¶ "Personal Care Ingredients Market Insights"
Welcome to The Chemical Show, the podcast where Chemical means business. I'm your host, Victoria Meyer, bringing you stories and insights from leaders driving innovation and growth across the chemical industry. Each week we explore key trends, real world challenges, and the strategies that make an impact. Let's get started.
Welcome back to The Chemical Show where Leaders Talk Business. I am recording this episode in the timeframe between InCosmetics and NYSCC suppliers Day, and we are giving this a personal care ingredients focus. And because of that, I am speaking with an expert in the market, so Sunanda, Sunnie, Desai is the Vice President at Kline and Company where she leads the global chemicals and materials practice and oversees the firm's advisory service in the chemical sector.
So Sunnie is an expert in go to market and growth strategies, and she works extensively with clients across personal and consumer care industries. We're gonna have a great conversation about what's happening. The personal care ingredients market. It says it gonna be a great tea into folks going to Supplier's Day, and to folks that aren't going to Supplier's day, but are just interested in what's happening. So Sunnie, welcome to the Chemical Show.
Thank you for having me, Victoria. It's a pleasure to be here.
I am so glad to have you here. So let's just start with your origin story. I love to start every episode with this. What's your origin story? How did you get interested and engaged in chemicals and specifically in personal care and, consumer care?
so I've always, enjoyed analytical, uh, topics and, I come from a family. Um, my, both my parents, have education in mathematics and the sciences. I. So, I have a little bit of a typ, atypical, uh, background for the chemicals and materials industry. I actually started my career as a software developer in Silicon Valley in California. I have a math computer science undergrad degree. And, really enjoyed actually the, the analytical aspect of, of programming and software development.
And eventually I found my way into consulting. And, I really like the energy of consulting. The aspect of solving problems, answering questions with a great degree of intensity, uh, working in a team. I, I really enjoy all of those. Aspects of consulting and, I felt a lot of passion for chemicals, materials, and ingredients. I think, this is an industry that touches every aspect of our lives.
And, when the opportunity came to work with client and company on two favorite areas, essentially consulting and the industry, I, I took it and, um, as they say, the rest is history.
Yeah. Well, and, and I think that's really cool 'cause we don't necessarily have a lot of data scientists, or at least, how about this? We didn't used to have a lot of data scientists in the industry, and I know that's a growing field. And I would not often think of people going from Silicon Valley to, uh. The chemical industry even as a consultant. So I think that's a great leap. And really just kind of interesting journey that you've taken. Let's talk a little bit about Kline and Company.
'Cause a lot of people may not be familiar with them.
Absolutely. Kline is a global, management, consulting, advisory, market research firm. We've been active in the specialty chemicals, materials, and ingredient space
I.
65 years. We have a global presence. We're headquartered in New Jersey. We have offices all over in Europe and in Asia. And, essentially from a personal care and consumer perspective, we cover the entire beauty value chain, starting from the ingredients, the raw materials, the ingredients, all the way down to the brand owners, the distribution, and the retailers. The business covers the entire personal care value chain.
That's really cool. I've been familiar with Kline for probably about a decade, um, but I definitely think of them, think of Kline as really, especially chemicals, and really just bringing a lot of data and insight to. Markets and products that maybe are sometimes difficult to understand. Um, and I know I will say, I am just going to tell you, I like when people ask me for, you know, Hey, do you know how to find this information?
I'm like, I don't, but you know, let me send you over to somebody at Kline because maybe they do.
We are very good at going deep within the important aspects of the personal care ingredient space,
Yeah. Love that.
and as well as the breadth.
So with that, what are you seeing in the market today? What are the key
¶ Personal Care Ingredients Market Overview
trends that are affecting personal care ingredients in 2025 and beyond?
So, um, let me characterize the personal care ingredients industry. So this is about a $30 billion ingredients industry. Okay? So from the manufacturer's perspective, and if you look at it, there's the actives, specialty actives, which are very much a concept cell. You have more of the commoditized ingredients, and then you have the entire specialties, which are
Hmm.
that are highly differentiated. This is where client focus is. Now, if we talk, think about the trends that are affecting the market, sustainability continues to be an important trend in this space, and
Yeah.
is essentially natural ingredients. You know, naturalness and natural ingredients are still important, and I. The interesting aspect of sustainability though is the impact that sustainability has on natural ingredients have vary by ingredient category. So in, for instance, surfactants, emollient, actives that actually have very good natural alternatives to offer and where there is an opportunity to make a claim or uh, or branded as a natural product, definitely has much more of that.
