Adjustments Beauty And Wellness Brands Are Making To Cope With Ongoing Supply Chain Disruption
In this edition of Beauty Independent’s ongoing series posing questions relevant to indie beauty, we ask 23 brand founders and executives: What’s an adjustment you’ve made or plan to make to deal with the supply chain disruption that’s occurring? As we look forward to next year, is there anything more broadly you believe you or the industry as a whole could do to help with the situation?
- Gemma DePalma Chief Supply Officer, Foria
We have bought deep, but not recklessly, focused on ingredients that are hard to procure and planned inventory one year ahead. We moved key products like our Quickie Kit out of shipping boxes when we learned there was a shortage on corrugated goods.
Perhaps industry players could partner more when buying and ship products together. Transportation is a bottleneck and costs are rising. If partners banded together, this could fill trucks, ease bottlenecks and share costs. It would also be more environmentally friendly as trucks would be to capacity and limit the number of half-full trucks on the road.
Since last year, we have been way more preemptive by planning way in advance. We have asked our partners to plan way ahead and give us longer lead times. A production in the past that may have taken four to six months is now taking six to nine months, and logistics and freight have increased more than 5X.
I believe our crippled supply chain will continue well into 2022, and it will be hard to predict growth. Right now, it is more important for us to manage our supply partners, product production and receiving products into our warehouse, and prepare for recovery. It's hard to project growth when there are multiple, unpredictable disruptions.
- Martha Van Inwegen Founder, Life Elements
Aside from ordering early for the holidays, we have changed over 70% of our vessels to U.S.-based suppliers and have improved our sustainability footprint in the process with 100% home compostable mushroom packaging from Paradise, Calif., and Eco Smart biodegradable tubes from Chanhassen, Minn.
At the same time, though, we have seen significant shortages and/or cost increases on several key raw ingredients that are foundations for some of our products. However, as the formulator and maker, I have the ability to reformulate with alternative, just as active, ingredients if needed.
First and foremost, we try to establish solid relationships with our key suppliers. That trust is an integral part of our communication with vendors so we have the most up-to-date info. The suppliers are obviously stressed. We just want the facts so we can make decisions about alternative sourcing options.
I think the bigger picture is challenging since there is no comprehensive dashboard or news source available to see what the overall landscape looks like. One idea if anyone wants to take it on could be something similar to our own local agricultural community, which publishes the produce available in season, and I envision an EWG-style listing of key ingredients and other raw materials (packaging, vessels, etc.) and what the overall availability is. Any takers?
- Meredith Krill Co-Founder, Swair
When we first heard about the disruptions in the supply chain, our first action was to order a year's worth of packing since that typically has the longest lead time. Luckily, we received our order in September, so we feel like we are in a good position for the next 12 months. It was a big financial undertaking, but we knew a potential disruption in business would be more devastating in the long run. In addition, we told our lab we would be willing to substitute delayed ingredients in our formulations as long as they are as clean and efficacious as their current version.
I think this situation is a great reminder for all brands, even small ones like ourselves, that it is crucial to diversify your supply options. It is important not to be reliant on a single resource for your business. Even if you are not currently using more than one manufacturer, packaging supplier, warehouse, etc., you should have a list of qualified providers for more options in case of supply disruptions, pandemics, natural disasters or other occurrences.
- Lisa Bonoff Co-Founder, Lumion Life
If we have learned anything during this time it is that we are not alone. We have paid for air freight, wrapped a label around a bottle instead of direct print, and had sleepless nights worrying about not having serum bottles for our loyal subscribers.
As a company who has always produced our formula in the U.S., it would be a complete game changer if we could have our packaging produced in the U.S. as well. Over time, these manufacturers have gone away or their minimums are just too high. I know we would pay a small premium to have that option, and I believe other companies would as well.
- Pooja Ganesan Founder, Booni Doon
Our new product launches have been most affected by the supply chain disruption, and two of our new launches have had to be pushed back to next year. Not only have we had to deal with delays in receiving packaging from our manufacturer in Asia, but the increased cost of shipping has been really challenging. Our sea freight costs are more than 250% up from earlier this year.
