December 19, 2022
Ingredients in 2022 – the price is right
FIRST HALF The supply chain disruption caused by the pandemic showed no signs of abating in early 2022. If anything, it got worse as inflation rose, leading to price rises across the board. Both Givaudan and BASF kicked off the year with price increases while Indonesia barred exports of palm oil in the face of domestic inflation, causing supply to dry up and the price of vegetable oil to soar.
No wonder the hunt was on for a credible alternative. Unilever and Genomatica launched a US$120 million venture to scale and commercialize a replacement ingredient, which would not only help the UK-based FMCG giant meet its ESG goals but also provide supply chain security – increasingly important in this post-pandemic era. Indeed, if the lessons learnt during the pandemic weren’t enough, the world got another sharp reminder as Russia invaded Ukraine, leading to yet more shortages. Its not surprising that the US announced a deal to build its first domestic heavy rare earths separation facility in June.
Along with supply chain security, sustainability continued to be a key ingredients trend. Coty kicked off production of what it claims to be the first globally distributed perfume made using carbon captured ethanol in January, while Beiersdorf debuted a moisturizer featuring an ingredient obtained from recycled carbon dioxide.
SECOND HALF LVMH-owned Dior, meanwhile, unveiled what it is claiming to be the first formula of its kind, a water-based, alcohol free fragrance, which could be a game changer both for those targeting the halal market as well as mitigate against future ethanol shortages.
Talking eco-ingredients, Inolex launched a hemp-based cationis derived from Cannabis Sativa Seed Oil manufactured using the company’s patented energy-saving synthesis process. And while we’re on the subject of ‘green’ ingredients, CBD continued to hit the headlines as the regulators swooped in. Hong Kong threatened to ban the substance altogether while the UK moved closer to regulation, closing its CBD public list to new products at the end of June. Still, the discovery that the ‘majority’ of CBD-based products contained illegal substances by a laboratory in the UK and the increasing attention of regulators hasn’t stopped new products hitting the market. Kate Moss unveiled Cosmoss, a new wellness range comprising a fragrance, face cream and CBD and collagen oil drops.
Meanwhile, with consumers increasingly well educated with regards to cosmetics ingredients, traceability and accountability continued to be key. Sederma even launched a consumer-facing website dedicated to its anti-wrinkle preparation, Matrixyl while Clarins cut the ribbon on a new platform named T.R.U.S.T. designed to provide transparency on ingredient traceability.
WHAT’S NEXT? While suppliers could be forgiven for thinking the worst was over as the pandemic receded, 2022 has proven to be yet another rollercoaster ride for the ingredients industry and it’s not over yet. With energy shortages and rationing looming, it’s likely that shortages will persist and prices will continue to rise into 2023. Can the ingredients industry rise to the challenge?
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