SUSTAINABILITY Beauty's New Battle Ground - The Red Tree
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SUSTAINABILITY Beauty’s New Battle Ground Commentary and case studies on the challenges, innovations and rewards of the sustainable beauty movement By Nick Lamb, World Bachelor in Business at the University of Southern California. May 2021 With support from: Investing in the best ethical and sustainable consumer businesses to help them scale their profits and their impact A leading international beauty brand consultancy
CONTENTS
03 Introduction
THE TIME IS NOW
07 Retailers and Brands – A Shared Journey
THE MANY FACES OF SUSTAINABILITY
09 Innovation and Differentiation
10 Ingredients: Efficacy and the Environment
14 Clean and Natural vs. Environmentally Conscious
16 Beyond Cruelty-Free
17 The Packaging Paradox
18 Full-Spectrum Sustainability: Clarity vs Complexity
20 Beauty For All – The Rise of Inclusivity
SORTING THE WHEAT FROM THE CHAFF
23 The Benefits of Being Born Sustainable
25 Greenwashing – A Risky Game
26 The Role of Regulation
27 “Same Same but Different” – Regional Variations in Sustainable Consumption
ALL STAKEHOLDERS CAN PROFIT
29 The Partnership Approach
30 The Profits of Purpose
32 The Rewards of Navigating Complexity
2
INTRODUCTION
The sustainability movement has permeated the beauty industry faster
and more extensively than any other recent trend – and so it must. Beauty
products have always succeeded through providing their customers with a
‘feel-good’ factor and increasingly customers can’t feel good if they know
they are contributing to the social and environmental problems we face,
rather than being part of the solution.
Success in sustainable beauty can offer entrepreneurs a tremendous
opportunity to have real social and environmental impact, as well as well-
deserved commercial gain. But there is a myriad of challenges to consider
when creating a new sustainable beauty brand:
“What’s our mission?” path and consider how to convey these
Among so many elements of sustainability complex issues to customers clearly and
they must decide which are most important convincingly.
to them, and make sure these elements
“Is our product good enough?”
have a genuinely material impact on
They must ensure that the new product
society and our planet.
addresses a niche in the market and can
“Do my customers connect with this stand out against the countless other
mission?” beauty brands which may be viable
They must evaluate and understand substitutes in the minds of customers.
whether target customers already Sustainability maybe their goal, but the
understand these sustainability issues and quality and differentiation of their product
would value a solution; If not, will they take is vital if they are to grow their business and
on the challenge of educating customers have any impact at all.
on the issue? This requires aligning product
“How will we measure and prove our
and messaging.
credentials?”
“How can we communicate these They must have a clear idea of how they
sustainability credentials?” quantify their sustainability credentials to
They must focus the brand story ensure authenticity for their own peace-of-
authentically on their chosen sustainability mind as well as for customers.
3
These questions may at some point have appeared less significant in light of the
Covid-19 crisis which ripped across the globe in 2020 and 2021. But that crisis has
only served to highlight our interdependence – the impact which even our most
minor choices make on our society and our environment. As some countries
begin to emerge from the pandemic the influence it may have on our habits
and behaviour will be wide-ranging, even influencing the way we feel about our
choices as consumers.
In an area of rapidly evolving complexity the greatest asset maybe information.
This report seeks not to judge, nor to claim expertise or make recommendations.
Instead we aim to present the sustainability challenges facing brands and
entrepreneurs in the beauty industry at present, adding perspectives from
industry experts tackling these issues head-on and highlighting the innovators and
influencers striving for solutions.
This document includes clickable links wherever we quote a statistic or reference a
case study – we hope it serves as a starter guide to navigate your way around the
issues we discuss.
There is no consensus on what constitutes true sustainability in beauty – not
yet, anyway – and undoubtedly readers of this report may disagree certain
of its elements. While it is not our intention to offend or provoke, if this report
opens a discussion and an exchange of perspectives, it can only be a
positive thing.
Ultimately shared knowledge and debate is what will drive
action and sustainable progress.
