NEW PRODUCT TRENDS AND EXPANDING OPERATIONAL FOOTPRINTS ARE TRANSFORMING CONTRACT MANUFACTURING

BY DEANNA UTROSKE

The global market for third-party manufacturing is growing; and while data is not uniformly disclosed, some estimates suggest that already at least half of all cosmetic, personal care, and fragrance product production is outsourced to manufacturing facilities not owned by brands. Figures published online by India-based market research firm diMarket this past June estimate the 2025 global cosmetics contract and private label manufacturing market at $50 billion.

Today, many beauty and fragrance manufacturers are growing their international presence and their production capabilities—moves that allow brands to keep pace with consumer expectations, and that at the same time, mean the third-party manufacturing sector is helping reshape the cosmetic industry supply chain.

Keeping pace with our fast moving industry can be challenging. But fortunately, there is one place where manufacturers from every major market show up to help brand leaders and R&I pros from around the world discover the most compelling product trends, find the capabilities and connections needed to realize their ideas, and understand the most forward-facing solutions in tech and sustainability. That place is Cosmopack.

Product Trends and Formats

Manufacturers play a critical role in the innovation process. For instance, wellness and mental health are important to beauty consumers today and many brands have launched products to serve these needs. New fragrance design guidelines developed by Firmenich are a good example of how contract manufacturers are fostering innovation and influencing trends like wellness.

In September, the fragrance maker announced patent-pending guidelines that perfumers can use to create scents that facilitate human connection and alleviate feelings of social isolation. The emotiOn™ social connection guidelines are backed by decades of neuroscientific research, a consumer study spanning 20 countries and responses from 12,000 people, and olfactive patterns identified by the company’s proprietary AI model.

“We’re harnessing the power of scent to foster emotional wellbeing and human connection,” says Chief Science and Research Officer Sarah Reisinger, in a press item posted on the company site. She calls the emotiOn™ social connection innovation “a testament to how science can elevate everyday experiences,” and explains that “by decoding the emotional language of fragrance, we’re creating scent solutions that help people feel more socially confident and connected.”

Contract manufacturers invest in not only the development of formulation technologies, but also production capacity which (in aggregate) determines the upper output limit or total market volume for each product format as well. Consider sticks and bars, for instance—both formats that are increasingly common in every category. In early December, mid-size contract manufacturer SV Labs expanded hot-pour capacity at the company’s facility in Wisconsin (US) with an expectation of producing more deodorants, antiperspirants, balms, and other similar hot-pour format products for regional and international customers.

Graham Orriss, CEO of the California-based manufacturer, told the press that “this new line provides the speed, flexibility, and technical versatility to launch bolder concepts, react faster to retailer and consumer demand, and scale confidently from pilot runs to national distribution.”

And in November, soap and solid beauty product manufacturer MidSolid Press and Pour announced added production capacity along with upgrades in quality control, as well as in the company’s product development, formulation, and packaging offerings.

In business since 2006, the small-scale private label beauty maker works with local and regional brands (those in or around the state of Colorado in the US). MidSolid Press and Pour made the facility improvements in response to a what company Founder Creighton Thomas calls a “tremendous interest from businesses that want to be part of this [solid bar] movement.” The manufacturer expects “custom hair care products,” namely shampoo and conditioner bars, to account for the bulk of the new production.

image NEW PRODUCT TRENDS AND EXPANDING OPERATIONAL FOOTPRINTS ARE TRANSFORMING CONTRACT MANUFACTURING

International Trade and Operational Footprints

The subtext of both SV Labs’ and MidSolid’s recent capacity expansion news is that demand for regional production is up—in the US and other major markets.

India is a rapidly developing beauty market. And this past February, kdc/one (Longueuil, Québec, Canada) and Clarion Group (Mumbai, India) incorporated a joint venture in India. Known as kdc/one Clarion Beauty Pvt Ltd, the venture brings together two renowned contract manufacturing companies to provide both local and international brands with product formulation and packaging manufacturing. As Clarion Group Chairman K N Lakshmanan told the press in March, the “two companies not only have complementary manufacturing, formulation and packaging strengths in the beauty and personal care products sector, but…also share a commitment to providing the highest level of innovation, quality, service, agility and regulatory compliance.”

And he went on to emphasize the demand for beauty manufacturing from local as well as cross-border brands, saying “We are excited by the huge potential of this joint venture and believe that together, we will be the partner of choice for brand owners,…whether they are already operating in the Indian market or looking to enter the region.”

The legacy, multi-national manufacturer Intercos (Agrate, northeast of Milan, Italy) is also making moves to further expand the company’s operational footprint and meet demand for regional production. In September, Intercos CEO Renato Semerari told Bloomberg journalists Flavia Rotondi and Antonio Vanuzzo that the beauty maker is looking to add to its 16 production facilities by acquiring a company in the US, one generating between $100 million and $200 million in annual revenue. Intercos, a cross-category company with extensive expertise in color cosmetics and 2 manufacturing facilities in the US already, “lacks the capacity in hair or skincare to win over the largest brands or emerging trendsetters in the US,” according to Semerari in his interview with Bloomberg. He and his team had, at that time, “identified one buy-out candidate” that met the criteria and were open to others. To date, no deal has been announced.

Asia-based contract manufacturers are also capitalizing on an increased demand for products produced in the States. In July, Kolmar Korea opened its second factory in Pennsylvania, spanning nearly 200,000 square feet—that’s the same state where Kolmar US headquarters are located. This new manufacturing facility is equipped to produce up to 120 million units of skincare and sun care annually. And “this is the first time a Korean cosmetics company has directly built a production facility in the US rather than acquiring one,” according to comments attributed to an unnamed Kolmar Korea spokesperson in a press release issued shortly after construction was completed. “We’re ready,” said the spokesperson “to support K-beauty brands looking to enter the US market without tariff concerns, as well as global customers aiming for North American, European, and South American markets.”

CTK acquired a new US facility in March. And now in December, that site is operational with 40,000 square feet of manufacturing sapce in addition to a 30,000 square foot logistics warehouse. The California manufacturing plant will “serve as the gateway to the US West Coast market and establish itself as the global hub for K-beauty OTC products,” according to Cheeho Choi, Head of CTK's US OTC Business. CTK is multinational contract manufacturer with capabilities in sun care, color cosmetics, skincare, personal care, and OTC care products. The new US facility is formally known as CTK OTC LABORATORIES or COL and has the capacity to produce more than 20 million units annually.

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NEW PRODUCT TRENDS AND EXPANDING OPERATIONAL FOOTPRINTS ARE TRANSFORMING CONTRACT MANUFACTURING

Product Trends and Formats

International Trade and Operational Footprints

Discover More and Step into the Future

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NEW PRODUCT TRENDS AND EXPANDING OPERATIONAL FOOTPRINTS ARE TRANSFORMING CONTRACT MANUFACTURING

Product Trends and Formats

International Trade and Operational Footprints

Discover More and Step into the Future

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