Innovative ideas are the lifeblood of every company—especially in the beauty industry. Once upon a time, new product launches were another telltale sign of innovation. According to Euromonitor International, more than 25% of all new brands launched in 2023 were in the beauty and personal care space (data for 2024 was not available at press time). 

“More than 90% of new product development is driven by sub-brand launches, and innovation in beauty and personal care mostly comes from brands expanding their product portfolios with new lines,” observed Egle Tekutyte, senior analyst, Euromonitor International.

Ron Robinson, founder of BeautyStat agrees. 

“There is a dearth of innovation that’s due to the number of new products and brands coming into the market,” he said. “Many of them copy or dupe what’s on the market to do a slight spin on what’s out there. I don’t see step-change innovation.”

Robinson entered the beauty industry when technology was focused on emollients, moisturizers and aggressive face scrubs.

“We were great at covering the skin with emollients or stripping the skin. That was the cycle. Strip, cover, strip, cover,” he recalled. 

All that changed when alpha-hydroxy acids (AHAs), beta-hydroxy acids (BHAs) and retinol came on the market.

“We made the transition from covering the skin to really treating it. It was exciting.”

And now? Robinson said every brand recognizes there’s dearth of innovation. In the TikTok Era, consumers want results.

And when will true innovation return to the beauty industry? Robinson expects a turnaround in 2026.

“The big players are doubling down, building new labs and partnering with pharmaceutical companies,” he explained. “We are in the early stages of these collaborations. In 2026, we will see the results of these partnerships and investments.”

Until then, copycat products at low price points are considered innovative, Robinson joked.

“We see that with AI. Some big AI companies in China can do more with less. That is the new type of innovation.”

AI & Beauty

That shortest of buzzwords, AI, is impacting beauty. McKinsey & Co. estimates Generative Artificial Intelligence could add $9 billion to $10 billion to the global economy based on its impact on the beauty industry alone. How? McKinsey concluded four gen AI use cases are likely to have the greatest impact: hyper-personalized targeting, experiential product discovery, rapid packaging-concept development and innovative product development. 

Still, many would-be users remain reticent, skeptical and downright hostile to AI. In fact, the biggest “hallucination” surrounding AI may be the idea that employees use it. 

At the Personal Care Product Council Beauty Summit, Sol Rashidi, a C-suite executive at several Fortune 100 companies, joked AI is like teenagers and sex: “Everyone talks about. Nobody knows how to do it. Everyone thinks everyone else is doing it. So, everyone claims they are doing it!”

Rashidi understands the AI landscape. In 2011, she helped develop IBM’s Watson. Since then, AI has infiltrated every industry including banking, media and tech. Sales and marketing have been most impacted by AI, “because the risk element is low,” according to Rashidi. She predicted global investment in AI will reach $1.85 trillion by 2030—“you can solve world hunger with a quarter or third of that amount,” Rashidi quipped.

Yet, the biggest threat to AI success has nothing to do with technology and everything to do with people.

“Years ago, we built the perfect AI system—cutting-edge models. Impeccable accuracy. Seamless deployment,” she recalled. “It sat there—untouched—while the business teams quietly returned to their Excel spreadsheets and processes.”

The problem then, as now, according to Rashidi, is that people don’t trust it, don’t understand it and don’t see how it fit into their day-to-day reality. As a result, organizations get stuck in perpetual proof-of-concept purgatory. The lesson? Scale comes from adoption, not algorithms. Rashidi even wrote a book on the topic, “The AI Adoption Playbook.” 

What countries use AI? Rashidi said India, Singapore, United Arab Emirates and China have the highest adoption rates. The lowest adoption rates are in France, Spain, Australia and the US. Why? 

“Disruption is hard. The pace of change is fast. It is impossible to keep up even for those in the space,” observed Rashidi. “It’s a people problem. Not a tech problem.”

She predicted it will take 4-5 years for AI to be fully adopted.

Fast Formulator at the University of Miami

Samiul Amin PhD is professor of practice, Chemical, Environmental and Materials Engineering Department, University of Miami. He noted that disruptive innovation and step changes only occur when there is a convergence of disciplines such as AI/ML/Formulation Science/Material Science

“You still need human intellect behind the data,” said Amin. “The knowledge base must be there.”

Amin has that knowledge. Before entering academia, Amin spent decades in the chemicals, consumer and personal care industry with companies such as ExxonMobil, Unilever, L’Oreal and Malvern Instruments. At the University of Miami, he cofounded FastFormulator with U. of Miami’s Yelena Yesha, PhD. FastFormulator combines artificial intelligence with machine learning  and formulation/colloid science to help formulators design smarter, more sustainable products.

