Nick Benson, CEO and co-founder, Atelier
Recent uncertainty around the potential fallout from President Donald Trump’s tariffs has left beauty executives scrambling to solve a unique and tricky set of challenges. But seasoned executives know this is just the latest disruption on a long list of manufacturing and supply chain issues that have plagued the beauty industry over the last 10 years.
These challenges have led to rushed conversations among industry leaders about how to revise geographic sourcing strategies and whether to reshore manufacturing and production facilities. However, making scattered, frenzied supply chain decisions can compromise margins, innovation and future brand safety.
The most forward-thinking beauty leaders are recognizing something more fundamental: the entire manufacturing paradigm needs reinvention.
Why traditional supply chains are failing
For decades, beauty brands have relied on manufacturing models built on linear, rigid processes and personal relationships — think WeChat messages, single-point-of-contact owners and Excel spreadsheets.
While this approach was once considered standard operating practice, it has become a significant liability amid increasing global economic volatility and complexity, especially in the most competitive marketplace to date.
Adding to that, behind every beauty product lies an intricate web of specialized ingredients, often sourced from more than a dozen global regions. Many of these components simply aren’t available domestically, making reshoring impractical. And moving manufacturing or production facilities back to a product’s country of origin doesn’t address the underlying beauty supply chain fragility.
How composable manufacturing and multi-shoring boost production
Composable manufacturing may be set to change all of that. Composable manufacturing is a network-based approach to manufacturing that allows companies to quickly reconfigure their production processes in response to market demands. The approach has been successful in industries like automotive and electronics, but it is only beginning to emerge as a defining advantage in the beauty industry — where innovation, speed and agility directly impact market success.
To that end, top beauty companies have begun opening independent manufacturing facilities in multiple global regions. Rather than relying on a single linear production route, they’ve set up sophisticated, tech-enabled, network-based systems with built-in alternatives that can be used immediately when problems surface.
This multi-shoring approach represents a fundamental shift in process from traditional manufacturing models to composable, interconnected production ecosystems — and it’s working.
Beauty brands have been able to gain an edge over their competitors while simultaneously addressing speed, risk and innovation challenges by: categorizing their ingredient portfolios based on risk profiles and available alternatives; developing tailored contingency pathways for product components based on their strategic significance, market volatility and substitution possibilities; and selecting only the most performant supply chain partners to compress production timelines from 12 to 36 months to three months or less.
For example, a leading European prestige beauty brand recently opened a new production facility in the United States in less than five months. This positioned the brand to navigate the potential impacts of tariffs seamlessly, while competitors remained exposed.
How data-backed insights increase brands’ supply chain agility
Having data-based insights about the beauty product manufacturing ecosystem can give companies an advantage over their rivals, and the most successful brands are relying on those insights to stay ahead of the competition.
By using performance-based data intelligence rather than outdated, less-reliable comparison tools, brands have significantly more options to choose from when supply chain disruptions occur. For example, they can select business partners that offer more stability and better prices, with faster, superior innovations.
Unfortunately, a large number of beauty executives lack transparency into deeper supply chain tiers. Simply put, having boundless supply chain knowledge is impractical, if not impossible.
However, by incorporating data technologies backed by AI, all aspects of the supply chain can be more easily understood. Potential points of failure and opportunities for optimization can be identified before they snowball into product shortages or major disruptions.
What the future holds for beauty product manufacturing
As beauty product manufacturing processes continue to evolve, two factors are likely to reshape competitive dynamics soon.
First, manufacturing technology itself is becoming as strategically significant as product formulation innovation. Brands increasingly have been differentiating themselves from their competitors through their production capabilities rather than solely through their products’ attributes. This is only likely to increase going forward.
Second, speed will also continue to be critical. Quickly responding to cultural trends with new or improved beauty products is no longer optional — it’s something every brand is expected to do. As a result, production processes will continue to become more composable and adjusted on a per-product basis. Brands that successfully establish composable, network-based manufacturing capabilities will maintain both innovation and financial momentum through unexpected supply chain disruptions.
The beauty industry is at a turning point where having a sophisticated manufacturing process means excelling in the industry. Brands that are able to build adaptable production systems aren’t simply addressing the current challenges of potential tariffs, they’re investing in long-term strategies that will help them succeed in an increasingly unpredictable global landscape.
Sponsored by Atelier