4
The time is
NOW
5
The natural and organic beauty
market currently represents a
market & is
growing rapidly
For example, sales in the clean
skin-care category have
Doubled
from 4 years
earlier
Consumers are embracing sustainability:
of global consumers
73% would change
consumption habits
to reduce environmental harm
6
RETAILERS & BRANDS
a shared journey
In an effort to recover from the brands and industries. They also have a
turbulence of Covid-19, every retailer great depth and understanding of data
is searching for ways to differentiate around customer behaviour. This insight,
itself and attract customers. Big if shared in the spirit of cooperation,
retailers, such as Carrefour, Walmart, can be extremely useful to all brands,
and Boots, all promote sustainability particularly small brands, in helping
efforts and are making significant them navigate the complexities of
inroads in offering more sustainable sustainability. While brands are being
products by working with their brands pushed to meet retailers’ criteria, they
to that end. Walmart has committed must also innovate and establish their
to removing an astounding one own sustainability credo.
billion metric tons of emissions out
Imelda Burke, owner of the CONTENT
of its supply chain. Amazon is also
store in Marylebone looks
attempting a sustainability push, and
their “frustration-free packaging’ “for and to brands who are
initiative has eliminated half a million tackling the big questions: what
tons of packaging material. Amazon is happens to packaging after
partnering with Hasbro and P&G brands use?; are the ingredients
like Tide to redesign packaging and biodegradable?; are they
eliminate waste. For the most part these
considering resources such as
retailers are pushing on an open door
water use?; or have they created
with their brands - Unilever has pledged
a new format that conserves
to reduce its environmental impact
resources?”
across every aspect of the supply chain
including ingredients, manufacturing, Since many brands are experiencing
packaging and transportation. far greater growth from online sales
than through retailers, it is vital that they
Partnerships between retailers and
formulate a plan to go beyond the
brands make sense. Retailers have
requests of retailers and further
the benefit of a breadth and depth of
pro-actively differentiate themselves.
knowledge about innovation collected
from their experience across multiple
7
The many faces of SUSTAINABILITY SUSTAIN ABILITY 8
INNOVATION &
DIFFERENTIATION
Competition is fierce in the clean and THREEANGL is a Canadian company
sustainability beauty marketplace, that sells a natural deodorant that
so some companies are employing comes in a biodegradable container
innovative earth-friendly strategies to made from agricultural residues which
differentiate themselves and attract fully degrades in 2 years, leaving no
consumer attention. Such programs trace in the soil. Lush has developed a
range from repurposing food waste, to collection of beauty products that are
oil that saves trees, to shampoo bottles sold worldwide ‘naked’ without boxes
that save beaches, to packaging or bottles. Olay is exploring reusable
that does not add to landfills and packages. Unilever introduced a new
creates zero waste. Hydro Phil aims 100% vegan brand, Love, Beauty &
to curb the 13.2 billion-a-year use Planet, which has 100% post-consumer
of plastic cotton buds by supplying recycled plastic bottles. Other brands
biodegradable bamboo and cotton have partnerships with the Forest
swabs. Kirsten Kjaer Weis uses beeswax Stewardship Council and have
in her lipsticks and blushes which help certified cartons, some of which are
promote biodiversity; specifically, manufactured with wind power in a
she buys from Italian beekeepers carbon-neutral facility; the list goes on
whose bees pollinate biodynamic and on. Recycling, reducing, reusing,
flower fields on the border of France repurposing, and eliminating are all
and Italy. LOLI Beauty Skincare uses strategies that may be employed in a
ingredients repurposed from organic- variety of methods. Each brand must
food-supply waste, such as plum pits, decide what works best for its consumer
for their antioxidant-rich moisturizer. and its product.
Herbal Essences, in collaboration
with TerraCycle (a global leader in
recycling innovation), has created
bottles made with 25% plastic that has
been collected from the coastlines in
Canada, Panama and other polluted
spots around the globe.
9INGREDIENTS
efficacy and the environment
One of the fastest-growing trends in the sustainable beauty world involves
clean/natural/non-toxic beauty products.
90% 50%
A survey conducted by students According to a study conducted
at the Fashion Institute of by Harper’s Bazaar, more than
Technology’s graduate school 50% of polled women chose to use
found that over 90% of beauty beauty products that are associated
consumers believed that naturally with having either “clean” or
derived ingredients were better for “natural” ingredients.
their health.