“AI is an effective tool to accelerate product development and bring about disruptive innovation. However to be effective and bring value it needs to be integrated with deep science knowledge and human expertise and experience. We have so many years of knowledge. AI doesn’t discard that knowledge—it makes it work for you,” he told Happi. “The scientist must be in the loop. R&D formulators and scientists will still play the most pivotal role in the future,” he said.

Amin said the lack of innovative culture, resistance to change, data security, trust in AI/ML models, integration challenges and market noise surrounding AI/ML keeps adoption rates low.

“The reality is that all these factors is creating a fear of adoption,” Companies talk about it, but they won’t take the leap or take extensive time to decide”

FastFormulator takes into account all these factors to help companies make their journey to AI/ML adoption smoother and faster so that companies and their R&D organizations can fast move into market disruptive innovations powered by AI/ML.

AI is at the forefront of innovation at Estée Lauder Companies (ELC). Carl Haney, EVP-global innovation and research and development, The Estée Lauder Companies said there is exciting potential at the intersection of AI, personalization, and beauty. More specifically, ELC is leveraging generative AI in three key areas:

• Discovery/invention—new ingredients that target new benefits, 
• Trends and speed-to-action and 
• Product development (i.e. formulation, precision).

Innovations in New Jersey

You’ll find hundreds of chemists, researchers and engineers in Clark, NJ. The world’s biggest beauty company, L’Oréal Groupe, made a big bet on innovation. Last month, L’Oréal dedicated its $160 million North America Research & Innovation Center in Clark, NJ. The nearly 250,000-square-foot facility is L’Oréal’s largest outside of France. Although L’Oréal has been in Clark for decades, this investment puts all researchers under one roof to foster innovation.

“L’Oréal has been in Clark for 70 years, but efforts were siloed,” noted Patrick Kullenberg, chief innovation officer, North America. “(This facility) allows for co-creation. It allows for a surge in creativity. There are a lot of growth opportunity for the business with 600 scientists under one roof, and more than 40 strategic partnerships.”

In describing L’Oréal’s product innovation process, Kullenberg said “consumers are at the heart of our innovation from the beginning.”

The discovery phase uncovers consumer needs, tensions and trends. The frame phase translates consumer needs into product concepts. The build phase creates product and packaging. The test phase is focused on consumers and professional organizations. Finally, prior to launch, claims and communication are developed. During the grand opening, reporters and guests were invited into the laboratory to learn more about breakthroughs such as Melasyl, L’Oréal’s patented molecule that inhibits melanin production by capturing and inactivating melanin precursors.

A Blueprint for Success

L’Oréal teams around the world have developed innovations in the skincare space, such as Cell BioPrint, which uses a tabletop hardware device that provides personalized skin analysis in just five minutes, using advanced proteomics—the study of how protein composition in the human body affects skin aging.

Cell BioPrint debuts in Asia later this year. The device was developed through a partnership between L’Oréal’s Longevity Integrative Scienceä, an approach that reveals how mechanisms in the human body can affect skin’s appearance, and Korean startup NanoEnTek. It produces a personalized skin assessment including: Skin’s biological age, ingredient responsiveness and shifting from reactive to proactive skincare.

“At L’Oréal, we’re always looking toward the future of beauty, blending cutting-edge discoveries with our long-standing beauty expertise. With skin being the largest organ, and a key part of people’s wellbeing, we are thrilled to unveil Cell BioPrint, an exclusive microfluidic lab-on-a-chip technology coupled with our century-long skin science leadership,” explained Barbara Lavernos, deputy CEO in charge of Research, Innovation and Technology at L’Oréal Groupe. “With the Cell BioPrint device, we offer people the ability to discover deeper insights about their skin through specific biomarkers and to proactively address the beauty and longevity of their skin.”

Why Cell BioPrint? The $125 billion global skincare market is driven by consumers who are continuously seeking more information about, and more efficacious products for, their unique skin, according to L’Oréal. Yet, a recent US survey of 2,000 skincare users, found nearly 80% reported relying on trial and error to determine what worked for them, with the average person reporting trying seven different cleansers before finding one they love. L’Oréal Cell BioPrint identifies unique biomarkers in the skin that can indicate key components of healthy-looking skin and longevity. It works through a simple, non-invasive process based on cheek stripping, images and a short questionnaire. L’Oréal Cell BioPrint is scheduled to pilot with a L’Oréal brand in Asia later in 2025.

A Diverse Audience

Janet Wangari Olivero PhD, AVP-R&I, led reporters through a portion of L’Oréal’s 6,000 square foot laboratory where there were demonstrations on the latest breakthroughs in makeup, hair and skin. According to L’Oréal estimates, 50% of the Gen Z population has curly hair. To serve this ethnically diverse population, L’Oréal Paris gathered insights from multicultural groups to develop L’Oréal True Match foundation. 

