Cosmoprof North America

REPORT ETHICALLY CORRECT

The consumers’ holistic eco demands

The definition of what ethical means continues to expand. As vegan, cruelty-free, and Fairtrade claims have become baseline, especially in the Western markets, companies today are coming under increased scrutiny for the way they treat employees and execute their full supply chains. Consumers are beginning to judge ethical correctness not only by the “made in” label and origin of a product’s raw materials, but also by its “made by” aspect, i.e. who is behind the production, and how are these individuals being treated? This also applies to ethnic and gender equality. Going forward, consumers will value companies that don’t push for excessive consumerism, that have clear goals for circular economies, and that engage in restorative actions to repair past ecological “sins.” The prominent movement for Ethical Correctness requires brands to demonstrate impeccable ethical behavior in all aspects, and this demand is continuing to gain importance as consumers are increasingly conscious of a more holistic approach to their purchasing habits and the industry as a whole. It is clear that society is going through seismic changes and reinventing its rules. Will this lead to a “reset-all” of our traditional standards? At BEAUTYSTREAMS, we have identified five territories that will drive ethical consumer behavior in the coming two years.

ACTIvE CONTRIBuTION

Imagine a brand that is harnessing the power of its community to take a public stand on social, political, and sustainability issues. At Beautycounter, an early clean beauty proponent, that strategy has helped the company to attain $1billion in value. The Californiabased brand is a frequent visitor to U.S. Congress and has helped pass legislation on clean ingredients and transparency, directly impacting local communities in its home state. Beautycounter has cut over 1,800 harmful ingredients from its formulations, which it has found are disproportionally affecting women of color, something it considers both unethical and unjust. And its ethical actions are paying off. According to World’s Most Ethical Companies® index, honorees have historically outperformed others financially, demonstrating the market value correlation between ethical practices and performance. At Beautycounter, this translated into sales soaring by an estimated 20% to more than $500 in 2020, a pandemic year, which many found challenging.

ALL TOGETHER

Society is witnessing a rise in minority populations, an increase of inter-racial marriages and migration, and a clear rise in a willingness to assert one’s individuality. We are finally entering the age of full equality with regard to gender identity, ethnic background, age, religious beliefs, sexual orientation, and special needs. Creating inclusive cultures that value difference means avoiding terms such as “multicultural” or “ethnic” to designate nonCaucasians because true multiculturalism includes everyone. Increasingly, brands are addressing needs rather than ethnicity – cue hair products, for example, that are designated for “tight curls “as opposed to “Afro hair.” Positive examples include: DEPIXYM’s highly-pigmented cosmetics which celebrate the idea of self-discovery, regardless of race or gender, through the power of make-up. “We got tired,” saythe brand’s founders. “Tired of everything being positioned to within an inch of its life... We wanted to launch epic products, for people. That’s it. No positioning. No gender. No rules.” The discussion around gender has become louder over the past few years with politics and corporations now deploying further initiatives to help abolish the cliché of “human identity definition through sexual identity only.” Note that more than half of Gen Zs agree that gender is non-binary. Meanwhile in fashion, the industry is leading efforts to address consumer concerns about non-standard body types, as seen on the latest round of runway shows. Brands are increasingly recognizing the market significance of those with disabilities, too. Considering that one billion people around the world live with some form of

disability, making up around 15% of the global population, the opportunities for innovative product development are plentiful. Even when it comes to product packaging, inclusivity is key. Think disability-friendly designs, e.g. using symbols and braille, easy-toopen mechanisms, and ergonomic tools. To wit: Olay developed their Easy Open Lid – a winged lid with imprinted braille, for those who struggle with grip or who are visually impaired. The brand has chosen not to patent this lid, but rather to share the design with the rest of the beauty community, and is also offering the lid to consumers at no additional cost.

CuLTuRAL sENsITIvITy

In order to genuinely understand and address consumers it is key to reflect our diverse society within the product development, and, on a human level, within the marketing teams themselves. Only a team that lives and breathes like the society it targets will be culturally sensitive enough to successfully address consumers who look for authenticity and transparency.

A truly multicultural brand goes beyond the expected lineup of models and influencers with a spectrum of skin shades and gender identities, and incorporates cultural sensitivity in product development and communication at the base level, and this includes a plethora of religious beliefs, too. Takes cues from Australian beauty brand Sienna Byron Bay which launched a collection of nail polishes that are Wudu-friendly, meaning: because their new formula is water- permeable, it is compatible with the cleansing ritual practiced by individuals of the Muslim faith, an aspect that is often overlooked. White-centric ideals of beauty have long dominated the mainstream skin care industry, driving a significant lack of inclusion and representation in terms of care for darker skin, when in fact the distinct physiological characteristics of melanin- rich skin demand a more targeted skin care routine that treats and caters to its special requirements. Since melanin-rich skin can display various common skin conditions differently than white skin, it is also more reactive and prone to forms of trauma and inflammation which can lead to the likes of hyperpigmentation, acne, and over-active scarring, among other issues. Consider that by 2050, what are now minority populations are expected to constitute the majority of the United States. And, by 2045, “white” individuals are slated to account for only 49.7% of the population while those who identify as Hispanic and Black will represent 24.6% and 13.1% respectively. In fact, Gen Z already boasts a non-white majority in the US. The Latinx (used as a gender-neutral term to describe people of Latin-American origin, mostly in the U.S.) community especially is seeing a surge in attention. With Latinx consumers in the U.S. spending 13% more than the national average consumer on beauty and personal care products, and with their overall beauty spending expected to top $1.9 trillion by 2023, the market has seen a notable rise in Latinx celebrities, influencers, and entrepreneurs launching brands that champion the richness of the Latin culture through heritage ingredients and local pride. Cue Rare Beauty, LU LatinUS Beauty, Treslúce Beauty, to name but a few.

