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Beauty Inc issue 10/12/2012

International Flavors & Fragrances just inaugurated a new manufacturing facility in Singapore with automated processes allowing for minimized use of energy, water and cleaning chemicals.

This story first appeared in the October 12, 2012 issue of WWD.  Subscribe Today.

In cosmetics formulations, LVMH Moët Hennessy Louis Vuitton has replaced oil polyacrylates obtained from petrochemistry with polysaccharides derived from bio-fermentation or algae.

Neutrogena Naturals’ Web site is wholly powered by nature, thanks to a “first-of- its-kind” energy-efficient “green” server that’s fueled by the sun and wind.

These are just a few examples of how sustainability has gone from buzzword to watchword in the beauty industry in a few short years, compelling companies to radically alter everything from their sourcing and formulation to their manufacturing methods. “Expectations about large companies are becoming more demanding, with people believing [firms] should invest more in sustainability, share prosperity and create value for society as a whole,” said Jean-Paul Agon, chairman and chief executive officer of L’Oréal, during his keynote speech at the WWD Beauty CEO Summit in May. “We have to share our prosperity and our development with the communities around us.” That idea is becoming ever more mainstream. As Elisabeth Murdoch said earlier this summer when alluding to the phone-hacking scandal plaguing the media company run by her father and brother: “Profit without purpose is a recipe for disaster.” Beauty executives have taken heed, making sustainability a business imperative and implementing measures beneficial to all of their stakeholders, including eco-conscious consumers, not to mention the earth, which the United Nations projects will experience a population in- crease to 9.3 billion people by 2050.

Ethics are playing a large role in the shift toward sustainability, and consumers are increasingly wary of unsubstantiated claims. “There is a profusion of logos and labels and certificates,” says Olivier Dubigeon, founder and director of Sustainway, a consulting firm. “Where is the evidence that the promises are being upheld?” he continues, explaining the prevailing attitude.

“Consumers want to have access to well-identified products with less ingredients and with clearly indicated origins.” They’re also looking for authenticity and expecting simplicity and sincerity, he finishes, adding, “A key word is trust.”

Opening LVMH Research’s 12th scientific symposium, in Paris, in September, Claude Martinez, president and chief executive officer of Parfums Christian Dior, declared: “The cosmetics industry is fully aware of what is now jeopardizing our world in terms of the essential raw materials that we use and which will have an impact on the products we are going to develop and sell in the coming years…It is obvious … that some of the raw materials will have to be changed. We have to use substitutes, and some of them are going to be depleted if we do not implement the right strategies right now.”

Martinez cited an example from the makeup category, where frequent closures of refinery sites in Europe have helped drive LVMH’s quest for other resources. “The mineral rocks that we use in mascaras and lipsticks are progressively being replaced by vegetal rocks,” he said. “We are also leading research in terms of veg- etable colors, and we have to look at their stability when exposed to light. We need to focus on numerous domains.

“We do have good news,” he continued. “We now realize that these new raw materials sometimes bear a very high added value for our customers in terms of the final touch and sensuality of our products.”


LVMH is not alone in its focus on the vegetal world when it comes to beauty products. As of last year, 55 percent of the new raw materials used in L’Oréal’s formulas were plant-based, and 45 percent of them complied with the principles of green chemistry, which is the philosophy encouraging product design and processes minimizing the use and production of hazardous substances. That’s versus 29 percent in 2010.


“We need to make sure that our supply chain is really sustainable, and that we are working with our suppliers and supply chain in a way that protects and valorizes biodiversity in order to better protect [it],” says Laurent Gilbert, international development director of advanced research at L’Oréal.


There’s been a push for sourcing control and full traceability while at the same time respecting biodiversity and the local populations that could be impacted, say, by the culling of longosa from Madagascar. Consequently, LVMH and L’Oréal are among a growing number of firms to create programs that help support and develop local cultures involved in the production of natural raw ingredients they use. At L’Oréal, it’s part of the Solidarity Sourcing initiative.

