But it can be done, especially when one teams up with a capable contract manufacturer (CM). These silent partners can turn dreams into reality—but you’ve got to do your homework first, say industry veterans.
“CMs will do all they can to help, but don’t go in expecting the CM to offer all the creative and visionary answers,” said Cherie Buziak, CEO/owner of BeautyEdge LLC, a beauty product development and advisory consultancy.
According to Buziak, there must be a transfer of more than just production run numbers.
“When building a new relationship with a CM, make it a point to get the CM just as excited as you are about your brand. You can do this by providing as much information as needed so they can jump on board with your vision,” she told Happi. “Be prepared to explain what the story is that you would like to tell about your brand or product, and what makes it different from every other brand in the market.
The More You Know
Others agree that the more a brand owner or entrepreneur knows about her end game, the easier it will be getting there.
According to Todd Shea, vice president of innovation and strategy for Aware+CEI+Vee Pak, Chicago, start-ups should have a clear idea of “their brand, its DNA, the market segment they’re targeting, and the distribution channel should be clear with some preliminary investigation and resulting strategy.”
“It’s helpful when a new customer comes to us with a fully vetted idea for their product and/or brand. Starting out knowing what a customer definitely wants or does not want in regard to formula and packaging is really helpful,” added Sarah Grobel, business development manager at Federal Package, a contract manufacturer based in a Chanhassen, MN. “It’s also helpful if they understand that working with a contract manufacturer is a process that can sometimes have longer than anticipated lead times. Manufacturing new products isn’t something that can happen overnight.”
Cornelius Grupp, CEO of contract manufacturer C-Care, LLC, echoed that sentiment. He said that often start-ups are not up to speed when it comes to the manufacturing process, including lead times and costs.
“They are excited, but seem rigid when it comes to the manufacturing side and what they want to achieve in a short period of time. It is a learning process for a new company,” he said.
Brittany D’Ambrosio, director of marketing at Kirker Enterprises, a custom manufacturer specializing in nail lacquer and nail care treatment products, said startups need to know their anticipated order quantities and target market and a have a benchmark formula in mind.
“In addition to having an established tax identification and seller permits, start-ups should have an idea about their budget which will determine their volume and if they are leaning more toward private label or custom manufacturing,” said Rachel Rendel of Columbia Cosmetics Mfg., a private label and contract manufacturing house with a manufacturing plant in San Leandro, CA.
Buziak, who has worked on many product development projects, provided a laundry list of key pieces that should be in place—NDA, business plan, finances, volume runs, product profile and more (see sidebar, below).
Buziak also said brand owners should be explicit about the product benchmark, the package, the desired claims and performance.
“Be creative verbally and visually about the look, texture, feel on skin, positioning and technology of the brand. Imagine and communicate the experience that you would like the final user to have while using the products,” she said.
Pick Your Partner
Once a brand owner has key issues sorted out, they can search for that perfect manufacturing partner. While word of mouth can provide avenues to explore and the internet has made it easier than ever to find contract manufacturers, brand owners should do their due diligence.
“Inquire if the CM provides services like regulatory, product development, marketing, claims development, package design and engineering. Some CMs provide these services, some don’t. If they don’t, be prepared to outsource these services from third party entities,” said Buziak.
And it might be wise to dig deeper into their track record; brands have shared with Happi stories about unscrupulous contract manufacturers, and warning letters from FDA can be alarming. (In fact, just recently, the US Food & Drug Administration posted three new warning letters in which it detailed issues with contract manufacturers. During one inspection at a CM, FDA found significant violations of current good manufacturing practice (CGMP) regulations for finished pharmaceuticals, including acne shave cream, acne shave moisturizer and pain gel; another used a raw material lot with a “too-numerous-to-count result for total aerobic microbial count” in an acne treatment it was making for a customer.
“Run all required tests especially with product stability and safety testing, consumer science testing or at least a quick product performance test,” suggested Buziak.
More Than Production Runs
In addition to production capabilities, the best CMs will provide insight and expertise that can help guide other key decisions.
For example, savvy contract manufacturers keep up with trends and regulations in the category, which can aid in ingredient and package selections.
“Making sure our products are as green and carcinogen-free as possible is a trend in the marketplace that directly relates to being on top of changing regulations not only in the US but also worldwide,” said Rendel of Columbia Cosmetics, which offers liquids, lotions, powders, color, SPF products and skin and is proficient in worldwide regulations including Europe and Japan.
“We work to ensure that all requirements are met whether we are working with a cosmetic or OTC formula which puts our customers at ease, especially those that may not have any experience with FDA regulations,” said Grobel of Federal Package.
D’Ambrosio of Kirker said her company’s “regulatory department continuously researches all ingredients used in our products to ensure we use only FDA approved colorants and raw materials approved for use in cosmetics and processes recognized by cosmetic industry standards.”
Leading contract manufacturers stay in tune with what consumers want in their beauty and personal care products now, and forecast what’s ahead.
For example, based on the drive toward natural ingredients, textures and specialty effects, Kirker just released formulations that contain an exclusive hybridized and multifunctional acrylic polymer that is new to the cosmetic market.
