Are Beauty Product Launches And R&D Due For A Correction?

In a recent LinkedIn post, cosmetic chemist Kelly Dobos wrote, “I expect some big contractions in the beauty industry in coming years. R&D (and product launches) will experience shrink and become more focused but regulatory, quality and analytical chemist positions will become vastly more important.”

We were curious if others agree with Dobos’s prediction. So, for the latest edition of our ongoing series posing questions relevant to indie beauty, we asked her to elaborate and put the following question to 22 cosmetic chemists, beauty entrepreneurs, executives, manufacturers, product developers and more the following question: Do you think there will be R&D and product launch contractions in the beauty industry?

Kelly Dobos Cosmetic Chemist and Adjunct Professor, The University of Toledo

Many contact manufacturers are going to have to take on increased costs of compliance with MoCRA, especially establishing and maintaining GMPs. There’s going to be a trade-off in being able to produce more products and successfully prepare for all aspects of compliance. And while there are some exemptions for small business, there is no exemption from ensuring product safety, and GMPs significantly impact product safety.

There are people who have great ideas and need a manufacturer to produce them. Product development is fun and exciting. Quality assurance and quality control are not always top of mind when starting out but are crucial to producing safe and consistent product. Contract manufacturers are courting indie brands with incubators and clean beauty concepts, but given the conversations going on inside the industry, some are not meeting the most fundamental aspects of quality.

I get a lot of contacts from people wanting to start brands, and one of the most common questions I hear relates to finding a manufacturer with low minimum order quantities, and while that’s certainly important in managing other aspects of the business, people should really be also asking how robust the manufacturer’s quality assurance and quality control programs are.

These add significant cost, and it is so important to understand and that these things be an absolute must-have with the new GMPs requirements set to publish under MoCRA. Most indie brand owners may not even think to audit their manufacturers facility or give much thought to plant hygiene matters and the importance of incoming raw material inspection. These things are going to become incredibly more important in our new regulatory environment. Ideally, you want your manufacturer to take care of all of this.

Here’s an example of a concerning issue from an FDA warning letter. Good manufacturing practices (GMPs) are currently mandatory for OTC drugs and cosmetics that are also OTC drugs like a sunscreen with moisturizing claims.  I recently read a warning letter to a manufacturer that makes sunscreen and should know the rules. The manufacturer’s response to the FDA noting that their manufacturing lacked adequate procedures and process controls, which is documented in the public warning letter, was that they “default to the established cosmetic regulations because the sample matrices of sunscreens more similarly follow cosmetic formulations.”

It's well known that manufacturing OTCs drugs means a higher degree of scrutiny than cosmetics, and they were defaulting to cosmetic regulations? And this isn’t the only warning letter I’ve seen sent to a well-known contract manufacturer regarding GMP violations. I remember another that had a manufacturer not performing microbial tests for OTCs.

I submitted a FOIA request for inspection reports a few years back for a few foreign contract manufacturers of sunscreen, and they were pretty concerning. One noted a lab employee trying to hide documents and evade inspectors.

I think it’s time to hit pause of the churn of product development and focus on producing product safely and consistently, two things that quality systems are essential to, but it’s going to increase cost for manufacturers who don’t already have the staff and procedures in place. For many reasons, including the current macroeconomic conditions, sustainability goals, etc., making fewer, better products just makes sense.

Manessa Lormejuste Beauty Scientist and Strategist, Ness Knows

There are two reasons why I believe this to be true. The first being several brands that were incubated in the last five to 10 years have gone out of business post-COVID as the cost of formula development has gone up significantly. As materials increase in price and the cost of labor continues to rise, these costs are factored into the prices quoted by contract manufacturers. Brands that do not have the capability to run their own R&D are left at the whim of their chosen manufacturer.

I’ve seen several brands that can no longer afford the significantly increased prices they're being quoted. This coupled with sitting on excessive inventory has led to a lot of brands going out of business over the last two years. We will continue to see nascent brands go out of business because they can no longer afford to compete.

