"Most new technology comes from ingredient suppliers," says Ed Matson, vice president of sales and marketing at Milford, Conn.-based Carrubba Inc. "If Estée Lauder comes out with new technology, that's more an exception than the rule. Most innovations you see in products were brought to market by an ingredient manufacturer."
Migrating toward naturals
Whether they're ultimately for conventional products or natural goods, ingredient suppliers are feeling a major push toward naturals. Botanical ingredients lead other specialty active ingredients in personal care product sales at 8 percent growth, according to market research firm Kline, based in Little Falls, N.J. "Today's consumer wants not only natural products, but also performance," says Nikola Matic, senior analyst, chemicals and material industry, at Kline. "These two requirements were regarded as contradictory a few years ago, but highly substantiated botanical products developed recently brought new solutions to formulators." "It's always been a challenge walking the line between naturals and a performance expectation that's based on how conventional personal care products that don't contain a lot of natural ingredients perform," says Tom Havran, branded products developer at aromatherapy company Aura Cacia, based in Norway, Iowa. "As technology develops, natural ingredients are getting closer to that."
Often, when conventional manufacturers seek to hitch to the naturals bandwagon, they miss it. "In general, they're not doing a good job [sourcing natural ingredients]," Matson says. "Unlike core natural and organic lines, they don't understand the effort it takes. And they are attempting to apply the same level of effort [as they do to sourcing synthetics] and thus having some problems."
Conventional companies often don't understand the nature of sourcing natural ingredients—which can be affected by weather, seasons and other natural forces—and expect the supply to be similar to that of the constantly available synthetic versions, say suppliers. Many factors go into an ingredient's price and availability.
Often, research supporting a new ingredient will drive the market up, so companies like ingredient supplier PL Thomas, based in Morristown, N.J., apply clinical trials to potential new ingredients right away, before they're developed for market. But sometimes supporting research can drive up demand too much. For example, a highly publicized study about resveratrol made it so popular there was a shortage of the ingredient, says Dan Lifton, chief operating officer of Quality of Life Labs, based in Purchase, N.Y.
Even if the demand for a particular ingredient is consistent, many natural ingredients are subject to seasons, weather and sustainability issues that can alter prices. For example, hurricanes drastically affected prices of vanilla and citrus oils in recent years, says Tim Blakley, aromatherapist/educator for Aura Cacia. And with shortages come imitations. "We've seen more and more adulteration now," Blakley says. That raises the importance of knowing your ingredients suppliers. "If you're looking at a hand soap or body care product—the chance that [finished goods] companies are testing the essential oil to guarantee purity are close to zero," Blakley says. While Aura Cacia tests samples pre- and post-shipment, Blakley says it's a dog-eat-dog world in ingredient supply. "Most of them are pretty good, but you really have to take [testing] in-house," he says.
Aside from adulteration and forces of nature, one of the biggest challenges ingredient suppliers face is developing natural alternatives to conventional ingredients, such as preservatives and ceramides.
"Consumers are more savvy," says Alda Brandao, product manager for PL Thomas. "They've started demanding products without the chemicals." Some of the most challenging ingredients to swap for natural alternatives are preservatives.
"Everyone's looking for natural preservatives," Brandao says. "Most of the preservatives are synthetic, so natural preservatives and anti-microbials are probably the next generation of products that will come out."
Havran of Aura Cacia agrees. "A new formula for the preservative—that's top on the list. That's where a lot of the focus is in ingredient development. The options that are available change rapidly."
For PL Thomas, that means developing its rosemary ingredient as well as experimenting with a combination of fermented plants, Brandao says.
Also typically synthetically produced, ceramides that are naturally produced could offer potential in the anti-aging market. "This plays a major role in the protective barrier of skin," Brandao says. "These ceramides are deeply involved in skin hydration, making up 35 to 40 percent of intercellular cement that binds cells together. Most products have synthetic ceramides." Brandao says to look for a natural ceramide from vegetable origins soon.
Other developments to keep an eye out for, according to suppliers: more natural forms of vitamin C and collagen, ingredients made from African baobab and new, natural foaming agents.
Ingredient trends of the future
For suppliers, market trends and new research are the keys to sourcing the most successful ingredients. What types of ingredients do they tap for future success?
Anti-aging products have been termed recession-proof by a few analysts and suppliers. Along those lines, Shaheen Majeed, marketing director at Piscataway, N.J.-based ingredient company Sabinsa Corp., predicts the market for skin whiteners and brighteners will only get bigger. Suppliers also point to superfruit ingredients, nutrients that can be used for beauty-from-within products and fair-trade-certified ingredients.