D’Ambrosio said Kirker showcased the technology at Cosmoprof Bologna alongside new nail effects such as Crushed, “Plastic” and Nebula. And this month, Kirker will provide clients with its “Spring-Summer 2020 Nail Summit” presentation.
Keeping up with trends can also mean taking a microview of the marketplace. For example, just because blue and purple are trending in Los Angeles, they might not be in Arkansas, observed Rendel of Columbia, which is expanding its footprint and machinery to offer powder pressing, lipstick molding and tube and liquid filling.
C-Care has its pulse on color trends, too, especially when it comes to hair color, where the firm has expertise. Since the early-2000s, C-Care has stood on a 19.8-acre property that includes a state-of-the-art manufacturing plant. Grupp told Happi that the firm is currently building an innovation hub for R&D on that campus.
C-Care is innovating in packaging, too, and will soon roll out a pouch filling option for cosmetics.
“We solve issues for our customers. We are proactive and strive to stay ahead of the curve,” said Grupp.
Across the board, contract manufacturers Happi spoke to for this story noted the uptick in natural ingredients and sustainability.
“Consumers are becoming very knowledgeable about the ingredients they use in their personal care products and are looking for brands that are free from harsh chemicals and having ingredients with names they recognize. They see these as environmentally-friendly and less harmful to themselves and their children,” said Grobel of Federal Package, which is an organic-certified manufacturer.
Sustainability and more natural formulations are an area of focus at Aware+CEI+Vee Pak, too, and the company has made significant investment during the past several years in these areas.
“Our company offers greener, more natural formulas in each of our areas of expertise,” noted Shea.
Shea’s firm has been expanding through acquisition, too. In November, Vee Pak acquired Cosmetic Essence Innovations (CEI), a Holmdel, NJ-based product development and full-service provider to the beauty and personal care industry. That deal came approximately one year after VeePak closed its acquisition of Aware Products, which manufactures hair care, bath and body, and skin care products.
The acquisition of CEI will broaden Vee Pak’s product offering, enhance its product development and innovation capabilities and provide its customers with expanded manufacturing capabilities through a coast-to-coast network and an international presence.
“We are very excited to welcome the CEI team to our platform. The combination is a further step in our goal of helping beauty and personal care brands grow from infancy through to maturity, and I cannot wait to bring the full breadth of our capabilities to our customers,” Richard McEvoy, chief executive officer of Vee Pak, said in a press release when the deal was announced last year.
The End Game
Contract manufacturers keep tabs on trends and regulations, make investments in their capabilities to grow alongside their customers, and entice new clients whether they want to move their product from concept to shelf, expand into new categories or increase their production runs.
For startups, finding a great contract manufacturer that they can stick with provides solid footing as business ramps up.
“We have a long-term contract manufacturing partner that has been with us from day one,” said Brian Guadagno, who is founder of a growing reef-safe sun care brand called Raw Elements.
Is there any way to ensure that you’ve found the right contract manufacturer, or does it remain a leap of faith?
Experts agree that entrepreneurs in the beauty industry can increase their chances for success by assessing as much as possible ahead of signing any contract.
Buziak suggested three additional areas to consider:
- Do the products that the CM currently makes fit with your own vision?
- Can the CM reference commercialized brands or products it has successfully developed?
- What are expectations for turnaround times?
“Failing to build extra time into the product development calendar can wreak havoc on the final product and its integrity. Generally, a project manager will build in development gateway and deadline dates. Cushion time is always needed just in case something gets delayed during the development process. Raw material deliveries can get delayed, formula stability can fail, items can get caught up in customs. You’ll want extra time built into the calendar for these ‘just in case’ scenarios,” Buziak told Happi.
The goal for the client and the customer should be the same.
Said D’Ambrosio of Kirker, her company’s “favorite stories are those that begin with a dream and end with a successful launch.”
All contract manufacturers—and their customers—would surely agree.
• Cherie Buziak, chief executive officer and owner of BeautyEdge LLC, a beauty product development and advisory consultancy, has worked with many brands and contract manufacturers (CMs). She outlined several key items that beauty/cosmetic/personal care and home care brands have in place:
• An NDA: A non-disclosure agreement between you and the contract manufacturer will open lines of communication for probing questions that the contract manufacturer may have without the worry of commitment or breach of confidentially on either side.
• A Business Plan: This can always be adjusted during the development process. A plan shows that you are serious, you’ve done your homework, and that you have the finances to back up your vision. You won’t have to go over the business plan with the contract manufacturer, but you can reference key points from your plan through the conversation.
• Finances: A credit check may be run. A contract manufacturer may require fees against development work that can then be applied toward the order.
• Volume Runs: Each CM is different, but a general rule of thumb is to expect to run 5,000 pieces for personal care and skin care products. Color cosmetics volume runs may be a bit lower depending on the CM’s requirements. Some will be flexible with lower runs; however, consider that costs most likely will be higher in this case.
• A Product Profile: This document isn’t necessary to turn over in the first conversation with the contract manufacturer, however, having the details somewhat fleshed out before your first conversation with the CM will make for more effective and productive conversations.
• Complete Competitive Research: Be prepared to explain what the story is that you would like to tell about your brand or product, and what makes it different from every other brand in the market.