But it’s important to note these are Nonetheless, it is clear that consumers
not regulated terms and are therefore are becoming more conscious about
subject to broad interpretation. The the health effects of the products they
term “natural” usually implies products are applying to their bodies, and they
that use only plant-based ingredients. want “natural” ingredients. What is
There has been a pushback, however, less agreed upon is what ingredients
against the “natural” movement, as must be avoided in order to make a
“natural” is often taken to mean no product clean and natural, and if these
synthetic ingredients, many of which ingredients are actually detrimental to
are needed to make products safer your health.
and to prevent spoiling. According to
Parabens, a common beauty industry
cosmetic scientist Perry Romanowski,
ingredient that extends product life,
there is no such thing as a truly natural
has come to face significant consumer
beauty product, as all cosmetics
backlash, and, as a result, many brands
must be processed in some way.
10have responded by removing parabens altogether from use in cosmetics due
from their products. Consumers’ to insufficient research, but others are
concern about parabens stems from permitted and regulated tightly, thus
a belief that it can alter the normal ensuring they are used safely.
hormone cycle of males and females
Furthermore, there is a risk that brands
by acting like estrogen in the body.
which aim to be parabens-free may
There is also a belief that parabens may
opt to use other, potentially more
increase the risk of cancer, especially
harmful, synthetic ingredients to prolong
breast cancer, in women. However,
the life of their products. There are
the majority of research does not
debates surrounding other controversial
appear to conclusively support either
ingredients such as formaldehyde and
of these claims. Most skincare and
aluminium both of which are rumoured
beauty products contain parabens
to increase the risk of cancer, though
in incredibly low doses, much lower
yet again research does not show a
than what would be needed to affect
consensus on these conclusions. This
the human body. Parabens are not
is not to say that these alternative
regulated by the US Food and Drug
ingredients are completely safe;
Administration (FDA), and the FDA
rather, there is no significant
stated in August of 2020 that
research confirming they
“at this time, we do not
are dangerous, and many
have information showing
provide benefits to the
that parabens, as they
product. Despite the
are used in cosmetics,
lack of condemning
have an effect on
research on many of
human health.” Parabens
these ingredients, it is
have traditionally been
clear there has been a
considered the safest
shift away from ingredients
preservative available, used
that consumers associate with
primarily to increase the safety of
negative health effects – perhaps
products by preventing bacterial
consumers feel that amid all
or fungal contamination that
the confusion and conflicting
can potentially cause illnesses. In
information it’s better to be safe
Europe, five parabens are banned
than sorry.
11Beauty brand Beautycounter, for These cautionary tales have increased
example, cites as a compelling the demand for transparency, while
marketing proposition that it restricts also creating a more research-driven
1,800 ingredients from its formulations. consumer. Sarah Brown of British
skincare brand Pai addresses this issue
The real take-away is that the clean
by “being independently certified
and natural trend has forced brands
organic by Brussels-based
to be upfront about what is being put
COSMOS… a strict standard
in their products, and they are kept in
which ensures that
check by an increasingly aware and
(their) products
activist consumer base. It is also clear
are
that consumers’ sentiment is moving
produced
ahead of, or despite, scientific research.
to the
Companies that are transparent about
highest
their products’ components and make
ethical and
a strong case for the ingredients used
sustainable
will be the ones that continue to thrive.
practices.”
It is important to note that there have
also been several incidents of false
claims in the beauty market that
have led to increased consumer
distrust. In 2010, the beauty brand
Brazilian Blowout was sued for having
dangerous amounts of formaldehyde
in their hair products that claimed to
be formaldehyde-free. In 2017, an
opinion was published by the American
Journal of Obstetrics and Gynecology
that beauty products were exposing
minority women to a greater amount of
dangerous ingredients than Caucasian
women, likely due to the greater use
of skin lightening and hair straightening
products by minority women.
12Rannesh Jansari of Fushi notes:
“We make sure each product has an origin, (and) each ingredient is
listed to show its exact source…to show our customers a very transparent
snapshot of our activities.”