Push from naturals or it has that, uplift, but there's certain, categories like preservatives or UV ingredients where it's a little bit
Hmm.
because there might not be suitable natural alternatives that perform at the same level of efficacy that is needed.
Yeah. And so then the, um, the formulators, the brands and the formulators are making decisions based on that, based on availability and efficacy.
They are, they
Yeah.
Um, as you know that there have been recent announcements, by certain big brands such as L'Oreal have made announcements that there's going to be a significant portion of their ingredient. Formulations are going to have natural ingredients. By 2030. So there's definitely those types of announcements and the brand owner pushes that are basically in pushing the industry, towards more natural ingredients.
Yeah. What other trends are you seeing?
From a consumer perspective, there's definitely a trend towards wellbeing. And so what that means from a, a beauty perspective is neuro cosmetics are actually of interest and neuro cosmetics actually are topical cosmetics, right? So they're topical, products that are applied to the skin, but they interact with the nervous system of the skin to essentially produce a desired effect. It could be enhanced mood, it could be relaxation.
And there's different ingredients that are formulated with these products to give that there could be neuropeptides, there could be cannabinoids, there could be different ingredients that confer this particular effect to a neuro uh, cosmetic.
Is this a generational thing? I, 'cause I gotta be honest, I'm a little freaked out by some of this, um, personally. But is it, is it, do you see this trend cutting across. Demographics or is it localized or is it just still starting and therefore will become widespread um, in a few years?
I mean, if you think about aroma therapy, right? Like there
Hmm.
this, this aspect of using. Essential oils or, or other aspects to kind of enhance your surroundings, enhance your mood, and, you know, support relaxation. So it is essentially, there has been that movement for a while now.
Yeah.
we're seeing is essentially using more neuro cosmetics to kind of produce that, from a skin, from a topical perspective.
So, who's regulating these products? So when I think about these actives, and having neurological effects, what agencies or how do, are they getting regulated differently than other personal care products? Do they, or is it all part of the same ecosystem?
Well, all the products have to meet the requirements that are mandated for any personal care product to go out into the market, you know? So, my understanding is it's not that they're not that I, that they're not being FDA regulated or I do not know if the FDA is
Hmm.
of these. But they have to meet the basic requirements to be able to be marketed as a personal care product.
Got it. Makes sense. One of the things we were talking about earlier is the role of digitization in ai. And that's certainly a trend that, is here. And when we think about cutting across the industry, how do you see, personal care companies and personal care ingredient manufacturers harnessing, uh, digitization and ai.
So digitalization and AI is, is an important trend. To, to keep track of and definitely, there's various ways in which AI is actually
¶ AI's Role in Personalization and Optimization
being used. Now. The most, maybe the aspect of it that's been most known to more people is personalization. So the use of AI driven tools to essentially, um, hyper-personalized offerings based on certain skin types or, hair types. So that's actually the, the consumer end where you're actually targeting
Yeah.
to certain consumers. other uses are more behind the scenes supporting ingredient, say ingredient assessments to essentially really quickly assess ingredients for efficacy. and there's also essentially optimizing formulations. Now, while all of these have been, you know, raised and discussed in the press as
Yeah.
you know, ai, uh, uses, this point, it is unclear how much of this is being, you know, actually implemented within, the companies that we're looking at. But there are several high profile announcements on partnerships in the public domain between beauty brands and, you know, AI suppliers. So we have to see how much of this really is, being used.
So one of the things I've, I've, I've observed when I've talked to leaders across the industries. Number one, everybody's grappling with. How do they really utilize and execute AI and bring it into their systems, right? So people are, experimenting and I think that would align with perhaps what you're saying is people are experimenting and yet the biggest companies are embracing and experimenting even more So. I was at an event recently and somebody from Exxon, for instance, was.