During a three-year partnership, for example, the French beauty giant has worked with a supplier and NGO in Morocco on argan. It not only helped improve the supply chain and labor conditions of more than 250 women in the local cooperative, but it allowed for the introduction of three raw materials from the argan tree: argan oil, argan kernel powder and argan pressed cake extract. These are used in hair-care and antiaging products and scrubs, among other types of skin-care treatments; more than 15 L’Oréal brands benefited from the ingredients, including Kiehl’s Superbly Restorative Argan Body Lotion, Elvive Smooth-Intense Shampoo and Garnier Fructis Sleek & Shine Shampoo.


Givaudan’s ethical sourcing program comprises projects such as harvesting benzoin in Laos, where the company financed the building of a school and the training of teachers during three years. They have similar programs in place in Moheli, the smallest of the Comoros Islands, where they source ylang ylang, and Madagascar, where they procure vanilla. Such programs have been positive on myriad levels for companies, its executives say. During financial crises, for instance, stock of some raw materials can be reduced to a bare mini- mum and many growers therefore go bust and decide to grow another crop that always has a ready market, such as rice or wheat. In order to ensure enough production to support existing and new creations, stopgap measures had to be put in place to help ensure supply—both in quantity and quality terms.


We guarantee a fair-base annual payment, even for minimal harvests,” explains Nicolas Mirzayantz, group president of fragrances at IFF. So even when the market changed in favor of the farmers, they stayed with the firm, maintaining the original price, in recognition of the support the company had provided them during the difficult years.


Companies see their level of employee engagement in sustainability increasing, with suggestions on the subject streaming in from around the globe.


“It really has a huge level of excitement within the organization,” says Michael Carlos, president of the fragrance division of Givaudan, adding that the company’s customers are enthusiastic about it, too.


“People see they can make a difference,” adds Mirzayantz.


Some of the greatest challenges to creating ethical sourcing programs include finding financial and human resources to back them, dealing with weak local infrastructure and discovering quality, cost-effective products, executives say.

As part of its ethical sourcing strategy, IFF acquired Laboratoire Monique Rémy (LMR), a pioneer in sustain- able agricultural practices, in 2000. It produces a limited supply of pure essences destined for perfumery, using organic farming techniques and extraction processes.


LMR is currently launching Rose Water Essential, which is billed to be an ultraconcentrated alternative to traditional rose water. It’s sans water and therefore more sustainable, eco-efficient and less expensive than its classic counterpart, according to IFF. Since its formula is compact (1 kilogram of LMR Rose Water Essential equals 3 metric tons of rose water), it takes less energy to transport and a smaller amount of storage space.

For Rose Water Essential, LMR used a life-cycle assessment, a type of analysis method numerous companies have been employing to evaluate the environmental and social impacts of a product throughout its entire existence. After such a study, L’Oréal, for instance, launched shampoos with improved biodegradability. Last year in the U.S., Garnier Fructis introduced the Pure Clean hair-care
line, whose shampoo and conditioner are each 94 percent biodegradable, thanks, in part, to the surfactants used.

Two years ago, The Body Shop debuted the Earth Lovers collection, with product formulas that are between 93 percent and 100 percent biodegradable. And more recently, Biotherm’s Eau Océane Marine Hydration Gel, which is 99 percent biodegradable, came to market.

At Givaudan, there’s also been a focus on conceiving molecules that are much stronger in odor than usual, so they can be used in products at lower dosages in compositions and eventually have less impact on the environment. In 2009, the supplier introduced a fragrance ingredient molecule called Mystical, which is said to have a strong woody, ambery smoky character that’s powerful and diffusive.

Givaudan has also been at the forefront of implementing biotechnology and green chemistry. In March 2011, the company announced a partnership with Amyris to study the use of Biofene, a sustainable source material, to produce a key fragrance ingredient. Biofene is derived from sugar cane processing (rather than a petroleum-based chemical process, since petroleum is not a renewable resource). IFF sometimes uses microreactors, which perform catalysis using a small amount of a chemical agent that can help reduce the use of energy, such as heat. The company has also been creating ingredients without utilizing chemical sources, instead using living microorganisms, like bacteria or yeast, or alternative substances like enzymes. In 1999, L’Oréal started introducing green chemistry principles into its chemistry labs, and seven years later the company came out with Pro-Xylane, which is said to be the cosmetics industry’s first green-chemistry ingredient. It was formulated from a sugar derivative called xylose and used originally in Lancôme’s Absolue Premium Bx cream. Recently updated, Pro-Xylane was integrated in L’Oréal Paris’ Revitalift Triple Power.