Lastly, Rahil Vora of UK-based health and wellness retailer Revital cautions:
“Clear and simple messaging emphasising very few key sustainability
factors will go further with consumers than overmarketing a wide range of
blanket sustainability factors”.
13CLEAN & NATURAL
vs. environmentally conscious
While natural and clean beauty come from ecosystems such as the
companies often promote the positive humid tropics or arid subtropics where
health benefits of their clean products, the indigenous flora is already under
one area that is often overlooked threat”. Additionally, that same year,
is natural/clean beauty’s effect R. Alexandra Keith, CEO of Proctor &
on the environment. Many natural Gamble Beauty, stated, “If the entire
brands, like 100% Pure, OSEA, and industry switched to organic and
NOTO Botanics, focus their marketing natural materials, it would be a problem
efforts on health and not areas of for the Earth…”
sustainability such as sourcing and
Another worry with natural beauty
environmental consequences. One of
companies is that the sourcing of
the beauty industry’s leading sources
certain ingredients may involve
of environmental danger arises from
dangerous working conditions and
the collection and extraction of
underpaid workers. This is absolutely
ingredients for products, whether
not to say that all-natural beauty
natural or not. Palm oil is widely used
companies have a negative impact
in traditional makeup brands and is
on our environment compared to
considered natural, but its cultivation
traditional beauty companies – but
is also associated with the destruction
rather that a holistic approach
of rainforests. The acquisition of
is required to avoid unintended
natural ingredients can involve the
consequences. Many natural beauty
degradation of natural habitats, usually
companies address issues such as
in tropical biodiversity-rich areas. It also
ethical sourcing, including
increases the incentive for people living
True Botanical and Juice Beauty.
in these areas to replace forest land
Brands need to acknowledge that
with agriculture. Ethnobotanist James
natural beauty has the potential to be
Wong went on record in 2019 regarding
less sustainable if these unintended
his concern about the damage that
negative impacts are not addressed.
sourcing natural ingredients can have,
“particularly when these ingredients
1415
BEYOND
CRUELTY-FREE
The Body Shop appeared pioneering For example, Scottish startup Seilich has
when it built its brand upon the principle built its brand on biodiversity balance
of being cruelty-free and campaigning and giving back to the environment,
passionately against animal testing. cultivating meadow flowers to make
Decades later it is remarkable how its natural floral face mists, thereby
many brands still test their products on providing a sheltered habitat for bees
animals, particularly as a necessary step and other pollinators. On a much larger
to sell those products in the lucrative scale, Groupe Clarins has acquired
Chinese market which still requires it 200,000 acres of alpine farmland
by law. Peta maintains a list of such to carry out biodiversity studies and
brands and encourages customers to cultivate plants for use in the brand’s
switch away. The landscape maybe skincare and makeup formulas.
changing, however, as the Chinese
government announced that from May
2021 it would allow many imported
cosmetics and personal-care products
- such as shampoo, body wash, lotion,
and makeup - to be sold in the country
without being tested on animals. This
may pave the way for an acceleration
in cruelty-free certifications in the
beauty space.
However, the impact of products
on animal welfare doesn’t stop
with testing. Increasingly brands are
having to consider the impact of their
ingredient sourcing on the destruction
of natural habitats, as well as the
downstream impact on ocean life of
the contaminants in personal care
products washed away in our sinks.
16THE PACKAGING
PARADOX
Many beauty retailers and brands emissions in transportation as well,
have focused their sustainability efforts relative to cardboard packing. Given
on packaging, perhaps because it this conundrum, one strategy, laid out
may seem to be one of the easier in a report by Bain and Company, is
and obvious aspects of sustainability to simply eliminate all unnecessary
to address. Large brands and retailers packaging and minimize the container
such as Loreal, L’Occitane, Garnier, for the product. Other complementary
and Sephora are vowing to improve approaches include the use of recycled
the recyclability of their packaging. It is material in the packaging and ensuring
safe to assume that in the foreseeable that the packaging is recyclable as
future most beauty companies will have well. There is hope on the horizon: As
transitioned to eco-friendly packaging Liha Okunniwa of Liha Beauty observes:
in response to perceived consumer
“(as) more larger brands start
demands. Eco-friendly packaging
to buy and use (sustainable)
can mean many things ranging from
minimal packaging to recyclable materials instead of cardboard,
packaging to no plastics. the more flexibility that suppliers
would be able to have in their
Brands can have surprisingly difficult
pricing and minimum orders which
choices to make here. For instance,
would then give smaller businesses
eliminating non-recyclable plastic
more options”.