The second reason I believe this to be true is that consumers are growing more selective when it comes to affordable dupes. In a world where brands look at each other for competitive benchmarking, some may lose their core consumers if there is a more affordable option available.

E.l.f. is a great example of being a leader in the market for affordable dupes. They’ve understood that their consumer is driven by performance and value. Thus, they create cost-effective products with similar performance to more expensive products, allowing their consumers to experience the desired results without breaking the bank.

Whether it is a setting spray or a fragrance, consumers are continuously looking for dupes if they exist to ease the burden on their wallets. This may lead to a decrease in the frequency of product launches as brands must invest more time to make the product just right to capture their audience. I’ve been behind the scenes of several launches that were redirected before or after production ramp-up because the brand realized the positioning wasn’t quite right for their core consumer.

I think there exists an opportunity for brands to create more intentional products that their consumers are asking for versus creating launches that are replicas of top sellers. While this may inevitably slow down their launch calendars, I believe their core consumers will appreciate products that are intentionally designed instead of being saturated with options.

Krupa Koestline Founder, Cosmetic Chemist and Chief Formulator, KKT Innovation Labs

While I understand Kelly Dobos’s perspective, I don’t fully agree with the prediction of significant contractions in R&D and product launches within the beauty industry. The need for serious R&D will persist as the demand for innovative, effective and safe personal care products remains high. Instead of a contraction, I foresee a shift in how R&D and product development (PD) are approached.

Brands are likely to spend more time on thorough research and development, focusing on creating products that are innovative, efficacious and aligned with consumer demands for safety and sustainability. This increased emphasis might extend the PD timeline, ensuring each product is backed by robust scientific data and meets stringent regulatory standards.

Consumer awareness and expectations are evolving, driving brands to prioritize transparency, quality and efficacy. This means the quantity of product launches might be more measured, but the quality and impact will likely be higher. Companies will invest in R&D to differentiate themselves, leveraging advanced technologies and novel ingredients.

Although consumers demand quality, and regulatory and quality assurance roles should ideally increase, this is not always the case. Many brands, especially small- to mid-sized ones, struggle to justify spending on these roles as they don’t directly impact the bottom line visibly.

This shortsightedness can lead to issues like product recalls, regulatory fines, and damaged reputations. I hope this mindset changes, as investing in quality and regulatory compliance is crucial for long-term success. Brands should recognize the value of these roles. Proper investment in regulatory and quality assurance ensures compliance, builds consumer trust and enhances product quality, ultimately supporting sustainable growth and profitability.

Princess-Ann George-Ezuma Formulation Chemist, Independent Chemical Corporation

I agree with Kelly's statement, though an additional prediction I foresee is that of chemists having both analytical and formulation experience as a result of this contraction. Analytical chemistry would enable cosmetic chemists to understand raw materials at the molecular level, which could further prevent the stability, safety and regulatory issues the beauty industry faces.

Due to my previous background in analytical chemistry, I am familiar with the techniques used to analyze such ingredients and as a recent formulator. I bridge the gap between the two by reassuring consumers on the safety of ingredients found in their products.

Rose Fernandez Beauty Industry Expert and Advisor

It is an interesting time for R&D and product launches. I have noticed indie brands are relying more on the contract manufacturers to lead new product development compared to relying on this process with a senior level product development role in-house.

From this perspective, I make the correlation that there is a tempering of launches driven from a resource level, but also with the recognition of the investment required to launch a new formulation with testing and getting it right at the inception of the idea and ultimately to finished product.

Given the complexity of the R&D process now with new regulation, MoCRA, and the ever-changing clean ingredient landscape, there will be a need for additional chemists, quality and regulatory talent at the contract manufacturer or ingredient manufacturer level and certainly on the larger brands that can invest in these teams. This is another indication of the consumers’ preference swinging back to science-led and tested innovation.

