Navigating regulatory challenges: Insights from the IBA Cosmetics Convergence Fall Symposium 2024
The cosmetics and personal care industry is facing an increasingly complex regulatory landscape, with new packaging, chemical, and environmental policies being introduced both at the state and federal levels. CosmeticsDesign attended the recent Independent Business Association (IBA) Cosmetics Convergence Fall Symposium 2024, where several industry experts shared their perspectives on the most pressing challenges confronting manufacturers today.
From eco-design regulations to the surge of Extended Producer Responsibility (EPR) laws, these speakers provided valuable insights into the strategies companies can employ to stay compliant and competitive in an ever-evolving market. Following the Symposium, we asked each speaker the following question: From your perspective, what is the biggest challenge facing cosmetics and personal care product manufacturers today, and what strategies do you recommend to overcome it?
Here are their responses and key takeaways.
Annika Von Grey - Senior Consultant, Fiscal Note
A: Manufacturers today need to stay abreast of emerging packaging regulations and legislation, including but not limited to eco-design. Recent and current policy developments work to decrease packaging amounts, increase safety through the limiting of various harmful materials, encourage recyclability transparency, and more.
This matrix of priorities affects essentially all manufacturers of physical products, including cosmetic and personal care product manufacturers.
The Extended Producer Responsibility (EPR) policy system emerging in the US is quickly gaining traction and attention. Though currently only operational in a select number of states - California, Colorado, Maine, Oregon, New Jersey, Minnesota, and Washington- EPR will require producers to be responsible for the end of life collection and treatment for their products.
This responsibility incurs costs and also requires the implementation of systems that can account for the entire lifecycle of a product. As this policy comes into effect, cosmetic companies and organizations will need to establish and promote recycling initiatives, including disposal guidance on packaging.
Some manufacturers, in given states and regions, will also increasingly be obligated to use a certain percentage of post-consumer recycled materials in their packaging.
Transparency around packaging labeling is also prioritized by both policy makers and consumers. Regulatory bodies are paying close attention to ingredient disclosure and labeling, requiring that manufactures provide consumers with easily accessible information about the products they are buying and using.
This close attention may also lead to increased chemicals and ingredient bans, as regulators reassess the health risks of chemical components. Labeling regarding the recyclability of packaging is also being standardized and made more stringent, in part to account for advancing recycling processes and technologies.
It is essential that manufacturers stay abreast of policy changes. Taking a proactive approach, by tracking policy as it develops and before it becomes enforceable, is an essential element in avoiding costly penalties.
As a changing regulatory landscape, largely led by state-level governmental bodies, leads to patch-work compliance schemes, manufacturers operating in multiple states or developing products that will cross state lines must consider legislative and regulatory developments at the state and federal level. The life-cycle of legislation is frequently quite lengthy: identifying bills as they are introduced, and following them through the amendatory cycle, allows manufacturers to proactively assess risk and plan for required operational and manufacturing changes well before the risk of non compliance penalties comes into play.
Rachel Gartner - Counsel, Holland and Knight (formerly McDermott Will & Emery)
A: The path to market for personal care products will become more challenging as regulation increases. This is the age of the savvy consumer.
They’re curious about the products they use, and rightfully so. Manufacturers, alongside the brands, should educate their consumers on the reality of manufacturing personal care products and advocate for themselves in forums that will impact the law making process.
Otherwise, we will see a regulatory framework that addresses consumer concern, but doesn’t account for the reality of manufacturing in the personal care products industry.
Barae Jomaa, Ph.D., ERT - Principal Toxicologist and International Regulatory Lead, Colonial Chemical
A: Increased scientific understanding of the properties of PFAS and other substances of concern has led to the drafting of state laws and international regulations aimed at limiting or banning such substances. This rapidly evolving mosaic of regulations poses significant challenges for manufacturers of cosmetic products and ingredients.
It is therefore incumbent upon companies to prioritize compliance, transparency, and innovation to navigate these changes, meet consumer expectations, and maintain market relevance.
Loren Scott - Co-Founder and President Sales, KO-Pack
A: As a growing start-up contract manufacturer at KO-Pack, we see inventory and cash flow management as two of the most significant challenges in the cosmetics and personal care industry today. Many of the independent brands we work with are facing pressures related to managing stock levels while ensuring they can meet fluctuating market demands, particularly when a product gains unexpected attention, such as during a viral moment on social media.
To overcome these challenges, we prioritize building strong, forward-looking partnerships with our brands. This means maintaining constant communication and planning three to six (sometimes 12) months ahead, especially around their social marketing strategies and upcoming product pushes.
Understanding their upcoming campaigns and content releases allows us to anticipate their inventory needs more effectively. By working together to align manufacturing schedules with these marketing efforts, we can avoid overproduction or stock shortages.
One strategy that has been particularly effective is using blanket purchase orders. This allows us to bring in raw materials in advance and optimize production schedules for efficiency.
At the same time, it enables us to release finished goods in a cadence that keeps inventory levels above par, ensuring brands are prepared for any unexpected spikes in demand. This collaborative approach between us and our brand partners is key to navigating the complexities of the market today.
Michael Washburn - Founder and Principal, Washburn Consulting
A: In my view the biggest challenge facing cosmetics manufacturers is the sudden uptick in packaging and other related regulations hitting all at the same time. This includes packaging extended producer responsibility (EPR) laws in five states, regulations requiring minimum recycled content in plastic packaging in four states, emissions reporting in California, the federal Modernization of cosmetics Act alongside recycling labelling requirements in California.
Adding to this is the likelihood that more states are contemplating various regulations in coming years and several are likely to come into force. This is putting pressure on internal compliance resources.
In terms of strategies my advice to clients is always the same, get smart fast, engage early, bring in outside expertise and look for support from peer companies and trade associations. There are solutions, systems, data management tools and experts already prepared to support this kind of compliance.
Where companies make it difficult is when they wait too long, fall behind, get overwhelmed and fall out of compliance. You will need to do this and it will cost you less, and frankly be less stressful if you ramp up with a keen awareness of the compliance timelines.
It takes time to understand the rules, socialize the resource demands internally, budget against the new reality and develop a program. No time to waste.