Talking about the AI and digitization that they're using in their manufacturing sites. You know, flying drones to get temperature readings and doing other stuff and things that companies maybe can't necessarily dream about. I know you've talked about the, the L'Oreal example, and I've seen similar things from L'Oreal and Unilever's and others, as it relates to the consumer brands.
And part of it is we need these, um, the bigger companies to, to lead the way and do some of this testing and figure out. How it's all gonna work so that it becomes more widespread in adoption across the industry.
Absolutely Victoria, and that's what it is. Market leaders will always embrace new technology
Yeah,
and try to see where it can take them,
yeah,
the rest of the market and the rest of the players in the space follow suit. What you're mentioning right now is an example of that.
yeah. So, you know, we're sitting here in 2025 in a period of a lot of. Turmoil, let's call it turmoil, right? So tariffs, regulations, you know, we've got the new administration in the us but let's not forget, we actually have new governments and new governmental leaders across the world, right? But certainly if we, we focus in on what's going on from reciprocal tariffs to non tariffs, to pauses to others, there's just a ton of uncertainty and, you know, maybe a bit of an uproar.
It seems, at least, at the biggest level, how is this affecting the companies that you work with?
So that's a very good question. There, there is a significant degree of uncertainty in the market, as you say, and the most important thing for personal care companies to think about is how to manage in the face of uncertainty. There is definitely various strategies that can be undertaken. But there is an aspect of agility and making those quick decisions based on the situations in the market and what are the no regret moves that can be made. This is an important way of thinking.
From a personal care, um, for a personal care in industry leader. If we were to talk a bit more concretely about specifics, really that what that would entail is when the tariff situation started, you know, there was a lot of concern in terms of the impact, right? Increased costs,
Yeah.
costs, increased prices, all of that. So from the perspective of now, we we're seeing some discussions where there might be some reprieve, but it's still uncertain. So what does this mean for personal care ingredient suppliers? Well, it's still the time to be thinking more strategically about what are those no regret moves that you can make today. That will still put you in a good position regardless of what the outcome is. And some of those could be thinking about the supplier base.
Is this a good time to diversify that supplier base? Is this a good time to invest in some of those relationships with contract manufacturers so that you can
¶ Strategic Moves for Ingredient Suppliers
or enhance those relationships so that there is an opportunity? To manufacture formulations
Hmm.
where those tariff, uh, tariff considerations might not be so harsh. it's also a time to think about should any ingredient or, or should any, formulations be visited, revisited, um, to, maybe consider ingredients that might be negatively impacted by any future. Um, or even current tariff restrictions. And as you know, Victoria, the devil is always in the details. I mean, if you really were to look closely at what's in the annex, um, there are exemptions. And then there are not.
So really kind of understanding, you know, are my ingredients falling within that exemption list are or are they not? So kind of starting from that point is also very important.
Yeah, I think those are great. And, and, and the no regret moves. I like the way you frame that. I was speaking with the, um, a leader recently and, you know, everybody's always like, well, how's business? Is business soft? Is it busy? Or whatever? But this person was like, they are so busy. And part of it is, they're doing a lot of projects with their, business partners, their customers, et cetera.
And I think a lot of this is around reformulations innovations, thinking about these things that you've talked about, supply chain, what products you're bringing in, and how you can be more
¶ Thriving Through No-Regret Moves
effective. So I think that's, you know, it's definitely good news. I think we're always a little bit worried, and I know that, you know, market softness is a concern. The cost of doing business and the cost of raw ingredients and the effects that has is a concern. But I think, getting busy. On these no regret moves is really smart.
You're absolutely right, Victoria. In light of the current situation, it is also important to think about are there quick wins that can be taken advantage of? Are there, opportunities to cross sell? Are there inorganic opportunities that can be, you know, considered in light of these changes? So, um, definitely that's another point to keep in mind, to enhance one's position.
Is this a busy time for Kline? Do you see a lot of. Clients coming to you with big questions, and if so, what, what are they? What are the questions that your clients are asking you today?