is a more vexing task than some
manufacturers and consumers may
have anticipated. It’s not just about
costs - from a manufacturing and
distribution point of view, plastic has
many advantages over cardboard, its
chief alternative. Plastic can expand
the life of products as it is exceptionally
durable. In production, plastics emit Finally, some brands, such as Lush
a fraction of the carbon emissions and Kiehl’s, offer discounts for future
produced by cardboard. Plastic purchases when the brands’ empty
packaging is also significantly thinner containers are turned in for recycling at
and lighter, leading to reduced CO2 the retailer.
17FULL-SPECTRUM
SUSTAINABILITY
clarity vs complexity
In addition to caring about the environment, packaging, and ingredients,
consumers also care about how products are produced, companies’ hiring
practices, carbon footprint, and efforts to “give back”. Can a company address
all these concerns and do it profitably? There is no right or obvious answer, nor a
one-size-fits-all roadmap to success. Brands such as Credo Beauty, Drunk Elephant,
By Humankind, and True Botanicals have all adopted different approaches.
However, they all promote a message that is crystal clear, directly communicated,
and appealing to the sustainably-focused consumer. These brands each have
established products and cultivated an image that meets consumers’ wants and
needs. Per the chart below, almost all these brands rely on a strong social message,
but those messages vary as to the breadth and depth of sustainability measures.
Comparison of sustainability
elements across selected brands
Sustainable Eco-friendly Social Clean/Natural Vegan Ethical
Beauty Brands packaging Message ingredients Sourcing
By
Humankind
Credo
Beauty
Fenty
Tata
Harper
Love
Goodly
Mac
Cosmetics
(based on claims made on their websites at the time of writing)
18As the chart suggests, sustainable environmental impacts to company
companies attract new customers ethos. However, Anna Teal, CEO of
based in part on their definition of Aromatherapy Associates suggests,
sustainability. Sustainable brands
“Whilst a brand may not be able
can now encompass a wide range
to address all elements initially,
of environmental, social, economic,
and governance values. By tackling at least being cognizant of them
everything from gender rights to health and working towards a goal with a
needs, brands can better connect clear plan is better than not at all.”
with their customers and fulfill different
niches in the market. Brands that clearly
identify their values also can create a
community around their brand, resulting
in loyal repeat customers. Rihanna was
able to create a community around
her Fenty brand promoting social
inclusiveness and equality by offering
make-up focusing on a wide range of
skin tones “so that people everywhere
would be included.” While her brand Likewise, according to Imelda Burke,
encompasses very few other aspects
of sustainability, she has fulfilled a niche “to market a product, brands need
in the market and attracted consumers to be transparent about what they
with her popularity and resonant social have done that makes the product
message. Other brands, such as Love sustainable and provide clear
Goodly, have tried to fulfil almost every information on how it is better.
aspect of sustainability they can find. Focus on what elements they
Again, there is no easy path. The have done well, honestly, while
UK website Ethical Consumer rates improving on the rest”.
three makeup brands the highest: Companies that are transparent with
Lush, Green People, and Odylique. ethically minded consumers about
These brands all attempt to address their sustainability efforts are generally
every aspect of sustainability, from rewarded with positive results.
19BEAUTY FOR ALL
the rise of inclusivity
Most successful sustainable brands Charlotte Mensah provides products for
convey a strong social message, natural, textured and mixed heritage
potentially around personal health and Afro hair, but also drives diversity
environmental awareness, but inclusivity through product creation all the way to
is a separate issue deserving real focus point of sale; Kohl Kreatives innovates
for brands, especially in an industry beauty products for consumers with
so often criticised for propagating motor disabilities, but more than just
unattainable ideals. On a product level being a makeup brush brand, aims to
it is about providing for a wide range be a force for social change, with its
of needs, skin types, genders, ages founder Trishna Daswaney establishing
and ethnicities, but on a brand level, skincare and beauty workshops to
as Kathleen Baird-Murray writes in her support transgender and cancer care
Vogue article, “inclusivity is more than communities; Live Tinted started life as a
just an extended foundation range”. digital community focused on inclusive,
The brands she mentions have been diverse beauty, before the brand’s first
created with inclusivity at the very heart product Huestick was created – a cult
of their mission. multi-use cheek, eye and lip product as
diverse as its users.
