Pandemic? What pandemic? COVID-19 hasn’t stalled some startups from starting their own beauty businesses; in fact, one intrepid entrepreneur insists a recession can be a perfect time to get going.

“There is no better time than the present to build your business,” insists Glory Skincare Founder Alisia Ford. “Historically, leading consumer brands and startups started in times of financial uncertainty and market instability. So, I say to my fellow budding entrepreneurs, keep going after your dreams. What I’ve learned thus far, is the team you build is so important, and it can make or break your business.”

Maybe, but even long-time contract manufacturing executives never experienced what took place in 2020. Employee safety, ingredient shortages and roller-coaster consumer buying patterns were just a few of the issues with which to contend. According to Warren Becker, CEO, Cosmetic Solutions, managing COVID was challenging from a workplace safety perspective. The company implemented a number of new protocols and procedures to ensure the safety of its team; many of which are still in place today.

“(It) was certainly a year like no other. In early March, when we saw what was starting to happen in the marketplace, we pivoted and dedicated a few lines to running sanitizer. In addition to satisfying the needed demand in our local community and with a number of partners, we were able to keep our doors open and people working continuously,” recalled Becker. “We are fortunate to have an extremely diverse and resilient client base, many of whom have strong e-commerce businesses, so our own business fared well overall and put us in a stronger position than we had anticipated going into 2021.”

Besides specific companies, specific categories thrived too. According to John Stanek, director of marketing and product development, Covalence, demand for all skin care product types remained strong, and OTC acne product exceeded expectations.

“I anticipate above average interest for OTC acne treatments and luxury skin care products and expect these products will lead the pack in 2021,” he predicted.

Jordy Pickel, director of marketing, Accupac, described 2020 as “supercharged,” noting that many clients felt the pinch when the pandemic hit, but since her company works with a lot of multi-brand CPGs, Accupac’s orders increased substantially. At the same time, the company manufactures a lot of soaps, sanitizers and skin care products, all of which were in high demand last year.

“Skin care was the category that grew the most for us. A few of our customers made it into the social zeitgeist, so demand for that has been high. We’ve also seen this mentality during COVID for us to stop and think about personal and self-care. It’s brought in a lot of new consumers interested in skin care,”said Pickel.

Stanek explained that factors influencing demand are both pandemic-related; continue mask-wearing will support demand to treat breakouts associated with face coverings and increased consumer-liquidity will stimulate luxury skin care sales once economies start opening up.

Like other contract manufacturers, early on during the pandemic, Dynamic Blending got caught up in the hand sanitizers frenzy. But unlike others, the company partnered with US Ethanol to ensure a study supply of alcohol, recalled Jordan Erskine, CEO and co-founder, Dynamic Blending. Fast thinking among its 110 employees kept Dynamic Blending fully operational throughout the pandemic and the company thrived on demand for CBD and skin care products. As more states move toward legalization, demand for CBD and other hemp byproducts will continue to soar, and propel Dynamic Blending even higher.

“Last year we hit No. 17 on the Inc. 5,000 list of the fastest-growing private companies and we’re No. 1 in Utah,” noted Erskine. “Our sales doubled last year and they will double again this year.”

He credits the growth to Dynamic Blending’s turnkey system that includes everything from concept to formulation to graphic design to even Google search help. At the same time, Dynamic Blending is open to joint ventures and will even work for free in return for equity.

“There are a lot of good ideas out there that are just missing the manufacturing piece,” he explained.

Federal Package’s ability to provide a total turnkey solution has been a great advantage during the pandemic, as well, according to Sarah Grobel, director, sales and business development.

“Our turnkey customers experienced minimal disruption, where those customers that supply their own raw or pack out materials from other domestic and foreign sources saw delays in lead times to receive their materials,” she explained.

Grobel said COVID-19 created a significant shift in the retail landscape and altered consumer buying behavior. Some key customers were impacted and shut down for several months. The effect started at the end of Q1 and persisted in some format throughout the year.

“Our end users found new ways to shop and purchase product. National brands with national retail distribution via essential businesses fared much better than regional brands and specialty retail distribution,” she said. “Direct to consumer brands, through their own online website, or through online retailers found solid footing to serve their customers.”

