Amyris, the Emeryville, California-based biotechnology company, is ever evolving.
It began life in 2003 with a $42 million grant from the Bill and Melinda Gates Foundation to create a molecule to treat malaria by engineering the genetics of yeast strains and fermenting them in sugarcane syrup, in order to convert basic plant sugars to hydrocarbon molecules.
Since then the company has adapted this technology to develop clean ingredients, including its sugarcane-derived squalene, an alternative to that found in deep-sea shark livers, for countless markets.
“Beyond squalene ingredients, we’re the world’s largest producer of natural vanilla. We’re the world’s largest producer of the patchouli oil, which goes into Tide detergent and Tom Ford perfumes. We’re the world’s largest producers of sandalwood. So there’s a whole series of ingredients that we make sustainably, and nobody else has the technology for,” said president and chief executive officer John Melo.
During the pandemic, the business evolved once again. Prior to COVID-19, 80 percent of Amyris’ business was in supplying ingredients to other companies, while the remaining 20 percent was its consumer brands, including Biossance. Today, around two-thirds of the business is devoted to consumer brands and one-third is focused on supplying other businesses.
The reason for the switch was twofold. First, Melo realized Amyris could have a greater share of the profits by funneling the ingredients into his own brands. Second, when he was trying to sell squalene to some of the biggest beauty companies in the world, they would often tell him it’s not the same as the squalene they source from sharks and olive oil. (Amyris and other biotech beauty companies can create molecules that are identical to the ones found in nature, but are instead, produced in a lab.)
“That’s crazy,” he continued. “In 2015 I decided we are going to tell our story to the consumer, because I’m going to bet that if the consumer knows the facts, and the consumer is going to get more and more focused on ingredients, we will win with our consumer brands. And then we’ll force the rest of the industry to really make better decisions — decisions focused on the health of our planet, rather than the profits of their profit loss statement.”
The company launched its first consumer beauty brand Biossance, which centers around squalane, in 2016, and more recently followed with a number of sustainable, clean brands with celebrity partners.
Given its aggressive move into direct-to-consumer and numerous launches this year, all focused on bringing sustainability to the masses, Amyris is the 2022 WWD Honor recipient for Best-Performing Beauty Company, Small Cap.
As well as Naomi Watts’ just launched menopausal beauty brand Stripes, there are also color cosmetics line Rose Inc. with model Rosie Huntington-Whiteley; hair care brand JVN with “Queer Eye” star Jonathan Van Ness; beauty brand Costa Brazil with former Calvin Klein designer Francisco Costa, and its newest partnership — a deal with David Beckham for products set to launch in 2023.
While Melo wouldn’t say much about the Beckham brand, he teased that it will launch around the middle of next year and will be focused on tattoos, of which the British soccer legend has many.
“The issue I’ve learned in developing this brand with him is like within a week of getting a tattoo, it’s no longer Instagrammable. You lose the shine. And obviously, your skin gets affected when you get one. Imagine a product that brings back the shine of a fresh tattoo, while nourishing your skin and making it healthy,” he said.
And with its latest launch EcoFabulous, Amyris is thinking younger. The direct-to-consumer brand, which will span skin care and makeup and launches at the end of October, is targeted toward younger Millennials and Gen Z. Up next will be For You, a hair brand partnering with actress Tia Mowry and Walmart Inc., with Melo citing the importance of democratizing sustainability.
But while the company has been teaming up with a number of celebrities, it doesn’t want to be seen as a typical celebrity brand incubator, with Melo describing the ventures so far as chance meetings with somebody who has a really interesting insight or positioning around a particular intersection.
He crossed paths with Van Ness and Huntington-Whiteley due to some of Amyris’ other business arrangements and revealed that in getting to know them, the “insight popped. That’s why I say it was accidental. It wasn’t like we made a list of people.”
On the recommendation of her friend, former Calvin Klein designer Costa, Watts, meanwhile, pitched Melo the idea for Stripes, which also led him to acquire Onda, the clean beauty retailer she cofounded in 2014, for an undisclosed sum.
So far the consumer has been responding well to Amyris’ consumer brand strategy, according to Melo, helped by an increased interest in wellness following the pandemic.
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“Skin care just took off. Because of the focus on health during COVID[-19] it took off in a way that was grounded in fact,” he said. “Consumers want to know what ingredients are you putting in it? How are you formulating? Why should I believe you? And why is that better than the other? And then efficacy and performance really took priority. It’s no longer ‘tell me a great marketing story’ or ‘put a celebrity face on it.’ We got lucky that came together at the same time that we started really building out our consumer portfolio.”
Financially, Amyris is seeing an impact in its numbers. Sales were up 25 percent year-over-year for its second quarter, at $65.2 million. That figure is below analyst estimates of around $80 million, but the company also saw consumer revenue more than double, jumping 108 percent to $43 million compared to the same period a year earlier. The company reported a net loss of $110 million, compared net income of $15.4 million a year earlier on the back of higher spending on building inventory and brand development.
Even after all of Amyris’ evolutions, Melo said he’d still describe the business as a biotechnology company.
“We’re science in the deepest way. Nobody does the science we do in the world at the level we do it,” he said. “We don’t buy what’s available to us and take somebody else’s story. We literally look at what are the best ingredients in the world for the categories we play in. And if they’re not produced sustainably, how do we make them sustainably to really drive and deliver to the consumer, the best offering that we can?”