Success stories tend to oversimplify the beginning of a corporation. For example, the year is 1946. Mrs. Estée Lauder is in her kitchen, formulating a cream that would spawn a multibillion-dollar beauty empire. Or, more recently, teenager Bill Gates, is hard a work in his parents’ garage, developing a computer program that ultimately leads to the creation Microsoft. Both of them represent romantic shortcuts and often the reality of success is closer to the scenario credited to Thomas Edison: Success is one percent inspiration and ninety-nine percent perspiration.  

Nobody likes to describe or read about perspiration, be it physical, intellectual or financial. This column is meant to help the reader willing to produce and sell cosmetics, to figure out what kind and how much perspiration is needed to succeed.

Create a Brand

Where does one begin? Is it the creation of the brand or the product? This is the chicken or the egg question. One can do the two things in parallel, but for the sake of clarity, let’s talk about the brand first.

The brand is what tells the rest of the world that the product is the best and why it is unique. It must be easily recognizable in every region. Ideally, it is characterized by seven parameters: 

• A catchy creation story; 
• A creed; i.e., a set of beliefs or aims which guide one’s actions;
• A small set of consistent symbols; 
• A few words defining its essence; 
• A few words defining its opposite;
• A few behavioral dictamens and 
• The leader. 

When taken together, these parameters constitute the brand’s core identity. They must be defined at the very beginning and must serve as a framework for future developments. This framework is imperative to ensure that future products will not enter in contradiction with the core identity; to do so would risk losing customers. 

When a brand becomes global, it must adapt its core symbols to local culture.

Regional Bias

For instance, the white color used to indicate purity in Western countries is not appropriate for countries where white is the color of mourning. The same holds for new products to be launched in the future: they must adhere to the core identity! To give a paradoxical example, a imagine what would happen if Disney started marketing X-rated movies!

Decisions must be made at the very beginning about the brand and its role. What is the consumer niche? Is the line designed for heavily pigmented skin? Will the brand offer products that are good for everybody (one-size-fits-all) or provide a more personalized approach? 

The choice between holistic and punctual treatment is imperative. Here are some more questions to consider. What activity is expected for the products? What about a cosmeceutical slant? With or without ayurvedic ingredients? Will the brand use (or refuse to use) words like organic, botanical, green, exosomes, natural, etc.? Which ones? Will it make women more beautiful (thereby excluding men from being potential customers)? Will the product boost wellness? Will the product reduce the appearance of the signs of aging? Will it increase longevity? Will it provide the consumer with colorful life stimuli? Should the makeup line provide a mask behind which consumers hide or, on the contrary, will the makeup encourage the freedom of self-expression?

Stability Testing

With intellectual perspiration we have created a brand. We can now consider the physical and financial perspiration necessary for producing a product.

A product must be stable, must be innocuous, must be impervious to adventitious microorganisms and ideally should have an efficacy. One starts with a laboratory sample, a couple of kilograms or so, that can be aliquoted and subjected to:

• Accelerated stability test, generally at 40°C for three months; 
• Safety tests such as the Human Repeated Insult Test (HRIPT) and/or the Hen’s Egg Test on the Chorio Allantoic Membrane (HET-CAM) that are quick to perform, relatively inexpensive and enjoy consensus;
• Resistance to contaminations by microorganisms; and 
• Efficacy tests that can be relatively quick or that might last for months.

For the laboratory sample to be proven stable, safe, impervious to microorganisms and and efficacious, one should consider a three-to-six month interval. 

Scale-Up

Once the sample is satisfactory, one proceeds to scaling up the production, passing from 1-2kg batches to 500-1000kg batches. Size matters because all the physical steps involved in the preparation, particularly the heating and cooling steps, may take much longer in larger batches. As a result, some chemical reactions between the ingredients can occur that did not occur in the quickly prepared laboratory sample. This can change the very nature of the final product. It can end up having different stability, safety, resistance to microorganisms and efficacy. 

This means that one must be ready to work and wait another six to nine months before having an industrial batch ready for packaging. At this point, the four steps already detailed must be repeated for the product in its final package. This step is required to ensure that the chemical nature of the container does not affect stability nor microorganism resistance.

And when the product is an OTC product meant for the US market, the law requires that three industrial batches be prepared having the same characteristics. For example, a sunscreen must have the same SPF values in each one of the batches. Thus, one easily understands why the time to the market is relatively long, and that planning 18 months from the finalization of the paper formula to the shipping to market requires cutting a lot of corners. 

It’s Economics, Stupid!

Cutting corners can be done by established companies with experienced R&D facilities and large cash supplies that can afford a mishap from time to time. I do not recommend it for cash-strapped beginners. One accident on the road to market might turn into a financial setback. To give an example, the acceptable cost of goods for a 1000 kg batch (20,000 50-grams jars) is about $40-60,000. Packaging adds another $20-40,000. The costs for stability, safety, microorganism resistance and efficacy tests may total $50,000 or more. Of course, one should not exclude the preparation cost for laboratory samples and industrial batches. Advertising and in-store promotion costs must be factored in as well. 

One poor choice, be it in ingredient selection, packaging or testing may end up costing the entrepreneur $150,000 or more. An unexpected charge that could send one back to the drawing board or force one to simply abandon the project altogether. Or, even worse, put a product on the market that is unstable or non-resistant to microorganisms. Such a move would lead to even worse financial and reputational consequences.

Paolo Giacomoni, PhD

Insight Analysis Consulting
paologiac@gmail.com
516-769-6904

Paolo Giacomoni acts as an independent consultant to the skin care industry. He served as Executive Director of Research at Estée Lauder and was Head of the Department of Biology with L’Oréal. He has built a record of achievements through research on DNA damage and metabolic impairment induced by UV radiation as well as on the positive effects of vitamins and antioxidants. He has authored more than 100 peer-reviewed publications and has more than 20 patents. He is presently Head of R&D with L.RAPHAEL—The science of beauty—Geneva, Switzerland .