Post-Pandemic Possibilities

Like every other company, Covalence encountered significant business stress during the past year primarily related to staff shortages fueled by the pandemic. However, the company worked diligently to shore up deficiencies whenever discovered and improved inter-departmental workflow of all departments, according to Stanek.

“We expect processes developed to improve net throughput will pay dividends for years to come,” he added.

Besides CBD and related products, Erskine and Pickel predict that demand will surge for personalized skin care and luxury oral care, such as Moon by Kendall Jenner. In contrast, he expects color cosmetics sales to suffer for the rest of 2021. Still, that isn’t deterring newcomers to the beauty category. Ford, along with Priyanka Ganjoo, founder of Kulfi, are just two of eight intrepid entrepreneurs selected to participate in the Sephora 2021 Incubator program. At the completion of the program, participating companies will launch at Sephora, putting the retailers on track to double its assortment of BIPOC (Black, Indigenous and People of Color) brands by the end of the year. Other brands in the Incubator program include 54 Thrones, EADEM, Hyper Skin, Imania Beauty, Ries and Topicals.

Glory is a skin care brand focused on clean-targeted treatments formulated for melanin-rich skin. Glory will launch its first skin care line upon completion of the Accelerate program. Kulfi debuted in February and is designed around South Asian skin tones and undertones. According to Ganjoo, Kulfi is designed to challenge toxic beauty standards in South Asian culture defined by Eurocentric ideals and the patriarchy. 

“I knew that launching a color cosmetics brand would be challenging but there are two things that kept me going,” Ganjoo explained. “First, I was building a brand around a real problem I faced and knew many others in my community were experiencing. That challenge wasn’t going away just because we have a pandemic. Second, having worked in the beauty industry for the past six years, I have an understanding of the way beauty trends rise and then fall. Right now, we might be at the peak of skin care, but color will bounce back soon enough.”

Ganjoo thought Kulfi Beauty would have a longer incubation period with a slower start. What she didn’t expect was how much Kulfi’s brand philosophy would resonate with what is missing in color cosmetics today.

“Color lost its way because so many brands were launching without intention and purpose. Kulfi Beauty is bringing these values back to the forefront,” she insisted. “Five eyeliners are probably the smallest and tightest launch assortment, but through storytelling and visual cues, Kulfi has made an outsized impact.”

Glory Skincare was launched right at the beginning of the pandemic so, from the very start, Ford and her team adjusted quickly and pivoted when necessary. One change to the business model was offering the Glory SkincareQuiz that asks a series of questions to learn about the customer’s skin type, skin condition(s), lifestyle, etc.

“Our intention has always been to bring education to skin care for women of color,” Ford explained. “One thing to note about skin care is that what works for one, may not work for the other.”

That’s precisely where Ford’s idea of offering a personalized subscription box originated. Based on the SkincareQuiz, she wanted to test the market to see if there was a need for personalization in skin care and to test some assumptions around various gaps in the skin care and beauty market.

“Not only did we sell out numerous times due to high demand, but we experienced an increase in sales and positive feedback seen in the organic press,” she said.

Ganjoo has been following Accelerate for several years and was tracking when applications would open. When she found out that this year would be focused on founders of color, it felt like the right moment to apply because it signaled that Sephora was committing to diverse founders in a big way.

“The timing was key because perhaps a couple of years ago, we may have been considered too niche,” she said. “Sephora is a brand builder and storyteller. Our brand story is such an important part of our identity and I wanted to partner with someone who had the expertise to amplify it.”

Ganjoo noted Accelerate provides exposure to founders who have built successful businesses at Sephora.

“The cohort of founders has also been a great resource,” she added. “Finally, it’s an opportunity to make Kulfi accessible to Sephora’s clients and our community in a big way.”

According to Ford, Glory has been collecting data from its customers, through its SkincareQuiz, to better understand their top skin concerns. She is planning to use the thousands of responses collected in the past year to create products that really speak to the unique needs of Glory customers.

“It’s an honor to be chosen by Sephora and to work alongside the other talented brand founders,” she told Happi.

When One Salon Closes…

For Jamila Powell, founder of Naturally Drenched, COVID-19 forced her to pivot dramatically. A year ago, she shut down her business, Maggie Rose Salon, which she said was an especially tough move because 2020 was slated to be a major year for the salon. She lost income and some of her team.

