Beauty Prepares for 2025’s Business Climate: Insider Insights

No one can be certain what a new U.S. administration will mean for trade or the economy, but with worries over trade wars looming, alongside cautious consumer spending in many markets, Global Cosmetic Industry reached out to a panel of experts from the beauty supply chain to get a sense of how people are preparing. One key theme kept emerging: cost.

Dan Wolfe, senior vice president of business development, Cosmopak.Cosmopak“Cost has and always will be a key consideration in developing and selecting packaging,” says Dan Wolfe, senior vice president of business development, Cosmopak. “Our brand partners task Cosmopak to create a supply chain strategy to produce the highest quality packaging and finished goods at the lowest cost. Cosmopak executes this by tapping its global network and internal processes which have developed and evolved over the course of 20-plus years.”

He adds, “In order to maximize the value to cost ratio for our clients we focus on two areas: geographic manufacturing optimization and timeline and project management.

Wolfe notes, “China has many strengths, including a vast supply chain of decoration suppliers, an efficient and skilled workforce, and a wide array of stock molds. However, shifting geopolitical dynamics and the potential imposition of tariffs have presented challenges.”

He adds, “One of the most effective approaches Cosmopak has implemented to mitigate risk and keep costs low is the cultivation of partnerships with suppliers in other regions, including Southeast Asia and Latin America, which it has been doing over its history. By establishing alternative manufacturing hubs, our clients reduce their dependency on China while taking advantage of cost savings from these increasingly sophisticated markets. Southeast Asia, with its expanding industrial base and competitive labor costs and proximity to China, provides a promising alternative for cost-effective production while tapping into the raw material supply chain and expertise from China. Latin America, meanwhile, offers proximity to key Western markets, enabling faster shipping times and reduced transportation costs.”

Wolfe concludes, “At Cosmopak, we have always prioritized speed-to-market in our development and manufacturing processes, helping clients respond rapidly to trends. Many customers use a just-in-time (JIT) product model, and we collaborate closely with our clients to develop precise, achievable timelines. Our approach balances the benefits of JIT with the practicality of avoiding costly expediting measures, such as air freight. Cosmopak’s dedication to strategic planning and reliability ensures our partners can confidently continue a JIT model while eliminating unexpected costs.”

Navigating Tariffs and Cost Optimization

Earl Trout, vice president sales, North America, Aptar Beauty.Aptar Beauty“In light of recent tariff increases on imported packaging components, brands are increasingly seeking strategies to optimize operational and final product costs,” say Ryan Kenny, president, North America, Aptar Beauty, and Earl Trout, vice president sales, North America, Aptar Beauty. “The current economic landscape is marked by fluidity and uncertainty, making it crucial for brands to adapt swiftly to changing conditions. At Aptar, we are witnessing a significant prioritization for local production as a key strategy for mitigating these rising costs.”

“We’re seeing two things regarding the tariffs,” says Samantha Burd, co-owner of Lady Burd Cosmetics. “1. Stocking up on imported goods now before January rolls around. 2. Looking into alternative countries to source goods from (think: South America).”

Burd adds, “We continue to urge our brands to be forward thinking and pre-plan as much as possible!”

Local Production: A Strategic Advantage

Trout and Kenny note, “Brands are prioritizing local production to avoid the steep tariffs already imposed on imported pumps, which have surged from 25% to over 50%. This shift not only helps in cost efficiency but also ensures quality assurance and faster turnaround times. Aptar’s US and Mexico manufacturing facilities are well-equipped to meet these demands, providing top-quality products with shorter lead times, thus enhancing supply chain responsiveness.”

Client Strategies and Requests

Ryan Kenny, president, North America, Aptar Beauty.Aptar Beauty“Clients are actively seeking ways to right-size costs by exploring alternative supply options and increasing their reliance on local suppliers,” the Aptar executives explain. “They are asking for solutions that can help them navigate these cost pressures without compromising on quality or delivery times. At Aptar, we advise brands to focus on sourcing packaging available locally, which not only mitigates tariff impacts but also supports a more resilient and responsive supply chain.”

Advice for Brands

Samantha Burd, co-owner of Lady Burd Cosmetics.Lady Burd CosmeticsAccording to Trout and Kenny, to avoid unnecessary expenses and cost exposures, brands should:

• Leverage local production: This reduces dependency on imports and avoids high tariffs.
• Enhance supply chain efficiency: Local sourcing can significantly cut down lead times and improve market responsiveness.
• Maintain quality standards: Ensure that local suppliers adhere to high-quality standards to meet consumer expectations.
• Adopt a global-local approach: Partner with suppliers that offer a blend of global leadership and local-level focus. This dual strategy ensures flexibility and resilience, allowing brands to leverage global capabilities while meeting specific local needs.

The executives conclude, “By adopting these strategies, brands can better navigate the current economic landscape and maintain a competitive edge.”

Optimizing Costs from Product Inception

Efficiencies in Manufacturing

Laura Horne vice president of sales and marketing, FP Labs at Federal Package.Federal Package“Cost optimization in product manufacturing is a critical component in any brand’s strategy—no matter where they are in their development journey,” says Laura Horne, vice president of sales and marketing, FP Labs at Federal Package. “The goal is ultimately to maintain your quality standards while ensuring a reliable, efficient and optimized supply chain that delivers on the brand's margin expectations. A few areas where FP Labs has partnered with brands are optimizing material purchases to get the best possible price, streamlining pack-out options that unlock production efficiencies, and investing in production line automation. Reviewing and revising container options that allow for premium presentation while reducing plastic, cardboard, and shipping costs is another avenue for brands looking for the combination of sustainability and visual appeal on the shelf.” 

Horne adds, “Many brands are focused on speed to market and are willing to take a lower margin, for a period of time, with the thought that together we could find optimizations. This strategy, with the right partner, has allowed brands to capitalize on innovation quickly and plan for future cost savings that can be invested back into the brand.” 

A Focus on Early-Stage Design

Sundeep Gill, owner, Sun Deep Inc.Sundeep Inc.Sundeep Gill, owner, Sun Deep Inc., tells Global Cosmetic Industry, "In our business, we find that the most efficient way to control costs is during the design stage when building product lines. The current trend we are seeing is that many brands are approaching private third-party formulators rather than the manufacturers. As a result of this, we find that the third-party-designed formulas are usually well above the anticipated cost by the brand. If cost limitations are not followed from the beginning this then tends to lead to either a long development timeline or a product that is not well suited in terms of cost for the market."

Gill adds, "When attempting to optimize costs of existing product lines on the market, it is important to have a clear understanding of what country each material is being sourced from. This can then give you a reasonable idea of where tariffs can cause disruption in your costing structure. Another aspect to consider when it comes to cost reduction, is to evaluate the different grades of material and the brand marketing values. For instance, the same fatty alcohol can have vastly different cost impacts if it is sourced from an RSPO source or not. Understanding what certifications are important for the brand’s marketing, prior to any changes for a simple cost reduction, will help prevent any marketing calamities."