Leadership in Sustainable Beauty
With the rise of highly customer-centric brands, the beauty industry has been expanding at an unprecedented rate. However, the environmental costs of innovative products are often overlooked due to the influx of new entrants as a result of the industry’s low barriers to entry.
We spoke with Laura Burget, co-founder of Three Ships Beauty, and Dion Hughes, co-founder of HiBAR, to discuss “How can beauty adapt to sustainability while maintaining high growth and consumer centricity?” Both are innovation leaders in the beauty industry, Three Ships Beauty, an all-natural, affordable skincare line, and HiBAR, a plastic-free, water-free hair care company.
** Throughout this article, we will use the “L” and “D” to refer to Laura and Dion, respectively.
Environmental costs: so many new products, but where do they end up?
Today’s customers have more choices than ever before, as we discussed when we delved into the unprecedented growth of the beauty industry. This is a positive gas pedal in many ways, as it creates more jobs, entrepreneurs and innovative product breakthroughs. However, the industry’s growth and its impact on the environment have not been balanced. From wasteful packaging, to complex international supply chains and microplastic pollution, the beauty industry’s environmental impact cannot be described in a single article. Here are some shocking facts.
Toxic ingredients
Most products are rarely used in their entirety before being discarded, which means their contents return to our planet through landfills and water currents
Oxybenzone in sunscreens has been shown to be toxic to coral reefs and marine life in the laboratory
Volatile organic compounds (VOCs) in perfumes, hairsprays and hand sanitizers cause smog and air pollution, producing the same amount of chemical vapors as petroleum in cars (although 15 times more petroleum is burned as fuel)
Notorious for the use of palm oil in over 70% of cosmetics, resulting in the deforestation of over 5% of tropical forests
Packaging and Carbon Footprint
Beauty products used worldwide generate more than 120 billion pieces of packaging each year
In addition to the packaging itself, the energy used in production and the carbon footprint of transporting raw materials and finished products also have an impact
Prior to COVID-19, over 93 % of sewer blockages and damage to marine life in the UK were caused by wipes and masks (a mixture of fabric and plastic) (similar statistics are spread across the globe, mainly in North America and Europe). The increase in personal disinfection products since COVID-19 has exacerbated the problem as wipes, napkins and chemicals are relentlessly disposed of everywhere – at least 100 tons of wipes were added to landfills in many U.S. states during COVID-19.
Carbon emissions, water pollution, endangered marine life, deforestation, smog and air pollution are just some of the under-studied but harmful effects of the booming cosmetics industry. Learn more about how cosmetics are destroying our planet here.
Our beauty products are polluting our atmosphere and oceans because, despite sustainable innovation, we are unable to address the waste problem as an industry by.
“London-based analyst firm Future Market Insights predicts that the global organic beauty market will reach $54 billion by 2027. Clean formulations, efficient recycling and non-toxic packaging have become the basic hygiene habits expected by millennial customers. But even cleaning brands with better formulas and packaging can’t solve beauty’s biggest problem – waste disposal.” – Credit: Mint
Do customers care about sustainability?
What’s holding customers back?
When considering other product factors, the answer to this question becomes more complex. While conscious buying continues to become democratized, it is often expensive, creating a barrier to purchase for many customers. three Ships Beauty is a great example of a brand that is transparent, natural and eco-conscious, and won’t go out of business.
In addition, there is a dilemma in how people view sustainable products because they are often categorized as boring and ineffective. Many people believe that products that are good for you and products that are good for the planet are mutually exclusive. However, Laura disagrees and offers a suggestion to address this gap.
L: “Unfortunately, there is still the myth that products that are good for you or natural/sustainable don’t work. This is no longer the case. There is a lot of science in our formulations, so we also have to fight an uphill battle to educate consumers that they will not compromise on efficacy when choosing natural products.”