As we think through our inventory runs and product development pipeline, we're planning to budget extra capital and allow for extra time. This entire experience has been a great motivator to try and source more locally from domestic manufacturers.
- Stan Ades Co-Founder and CEO, Pacific Shaving Company
We manufacture everything domestically here in the U.S., so we have some relief that our goods are not sitting on a freighter off the coast of California for months. That said, due to raw goods and staffing shortages, we are planning on production timelines to double, if not triple throughout 2022.
That means also investing in inventory. When it comes to transportation and domestic trucking, we are seeing transit times also taking three to four times longer than usual. We are communicating closely with our retailers and keeping them aware of any delays well in advance of expected arrival dates.
Retailers need to understand that we are all in this together. We have found that some retailers are better than others when it comes to being understanding of delivery delays. Levying punitive fines on suppliers for delays only diminishes their ability to spend those dollars on sell-through tactics. No one wants empty shelves, least of all the suppliers.
- Abena Slowe Co-Founder, Karité
We used to work with a tight-knit group of suppliers and manufacturers, but quickly realized over this past year that you always need a plan B and a plan C.
We’ve expanded who we work with to try to minimize any disruptions, which we’ve all experienced over the last 18-plus months. Don’t put all of your eggs in one basket.
It would be incredibly helpful if the industry had more transparency into the availability of high-quality vendors both locally and abroad.
- Aleezeh Khan Co-Founder and Head of Operations, CTZN Cosmetics
It has become more challenging to forecast lead times for inventory replenishment or new product development as many of our suppliers can't commit to firm timelines on delivery. With this, we are having to make forecasts much further out on production. For example, if we normally place orders four months in advance for production, we are now placing them six months in advance
I think we need to be more vigilant and do deeper and more consistent monitoring of our supply chains and inventory management to stay ahead of delays as much as possible.
- Meryl Marshall President and Chief Product Officer, Hynt Beauty
The supply chain issue has certainly affected our business. We have been planning ahead and purchasing components that we get from overseas earlier than usual as the lead times are long. We have been searching for and purchasing U.S. in-stock components that we have decorated locally. Our goal has been to upgrade to more sustainable packaging, so this is a challenge.
I recently found beautiful in-stock 100% PCR PET jars for a cream. The cream is compatible with the jar when I performed extensive testing. I do not think the indie brands will be able to make headway improvements in the supply chain. However, the large brands will advocate for expediting the process at the docks as well as U.S. factories to step up by providing better packaging options.
- Victoria Flores Co-Founder, Lux Beauty Club CBD
We have been seeing price increases across the board with respect to our packaging costs all year. Due to the increase in unit economics, we couldn't make a few of the beauty subscription boxes work this year, which was disappointing.
We have also updated our name to Lux Beauty Club Botanicals as we expand outside of CBD/hemp and launched our new range of non-CBD gummy supplements at Premiere Orlando to an incredible response. We are bulking up our inventory position as we speak so we don't experience any interruptions. Post-COVID was a wild ride, and now we face new challenges. I know we will come out stronger on the other side.
- Sara Cullen Founder and CEO, GEM Health
Our supply chain has been disrupted in two ways: 1) increased lead times, and 2) increased shipping times. We've combatted these issues by firstly trying to remap our supply chain to be as localized as possible. Secondly, we've built out our operations team to focus squarely on fulfillment and shipping to minimize any disruption to the customer experience.
Be as transparent as humanly possible with the customer on the issues that you are facing as a company and offer incentives to help alleviate any burden that these disruptions may place onto your customer base.
- Polly Roderick Global Brand Manager, INIKA Organic
COVID has changed the world dramatically in many ways, and one area that we are seeing great issues in now is logistics and supply. The challenge for us lies in inventory management. Planning meticulously and reinforcing our supply chains will ensure we are better prepared.
