For Beauty Brands, Sustainability ROI Is About More Than Money

TerraCycle Unilever Include USA Procter & Gamble Loop Ren The Body Shop Love Beauty and Planet Soapply Melanin Essentials Pantene Plaine

"There are no short wins with sustainability."

Sustainability efforts for beauty companies may cost more in the short term, but often pay out over time. Sustainability efforts for beauty companies may cost more in the short term, but often pay out over time. Beauty brands that want to be part of TerraCycle’s Loop program must develop durable packaging that can be reused at least 10 times. It costs more for businesses upfront, but has the potential to help brands reduce their packaging costs over the long term. It’s one example of the return on investment for sustainability — Ren, Pantene, Melanin Essentials, Love, Beauty and Planet, Soapply, Plaine and The Body Shop are among the brands working with and selling through the Loop operation. “Manufacturers are hitting parity on price and sustainability anywhere from two to three uses sometimes,” said Benjamin Weir, Loop’s director of business development and sales innovation. “We’re pushing the system to be as durable and as reusable as possible.” For Procter & Gamble, which has invested in Loop, the cost of making Loop-approved packaging is actually more expensive — but the business views it as an investment in learning. “While ROI is definitely something we are getting in certain pockets of our business, it is not the sole criteria for learning in this space, particularly with some of the pilots we are running,” said Anitra Marsh, associate director of global sustainability and brand communications at P&G Beauty. Marsh was referencing Loop, as well as Olay Whips refills, which launched in the fall. “We have to learn before we can bring things to scale.” Another P&G pilot launches Monday: The business is testing paper board tube packaging for deodorant, available exclusively at Walmart. “If you’re looking at return on investment, sustainability initiatives are the long game. There are no short wins with sustainability,” said Sarah Jindal, Mintel’s senior innovation and insights analyst for beauty and personal care. She called Loop’s efforts “a great example of that initial upfront investment that pays in bucketloads,” and said renewable energy is another key example. “At some point, once you’ve made that initial investment, you no longer have an electric bill that you’re paying to someone else,” she said. P&G, for example, has saved more than half-a-billion dollars after years of energy conservation programs across the company, said Kelly Vanasse, chief communications officer for P&G beauty and grooming. “That’s one example — the work we’re doing on zero waste to landfill, it’s the same thing.…The more we continue to realize those successes, it just creates a virtuous circle.” Jindal stressed that the timing of returns from sustainability initiatives can vary. “Returns will come in many different forms at many different levels at many different time points,” Jindal said. Unilever, for example, has started to see increasing sales momentum from “sustainable living brands.” Sustainable living brands grew 69 percent faster than the rest of the business in 2018, compared with 46 percent faster in 2017, the company said. Biossance, the skin-care line born out of biotech operation Amyris, has worked to build up its own virtuous circle — a sustainable supply chain in order to offer Amyris-produced squalane to the broader beauty market at “desirable price points,” said president Catherine Gore. “The promised land is really connecting sustainable ingredients, sustainable thinking, sustainable manufacturing and sustainable packaging with the cost effective-nature of that. We’ll really hit our sweet spot when all of the brands can afford to make these types of changes.” Biossance’s key sustainability initiatives revolve around sustainable sugarcane in Brazil. The company makes its own squalane with that sugarcane, versus harvesting from sharks. Sugarcane stalks are used for boxes, and gas off-put is used to power the plant. “All of that has been optimized so we can offer squalane by the ton to consumers and brands worldwide at a much more desirable price point than [killing sharks],” Gore said. “The whole idea is to keep the mission first, and in order for that to be accessible, it has to be at the right price point.” There’s also a softer side to the ROI equation. As sustainability permeates consumer consciousness, companies and brands that have taken steps in earth-friendly directions expect to see dividends coming in the form of consumer loyalty. “The concept of brand loyalty…has kind of flown out the window, but this view on sustainability — because it is becoming so important to the consumer, and it is so visible to the consumer — that becomes one of those really important parts of, ‘do I want to buy from this brand, or do I want to buy from that brand?” said Jindal. “That loyal relationship becomes really important in the fragmented world we’re living in where you’ve got new brands popping up almost every single day,” Jindal said. Right now, consumers are at the stage where they notice obvious things, Jindal said, like packaging. But as beauty companies delve deeper into sustainability and talk openly about their initiatives, consumer expectations are likely to evolve. “The more prevalent that information becomes, it becomes that much more important to a wider range of consumers,” Jindal said. “They’ll look at [company practices] and say, ‘you know what, I don’t agree with the practices of that company, so I won’t buy from them anymore.’ It’s as simple as that, to flip that switch, because there are so many brands out there they can choose from.” For Biossance, sustainability is a key part of customer retention. “There’s a large community that’s very close to our shark-saving initiative,” Gore said. The company estimates that by producing squalane, it saves two million sharks per year. That, combined with Environmental Working Group certification and other commitments, like zero waste by 2025, compostable boxes and going carbon neutral in 2020, keep customers coming back. “As we share those stories, it holistically brings a very dedicated community together that believes in the sustainability, wants to put their purchase power toward that, and trusts in the brand,” Gore said. P&G also sees customers caring more about sustainability. “When we have products consumers love, they’re like, ‘OK, I love your product — now help me love your product even more. What are you doing from a sustainability perspective?’ Everyone wants to do the right thing…today, doing the right thing is being more sustainable,” Vanasse said.