L: “Sustainability is a broad term and each brand has a different definition. Contradictory brand messages are confusing and make it difficult for customers to understand the purpose of turning to sustainable product alternatives. Lack of understanding and awareness is the reason why customers reach for different products on the shelf. The key to bridging the gap between consumer behavior and brand perception is product education. For this reason, transparent communication and environmental education are just as important as effective formulas.”
HiBAR’s Dion Hughes highlights the same facts about functionality.
D: “We believe we can get most people to make a change by creating products that are at least as good as the plastic packaging products they are replacing, preferably better (in terms of convenience, price, performance, actual user experience).). If we can do that, we are a viable part of the solution.”
In order for sustainability to become mainstream, products need to be made with both affordability and functionality in mind. Customers care about sustainability, but are not willing to give up either option. Transparency and product education will be key to helping more customers move to eco-conscious solutions.
Green washing
Greenwashing is the concept of marketing goods and services with eco-conscious features, but failing to deliver on these requirements. With the rise of online branding and digital marketing, it has become easier than ever to wash products. Once again, transparency and detailed education are the most important factors in standing out as an authentic and truly sustainable brand.
L: “As more and more brands leverage marketing sustainability, it becomes challenging to separate the bleached green from the authentic message. While the industry’s growing interest in sustainability is a positive trend, it becomes an issue when brands share only a small portion of the truth. At Three Ships, we believe we have a responsibility to educate our customers about the science behind our products and our top priority is to communicate with complete transparency. Our customers trust our brand because we will never make misleading claims or use fear-based marketing. Our website includes a full glossary of ingredients.”
Small independent brands in large retailers: scalability or sustainability?
Three Ships has evolved from a small independent brand to a hugely successful brand in large retailers such as Target and Hudson’s Bay. This transformation has involved outsourcing manufacturing, coordinating large shipping orders, and establishing strategic business partnerships. It is often assumed that as a company grows in size, maintaining sustainability becomes increasingly difficult as profit and scalability become top priorities. However, Laura discusses why sustainability is not at odds with profitability and consumer centricity, and how other brands are doing it.
L: “In fact, as we’ve grown, we’ve found it easier to prioritize and practice sustainability. When you’re just starting out, time and money are really limited. Unfortunately, it takes a lot of effort to build a full sustainability program as a company, and when you’re small, you don’t have the ability to go above and beyond with your suppliers to ask them to go above and beyond for you. As we’ve grown, we’ve been able to push our suppliers to source from more sustainable sources, require them to share documentation, and have had the ability to apply for various certifications.”
Laura may be right, as we see large companies taking their own sustainability initiatives. Garnier recently launched their Green Labs line of eco-friendly products. Sephora, on the other hand, has made clean and green products a priority through its ” Clean at Sephora” label and environmental charity rewards.
Large companies have tremendous resources and operational advantages that allow them to turn to innovative, eco-friendly solutions. However, it is not that large companies lack the will to innovate, but rather that they lack the internal culture and human resource organization to support innovation around sustainability.
How do organizations plan for sustainability?
Often, leading a sustainability program requires setting goals and creating a culture that supports that value. Minimizing the bureaucratic resistance that creates opposition to new ideas can be challenging, but doing so can help build bigger, better, more sustainable solutions.
1. Create an internal culture of transparency
Sustainability may focus on protecting the planet, but it starts with people being transparent about everything they do in their jobs. Leaders who are not afraid to be open and vulnerable can foster stronger relationships between employees and customers.
L: “Connie and I are transparent with our team in every way possible, and we basically share everything with them except our colleagues’ salaries. Because we are so open with our team, it has led to a culture where transparency is at the heart of everything we do. We train our employees to think like consumers, to understand what they are doing/thinking and how we can best support our customers’ needs. Our team follows the Golden Rule, so we don’t have an ethics committee or anything like that.”
2. Designated leaders
The worst thing any company can do is to make sustainability a “low priority” as part of its operations or marketing department. An organization that values sustainability will give it equal status in its organization, which means assigning someone (or more) to lead sustainability completely.