Cierra M. Sherwin Founder, First Production Beauty

I agree with Kelly's assessment on the importance of brands investing in regulatory and technical experts, but do not agree with the prediction around a shrink in R&D and product launches. With the increase in VCs incubating brands and even the big incumbents creating their own investment arms to build and grow small brands such as Estée Lauder’s NIV or Unilever Ventures, I have seen a huge surge in new brands being built that are in need of next-gen ingredient technology and a strong product pipeline to compete. Existing brands sold at retail also have a lot of pressure to present newness to buyers to maintain momentum.

I would say that the new launches we're seeing are more focused and more strategic than ever before. Gondola space is tight, and everything has to perform. Brands, especially those selling skincare, must invest in clinical testing or at the very least consumer testing, which is a big investment for a small business.

This may limit the volume of launches per year, but will make the product themselves stronger and easier to market. Gone are the days where a brand can launch with fluffy marketing copy alone. Consumers are savvy and looking for ingredient technology, impactful before-and-afters and data to back the results that brands are claiming.

In order to create a successful product launch that hits all of these touch points, it is critical that brands invest not only in a strong product developer, but regulatory and technical formulators as well. This is why I created First Production Beauty. We are a team of experts across product, regulatory and technical R&D to ensure our clients are set up for success from day one launch all the way through to scaling internationally.

If a brand intends to sell oversees, the regulatory requirements are constantly changing, and you need someone advocating on your behalf to ensure the formulations and registrations are up to date. Prior to MoCRA, U.S. brands were not legally obliged to register their products and had very little regulatory oversight unless it was an OTC product. Now, MoCRA is holding brands accountable (and liable) for the products they are selling.

You need to register the product and make sure you have all the required data to do so, and you need to have an action plan in place in case of a recall or an allergic reaction. This is where a lot of brands lose steam and momentum. They aren't thinking about these elements from the beginning.  It is critical to set up the business and product portfolio the right way from day one. It is much more expensive (and tedious!) to do so after you're in market.

Mikaela Maxwell Brand Marketing and Product Development Consultant, ANDSOME

There will absolutely be a significant contraction in R&D and product launches within the beauty industry. This shift reflects a broader trend towards quality over quantity. Brands, both newcomers and established players, no longer feel compelled to inundate the market with extensive product lines. New product drops with over 8 SKUs can't even be sustained from a messaging perspective for many brands.

Today's consumers are more discerning, prioritizing efficacy, safety and value in their beauty and personal care purchases. They do not want to spend frivolously. With the toughest critics on the internet ready to quickly cancel a product, brands have to ensure they are not only representing their audience, but also providing them with functional products that actually make sense and meet a real need.

What makes this newest launch more unique than any other tried-and-true body cream, leave-in conditioner, skin treatment, etc.? There has to be more value than just newness. In this landscape, simply being the latest trend or having a celebrity/influencer endorsement isn't enough to capture and keep consumer interest. It's a start, but it's fleeting.

Instead, there's a demand for authenticity, innovation and substance. Consumers want products that deliver tangible results, formulated with clinically proven ingredients, offered at reasonable prices and presented in aesthetically pleasing packaging.

As consumer preferences evolve, there's a growing appreciation for brands backed by cosmetic chemists and grounded in scientific rigor. They want clinical receipts! These brands resonate with consumers who are seeking reliability in their beauty routines. In essence, the era of superficial marketing tactics, products with marketing-level ingredients and flashy packaging is out, and a new era of substance and efficacy in the beauty industry is in!

Ellen Lennon SVP, Partnerships, The Goodkind Co.

Over the next few years, I anticipate that customers’ desire for new brands and products will remain strong, but they will also be more selective when it comes to where they are willing to invest their money. Consequently, retailers and brands must continue to introduce innovative offerings.

However, the quality and uniqueness of these products will need to see significant improvements. Customers are becoming increasingly sophisticated. They conduct thorough research and have elevated expectations for product experience, efficacy and clean formulations. They can quickly identify a great dupe or a “me-too” product, so the demand for truly unique products that address specific problems or fill gaps in the market will stand out.

I also concur with Kelly Dobos’s forecast that regulatory, quality and analytical chemist roles will become significantly more crucial. With the introduction of MoCRA and ongoing advancements in AI, it is imperative that brands and manufacturers invest in these positions to ensure compliance and thorough preparation before launching any new formulas.

