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Inventing Success

By: Rachel L. Grabenhofer
Posted: February 2, 2010, from the February 2010 issue of GCI Magazine.

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Corporate strategies to weather this economy are multifaceted, and range from cutting business units and focusing on core competencies to acquiring new businesses. The good news for R&D is that companies recognize the importance of innovation to their success. For instance, L’Oréal attributed its growth in part to innovation, stating “particular emphasis has been placed on affordable innovation, a strategy [that] will pay off in the coming quarters.” In P&G’s report, Bob McDonald, president and CEO, was encouraged by the results, which he thought were indicative of making the right choices, such as investing in innovation. According to the company Web site, P&G invests more than $2 billion annually in innovation, which is “important because innovation improves consumer value and leads to profitable market share growth.” Shiseido also emphasized innovation in its strategy for success. Shinzo Maeda, president and CEO of Shiseido Co., Ltd., reported that one factor behind the company’s increase in OTC sales is “enormous support from customers for products with innovative functions [that] are differentiated from rival products and existing products.”

With the industry’s sights set on innovation, one thing’s for sure: It’s R&D’s time to shine, which it has—even in the most trying of economic climates. There’s a saying that “necessity is the mother of invention,” which seems to be the case for the current state of beauty R&D. Molecules are becoming smarter, formulas more efficient, and dollars are stretching like never before. The following is a sampling of this ingenuity from 2009.

Greenness Revisited

While the market for natural beauty products continues to grow, R&D has struggled with inconsistent definitions for what’s natural. Terms such as eco-friendly, sustainable and green have complicated the market, along with the consumer perception that natural means safer. R&D has thus been challenged to develop products based on materials found in nature that are derived from sustainable sources, produced through eco-friendly means, are safe and provide efficacy, and that create a smaller carbon footprint—all, ironically, with little or no alteration to the original material. Add to these demands the general desire to omit ingredients having bad press such as sulfates, silicones and preservatives, and the ability of formulators to design safe and effective products becomes impeded by the overriding demand that they be natural. As Steve Schnittger of Estée Lauder has expressed, a little preservative is safer than a host of harmful bacteria growing in an under-preserved product.

These conflicting concepts have shifted R&D’s focus to specific aspects of greenness—i.e., renewable, sustainable, nature-derived—that can marry something tangible to the marketing claim. Rather than developing products that are entirely natural, R&D has made them as natural as possible and produced them in eco-friendly ways, yet maintains that in many cases, some synthetic components really are necessary to provide the desired efficacy.

Following this mind-set of making products as green as possible, raw material suppliers have devised internal metrics to classify the greenness of the materials they supply.