“While I was no longer able to rely on the salon as a source of income, I knew that I could rely on an e-commerce product to support me, my business and my family,” she recalled. “The creation of Naturally Drenched has been a lot of work and I have learned a lot of lessons along the way. I used my business experience from running Maggie Rose Salon to make smarter decisions for this new business venture. I’ve managed to succeed by not giving up and realizing that I can figure out anything as long as I’m patient.”

Powell has been in the salon industry for more than eight years, so much of the inspiration behind Naturally Drenched came from the day-to-day experiences she had with trained stylists and customers. She saw first-hand what stylists would do for each unique type of hair texture.

“They would talk about the different needs of each kind of hair they would work with and about products they wished they had more of,” recalled Powell. “This is when I first started to notice a lack of pre-conditioning treatments for textured hair and a lightbulb of inspiration went off.”

The result was Rebalance—a pH hair treatment for all curls and all textures.

“I wanted to create a cohesive, sustainable brand based on the hands-on knowledge I received in the salon,” said Powell. “Usually, lower textures receive a lot of love, but higher textured hair is left without that same love and attention.”

Rebalance’s key ingredients are superfoods such as papaya and mango, which Powell describes as delicious to eat, and excellent for hair. The formula also features bamboo extract, aloe vera and calendula, which help fight breakage and promote stronger, healthier hair growth. Rebalance is a pre-conditioner treatment to be used after shampoo but before conditioner.

“It will give your hair some extra TLC by restoring its natural pH and smoothing the cuticle,” explained Powell. “It is safe to use on color-treated hair and will leave hair with a beautiful shine.”

To create the formula, she worked side by side with cosmetic chemist Cynthia Johnson (Cindy J Labs) whom she found on Instagram by doing a hashtag search for #blackcosmeticchemist. She also found her manufacturing partner, Cosmetic Solutions, through Instagram, and did a Google search to read the reviews.

“Cosmetic Solutions has been great to work with, they are always very timely, and responsive, which is important when things are moving fast,” said Powell.

Unsolicited accolades like that help contract manufacturers going through any type of hardship.

“I’m proud to say that last year made us a stronger team and a stronger business. We saw some of our customers struggle and we made sure to pitch in and support them as we all navigated the challenges of last year together,” said Becker. “These experiences have allowed us to be more customer focused, with a fresh new take on what it means to truly add value and critical support to ensure everyone’s success.”

Looking ahead, Becker noted that COVID shone a light on the wellness movement as it relates to skin care and the value of healthy skin as an investment in overall wellbeing.

“As consumers have moved away from color cosmetics, they’ve gravitated much more to skin care products that will keep their skin looking and feeling great,” he said.

Along those same lines, Becker reports an increase in active ingredients that support skin health in the form of adaptogens and probiotics, as well as ceramides for skin barrier function and ingredients that calm and soothe the effects of constantly wearing a mask or PPE.

In addition, the Cosmetic Solutions team sees the following to be among the strongest categories in 2021 and beyond:

• Blue Light Defense—due to consumers increased use on the computer when working at home and conducting virtual meetings.
• Sustainability/Upcycled Ingredients—This is taking skin care sustainability to the next level as food byproducts are being upcycled to be used as skin care ingredients. COVID is the catalyst because it impacted many global supply chains so severely.
• Skinimalism—A return to simplified, effective skin care routines of no more than 4-5 steps.
• Inclusive Beauty—Brand owners are aware that they must provide products and services for everyone, including black and brown beauty, Latin, genderless, menopause, tweens and more.

What’s Ahead?

Right now, Powell is formulating a moisture treatment to introduce into the Naturally Drenched line.

“I’m working with the same cosmetic chemist that helped me formulate Rebalance, so I’m really excited about this next product. I also plan on stepping it up a notch in the arena of sustainability,” added Powell. “My goal is to constantly evolve and use the best ingredients for people and for the environment.”

Through the Sephora Accelerate program, Ford is working on many updates for Glory.

“Soon, you’ll be seeing a bit of ‘rebranding’ and updated messaging that speaks more truly to the company values. Later this year, you can expect to see a DTC skin care line that we’re really excited to share more information about soon.”