Age is another often overlooked factor
which can be better addressed. For
example, teenagers are targeted
by UK-based Planaire,
and not just for
their
20skin needs, but to address emotional culture of transparency. Its activist posts
aspects of choosing their skincare often highlight examples of cultural
products, aiming to deliver a more appropriation and racist undertones all
positive experience of beauty rather too frequent in the beauty industry.
than just selling products to help with
For an authentically inclusive approach
acne. Messages embedded within
brands must strive to embed a focus
products and packaging show diverse
on inclusivity not just into their products
faces, people with disabilities and
but into everything they do from hiring,
others in vulnerable positions showing
sourcing, product creation, marketing,
a more realistic side of life versus
distribution and activation. Customers
the dream sold by traditional
are savvy enough (and able, in the
beauty brands.
age of information) to look under the
Of course, there are also warnings to bonnet and discover if it is genuine,
be taken from high profile mishaps or just about a range extension
and lack of sensitivity around issues of or empty words in a marketing
inclusivity by larger brands, often called message. Avoiding reputational
out immediately for their perceived risk is as compelling a motivation to
wrongdoings on social media. succeed here, as is the opportunity to
Estée Laundry’s Instagram account differentiate one’s brand so positively
now has 183k followers and aims to from the industry at large.
hold brands accountable and create a
21Sorting the
WHEAT
from the
CHAFF
WHEAT
from
CHAFF 22THE BENEFITS OF BEING
BORN SUSTAINABLE
Larger retailers/brands are finding cosmetic products is expected to
it difficult to compete with smaller be worth over $20 billion by 2025
emerging brands that are born (according to a report by Grand View
sustainable. This has forced change Market). With more millennials adopting
upon larger, legacy brands. The vegan lifestyles, the vegan beauty
beauty giant Loreal has committed to market is one area that is not yet
100% eco-friendly packaging by 2025. oversaturated, leaving an
That’s laudable, but that is still years opportunity for brands
away while many smaller companies that are nimble and can
have already achieved these goals. pivot to meet vegan
For example, the British beauty consumer demand
brand Lush helped pioneer the zero- quickly.
packaging movement and required
no transition. While large brands are
working on modifying limited aspects
of their production, smaller, more agile
companies are addressing a wide
range of sustainable issues including
being organic, vegan, ethically
sourced, and cruelty-free. These
segments are expected to
grow faster than the overall
market. For instance, the
market for vegan
23A word of caution, however, for startup beauty brands: according to a
2019 Ipsos survey, consumers do not switch brands easily.
More than 80% of
respondents said they
were satisfied with their
current beauty products.
Additionally, 55% said
they would choose a
brand they know and
trust over a new brand.
Notably, however, the
same survey found
that two-thirds of the
respondents would try a
new brand if they offered
something “natural”.
and almost 60% said they
would try a new brand if it
were “clean”.
24GREENWASHING
a risky game
Though the potential gains from imagery – pictures of rainforests on
marketing sustainable products are earth-coloured packaging, with no
vast, dangers and pitfalls await any supporting authenticity; (ii) Misleading
brand who tries to fool an increasingly claims, such as “chemical-free” which
educated, well connected and vocal maybe subjective at best; (iii) Hidden
consumer. Over time the old tricks trade-offs – marketed as recycled
of superficial green marketing, or where only a percentage of one
“greenwashing” are more at risk from ingredient is recycled then blended
being spotted and publicly vilified. with virgin materials; (iv) Irrelevant
claims – such as being free of certain
It’s perhaps apt that this helpful list of
ingredients that are in fact banned
“types of greenwashing”
anyway; (v) Lesser of
was compiled by
two evils – referring to
Gen-Z high school
e.g. organic versions
student and activism
of products which
writer, Hannah
are still terrible for the
Nguyen. The list
environment.