We also need to ensure our supplier base is diverse for added cover. It’s definitely time to adopt a new versatile and flexible vision, suitable to our current reality of the new norm.
- Shirley Menard Founder, Beurre Shea Butter Skincare
One of the adjustments we've had to make is in sourcing our new scents for new products. The pandemic affected us in both positive and negative ways. We were fortunate in that we stocked up on prime ingredients such as shea butter and carrier oils during the early part of the pandemic. During that time, we worked on new formulations, adding body oils, body washes and lotions. Some were scented with unique essential oil blends that we got from other companies.
Recently, we were informed some of those scents are either backlogged or no longer available due to shortages. Now, we have to rethink these new formulations.
I honestly don't know what the future will hold regarding this disruption. It's on such a major scale that we just have to adjust or pivot to keep moving forward.
- Shamor Belliard Co-Founder, Just Beauty CBD
As we look ahead to the upcoming months and the unknowns that we are facing day-to-day with the shipping containers stranded on our shores, of course, it can be nerve wracking as an entrepreneur. With the holidays around the corner, Just Beauty CBD will do everything we can to ensure our customers receive their products. The world isn’t what it was prior to 2020. We are all learning to live and work in a new normal.
With that said, here's what we did to be on the offense to have a good defense. 1). Plan B: Based on our calculation, we have the inventory we need to satisfy our current accounts and new ones, while also signing up with a 3PL that's centrally located to efficiently ship out orders.
2). Enough Inventory: We have a stockpile of inventory to see our business through several months of disruption without risking formulation. We have even strategized with our manufacturer to ensure they are prepared with the raw materials needed for our skincare line production.
3). Supply Vulnerability Audit: Simply stated, we analyze every step in the supply chain per product and assess which item would be the most challenging to obtain but is a key element in the brand's finished product. For example, the caps to our Just Beauty CBD Lip Mood. Not every cap fits the container as simple as it may seem, and we have to keep cost in mind.
The more we as a company have to pay for the materials, we want to avoid increasing the price for the customer in order to keep things stable. However, our goal is not to have to do that, so being prepared is key in order to avoid the customer absorbing this cost. That is why it is important to also have a list of backup suppliers in various geographic locations and build relationships prior to needing to put out a fire.
4). Partnership is everything: As an entrepreneur (plus being a Virgo), one of the biggest challenges is to let go and trust that people can do their jobs. PSA: You cannot do everything! This is why finding the right logistics expert to partner with helps the business function. We found a fulfillment and supply chain expert that supports us before disruptions happen. Your logistics guru should be able to help locate alternatives.
- Marie Arlet Co-Founder and COO, Sheabrand
It's a wonderful thing that we live in an age where we can order ingredients and packaging from all different parts of the world. This has allowed for great advancements in technology, skincare (sourcing ingredients and packaging that would not be available locally), medicine and so much more. The problem is that, as we saw even prior to the pandemic, having your supply chain tied internationally is tricky as you have absolutely no control over our country's international relations with the country where your goods may be coming from.
If there's one thing we can take away from importing goods is never to put all of your eggs in one basket. It's great to have a reliable supplier overseas, but make sure that you also have backup suppliers in other countries or preferably in the same country as you. At this point, we are all just all too familiar with Murphy's Law and need to grow accustomed to having several backup manufacturers and suppliers.
- Amir Karian Founder, Alchemi Mushrooms
Health and beauty brands rely on the agricultural supply chain more than ever in 2021 with the rise of natural, food-based formulations. One of the biggest drivers we've seen that is disrupting the supply is overseas logistics and the congestion at various ports. This is affecting everything, from our raw materials, ingredients and packaging, which is causing manufacturers to raise prices throughout the supply chain.
While our mushroom farms are U.S.-based, we did rely on overseas partners for packaging material, which has become increasingly difficult over the past year. The biggest adjustment we've had to make is partnering with domestic suppliers in order to meet the demands of our customers in a timely manner.