Contract manufacturers are ramping up to meet increased demand. Cosmetic Solutions spent the past year investing in its facility to provide a greater selection of manufacturing capabilities to its customers.

Some of the new machinery includes a state-of-the-art Reverse Osmosis Water System (RO), additional tanks and kettles to expand compounding capacity, hot fill formulation, batching and filling capabilities that allow Cosmetic Solutions to address the increase in marketplace demand for products in the form of sticks, balms and salves.

“We also have a new, fully automated liquid filling line which is meant for liquid filling .5-8oz bottles, jars and airless pumps,” said Becker. “Finally, we’ve invested in our team with training and development programs, and are actively adding experience and expertise to our R&D and manufacturing teams.”

Covalence made improvements to existing filling efficiency by way of automation and cross-training will improve lead times and capacity for years to come, according to Stanek. Covalence didn’t add capabilities during the past year, but improvements made to existing filling efficiency by way of automation and cross-training will improve lead times and capacity for years to come.

Shortly before the pandemic hit, Accupac was ready to launch its new R&D/Innovation department, Cobalt Labs.

“Our Director of Innovation, Devin Garcia, has been working with some great brands this year to extend their SKU offerings,” explained Pickel. “In 2021, we will be rolling out a whole new host of capabilities for allowing our customers to reformulate and expand into new audiences.”

Federal Package added automation and new positions to its QA, engineering and supply chain teams.

“The benefits to our customers are a strong quality management process while streamlining logistics,” explained Grobel.

Mana Products collaborated with Meiyume and RPG to create The Vertical Beauty Alliance. It is said to provide a single source for best-in-class packaging and expertise in retail experience with development and manufacturing excellence and speed-to-market on a global scale, according to the companies. The launch of The Vertical Beauty Alliance comes just months after Mana Products was acquired by Traub Capital in a deal that set the beauty maker’s next phase of strategic growth in motion.

The Vertical Beauty Alliance maintains facilities and capabilities not only across continents, but across categories, too: skin care, makeup, hair care and fragrance. As The Vertical Beauty Alliance, Mana Products, Meiyume and RPG have nine R&D labs, six manufacturing sites, and more than 10,000 beauty product blueprints in their two formulation libraries.  

Dynamic Blending is rolling out a portal so that customers can see exactly where their projects are in the pipeline and easily interact with Dynamic Blending staff. In other moves, the company added a printer to customize labels and a 3D printer to produce machine parts. These investments underscore Erskine’s goal to have a seamless, in-house operation.

“We are always one step ahead,” he asserted. “If not, you’re falling behind.”

Post-pandemic, successful entrepreneurs and their suppliers have learned the value of staying ahead of issues. But according to Ganjoo, sometimes, going slowly is better.

“As a brand founder, it can be tempting to get everything done quickly, but the pandemic has taught me to be very intentional and thoughtful about every aspect of the brand,” she told Happi. “In the end, the quality of our work shines and has helped us get the kind of exposure we have despite being a small, indie brand.”

At the same time, it’s important to choose investors wisely and be particular about whom you bring into your company.

“The conversations I have had with investors are eye-opening because I began to realize who was a fair-weather friend and who truly believes in our long-term vision,” she added.

Other entrepreneurs certainly agree with Ganjoo’s assessment.

“I’ve learned to stay true to my original vision and to not take things personally. Entrepreneurship has so many highs, and lows, so you have to remember to protect your mental health and stay steady,” concluded Powell. “Taking your time and finding the right team of people to work with makes all the difference in the world.” 

Help Is Here for Entrepreneurs! The current business environment is very difficult for every company, let alone startups. If you’re ready to get going on that new concept for a personal care or home care formula, turn to Happi’s Contract Manufacturing directory, which is published every October and available 24/7 online at Happi.com. If you’re looking for even more guidance, contact the Independent Beauty Association (IBA). The organization helps beauty entrepreneurs get the information they need when it comes to education, legislation and networking. IBA’s mission is to foster the success of entrepreneurial companies in the independent cosmetic and personal care industries. At the same time, the group promotes and maintains the highest legal and regulatory compliance standards, environmental sustainability and ethical business practices. To learn more, contact IBA at independentbeauty.org.