The global beauty industry is currently valued at US$532 billion, according to a 2019 report from analytics firm Edited. And with a diverse cohort of Gen Z shoppers accounting for 40% of total consumers by 2020, there seems to be a greater need for companies to re-evaluate their brand values to align with the turbulent shift.
Millennials and Gen Z have grown immune to brands’ usual flowery marketing tactics. These dynamic citizens with distinct traits of being culturally agile, savvy, and highly inclusive. They value transparency and authenticity. Sustainability is deeply woven into Gen Zers’ worldview, as they’ve witnessed first-hand the impact humans have had on the plane.
Statistics such as Nielsen’s 2018 global survey has shown that 80% of Gen Z feel strongly that companies should help the environment, with 68% of U.S. Gen Z shoppers saying that they have made an eco-friendly purchase, and 82% of Southeast Asian Gen Zers claiming they prefer products from ethical brands. Furthermore, McKinsey’s annual report, in partnership with Business of Fashion, cites that 66% of consumers are willing to pay more for sustainable goods.
These studies indicate that companies who continue to market unsubstantiated claims will likely soon face troubled time, as transparency-minded customers will begin to avoid brands that do not align will their personal well-being and beliefs.
With demands for clearer and cleaner solutions, where can the beauty industry go from here? Based on current trends, it seems that packaging and corporate social responsibilities will be the critical streams for businesses to address within the beauty industry.
The hard facts have been useful in galvanising giants and conglomerates to act more diligently. L’Oréal, a leading company in the beauty industry, announced a multi-year agreement with Loop Industries to purchase PET resin made of 100% recycled materials for its packaging needs for the next several years. An incubator for innovation, Loop’s proprietary low-energy technology depolymerises waste PET plastic and polyester fiber and transforms it into virgin-quality PET resin. Another player at the forefront, P&G, has also followed suit, adopting similar green practices with a commitment to sign a five-year contract to purchase recycled plastic from a different source.
Although leaders in the business technically have more resources to address plastic in the environment, their business models are large and slow to change, whereas small entities such as startups and direct-to-consumer brands have an edge, with the ability to experiment with different supply chain and business models.
Randi Christiansen, the CEO & Co-Founder of Nécessaire, a new contender in the body care market, sums up the sustainable movement as “not a destination, but a commitment and reiterative journey. Trust is a critical component for us and we remain transparent about our business practices in every way possible. We like facts, and we like sharing them.” The skincare and lifestyle brand has adopted a 100% post-consumer waste shipping system. It uses 85% post-consumer waste boxes, as Christiansen further denotes that “no virgin forest materials are ever used.”
Besides pivoting to the use of more recycled materials, there also needs to be more profound developments in reusable and refillable packaging. A representative of leading international providers for beauty packaging International Cosmetic Suppliers, Eleanor Bunting, states that “in order for consumers to consistently reuse their refill it has got to be aesthetically pleasing and functionally effortless to use.”
“I think an aspect of sustainability that often gets overlooked is the social impact. Sustainability, at its core, spans further than just environmental, and includes social and economical issues”, says Chris Young of New York-based skincare brand Circumference. He further explains that “our focus has been to create a positive impact across all of those factors. So when we source our ingredients, our goal is always to help benefit independent producers through fair trade practices and develop a closer relationship that allows us to have a longer-term positive impact in their operations.” During difficult times with Covid-19, the brand has also worked with food banks in New York City to help those most affected by the pandemic.
Beyond the bustling capital cities of the world, brands like Rahua and Costa Brazil are also giving back to indigenous communities deep in the heart of the Amazon. Anna Ayers, Rahua’s Co-founder, and CEO share the roots of the brand by explaining that “the discovery of Rahua oil became the catalyst to support the mission’s work in helping the indigenous people create a healthy, self-sustained, growing economy. All Rahua plant ingredients are hand-harvested by the Amazonians through ancient, ancestral, ceremonial practices that date back from centuries.” Ayers takes pride and states that “Rahua provides tools and legal support for tribes and leaders to achieve ownership of their land. Thus far, we have preserved 95,000 acres of biodiverse tribal lands, respectively, which produces oxygen and sequesters C02 for approximately 100,000 people annually.”
With Costa Brazil, co-founder Francisco Costa decided to partner with Conservation International to scale up their efforts in offering empowering alternative opportunities to river-side agricultural communities who are burdened with growing conflict crops. The two Amazon regions that benefit from this longstanding collaboration include the Xingu area, which has seen severe threat due to deforestation and the Yawanawá tribe.
A corporation’s social efforts also encompass animal welfare. Vegan beauty launches increased by 175% from 2013 to 2018, according to Mintel, and is a category forecasted to grow steadily in the coming years. E-tailers such as Net-a-Porter are keeping up with the wave with the introduction of their Net Sustain initiative, which highlights brands that abide by a series of sustainable codes. Animal welfare is a key pillar within their extensive criteria. Net-A-Porter’s Global Beauty Director Newby Hands details that “with growing awareness of animal welfare issues and the impact of agriculture on the environment, we have adopted best-of-class practices and adhere to certifications such as the Responsible Down Standard, the Leaping Bunny, and the Vegan Society bodies.”
Brands are more committed than ever to crack the sustainability code and forge a wholesome communication strategy to connect with the new generation of consumers. This said, brands largely still need to find clarity and streamline their messaging, as more is not necessarily merrier. Those who overpromise or greenwash their practices without real sustainable policies will face consumer backlash.
Brands need to find their own unique solutions to complement their businesses. It is vital to be open to newness and innovation, and to be resourceful when enacting change. There is no one-size-fits-all mechanism, so agility is the key to survival.