Beauty Brands Tackle a Packaging Problem

Packaging is a customer's first introduction to a product. For prestige beauty brands, it can define the consumer experience. Many of the claims or ingredients between skin products can be hard for consumers to discern. However, packaging offers a surefire way to differentiate between options.

But the beauty industry has a packaging problem. Plastic, ubiquitous in cosmetic packaging - from thin, cellophane wrappers on eyeshadow to bottles and pumps for lotion and shampoo - has come under increased scrutiny for its negative environmental effects.

Recent reports illustrate our reliance on plastic packaging. A 2017 study in Science Advances showed that packaging is the number one use for plastic around the world.

National Geographic estimates that humans contribute 18 billion pounds of plastic waste to the oceans each year. That's the equivalent of, "five grocery bags of plastic trash sitting on every foot of coastline around the world."

Governments have taken small steps to ban plastics, with some success. A 2015 U.S. law forced manufacturers to eliminate microbeads - tiny, exfoliating plastic particles - from rinse-off cosmetics by mid-2017. The ban keeps microplastics, which can't be filtered out by many wastewater treatment plants, out of waterways and, eventually, the stomachs of fish and other marine animals. Canada, New Zealand and the U.K. have passed similar bans, with many companies voluntarily phasing them out altogether.

Unfortunately, the bans and pledges are often riddled with loopholes, according to a 2016 Greenpeace report. And microplastics, while a major problem, are a drop in the bucket compared to plastic packaging.

With so much resting on its packaging, it makes sense that cosmetics brands may be hesitant to make any sudden changes. Estee Lauder, however, has made environmental sustainability a key pillar of its business.

The beauty brand knows that the design and aesthetic of its packaging must reflect the prestige of its products. But today’s consumer, particularly young entrants into luxury cosmetics, cares not only about preserving her skin but also in protecting the environment. While the sustainability trend has been in vogue for decades, today it is more pronounced and advanced than ever. The beauty industry recognizes the importance of addressing sustainability in packaging and along the entire value chain.

While niche beauty brands are seemingly everywhere, Estee Lauder's brands have wide appeal. A consumer may not even be aware that she is buying a product associated with the EL empire: Estee Lauder's product mix extends includes Aveda, Bobbie Brown, La Mer, Origins and Smashbox. In total, Estee Lauder owns 29 well-known brands sold in over 150 countries. It's the only corporation in the world that focuses solely on prestige makeup, skin care, fragrance and hair care.

Estee Lauder's approach to sustainability requires an ongoing understanding of global consumer expectations for more sustainable products while meeting their changing needs worldwide. And it demands scientific and innovative design acumen. The EL group launches thousands of packages a year for its skin care, makeup, fragrance and hair care products. Managing complexity gives them a competitive advantage when it comes to both product and packaging innovation.

The company’s Board of Directors has developed corporate governance practices to fulfill its responsibilities to stockholders in providing direction and oversight of management of the company. Estee Lauder's goal is to be carbon net-zero by 2020 while meeting the highest standard in every location it operates in and sells to. By reducing its dependence on fossil fuel-derived plastic packaging materials, EL can meaningfully reduce its overall impact on climate change.

While many consumers are quick to point to recycling as a potential cure, only nine percent of plastic trash in the United States is recycled each year. And recent recycling import restrictions by China may make recycling more difficult: the U.S. exports a significant amount of its plastic waste (more than 372,000 metric tons in 2017).

Estee Lauder uses lifecycle analysis (LCA) software to monitor the environmental impacts of its packaging and design choices. In collaboration with suppliers, the company tests sustainable materials: plant-derived plastics, new packaging formats including refills and postconsumer recycled content.

In order to reduce its environmental footprint, Estee Lauder lists the following sustainable packaging approaches in its 2017 CSR report: low-impact sourcing, or making sustainability one of the core criteria in pricing decisions; leveraging bio-sourced materials; recycling; substituting materials that come from less carbon-intensive materials; pursuing more recyclable primary packaging; reducing the overall footprint by eliminating packaging components wherever possible.

Through relationships with key bio-material suppliers, EL is working to better understand the challenges, costs and performances of these materials and to assess the human health and environmental safety of the raw materials they procure. The results are in the numbers. In FY 2017, Estee Lauder reduced its carbon emissions by 36.3% and diverted or recycled 87.8% of its waste materials.

Estee Lauder's Aveda line is a great example of a brand that puts sustainability at the forefront of its production to help guide every decision it makes. Aveda finds inspiration in nature - not merely something to be cherished and protected, but also to be emulated as a model of sustainability. Aveda was the first beauty company to use 100% post consumer recycled PET. Today more than 85% of their skin care and hair styling PET bottles and jars contain 100% post consumer recycled materials. Mindful of their environmental footprint, Aveda works to minimize their packaging and maximize their use of recyclable and post consumer recycled materials.

There are multiple approaches luxury brands can take to be sustainable. While Aveda incorporates the circular-economy approach by offer packaging that can be recycled whenever possible. EL’s Origins brand incentivizes customers to return empty containers.

Estee Lauder isn't the only cosmetics company with an eye toward sustainability. As originally reported in Teen Vogue, both Unilever and L’Oréal have committed to making all of their packaging reusable, compostable, reusable or otherwise more sustainable than they have been in the past. Such approaches are not only sustainable, but encourage brand loyalty so it’s a win for the environment, the business and the customer.

Most importantly, luxury cosmetic companies need to challenge their packaging partners to meet the same standards. Being sustainable extends beyond addressing consumer needs. It’s taking into consideration the business’s employees, vendors, stockholders and institutional portfolio managers all of whom are making more intelligent decisions on what to buy, where to work and how to invest.