Angella Sprauve Cosmetic Chemist and Clean Beauty Product Developer

I agree with Kelly Dobos's prediction that brands will focus on fewer, more impactful product launches. This trend is evident in the industry, and I’ve personally observed it with larger brands I’ve consulted for, which are streamlining launches as retailers accommodate offerings from new brands.

Despite this consolidation, the number of new indie brands entering the market continues to rise. Consequently, while R&D may contract within individual brands, I believe the industry-wide demand for R&D will remain steady. Analytical and regulatory roles will become equally important as the industry faces stricter requirements and strong clinical claims become more crucial to brand marketing.

Emilie Mascarell Founder, Emilie Consulting LLC

I agree with Kelly Dobos's prediction about the future of R&D and product launches in the beauty industry. As consumers become more educated, their expectations for product performance and proof of results are rising. This shift necessitates more strategic planning, financial investment, and time to ensure products meet these heightened standards. Brands will need to be more intentional with their innovation calendars and R&D resources, which means we'll see fewer product launches and a more focused R&D approach to truly impactful developments.

On the regulatory side, I expect the arrival of new AI tools to transform roles significantly. These tools can streamline review, compliance, and registration processes, giving brands greater autonomy and efficiency. This evolution should allow regulatory experts to focus further on emerging regulations, making their roles even more strategic.

Anushka Nadkarni Product Development and Innovation Lead, Bentley Labs

I do agree with Dobos's prediction. I think it's a clear case of an oversaturated market. The past years have witnessed an exponential growth of products and hero ingredients, and now we are sitting with multiple serums within the same brand providing the same benefit. Consumers now realize that an excess of products is not necessarily needed and can do nothing but confuse one.

I think skin minimalism is tied to this as well and taking a step back to reevaluate the need and purpose of multiple products is an absolute need of the hour. These would finally see a decline in R&D and product launches.

Micah Halpert Organic Beauty Consultant

Product launches and R&D budgets will indeed become more focused in the near future. In addition to many companies being over-inventoried and having experienced a soft 2023, MoCRA and heightened involvement from the FDA will require manufacturers to catch up and become compliant.

The cost of running a robust quality program is very expensive and will no longer be an option. GMP certification has also become a must-have for contract manufacturers. Organizations that don't comply will be left behind, and as a result, we will get to see the very best innovation and hero products companies have to offer.

Cherie Buziak Owner and CEO, BeautyEdge

No, and yes! I think there will be contractions less in R&D and more in product launches in the beauty industry. Just like the stock market makes an adjustment, consider that there will be an adjustment and correction to the business of beauty in these separate areas.

Over the past five to 10 years, we have seen rapid growth in new brand launches due to the ease of market entry. This boom created significant opportunities for third-party manufacturers/turnkey and raw material suppliers. These same companies have seen the benefit of creating internal boutiques or teams within their companies dedicated specifically to startups.  As a result, these internally dedicated divisions created a surge in R&D staffing needs that will continue to grow. Also consider that there are many chemists starting their own formulating companies. What these companies may need further assistance with are marketing product developers along with internal regulatory and additional testing protocols to smooth the process out.

In the last five years or so, chemists and beauty industry insiders with a strong marketing background have started their own companies, further expanding the R&D “need” landscape. This trend combined with increased consumer demand for safety and ingredient transparency driven by the COVID-19 pandemic highlights the need for rigorous product assurance.

From a marketing perspective, we might see a reduction in the number of product launches. Brands have realized they can achieve success by launching fewer products strategically rather than flooding the market with multiple SKUs. It’s the classic marketing approach of launching a standout "hero" product. This approach focuses on strong brand strategy development creating brand recognition.

However, in the near future, with the advancement of available non-invasive skincare devices both professionally and for consumer use for appearance beautification, there is a sector emerging to create products to work with these devices. Additionally, the growth of dermatology and plastic surgery groups would be keen on launching new products to service their patients. Plus, the wellness category continues to explode in growth.

