The Real World of Cosmetics Manufacturing

Author: Yaroslav Protsko, economist, lawyer, marketer, co-founder of Piel Cosmetics (Ukraine, Kyiv)

Source: KOSMETIK international journal, No. 4/2013, pp. 46-49

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The beauty industry market, or rather cosmetics, is, if not the largest, then certainly one of the largest markets built on myths and legends – I think this is no secret to anyone. This is a market where marketers, not developers, have long been fighting for success. Of course, the fierce competition between cosmetic brands requires much more than just a quality product. And in pursuit of the consumer, marketers come up with more and more new explanations for why it is worth buying this particular cream and not a competitor’s cream, although, in fact, in the minds of consumers, these products are little different from each other. For example, collagen, one of the most popular components of anti-aging cosmetics, is considered a modern and innovative ingredient. But few people know that it was discovered in the middle of the twentieth century by Polish scientists.

In essence, collagen is a protein. But how much controversy surrounds it! Some skeptically, but rightly, say that collagen is a superficial moisturizing agent, while others confidently argue that collagen gets into skin cells and is integrated into the structure of its tissues. There are also those who claim that it is better to take collagen internally, since its molecule is too large and cannot get into tissues when applied directly to the skin. However, the latter forget what we have already said above: collagen is a protein. And how protein is absorbed by the human body can be read in school biology textbooks. Perhaps, such bickering regarding a component discovered more than 50 years ago looks strange, given the current level of development of science...

The technological capabilities of self-respecting domestic production are in no way inferior to their European competitors. Of course, there are other examples, but now we are talking about a manufacturer of the appropriate level

Companies are forced to come up with a lot of "tricks" that both professional cosmetologists and, of course, ordinary consumers "fall for". The saturation of the cosmetics market forces them to "decorate" their products in every possible way in order to somehow stand out against the background of the crazy number of cosmetic lines. Meanwhile, the manufacturing world continues to live its classic life, according to the laws that are typical for almost all markets and products. Have you ever noticed that, for example, in the interiors of cars from different manufacturers there are absolutely identical elements? That not a single auto giant will independently produce light bulbs, and much more for its cars? What am I getting at? The fact that the same principle exists in the cosmetics market. Let's consider it in more detail.

Product base - ingredients

In fact, any cosmetic product that you are currently using is the result of work by far from one company. There is a clear production division for all components of the finished product. Let's start with the most important thing - with raw materials and active components.

Individual factories and enterprises are responsible for development, testing, determining the technologies for introducing and dosing active components, while suppliers of raw materials are fully responsible for developing and introducing their products into cosmetics. There may be many of the latter, since they have different specializations, and they also supply their products with clear instructions for use, which also contain information on the dosage (from the effective minimum to the maximum). And finally, manufacturing companies develop cosmetics in their laboratories. Of course, based on the instructions of the suppliers.

So, most active ingredients for cosmetics are produced and supplied to cosmetic factories by raw material manufacturers. In other words, in many cases, different cosmetic giants have the same suppliers.

“What about unique patented complexes?” – you may ask. This is also worth mentioning. The key word in this case is “complex”, that is, a composition based on several components. Most often, this is exactly what it looks like. In order to distinguish their cosmetics and get another unique characteristic that would increase the level of trust among consumers (you must admit, it sounds loud: “unique patented complex”), manufacturers patent combinations of some components that, according to their research, made the product more effective. Thus, cosmetic manufacturers kill two birds with one stone, namely:

• gain another significant advantage for the consumer;
• partially protect their products from counterfeiting.

But do not forget that all the components of such a complex may be present in other cosmetics, but perhaps not in the same dosage.

In many cases, different cosmetic giants share the same suppliers.

It is worth noting that when buying high-quality cosmetics of Ukrainian manufacture, you often buy a product in the production of which active components from the same suppliers with whom global giants cooperate were used. In Ukraine, there are factories that are engaged in, among other things, exporting their products to European countries. In order to meet all standards, such enterprises are required to use production raw materials, the quality of which meets all EU standards. Therefore, many use raw materials from European manufacturers. By the way, in Ukraine there is already a factory with a GMP (Good Manufacturing Practice) certificate. This is a key document in European, and even in world practice, familiar to many. And according to the standards of this certificate, the use of low-quality raw materials is simply not allowed. Accordingly, all products of this enterprise meet European standards.
The main task of the factory - the manufacturer of cosmetics - is to develop an effective cocktail of components obtained from suppliers. In essence, this is creativity, like, for example, painting: everyone has the same paints, but not everyone can create masterpieces. But then there are instructions from the manufacturers of raw materials for everyone, so it is much easier to create masterpieces within this framework. And as practice shows, not everyone succeeds in developing a good recipe, but it has long ceased to be a miracle.

The secret recipe is simple: masterpieces are achieved by those who:

• doesn't skimp on paints (in our case, doesn't skimp on the dosage of components);
• chooses expensive canvas (uses high-tech equipment);
• looks around (learns, follows new technologies, the latest trends, uses modern components).

The last point deserves special attention.