Yes, it is a busy time for us and, certainly our clients are coming to us. One of the things they're coming to us is exactly that, what are the, are the quick wins in the market that we can take advantage of? Are there, um, inorganic plays that we can
Yeah.
You know, are there opportunities for ingredients that might not have been so, considered a few years ago that now become relevant in light of,, more considerations on price, price versus performance?
Yeah,
there's, there's, we're getting questions of that
that's interesting. I, those three, those are all really interesting. Especially this piece about: There may be formulations and products today that make sense. That didn't make sense two or three years ago because the circumstances are different. So I think it's, it's always a good reminder to, revisit your pipeline 'cause what you thought was dead maybe is not dead. It maybe alive and awake again today. Um, you know, the other piece you talked about, there's inorganic growth.
Do you see, a lot of interest in m and a activity right now. I mean, it's, again, it's it, you know, these periods of uncertainty, it's hard. But do you think that's gonna be happening? You know, if you were reading the Tea Leaves of the World, should we be expecting some moves?
Certainly I do think there is opportunity for inorganic, plays in the market. Um, I was at InCosmetics, a few weeks ago, I guess a month ago at this point.
Yeah.
and it's a very vibrant, it was a very vibrant show. And a lot of players in this space. So I can absolutely see that there is, I just think there is a lot of, there's a lot of players in the industry and I think that there is an opportunity for more consolidation in this industry. But this is my point of view.
We've talked about, uh, maybe some of the, the quick wins and the no regret moves, but what are the strategies that companies can and should be employing, um, to be successful here in 2025 and beyond?
Um, so that, that's, that's a big question. My points were about kind of, um, essentially about taking advantage of the quick wins about reconsidering formulations. Bigger picture. bigger picture thinking is about really reconsidering whether the manufacturing footprint needs to be changed in light of the way the, the,
The way the world is going. Yeah, yeah. Yeah. I think that's interesting. I think people are grappling with this, right? Where, what the right investment profile is, what the manufacturing footprint should be. I can't decide if we are shifting to a time of more regionalization. Certainly regionalization of supply chain seem likely regionalization of manufacturing. I don't know. Right? Because it's a big investment to make, to move, right? To move plants and assets or to rebuild them.
Is expensive and depending on a company's appetite, depending on frankly whether they're public or private, right? Because privately held companies maybe have, they have different time horizons and different judgment calls about whether they can make those investments. Whereas despite our best interest in, uh, in every public company, executive's interest in telling their story and helping their investors understand investors. Still by and large want quick returns.
And so navigating to that is tricky.
It absolutely is tricky and there were, there was a lot of discussion about look reconsidering manufacturing in the light of covid. But
Yeah.
Covid was, over, I mean, none of those changes did happen. So whether this is going to be the motivating factor is, is, um, is yet to be seen, but
Yeah.
at least reconsidering the supply chain and, and, uh, assessing the manufacturing footprint. Would be
Yeah. Makes sense. Makes sense. Alright, so Sunnie, let's talk about leadership. And I love to ask this question to people 'cause I love the responses that we get in. So do listeners. In fact, I hear, um, from folks is this is one of their favorite segments of the show. So when you think about your career, and how you've achieved what you have, what advice would you give to a young professional recently entering the industry about navigating her career in leadership?
the most important piece of advice I would give is to. Recognize the opportunities as they come to you and as they're presented to you, and have enough faith in yourself to take advantage of those opportunities to, to take them head on, even if you feel like you don't know how to kind of execute against them, and I believe that's what I have done in the course of my career. So I started, as I said, my career in, in software.
And then, I was able to make the move to an industry that I love being in and love working in. And, I was able to achieve that because I did try my best, try my best to be able to take advantage of those opportunities as they were presented to me.
Yeah,
is the, the, the advice
¶ "Investment Challenges in Manufacturing Moves"
that I would give to a, to a young professional starting
I love that. And I mean, it's a bit of the say yes even when it's really scary.
Yes.
Yeah. Awesome. Well, Sunnie, thank you for taking time to speak with me and to The Chemical Show audience today. It's been really great to have you here.
Thank you for having me, Victoria.
And thank Absolutely, and thank you everyone for listening. Keep listening, keep following, keep sharing, and we will talk with you again soon.