includes (i) Green
25THE ROLE OF
REGULATION
Though consumers are growing stating that their “role is to make sure
increasingly aware of ‘fake news’ that consumers can trust the claims
and false claims, they are also time- they see on products for sale and don’t
constrained and may not have the fork out extra for items falsely presented
time to investigate every choice as eco-friendly.” They are also working
they make. Third party certifications with the International Consumer
offer one solution, and though those Protection and Enforcement Network, a
certifications themselves are not global network of consumer protection
regulated, it is seen as better than authorities from over 65 countries,
marking one’s own homework. indicating that perhaps the move
Regulation around sustainability claims toward regulation will be a global effort.
may also be on the horizon, finally. In In the meantime, authenticity and
2020 the UK’s Competition and Markets brand trust maybe the best shortcut for
Authority announced they would begin consumers. And trust is difficult to win,
investigating whether green marketing hard to keep, and often impossible to
claims were misleading consumers, win back.
26“SAME SAME
BUT DIFFERENT”
regional variations in
sustainable consumption
Some markets may be more attractive than others from a producer’s perspective
as consumers are more inclined to pay for sustainable products, while in other
markets consumers are more sceptical of sustainability and health claims.
According to a Harris Interactive study conducted several years ago which asked
if consumers would pay more for green products;
In Italy almost 60%
said yes.
Followed by France
at 46%.
The US, Germany and
Spain all had willingness
scores in the low 40%.
The UK came in at 37%.
Notably, the same survey showed that 50% of the UK and roughly 33% of other
counties were sceptical of businesses claiming green credentials. As the clean
and green movement grows, those numbers should improve. The study reinforces
the importance of substantiating product claims and establishing brand credibility
with solid information and data readily available to the consumer.
27All
STAKEHOLDERS
can
PROFIT
PROFIT 28THE PARTNERSHIP
APPROACH
The goal of sustainability can be on transparency, standards, education
complex and challenging, which is why and innovation. These partnerships
it can be beneficial for beauty brands should help companies develop
to form partnerships with organisations methods to successfully measure and
within and outside of the beauty transparently communicate about their
industry. Non-government agencies, sustainability efforts. When impacts can
industry groups, or other groups that be documented and clearly articulated
have a focus on sustainability can help for comparison across products,
brands learn to operate efficiently companies and consumers
while being sustainable. can make decisions more
Previously mentioned confidently.
Beautycounter, a full-
line beauty product
company that sells into
Canada and the US,
partners with researchers
and universities to
formulate products conducive
to personal and environmental health.
More formal cross-industry partnerships
are emerging. In their excellent
sustainability report, “The Courage to
Change”, The British Beauty Council
called upon the industry to collaborate
through the creation of a Sustainable
Beauty Coalition, to set ambitious
targets for the industry to work towards
29THE PROFITS
OF PURPOSE
While implementing sustainability This can generally drive up beauty
measures can be difficult and complex, product production costs, but not
there appears to be a clear incentive always. Rannesh Jansari from Fushi
to do so. Sustainability-linked consumer explains that;
products have grown nearly six times
“we aim for a lower price point,
faster than other brands, according to
as we buy direct from source and
the Harvard Business Review.
manufacture everything inhouse.
A 2018 Nielsen Study indicated that As a result, we can offer a high-
73% of global consumers say they quality product at a competitive
would definitely or probably change
price.”
their consumption habits to reduce
their impact on the environment. In the
beauty industry, customers have shown
a willingness to pay more to ensure they
receive a higher quality, ethically made
product. In an Accenture study in 2019,
more than 50% of consumers confirmed
they would pay more for sustainable
products.
Going organic generally involves
increased costs due to a more limited
And ingredients and shelf life may be
product shelf life and the increased
offset by other reduced costs. There
cost of ingredients. Liha Okunniwa of
are hopeful signs that by forcing a
Liha Beauty notes that;
re-evaluation of the entire production
“naturally if something is truly process, sustainability can actually
sustainable it is likely to be at a streamline operations and benefit the
bottom line, according to research
slightly higher price point than
by Bain and Co. Likewise, disruptions
mass market products, due to
caused by COVID-19 have forced
the processes and extra lengths
a rapid re-evaluation of products
brands need to go through to
and assessments of cost structures
ensure true sustainability.”