“To win in beauty, we must develop products that are relevant to a diverse population,” explained Tiffany Giddins, associate vice president, consumer markets insights. “The No. 1 pain point for consumers is finding the right makeup shade.”

L’Oréal’s True Match technology enables 99.5% of women find their true shade. “It’s a great example of finding a pain point and then finding a solution,” she said. “Our innovation process is dynamic.

Inside & Outside

L’Oréal researchers understand that beauty is more than skin deep. Its subsidiary, SkinBetter Science, launched BioRewind, a dietary supplement to improve visible skin quality by helping reduce Advanced Glycation Endproducts (AGEs). Glycation is a natural process where sugars bind to proteins, such as collagen and elastin, forming AGEs that stiffen proteins and accelerate visible signs of aging. Without intervention, glycated collagen accumulates at an average annual rate of 3.7%.

BioRewind leverages proprietary rosemary extract and  bioactive co-factors which help reverse the cumulative effects of early-stage glycation and skin aging at the source, resulting in healthier and younger looking skin. Specifically, it reduces skin redness, dullness and rough texture. After 12 weeks, patients in the BioRewind treatment group experienced significant reductions compared to baseline. They include 30% reduction in rough skin texture; 28% reduction in skin dullness and 14% reduction in skin redness.

BeautyStat made its best-selling Universal C Eye Perfector even better by adding peptides to the formula. At the same time, BeautyStat reduced the price by 30%, by improving its supply chain.

“Consumers are excited. They appreciate multiple benefits in one product,” said Robinson. “Innovation can also be about simplification. The 10- or 12-step beauty routine isn’t always an option.”

BeautyStat is betting that vitamin C remains a popular skincare ingredient. Robinson noted that online search volume for vitamin C continues to grow. 

“Consumers know they need it in their routine,” he insisted. “There is a lot of competition on the market, but our formulas are pure, stable and most effective.”

Next month, BeautyStat will unveil a “blockbuster” innovation, in the words of Robinson.

The Beauty of Collaboration

Collaboration is a critical component of innovation at The Estée Lauder Companies, explained Haney.

“We see an exciting future of more collaborations with partners from across diverse sectors, including pharma, biotech and AI,” he told Happi. “Looking ahead, we’re particularly excited to continue exploring emerging biological pathways related to areas such as longevity, epigenetics, anti-inflammation and more.”

Earlier this year, Estée Lauder Cos. announced a collaboration with Massachusetts Institute of Technology (MIT). ELC is funding what it calls “promising research” led by Dr. Ana Jaklenec, principal investigator at MIT’s Koch Institute for Integrative Cancer Research to research the development of biodegradable materials for cosmetic applications and explore new solutions to combat the effects of visible light from the sun. Officials say this collaborative research with MIT complements ELC’s core competencies and expertise in skin science, biotechnology and more.

“Fostering strategic collaborations with world-leading scientific and academic institutions has long been a critical approach to driving innovation at The Estée Lauder Companies and enables us to remain at the forefront of research,” said Haney. “We are proud to collaborate with exceptional scientists who are exploring new frontiers in sustainability and innovation. Dr. Jaklenec’s research is demonstrating it’s possible to develop a new class of materials that can offer various transformative applications.”

With funding from ELC, Jaklenec will test her recently developed class of biodegradable materials for cosmetic applications. The initiative aims to further forge ELC’s leadership in green chemistry, while ensuring high efficacy and performance, official said.

The collaboration will also explore possible new solutions to help combat the effects that visible sunlight and blue light have on the skin. Leveraging emerging chemical technologies, this research will focus on developing dispersible, stable and formulation-compatible materials to block visible light effectively and protect consumers from visible light-induced pigmentation and potential photodamage.

ELC’s R&D Advanced Technology Pioneering team is collaborating closely with Jaklenec and her team of doctoral candidates, including Linzixuan (Rhoda) Zhang, on these research projects. 

More recently, in February, ELC announced a collaboration with Serpin Pharma to explore how Serpin’s anti-inflammatory research can be applied in cosmetics. The partnership accelerates ELC’s focus on transformative innovation by applying insights from Serpin Pharma’s two decades of anti-inflammatory research. Serpin’s biotech technology mitigates inflammation and enhances cell resiliency. 

L’Oréal is a big proponent of partnerships, too. 

“Open innovation is embraced at L’Oréal. Partnerships are critical to us,” said Mohamed Kanji, chief open innovation officer, North America. “Breakthrough science happens through collaboration with universities and startups.”

Haney of ELC agrees. He sees an exciting future of more collaborations with partners from across diverse sectors, including pharma, biotech and AI. 

“Looking ahead, we’re particularly excited to continue exploring emerging biological pathways related to areas such as longevity, epigenetics, anti-inflammation and more.”