L’Oréal also used a rose’s dedifferentiated cells, which had lost their specificity. Those were then cultured in reactors and represent a new active ingredient for Lancôme’s recently launched Absolue L’Extrait.


To help improve the way it produces Pro-Xylane and other ingredients, L’Oréal employs an E-factor indicator, which measures the quantity of waste per quantity of ingredient used. At first, the measurement for Pro-Xylane was 13(in a scale where commodities score between 1 and 5, and specialty products range from 5 to 50).

“Thirteen was already a good result, but it was not sufficient for us,” says Gilbert. “Now, the E-factor is less than five.”

When it comes to beauty-product packaging, manufacturers and brands are often employing greener materials.“Our approach to sustainable packaging is to optimize the amount of packaging that is needed to protect and deliver the product to consumers, while continually improving the environmental performance of the package,” says Paulette Frank, vice president of sustainability and environment, health and safety at Johnson & Johnson Family of Consumer Companies. “Ways that we improve the sustainability of the packaging materials we use include selecting lighter ma- terials that require less energy during distribution; using post-consumer recycled [PCR] content to reduce our reliance on virgin materials, and sourcing materials like paper cartons that are derived from sustainably managed forests.”

J&J also utilizes new packaging substances stemming from renewable sources. That was the case, for instance, for its Sundown sun-care products in Brazil start- ing in September 2011. Frank explains that J&J introduced a type of plastic in the brand’s bottles called “Green PE,” made from sugar cane. The containers, which had already used PCR content, are now 55 percent to 60 percent Green PE and 40 per- cent to 45 percent PCR.

For its Neutrogena Naturals line, launched in 2011, J&J used bottles with up to 50 percent PCR content and folding cartons made with up to 100 percent recycled content. Further, the carton paper it uses is 60 percent PCR.

“All of our cartons are Forest Stewardship Council—FSC—certified,” says Frank, referring to the independent nonprofit organization dedicated to promoting responsible forest management worldwide.

John Delfausse, president and chief executive officer of Sustainable Packaging Solutions, believes that in the next few years there will be increasing communication about sustainability, in part since many new packaging materials should be launched.

“We’re actually going to be seeing companies coming out with packaging that is now made from a renewable resource rather than a resource that has to neces- sarily be recycled all the time,” he says, giving as examples sugar cane and corn.

Delfausse sees a growing trend toward an increasing use of renewable energy— such as solar or wind—in manufacturing and distribution processes. “It’s important as an industry that we work together to try to maximize our efforts in this area,” says Delfausse, who chairs the Sustainable Packaging Roundtable as well as serves on the executive committee of the Sustainable Packaging Coalition.

J&J’s commitment extends even to the dissemination of the message. For the launch of Neutrogena Naturals, the company launched its green server, driven by solar and wind power, in 2011. The system is created to use just 72 watts, versus the 150 watts to 300 watts traditional servers utilize, and powers the Web site that explains the brand’s commitment “to finding creative ways to reduce the environmental impact of our products.” In all parts of the beauty industry, companies are continuously raising the bar when it comes to their sustainability performance. At Givaudan, for instance, the goal is to cut CO2 emissions per ton of production by 25 percent by 2020 (versus 2009) and to reduce by 15 percent the amount of incinerated and landfill waste generated per ton of production by that same year. It’s difficult for firms to gauge how expensive their sustainability practices are, since they’re increasingly part and parcel of their everyday activities. And executives say even if some are more costly than traditional approaches, the long-term benefits are important.

“It’s a virtuous circle,” says Mirzayantz. Still, a lot remains to be done. August 22 was dubbed “Earth Overshoot Day,” when mankind exhausted nature’s budget for 2012. No one doubts the drive for sustainability is here to stay and will only pick up steam. “People will have to change, modify and improve their business models to be able to deal with this,” says Carlos. “Consumers expect it, customers expect it, employees expect it. The imperatives on business are going to be stronger and stronger. It’s there for the long, long term. And if we don’t deal with it properly, it’s going to have devastating impacts.”




















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