceive to be ‘natural’.

The definition of ‘natural’ is quite varied, and consumer interpretations could range from being organic, vegan, or cruelty-free, to using plant-based or botanical ingredients, to being free from synthetics or fragrances, and even to ‘feeling’ natural in terms of packaging or sensory textures. Since ‘natural’ is not a standardised claim, this ‘clean washing’ can sometimes contribute to a level of mistrust surrounding the ingredient safety of products, which may explain the decelerating importance of ‘natural’ claims among US consumers in the past few years.

Instead, ingredient formulation assumed a greater role than ‘natural’ claims. As more US consumers sought out efficacious, ‘safe’ ingredients, successful brands have responded by making ingredient information and their benefits easily accessible to consumers via improved packaging, e-commerce filtration features, and various content efforts like blog posts, quizzes, or live-streaming events with influencers or doctors.

Skinification and botanical positioning

Because consumers are actively associating botanical ingredients with safety, efficacy and wellness, there has been a rise in beauty brands leading the momentum in ingredientled beauty, which has resulted in some high-profile reformulations. One skin care brand² relaunched its entire offering to focus on plant-based ingredients, like edelweiss, mulberry, and watermelon. Recent business activity is centred around brands that have an ingredient-led positioning. Several acquisitions of smaller ingredient-focused companies by renowned brands in the cosmetics market show how attractive ingredientled beauty has become.

Skinification is rising in hair care, with scalp treatments and hair masks featuring niacinamide and hyaluronic acid. For instance, a hair care brand³ incorporated micellar water, which is typically found in make-up removing facial cleansers, in its cleansing serum to align more closely between skin health and scalp health. A similar effect is found in personal care, in which a deodorant brand⁴ introduced a new antiperspirant which features skin care ingredients designed to condition skin and prevent signs of underarm shave irritation.

New paths

The search for skin benefits in non-skin care categories is underway, adding an element of newness to well-established categories, or resulting in new delivery formats. A pioneer in solid fragrances in Malaysia5 was designed to offer skin care benefits in a fragrance, but without the drying effect that comes from alcohol-based formulas. A sun care brand⁶ launched a sunless tan anti-ageing face serum that contains argan oil, vitamin C and hyaluronic acid.

And although skin care cannibalised some colour cosmetics spend in 2021 to varying degrees in different markets, colour cosmetics is poised to be the next area disrupted by ingredient hyper-focus, with more skinified launches expected moving forward, such as foundations with Amazonian clay, concealers with nourishing coconut oils, and lip tints and lip oils that add colour while nourishing the lips. Consumers will be looking for nutrient-rich colour cosmetics that go beyond covering or concealing skin problems, also supporting their long-term skin health.

This trend is already reshaping baby and child-specific products. Following trends from the adult beauty market, baby care brands introduced popular skin care ingredients into their reformulations while celebrities looked to enter the baby market, leveraging their fan bases and dominant social media presence. With beauty enthusiast millennials and Gen Z consumers becoming new parents, there is a clear demand for baby brands to offer the same variety of ingredients and claims as products in their own beauty regimen.

US Consumers searching for natural or organic features in skin care. figure: Euromonitor International Voice of the Consumer: Beauty Survey, fielded June to July 2021

New positioning

The rising priority of health and wellness is encouraging consumers to dig into specific ingredients coming from Traditional Chinese Medicine and Ayurveda, such as turmeric, moringa, ginger, goji berries, snow mushroom, etc. We see this interest especially pronounced in fragrances through the birth of a nascent but burgeoning category – functional fragrances.

Although functional fragrances remain niche, ingredient players have dedicated resources to expand in this segment to meet growing demand. Functional fragrances include ingredients that provide benefits ranging from boosting, activating, or calming down one’s mood, and are meant to utilise therapeutic properties to address emotional well-being concerns, such as lack of sleep and stress. Fragrance players are heavily investing in research to study the link between olfactory system and physiological changes. For instance, an Indian-based fragrance and flavours company⁷ partnered with universities to research the functional benefits of ayurvedic ingredients, some of which include moringa, brahmi (Indian pennyworth) and kalonji (black seed).

The demand for fragrances with hygienic benefits (e.g. antimicrobial and antioxidant properties, etc.) accelerated due to consumers’ renewed perception of safety, due to the Covid-19 pandemic, but has remained high, influenced by heightened demand for emotional wellness. Popular fragrance ingredients, such as vanilla, tea tree oil, thyme, and rosemary, are already known to have antimicrobial and antioxidant benefits, but industry players are conducting more research to study the relationship between the ingredient and improved function in the body.

Influence of sustainability

‘Green chemistry’ is coming to the forefront and is at the intersection of clean beauty and sustainability. The initiative focuses on eliminating hazardous substances and adding or replacing previous ingredients with biobased ones, essentially combining environmental sustainability with advances in biotech.

Among fragrances – a category which has maintained double-digit growth in 2020 and 2021 globally and bucked home seclusion trends that plagued other social occasion-centred categories – ‘upcycling’ is the latest green chemistry innovation. It refers to the transformation of a by-product or waste stream to a fragrance ingredient that possesses a heavier concentration of scent. One example comes from a large privately-owned fragrance and taste company⁸ which partnered with other ingredient suppliers that process the Bulgarian Rose Damascena – coveted for its sweet rosy floral scent, known for calming, relaxing, and aphrodisiac properties, and found only in Bulgaria’s unique ecosystem, The Rose Valley. The company and its partners created a soluble concentrate out of Bulgarian rose wastewater that can be used in fine fragrances, skin care, and bath and shower, to name a few. This process reduces the quantity of raw ingredients needed while still achieving a comparable level of the quality of scent, thereby elongating the life cycle of raw ingredients, and reducing environmental footprint.

A second example of conscious ingredient sourcing, the distillation process used by a Brazil-based ingredients company⁹ extracts oils from only the stems and leaves of Brazilian rosewood trees, rather than its trunk. This process upholds the legal protection of rosewood trees, which is endangered due to excessive harvesting from Brazil’s colonial period, while simultaneously making the ingredient available to the market.

Seasonality could also become a tool for players looking to improve their sustainable ingredient sourcing and stand out from competitors. Some brands use local harvesting methods and only release certain products during the growing cycles of their respective ingredients.

Outlook

As more of the consumer spending power shifts to younger Gen Z and Millennial consumers – who expect sustainability to be in the DNA of new brands – and as the beauty industry moves closer to its 2025 sustainability targets, green chemistry initiatives are expected to become more mainstream. Beauty and personal care companies and ingredient players should work together now to develop long-term visions that expand ingredient research and create economic incentives that encourage the adoption of green chemistry practices.