30and distribution outlets in the beauty Product formulation, packaging,
industry, as every aspect (ingredient and distribution channels must all be
acquisition, manufacturing, and weighed when examining the cost
distribution) has been affected. Some of being sustainable, and these will
companies have unexpectedly found undoubtedly vary brand by brand.
that as packaging becomes more
Sarah Brown, founder of Pai Skincare,
simplified and less wasteful, costs can
highlights the advantages of being a
drop, sometimes meaningfully. Costs
vertically integrated business:
can also be reduced by eliminating
unnecessary steps in the supply chain, “This gives full and unique visibility
which can in itself be eco-friendly. of your supply chain and the
Rahil Vora of Revital notes that, sustainable practices that run
“in the long run many sustainable with it”.
options such as refill and
packaging free concepts will in
fact be more cost effective and
cheaper for price-conscious
consumers.”
Anna Teal believes that there are some
excellent good-value brands available
that take sustainability seriously – with
Boots Botanicals and Weleda Skin Food
being two examples. Sustainability
doesn’t need to cost the world.
31THE REWARDS OF
NAVIGATING
COMPLEXITY
The sustainable beauty market is in its It is now clear that the
relative infancy and appears to offer sustainability movement is
substantial growth opportunities for not only urgent and vital for
those who can find the right formula, people and planet, but also
both metaphorically and literally. for profit, competition and
Launching new beauty brands and success. In an industry
products has always been inherently focused on looking
risky. With the additional battleground and feeling its best,
of sustainability not replacing the this combination of
old requirements of product, price forces is irresistibly
and quality, but adding to them, the attractive.
complexities of the market are greater
than ever.
But for those that meet a consumer
need, deliver a superior product,
and implement sustainable measures
authentically, strategically and
effectively, and importantly, are able to
communicate all of this with simplicity,
the size of the prize is well worth it.
Both financially and in terms of the
much bigger picture:
Doing well while doing good.
3233
is a sector-focused team with is a leading international beauty brand
hands-on expertise of investment in consultancy, and a powerhouse of
consumer businesses, in sustainability ideas, insight and inspiration. With our
and in company-building. We aim high level of beauty experience and
to be the shareholder of choice for a global client list spanning major
sustainable consumer brands and their corporates, private equity and
suppliers, scaling profits, improving well-funded start-up’s, The Red Tree
performance, and boosting positive is the go-to-company for vision,
social and environmental impact. We strategy, and implementation.
are reputationally compatible, mission Established in 2010, we have a proven
aligned, ethically certified, and offer track record in building beauty
private capital and relevant expertise businesses and brands. We develop
to companies who want to preserve and steer your ideas, challenge your
and enhance their ability to deliver thinking and deliver results.
on their mission. It’s sustainability
For an informal discussion on how
without sacrifice; It’s growth without
we might help you, please visit us at
compromise. We believe it’s the future
theredtree.co.uk or contact us via
of business.
LinkedIn.
To see how we do it, please visit us
at futurebusinesspartnership.com,
or contact any of us via LinkedIn.
With thanks to Gina Ritchie, Anna Teal, Liha Okunniwa, Rannesh Jansari,
Sarah Brown, Rahil Vora, Imelda Burke, Lizzy Moore, Melissa Barrett,
Simon Colbeck, and all those who gave their time and effort in the
creation of this report.
The views, information, and opinions expressed in this paper are those of the authors and do not necessarily reflect the official policy or position of
People Planet Profit Limited (trading as Future Business Partnership), The Red Tree Consultancy Ltd, or any other agency, organisation, employer or
company. Any observations, analyses, comments, conclusions and recommendations are those of the authors, and are made in good faith based on
information reported to us and the information to which we had access. We cannot, however, give any warranties or guarantees as to the accuracy or
appropriateness of the content thereof, and of the information or opinions contained in this paper.
Copyright © 2021 People Planet Profit Limited (trading as Future Business Partnership) & The Red Tree Consultancy Ltd. All rights reserved.
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