L: “As a small team, the best way to ensure that sustainability remains a priority is to hire someone to lead these initiatives. We recently hired a sustainability-focused intern who has been tasked with developing our sustainability goals and launching a three-ship sustainability webpage. The webpage will showcase our three-year sustainability plan, links to education on sustainable products and information on responsible sourcing.”
3. Measuring goals
By setting sustainability goals and standards, everyone in the organization can better help achieve those goals. Better yet, measuring goals helps communicate authentically with customers and prevents greenwashing.
D: “We recently received Leaping Bunny certification, a long-term goal that we’ve been debating with various vendors for over a year.”
L: “The operations team is working together to apply for third-party certifications that support our sustainability practices. The back-end operations team is responsible for measuring and tracking our sustainability goals, but the entire team is focused on making sure we are a sustainable company. At this point, it’s really embedded in our DNA and culture.”
Waterless Products
Most soap products consist of more than 70% water and come in plastic packaging. In fact, more than 552 million plastic shampoo bottles end up in landfills each year. hiBAR, Ethique and ByHumankind are leaders in the waterless product category, producing bar soap. everist is another unique alternative, creating a waterless, plastic-free paste concentrate.
Sustainable Packaging
Almost every company in the industry has adopted sustainable packaging in some way. Compostable mailing bags and recycling bins have become the norm for most DTC beauty brands. Recyclable packaging is not enough to protect and restore our planet, but it is definitely part of the solution. Laura and Dion explain their brand’s packaging philosophy.
L: “Our default packaging is glass, which not only offsets our carbon footprint, but also allows for unlimited recycling to reduce long-term waste. In addition, all of our shipping boxes are made from FSC certified paperboard and 100% post-consumer recycled paper with water – based dyes.”
D: “Our mission to eliminate single-use plastics extends beyond shelf-ready packaging. We said no to well-known retailers who asked us to ship plastic-wrapped products (the encouraging and happy ending to this story is that our opposition actually encouraged them to change their shipping requirements!) . We also avoided selling on Amazon because we knew that to compete in that channel we would need to ship Prime, which meant we would lose control of the shipping packaging, which in turn meant that our products would be shipped in plastic. We’ve found a solution to that system, so now, yes, we’re on Amazon, and when someone buys our product from our Amazon store, we guarantee it will be in 100% plastic-free packaging.”
From left to right: HiBAR Conditioner ($13.95); Mifune Beauty Pack; Everist Waterless Starter Kit ($54 CAD)
Made Locally
Despite the higher costs, beauty companies are choosing to prioritize sustainability as they increasingly opt to skip overseas manufacturing in favour of local production. While shipping to international consumers remains a huge burden on the process, companies like Three Ships are also certified carbon neutral, meaning they are taking steps to offset their shipping impact.
L: “In addition to our formulations, we consider the sustainability of our supply chain and the end of the product life cycle as well. To reduce greenhouse gas emissions, all Three Ships products are manufactured locally in Toronto. ”
D: “Our products are produced locally at our plant in St. Paul, Minnesota.”
Ingredients
The ingredients used in beauty products are extremely important not only for the impact they have on our skin, but also for the impact they have on the environment after we’re done using them. Brands are avoiding the use of palm oil due to its impact on deforestation. In addition, Sephora has implemented the Sephora Clean label to showcase more brands that use non-toxic ingredients. three Ships takes a unique approach to transforming pre-consumer food waste into naturally sourced and compostable products that are non-toxic to the earth at the end of their life cycle: “We use up-cycling.
L: “We use upcycled ingredients and produce from sources that would otherwise result in food waste. This process benefits renewable resources and optimizes bio-based materials as it cycles through the economy and natural systems.”
D: “The list of ingredient criteria considerations is long – setting aside our own criteria on ingredients we avoid (sulfates, phthalates, parabens, silicones).”