Noel Dutcher Business Development Director, Craft Beauty Lab

I do not actually think there will be R&D and product launch contractions at all, quite the opposite actually. While I do agree that regulatory, quality and analytical chemist positions will become vastly more important, I expect the same for product launches.

As both a lab and manufacturer, I can honestly say at Craft I am experiencing more opportunities than ever to expand R&D and product development. Every single day I'm approached with an idea from a client or a new ingredient or new testing or a new challenge, and we're bringing to life a ton of new product launches that I believe will continue to flourish. I think this perspective truly lies in that of the company.

Are you willing to explore the opportunities to introduce all of the potential product launches? Are you willing to use the ever-changing resources at your fingertips to grow, learn and change what I whole-heartedly believe will be a fast-paced next decade of skincare and cosmetic development?

It's a lot of hard work and dedication to keep up with the regulatory and quality requirements absolutely, but the amount of resources we have to do so is increasing at the same rate. I'm sort of obsessed with it.

VICKY COLANGELO Beauty and Wellness Industry Consultant, Nxt Beauty

The beauty industry has consistently demonstrated resiliency amid a multitude of market shifts. The move towards more cadenced and strategic product launches will necessitate greater creativity and scientific innovation, driving demand for talented chemists and product developers. To stay competitive, brands must also focus on regulatory compliance and quality assurance.

Furthermore, as the definition of beauty evolves to encompass holistic well-being, brands will need to invest in R&D to expand their product portfolios with credibility, authenticity, and a solid scientific foundation. The growing luxury market underscores that innovation is essential as consumers increasingly seek high-quality, cutting-edge products that deliver exceptional results.

As markets contract in one area, they inevitably expand in another, ensuring continuous opportunities for growth and adaptation in the ever-evolving beauty landscape.

Pamelia Lall Chief Product Officer, Pamelia Lall LLC

There will definitely be some contractions in R&D and product launches, especially in the science-backed, clinical skincare space where the evolution is leading into the bridging of biohacking, functional medicine and neuroscience. These categories require longer development timelines for research, trials and errors to optimize efficacy, safety and sensoriality to deliver results to the customers. Good news is that we are making great strides with AI to assist with cutting through data and consumer needs.

Jennifer Ritter Founder, JSR&CO Development Studio

The beauty industry is experiencing a shift towards more deliberate and thoughtful brand/product launches, driven by various factors like funding constraints, sustainability requirements and heightened safety criteria (MoCRA, evolving clean standards). This shift is resulting in fewer but more strategic brand and product launches, with a focus on long-term category building rather than sporadic product releases.

The emphasis on sustainability is particularly noteworthy, with brands investing more time and effort into responsibly sourcing ingredients, using eco-friendly packaging materials and overall sustainable development. This aligns with the growing consumer demand for environmentally conscious products. It also slows down the speed in which we can launch.

Moreover, the increased scrutiny on safety standards underscores the importance of thorough testing and compliance, which can extend the product development timeline, but ultimately ensures consumer trust and satisfaction. Overall, while these challenges may slow down the launch process, they also pave the way for more innovative, responsible and consumer-focused offerings in the beauty industry.

Corey Miles Founder, Niche Skin Labs Inc.

In today's beauty industry, major retailers are setting stringent raw material standards to meet the growing demand for clean products and transparency. And with the rollout of MoCRA, there is a big emphasis being placed on compliance, quality control and safety. That said, I agree that these positions will become much more important within larger beauty companies in the near future.

However, I do not see R&D positions taking a back seat any time soon. Without a strong R&D presence, there is less innovation, and with little innovation, you're unlikely to succeed in today’s competitive market.

As for smaller to medium-sized companies, I think we’ll see a demand for more roles with diverse work experience in an effort to save money. Candidates with a broader background in both R&D and other related functions such as regulatory will prove to be much more of an asset to these types of employers in the long run.

John Bartolone CSO, Skintensive

During my tenure in corporate R&D for major household brands, I observed first-hand the importance of robust analytical methods, product preservation testing, stability assessments and rigorous specifications.

