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Nutricosmetics Dilemma: Big Food or Big Cosmetics Playground

The first season of podcasts was hosted by Primož Artač, director of Tosla Nutricosmetics. Primož’s first guest was Olivier Goudineau, a personal friend and a former executive from the food industry who turned entrepreneur.

Primož opened the discussion by questioning why the cosmetic industry is less willing to develop eatable cosmetics than heritage products. Olivier pointed out three reasons for that:

  1. Companies don’t think the size of the market and the level of profit they could make out of edible cosmetics are interesting enough. Big cosmetics companies moving into nutricosmetics need a big incentive for the move. They are looking for big markets and money.
  2. The culture. Cosmetics companies have been training people to do certain things, to think and work in a certain way for decades. Thinking, working, and learning in cosmetics differ from nutricosmetics. And the shift is not easy. The company culture makes it easier for them to continue in the direction they know well, targeting skin from the outside rather than from the inside out. Big companies have tens of thousands of people working for them. Making the change in the way they work, think, and communicate is a big hassle.
  3. Supply chain and the market. However, this is not the most significant struggle because of the many similarities between cosmetics and nutricosmetics. They are both produced with the same ingredients. However, production lines might need to be adjusted, or the company could invest in a new production line. The question here is, where do they sell these products? Cosmetics companies are used to high prices by the kilo. Creams or high-quality cosmetics cost much money by the kilo, and nutricosmetics products have a much lower price. How do you motivate vendors of your products to go for products which make fewer dollars by item or shelf space?

Out of the three reasons above, Olivier sees the market size as crucial. Big cosmetics companies feel like the cake is not big enough for them. Consequently, it isn’t easy to motivate them to move into the nutricosmetics.

Interestingly, the industry, which is highly lucrative for the food companies compared to the food industry, is not lucrative enough for the cosmetics industry.

Is nutricosmetics “big enough cake”?

Big companies in the food industry, Nestle or Coca-Cola, sell products at low prices by the kilo, and they are sold everywhere. These food products can be found anywhere and at any time. The food companies sell products that don’t make a high percentage but sell a lot, and the rotation is very high. And this is where nutricosmetics products differ from food products – they are expensive by the kilo compared to chocolate and Coca-Cola.

The above paradox is the turnover of a cosmetic product versus a nutricosmetic product. Creams are typically used for 70 to 80 days, while collagen drink, for example, lasts for three weeks. Interestingly, the profit is probably much more significant with collagen, but it does not appear this evident at first sight.

The market needs to convince people to try nutricosmetics, while cosmetics companies have clients who don’t need to be convinced. If they decide to introduce a collagen product, they will need to invest much money in marketing. This is a considerable investment. They might start seeing the nutricosmetics market as a “big enough cake,” but that will bring many changes compared to their traditional business model. If anyone, the consumers will drive the big cosmetics companies into the segment.

The prediction is that some smaller companies will do the hard work of educating consumers and introducing products. Once the consumers are educated, the big companies will enter the market by either purchasing these companies or creating their brands.

What is it going to be? Food or cosmetics corporations?

Olivier is a co-owner of Yogattractive, a company that combines cosmetics, nutricosmetics, and face yoga. He expressed satisfaction in working with products in which he truly believes. The quality of their collagen and hyaluronic acid products and their proven results and feedback from the clients is something that makes him feel good and makes his life better. His main drive is to create good products for his clients that are also good for the business. He talks about how he is not burdened by the classification of food, cosmetics, or nutricosmetics company. When it comes to the nutricosmetics market, the companies owning it will focus on nutricosmetics, not the food or cosmetics companies. These companies either already exist, or they will start existing. The most likely assumption is that the companies focusing on nutricosmetics will be the ones succeeding in this industry. However, there is a big chance that big corporations will later buy these companies. But what is it going to be? Food or cosmetics corporations? For the reasons mentioned above, it seems easier for cosmetics companies to go in this direction. The point of sale of the food products is probably not the most adapted to collagen due to the high prices these products have. Grocery shopping includes toilet paper, chips, pasta, etc. It is not very common to pay 25€ or 25€ per kilo. But on the other hand, paying a high price is expected when shopping for cosmetics. On top of that, people are willing to pay for beauty. Even though we are increasingly aware that food affects our health, wellbeing, and beauty, it seems like there is a long way to go before we shift a part of our beauty routines to the kitchen, in the fridge.

And what about the positioning of the nutricosmetics products? Many brands are going from online sales to Walmart or multilevel. Is there a place for a high-end department store and simultaneously going with the mass execution for one brand? Can nutricosmetics products do both simultaneously, or should they be separate brands?

The answer to this is easy. If money comes out of it, there will also be solutions. It is easy to adapt a product to the place and the audience where it is sold. Going back to the Coca-Cola example: The bottles sold in supermarkets are 2 l or 1,5 l big, while the bottles sold in bars are 250 ml big. This is the easy part. It all circles back to the money. If the companies see the potential to make money, they will invest in the project, and we will see the products everywhere.

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