Beauty cream with speckles

The beauty industry has a problem

The beauty industry has a problem

The beauty industry

When it comes to sustainability and beauty, the buzz has focused on excess packaging and “clean” ingredients. But the beauty industry’s got a pretty big elephant in the room – beauty product waste. And it’s built into the industry’s business model. From the way products are manufactured to how they are distributed, there is waste at every step of the chain.

Where’s this waste coming from?

Across the supply chain, inefficiencies and overproduction lead to waste and the destruction of unwanted stock. The biggest culprits in the beauty sector are overproduction, unsold inventory and discontinued lines (such as reformulations, limited editions or older branding and packaging). Poor inventory management is also a big offender, which can mean products expire before they even hit the market.

Overstock becomes a big issue when brands and retailers don’t monitor their inventory levels properly. This is exacerbated by a trend-driven market, where stores and brands want to maintain a steady flow of the newest and tending products. As a result, stock piles up – and if businesses can’t keep up with the mounting stock, they end up with a waste problem. Data collected by Avery Dennison Smartrac found inventory accuracy in the beauty industry to be 50% on average – and as low as 30% at some high-SKU beauty retailers.[1]

Just how big of a problem are we talking?

It’s notoriously difficult to get accurate data on how many items get destroyed as it varies from business to business and brands don’t tend to share this information publicly. Understandably, as Burberry was faced with backlash after disclosing it had destroyed £10.4 million worth of beauty items in 2017.

"A major beauty retailer was found to be so over stocked that between 20-30% of its inventory was either out of season or past its expiry date, making the items unsellable"

But the problem is huge. More than 10% of beauty products are going to waste in brands’ supply chains due to overproduction, excess inventory and spoiling or damage to the products.[2] 

The beauty category has the highest amount of lost inventory due to overproduction per year, sitting at 6.2% - compared to apparel (3.9%), pharmaceuticals (3%), food (2.9%) and automotive (1.1%).[3]

In one case, a major beauty retailer was found to be so over stocked that between 20-30% of its inventory was either out of season or past its expiry date, making the items unsellable.[4]

 

So, what’s the beauty industry doing about this?

Everyone loves a villain. But the reality is brands aren’t to blame for the problem, although they do have a responsibility to find a solution. Waste and overstock are built into every retail model – and the beauty sector has a major challenge when it comes to unsold items, products nearing expiry, botched formulations and items damaged in transit or in storage. All of these products could end up in landfill.

Beauty has increasingly focused on sustainability – from packaging to waterless innovations – but not enough is being done to combat waste once the products are manufactured. Most work to avoid waste has centred on the “reduce, reuse, recycle” mantra and has focused on packaging, while other sources of waste have been overlooked.

"Most work to avoid waste has centred on the 'reduce, reuse, recycle' mantra and has focused on packaging, while other sources of waste have been overlooked."

That being said, some businesses have made real strides in combatting unnecessary waste. Take Elemis who have removed spatulas and paper leaflets from their products (resulting in an estimated 1.7 tonnes of plastic saved and removing 13 tonnes of unnecessary paper). Skincare brand UpCircle Beauty makes products with discarded ingredients from food companies, such as mandarin oranges and coffee grounds. And Boots’ ‘Recycle at Boots’ scheme encourages customers to recycle products which can’t otherwise be recycled at home by dropping their items off in-store in exchange for reward points.

The next key step is focusing on inventory and supply chain management – and working out how to keep beauty items out of stock cupboards and into customers’ hands. Being sustainable requires brands and retailers to find value in items already in circulation and to reframe waste as an opportunity rather than ‘just waste’.

 

 

[1] ‘Beauty Going Greener: Tackling Hidden Inventory Issues’, Delia Mitchell (CEW), 27 October 2021
[2] ‘The Missing Billions: The Real Cost of Supply Chain Waste’, Avery Dennison, November 2022
[3] ‘The Missing Billions: The Real Cost of Supply Chain Waste’, Avery Dennison, November 2022
[4] ‘Zero Waste Futures’, Avery Dennison and The Future Laboratory, March 2021
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