FROM “MADE IN” TO “MADE By”

Consumers are closely watching how employers are treating workers, especially in difficult times of crisis, and this influences their purchases. 65% of people say that a company’s actions will likely impact which brands they decide to purchase in the future, according to a survey by People magazine’s Insider Panel. The survey also found that more than 89% are monitoring the treatment of employees by the companies they work for, and watching whether corporations lay off workers, offer paid sick days, give back to their communities, etc. Showing the people behind a brand, for example, those involved in product development, helps humanize the brand and create a direct link to the target consumer (the “made by” factor). Cue Beco, the soap company with a disabled workforce (accounting for a whopping 80% of its staff), which invites businesses to “Steal Our Staff” in a campaign that works to help close the disability employment gap. Far-sighted brands are supporting local communities where they sell their products. Engaging in collaborations with hyperlocal non-profit organizations is only one way to show genuine support. The implementation of educational programs and the integration of local companies and individuals in the supply chain also highlights the will to solve the problem long-term from the bottom up, instead of simply “buying a good conscious” to look good. Others such as Lush are 10% employee-owned, instilling great value in its “made by” factor.

REsTORATIvE ACTIONs

The time is now to set realistic yet ambitious goals to not just reduce or eliminate waste, but actively reuse it. This requires reimagining what waste is, and how it should be addressed. Transparency is key. There is a groundswell of philanthropic actions designed to “repair” past mistakes. These include brands erasing their carbon footprint since their inception with the goal of becoming carbon-positive (going beyond achieving net zero-carbon emissions in order to create an environmental benefit by removing additional carbon dioxide from the atmosphere). Eco-aware brands are avoiding aggressive seasonal communication to push “new stuff” and are focusing on a “fewer but better” approach, namely developing evergreen collections that stand the test of time as well as favoring small-batch production which effectively curbs overproduction. To wit: Tropic is certified CarbonNeutral® and has doubled its offset emissions since 2018, meaning the brand removes twice the amount of greenhouse gases from the atmosphere than it emits. All the energy used on site is obtained from 100% renewable resources and the brand is also completely landfill-free. In 2020, Tropic recycled 122 tons which equated to 65% of all their total waste. Anything they can’t recycle is repurposed into an alternative fuel (which replaces fossil fuels) to power homes and businesses. All of the energy used to do so, such as all aspects of their operations, creates a double carbon offset. The brand also funds sustainable projects in order to counteract the greenhouse gases it emits through essential business activities and it invests in the Acre Amazonian Rainforest Conservation project in South America – an initiative which aims to protect biodiverse habitats by preventing deforestation across 105,000 hectares of pristine forest. Tropic also started supporting The Rimba Raya Biodiversity Reserve in 2019, which works with local communities to protect 65,000 hectares of forests in Indonesia from the threat of unsustainable palm oil conversion. Moreover, they have closed the gender pay gap, and have established a first aid program for mental health in every department to ensure their employee’s mental well-being. An impressive niche brand pushing the envelope forward in the ingredients department is Seilich, the UK’s first Wildlife-friendlycertified company, which goes beyond “just” organic. Run by botanist Sally Gouldstone as a “pro-nature business,” this Scottish brand grows natural ingredients on its own wildflower meadow (#grownnotflown), which it intends to expand to 7 acres this year. This will provide habitat for around 20 million wildflowers, support thousands of pollinating insects, and sink around 641kg of carbon every single year. Customers can become so-called Seilich supporters, and get treats in return. Seilich is also one of the few beauty companies that openly address the issue of essential oils, considered to be one of the most unsustainable ingredients in the industry. They use high-quality flower waters instead, which through their wildlife-friendly practices augment in potency – and that’s how the system comes full circle. The growing frequency of climate emergencies highlights that reversing climate change is not an option, but a duty, with both consumers and corporations waking up to the fact that their behaviors and consumption habits have a direct impact on the planet and therefore their own businesses as well as their quality of life. This has started long before the global pandemic, which however has accelerated conscious consumerism, and here especially the consumer demand for organic and sustainable products as well as production methods. During the pandemic consumers have started putting their health and immune systems at the forefront of their purchasing decisions, and have taken a more critical stance towards consumption in general. These factors are expected to continue to accelerate change across industries. This appetite for change is also reflected among beauty professionals. 55% of those beauty industry professionals surveyed by BEAUTYSTREAMS’ non-profit organization Openstreams Foundation believe that the industry’s immediate sustainability priorities are reducing packaging and using sustainable materials. The market for sustainable products is forecast to grow exponentially over the next five years, making it an even more logical decision for companies to invest in ecofriendly and ethical business practices, production, as well as sourcing options. The mantra is: Invest now or pay later.

ABOuT BEAuTysTREAMs:

BEAUTYSTREAMS is the go-to insights platform for the global beauty industry. With a team of over two-hundred collaborators on five continents it is the key reference point for strategy, product development, and marketing teams worldwide.