Looking forward, we not only predict, but are also hopeful that this pressure can drive more manufacturers to produce and source domestically and locally. Ultimately, if more beauty and wellness manufacturers turn toward locally sourced ingredients and raw materials, it would not only support our domestic economy, but also help create higher quality products that consumers can trust.
- Stella Rubinshteyn Founder, Lure Essentials
In order to prepare for the supply chain disruption, we have anticipated and addressed customer demand early. Currently, we have stocked enough inventory to last us through the first quarter of 2022. By taking this step, we can continue to support our customers’ health and wellness journeys. Though our costs have risen dramatically, we continue to maintain full operations and staff, and we take care of their families.
As we look forward to next year, we have formulated a plan to diversify our product line and subsequently establish multiple vendor relationships to ensure top-of-the line materials. We believe the industry as a whole cannot compromise on quality. Our clients count on us to help address their wellness needs and, if the quality does not remain of the highest standards, we risk compromising their health.
- Ashley Levine Co-Founder and CEO, RealSleep
Exploring options outside the box, especially where shipping from overseas is concerned. 1). Looking at importing through ports outside of Southern California where the wait times are the longest, even if the goods come into a destination slightly farther away on the ground.
2). Investigating options we wouldn’t previously have considered or that weren’t previously available. For example, having conversations with brokers about securing small amounts of space on private cargo planes chartered by other larger companies.
3). Planning much further ahead than usual, especially this time of year as Chinese New Year is quickly approaching. 4). Expanding our field of view outside of the traditional manufacturing options in Asia to more global options, In other words, reaching out to a broader scope of vendors both domestically and internationally than we would have in the past.
Collaboration between companies—for example, the air shipping method discussed above of chartering planes together—to minimize disruptions together and maximize efficiency. Sourcing and manufacturing domestically as much as possible, and planning as far in the future as possible to avoid bottlenecks for components or ingredients coming from around the world.
- P. Daniel Ward Founder, FormRX Skincare
For us at Form Derm Spa, we, of course, provide treatments to our patients and clients. This is the same as any other spa. The niche that we occupy is emphasizing service as the most important part of that treatment. We realize that anyone can provide the treatment, but we have the expertise and commitment to service that allows us to create a top-notch experience.
The way that we have planned on dealing with the disruption is to reinvigorate our efforts that emphasize service. This means that, if there is a supply or a shortage of an item, we will be able to offer that service and treatment in a different way and mechanism. We realize that our goal is to improve the lives of our patients and clients. We do so by addressing their needs and desires in the aesthetic realm. By emphasizing service, we will be able to continue to provide the service to our clients and patients even if there are missing supplies.
- Sophia Yen Co-Founder and CEO, Pandia Health
There are concerns about the U.S. Postal Service having delays. We need to get a new U.S. Postmaster. The current one was appointed by Donald Trump and, after he took office, there were significant delays in first class mail. This will definitely affect our business and hurt people who need to get their birth control and medications on time.
I have three businesses pertaining to the beauty and wellness industry. They all have been impacted in different ways due to the supply chain disruption. Our students at my aesthetics school receive Chromebooks in their kits. If cash flow allows, I have been trying to purchase greater quantities in order to avoid future delays.
Additionally, we custom make step-by-step protocol books for our students. Recently, there was a delay with the books due to the specific paper that is used in making them.
For my product line, In addition to ordering in larger quantities, I’ve been growing some of the botanicals at Kaelen Harwell headquarters. I plan on expanding this for years to come. The spa has been affected about the same as my line as most of the retail consists of products.
- Ebru Karpuzoglu Founder and CSO, AveSeena
Even in this pandemic period, skincare orders have soared, and we are expecting an online growth around 48% by 2023 in this segment. With this comes a lot of pressure and extreme care to deal with the supply chain disruption that we hope to be resolved soon.
However, this disruption poses a challenge when to ensure the right products get into the package and arrive on time. Therefore, we planned early—at the beginning of the pandemic—to handle every phase of our fulfillment process to be efficient and seamless without delay from start to finish.
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