The importance of staff

In this context, we are talking directly about qualified personnel and the approach to their training at a particular enterprise. Whatever one may say, people, as in any other area, are the decisive link in the field of cosmetics production. Starting from the technologist-developer and ending with the specialists who are directly responsible for the production of products. We should never forget that the correct use of equipment and the final result largely depend on these people. An integral part of modern production is maintaining the qualifications of all personnel whose activities are related to the development and production of products. For example, GMP standards imply mandatory regular confirmation of the qualifications of employees and their training. All national production should strive for this, regardless of scale. Modern technologies do not stand still, and if we do not want to remain forever in the past, we must keep up with the times. Fortunately, in this case, the domestic manufacturer and developer has another trump card: both young and experienced industry specialists who have truly effectively combined the knowledge of the classic "Soviet" cosmetic school, regional specifics (you must agree that it is important to develop cosmetics, taking into account at least the climatic features of the area) and modern world experience in the development of cosmetics.

Equipment and packaging

The issue of equipment and technologies also deserves special attention. There are a lot of myths here too. But to be brief, in mass production factories in 100% of cases, absolutely identical technologies are used, and have been for a very long time. Of course, this concerns equipment that operates on the same principle, and to generalize, a fairly simple principle is used in the cosmetics industry. And the same technologies are available to absolutely everyone. At least because the manufacturers of such equipment are interested in the largest possible sales of their units.

You didn't think that some kind of nanogun (the cost of which is comparable to the price of a hadron collider) is used in the production of nanocosmetics, which, under conditions of a complete vacuum, charges the cream mass with active nanoparticles? No, it's not like that: what is commonly called nanocomponents due to the ultra-small size of the particles is purchased from suppliers and introduced into the cosmetic product in the classical way.

Of course, we are not talking about equipment that is more than thirty years old. We are talking about modern installations, although outdated equipment still exists. But I am convinced that this is for the time being, because modern standards in the world of cosmetics do not leave a chance for such an approach. And by the way, if a manufacturer uses cheap equipment, then most often it affects the latter more than the quality of the finished product. Such equipment breaks down more often, it needs to be repaired endlessly - and loses money on this.

So, summing up the above, I want to say that all factories – cosmetics manufacturers create their brands on approximately the same equipment. Including in Ukraine. I can competently state that the technological capabilities of self-respecting domestic production are in no way inferior to their European competitors. Of course, there are other examples, but now we are talking about a manufacturer of the appropriate level.

As you understand, the situation is similar with containers and packaging for cosmetics. Separate enterprises are also responsible for their production. Depending on the market segment, packaging and containers for cosmetics can be absolutely different. Do not forget that the high cost of the packaging itself does not in any way affect the quality of the product. Most often, it affects only the price. Many cosmetics manufacturers, especially mass-market ones, consciously follow the path of reducing the cost of the recipe, but use more expensive packaging in the hope of attracting the client with a more luxurious, rich appearance of the product.

Get to the root of the matter!

One morning I noticed the composition of thermal water from one of the world's famous manufacturers. It didn't take any special knowledge to understand: inside is just water, water from a natural thermal spring, enriched with natural components. And nothing more from the active components. Of course, moisturizing with such water is good for the skin, but why should a Ukrainian consumer pay so much money for water from a thermal spring located in one of the European countries? A question then appeared in my head: why can't we, Ukrainians, independently create a more effective, higher-quality cosmetic product, and at an affordable price? Can't we do better?

“I will never believe that a product that is ten times cheaper can work as well as the product I use,” you will say. This is the belief that most of the cosmetics world is built on. Yes, you will be partly right: products that are significantly different in price often do not produce the same effect. But I can assure you: a product that is two or three times cheaper can sometimes work just as well, or even better, than a more expensive one. Why? Simply because even pharmaceutical factories spend more money on marketing their products than on research into their effectiveness. Who do you think pays for advertising? And for expensive packaging? Of course, you!

At this stage, having comparable capabilities, technologies and potential, the national manufacturer is still losing the sales battle to the well-known world giants. There is one reason: in the post-Soviet space, the needs of the market were not taken seriously, and the creation of products and production were carried out using the imperfect methods of the planned economy.
The decades of the 90s and 2000s allowed the battle for consumer preferences to be lost. And the buyer gave his vote in rubles to the one who asked questions - and created the goods he needed.

However, in the 2000s, the Ukrainian manufacturer also slowly began to regain its position. But even a manufacturer who has learned to create a product that is needed by the market, more affordable and of better quality, still finds it very difficult to reach its consumer. This is largely explained by the fact that the perception of the market in the consumer's head has already been formed by skillful marketing campaigns of global brands, while the national manufacturer was still little acquainted with this science. The fight for a place in the sun is waged in the minds of the consumer, where the opinion that high-quality products can only be produced abroad has firmly taken root. And although times are changing, and although some national production has grown to the level of European quality, the Ukrainian consumer continues to follow the lead of overseas advertising campaigns with huge budgets, not noticing that European society, understanding the significant share of advertising in the cost of products, has already changed its consumer vector.

You have to believe in yourself!

Returning to the topic of national production, I would like to note that the Ukrainian consumer has long had the right to receive a quality product at an adequate price and deserves it. And most importantly, the Ukrainian industry, and not only in the cosmetics sector, is capable of producing this product. The problem lies only in the invisible barrier of perception between the national consumer and the manufacturer: "Ukrainian" is still perceived through the prism of post-Soviet mistrust of the national product, which, in my opinion, is somewhat similar to a national inferiority complex. In any case, the situation will not improve on its own, and only we can change consumer consciousness in favor of consuming national products. This is the direct responsibility of any responsible Ukrainian manufacturer - to reform the consumer's consciousness with their product and their actions. At the very least, this is much more beneficial for the well-being of the country than mass consumption of imported goods. With joint efforts and, of course, high quality standards, the Ukrainian manufacturer will be able to win the fight taking place in the minds of our client.