These are costly and time-demanding endeavors that are cornerstones of safe and compliant product development for companies of all sizes. Unfortunately, the influx of new beauty brands eager for market share may overlook these crucial steps, relying solely on contract manufacturers.

To meet new stricter regulations, I would expect a contraction in product launches across the industry until new innovative breakthroughs are realized with R&D personnel becoming even more digitally savvy and reliant on AI-based platforms that can speed up a lot of the analytics and testing required.

In my current role as CSO at Skintensive, a smaller dermatologist and science-driven brand, we’re showing that indie brands can operate at the same level of major brands to ensure our product claims are compliant, balanced and supportable. We’re also continuing to invest in new innovative ingredients, extraction methods and formulations that meet the needs of our consumers.

Laura Lam-Phaure Founder and President, Lam Phaure Beauty

I anticipate a contraction in the beauty industry due to several factors. Consumers are becoming increasingly knowledgeable about sustainability and recognizing that overconsumption undermines sustainability efforts.

Additionally, many consumers are growing weary of the relentless marketing they encounter as soon as they open their phones, step outside or even within their homes. The omnipresence of ads is making them seem less genuine. This shift is compounded by stricter regulations coming down through MoCra and the current state of the economy.

While I foresee shrinkage in the industry, I do not believe this signals an overall decline. Instead, it will likely encourage brands to focus on creating more stable, flagship products rather than chasing the latest trend or viral sensation.

Julie Pefferman Founder and Senior Consultant, Cosmeta

I agree at least partially—and that’s what we’re already seeing with the trend of slow beauty and the shift to quality over quantity as far as new launches go. It’s tied to the simultaneous down shift in the economy and the interest in sustainable eco-friendly options, not to mention consumer product fatigue.

I think there will be more indie brands using less launches as a point of distinction for a variety of reasons like eco-friendliness, efficacy and budget hero products. However, large brands who still struggle to compete in an innovation level will continue launching a variety of things like spaghetti at wall to see what sticks.

As far as R&D being replaced by more regulatory, I don’t agree completely. I still believe innovation is more important than ever, and R&D is at the heart of that. With the sea of new regulations, it is very challenging especially for indie brands to navigate but thankfully there are growing technologies that help bridge the gap when hiring regulatory staff isn’t possible.

John Reppucci Expert Beauty Executive

I would say that is an accurate statement. For years, brands have been able to put in what I call “fairy dust” into a product, meaning the minimum amount required of an ingredient or oftentimes less just to substantiate a claim on pack.

However, the world is evolving with technology, and the consumer is becoming more and more educated alongside brands backed with science and clinical studies that have gone the extra mile to make a claim on a product that yields results. These brands will separate the boys from the men so to speak.

Matt Unger President and Chief Commercial Officer, Cosmetic Solutions

At Cosmetic Solutions Innovation Labs, we do not expect less, but more as the industry continues to identify new niches and opportunities to solve the needs of an increasingly diverse consumer base and increasingly divergent needs.

That said, there are certainly headwinds with the cost of cash pressuring the commercialization of new products and increased cost of compliance and registration with regards to regulation. However, every time a beauty industry contraction has been threatened, the industry finds ways to rebound and be more vibrant than ever.

We are investing in R&D resources and equipment to better serve an increasingly diverse client base as well as increased regulatory, analytical and compliance resources to be able to manage increased regulation and continue to provide meaningful certifications on both a site and formula basis for our customers.

We continue to be in the middle of a retail upheaval that will change the topography of how consumers shop for newness as well as how they repeat purchases and explore adjacent products within or across brands and whether they choose to go in-store, online and on which platforms they reorder.

The retail upheaval and the way the industry interfaces with the evolving consumer base will likely drive more of how new product launches are managed, the types of quantities and order patterns required to support launch and replenishment than any other factor.

If you have a question you’d like Beauty Independent to ask beauty entrepreneurs, executives, cosmetic chemists, product developers and manufacturers, please send it to editor@beautyindependent.com.