Recycling Programs
Most “recyclable packaging” is properly recycled by the end user, so it is difficult to see the benefits of such initiatives. However, many companies are starting to implement recycling programs for a variety of industrial wastes, which helps to promote recycling. brands such as Lush, Origins and Mac also offer discounts and incentives to customers who bring in used products for recycling. Notably, CPG giant Garnier recently started a recycling program with TerraCycle. Unfortunately, customers still know little about the availability and benefits of such programs, and Laura says recycling programs will get bigger and better in the future, as she sees it as an area of future innovation for Three Ships Beauty.
L: “We are impressed by brands that have implemented recycling programs to eliminate waste and restore product lifecycles. These programs accept empty bottles that have been sanitized and reused as new packaging. Brands like TerraCycle work with manufacturing facilities to help recycle hard-to-recycle waste like skin care pumps and aerosols. As our brand continues to grow, recycling programs are an initiative we hope to implement in the future.”
Refillable ProductsCPG household cleaning products brand Blueland has completely raised the bar in this area. While not a beauty company, many companies have followed Blueland’s refillable model, reducing the need for wasteful packaging. dove, Dior, Kiehl’s and Ouai are some of the top brands that already have some version of refillable products in their inventory.While 1-2 refillable products is a good start, in order to really make a difference, brands need to rethink their larger product offerings. Capitalizing on eco-efficiency and customer preference for sustainability, Birchbox Subscription Services launched its third private label, Re.fil, to improve the accessibility of refillable products.
“With the growing popularity of refillable beauty solutions – from Love Beauty and Planet’s refillable hair care products at Target to Loop’s partnership with Ulta to develop reusable containers – -Birchbox is launching an in-house brand to address similar issues.” – Cara Salpini, Retail Dive
At the end of the day, bottom-up innovation is just as important as top-down change. In the startup space, this starts with where the money comes from: investors and venture capital firms.ESG has become an increasingly important focus for many large companies such as CPP Investments and Manulife, but has also created opportunities for innovative companies such as New Age Ventures and SustainVC to join the field. According to the 2018 Global Sustainable Investment Review, ESG integration in the public and private markets increased by 69% between 2016 and 2018. Additionally, according to the 2019 Preqin Global Private Equity and Venture Capital Report, nearly two-thirds of investors, noted that ESG guidance is critical for alternative investments.
Unfortunately, investments are also greenwashing. In many cases, the impact and value of sustainable investing is still missing.
L: “In the seed round in October, our investors didn’t seem to care about sustainability at all. I think for most investors, they see it as a trend that they can profit from by supporting brands with these values. I think this will start to change over time as more “new age” investors replace old school beliefs. Angel investors and venture capital firms focused on sustainability are still few and far between. In order for us to make a real impact, investors in public companies need to hold leadership accountable. Large companies will be able to make the greatest impact.”
Final Insights
From pervasive waste issues to over-packaging and green marketing, the beauty sustainability puzzle is far from solved. Rather than viewing this as a disadvantage, the lack of green innovation in the nearly $700 billion beauty industry should be viewed as a collection of revenue streams waiting to happen. There are promising examples of thought leaders, such as Laura Burget and Dion Hughes, making this a priority. In addition to the brands discussed in this article, Elle’s list of Green Beauty Stars for 2021 and Harper’s Bazaar’s list of sustainable beauty brands are great starting points for greener alternatives to cosmetics.
At Onova, we are committed to helping our clients achieve their innovation goals around sustainability through our Business Incubator and Design Sprint services. Visit us on Twitter and LinkedIn for regular insights and updates.
L: “There is no Planet B – the Earth is all we have. We have a responsibility to do the right thing for our environment and all the creatures we share the planet with. From sustainable packaging to responsible sourcing, the future is bright for the clean beauty industry and we want to lead the sustainable beauty movement.”
