Maintaining the Range at New Directions

Fresh from the farm

This is surely the most romantic ideal in terms of cosmetic ingredient sourcing but just how practical is it?

It is not always or even often the case these days that farmers have the ability and expertise to both farm the raw crop and produce the finished ingredients that we need for cosmetics. I'm talking here about things like vegetable and essential oils, butters such as cocoa and shea, exfoliating scrub particles, lanolin, beeswax, herbs and extracts. You see for many farmers, the art of farming has been enough of a job, all consuming and capital intensive and to keep their farm overheads down post-processing has been kept to a minimum. It is easy in the small cosmetic brand owner or developer end of town to sit in a bubble of imagination that they can cut out all middle-men, get to know the farmers directly and buy all of their supplies freshly squeezed, plucked or harvested when the reality is often somewhat different, especially when, instead of just one brand to feed, you have several thousand.

Like all industries the farming industry has changed with the times, following trends for small all-encompassing family run enterprises to larger, price driven operations ranging from boutique player (organic etc) to factory farm size. These trends have followed market dynamics and personal aspirations such as the change in farming families from automatically taking on the family business to moving away and doing something completely different. These trends are, of course different across the world with some countries and regions being particularly strong in maintaining family ownership either through choice or necessity while others have moved more dramatically away from this. An Australian Bureau of Statistics report from 2015-2016 found the average farmer here in Australia is 56 years old, increased from 54 less than ten years ago. Young people are still not seeing farming in their future here in Australia. But for those who are still farming, there has been interest in diversification and value-add at the farm gate in order to increase profit margins and remain viable. This has included the start-up of boutique olive presses for small-batch and specialty oils, farm-gate wineries, micro-breweries, and other agritourism activities. Figures from the 2015-2016 year showed a strong increase in tourist numbers across all agritourism sectors for Tasmania making this a growth industry and one that may potentially bring younger people and families back to the land. But where does this leave cosmetics?

For a company like New Directions we have to keep our eyes on four key metrics when it comes to sourcing materials.

• Supply chain security
• Quality and reliability of quality
• Price
• Usability

Small, boutique farms cannot always produce at a level that would be practical for a company like ours. For example, it has been possible from time to time to source a rose oil and rose water from Australian grown sources, something that we would like to stock given our love of locally produced goods and the popularity of rose. However, not only are these products highly seasonal but when they are available sometimes it is only in very small quantities - less than 1 Kg in total available for the whole year with no guarantees as to what production levels or quality might be for the following year. Of course this is irrelevant for a small brand buying direct but highly problematic for us.

The bottom line here is that buying fresh from a farm is sometimes possible but often not and rather than see that as a good or bad thing, it is merely a reflection of the dynamics of a complex marketplace. Oil crops go off-site for pressing and refining - and this is especially true for many essential oils, especially the high value oils that require more specific distillation conditions and quality checks, herbs need sorting and grading, ingredients such as lanolin and lecithin need to be processed and cleaned and beeswax is often too small in yield to be processed by individual farmers. New Directions requests process flow charts for all materials and with an increase in compliance and greater appreciation for quality standards and trace-ability through the supply chain confidence in authenticity and purity standards from third party processors has increased.

Bulk traders/ Wholesalers/ Consolidators.

The next step up the supply chain from the farm gate is a bulk trader or wholesaler and this is commonly found in the essential oil and vegetable oil market as well as for some other natural ingredients. As we mentioned earlier the small yields and inconsistent availability and quality of some crops has created the need for a third party specialist. While some traders/ wholesalers are just price driven and have little regard for the quality of material they buy, most often these companies are full of highly qualified and experienced buyers, material handlers and quality assurance staff. This tier in the supply chain operates to ensure ready-to-use quality for up-stream buyers and consumers by making sure that packaging is tested and maintains product integrity, that batch records are created and specifications developed, that Certificates of Analysis are created and that quality is maintained while managing stock inventory keeping an eye on market pricing and future stock issues. In summary, this tier of the supply chain, when working well, helps to develop and enforce quality standards, provide technical specifications and analysis and smooth out stock peaks and troughs. New Directions plays a role in this part of the supply chain in addition to benefiting from it.

Engineered Ingredients - The Global Cosmetic Ingredient Market.

Chemically and physically Processed Ingredients, natural and synthetic.

While it is only natural to want our ingredients to be pure and simple, that doesn't always give us what we need to make the sophisticated, long-lasting and light-feeling products that we so desire and that is where these ingredients come in.

Cosmetic ingredient manufacturing companies are spread all around the world and most have multiple manufacturing sites to cover different markets. Sadly for those wanting 'Australian made' ingredients Australia has lost many of the chemical manufacturing plants it once had so most of the ingredients in this category are imported.

Because of the nature and complexity of the chemical manufacturing industry many of the larger, more established companies producing specialty materials have global networks of agents to co-ordinate imports and manage ingredient compliance across the different markets. Where these networks are established, New Directions purchases from these agents rather than importing directly.

Being a small market it is not always possible to access all ingredients that a large chemical manufacturer has to offer and that is a key reason why it is possible to find many more ingredients after a quick 'google' than you can actually access locally. While this is frustrating we, at New Directions, do try to source a variety of options for client and make them available in small pack sizes to help spread out the costs of cosmetic R & D.

As with cooking, cosmetic formulating has its kitchen cupboard basics and these tried and tested ingredients can often be imported directly from factories specialising in generic ingredients. Examples of such would be things like phenoxyethanol, ceteareth-20, salicylic acid, Ascorbic Acid, Cetearyl Alcohol and many more. For this class of materials we purchase to a New Directions specification which is usually based on the chemical analysis of the ingredient and its suitability for cosmetic use. The main advantage of purchasing these materials this way is to again ensure supply and cost efficiency. The down side is that occasionally subtle differences in specification between suppliers can be noticeable in some formulations, especially those that are formulated at the edge of their stability.

A closer look at these ingredients.

We have a lot of ingredients fitting into this sector including all of the bits and pieces you need to hold your product together and keep it preserved! The business of turning a vegetable or petroleum oil into a cosmetic ingredient has become somewhat of a detail minefield of recent times as we all try to work through and agree on what constitutes natural vs synthetic, fully organic or made-with organic.

Product standards such as COSMOS, Ecocert, Organic Food Chain, Australian Certified Organic could not exist without an ingredient philosophy or definition. This definition has generally focused on both the ingredients origins and their subsequent processing. Once that information is to hand, what has typically happened is that a board of interested parties has analyzed these processes and made a decision as to which ones can be justified under a natural standard and which ones cannot. It pays to remember that these standards are developed by independent businesses or private bodies rather than government or third-party initiatives.

After all of that we are left with ingredients that fit into a variety of categories including these which are the definitions used by the COSMOS standard:

• PAIR = Physically Processed Agro-Ingredient
• CPAI = Chemically Processed Agro-Ingredient
• SyMo = Synthetic Moieties (for example silicones or petroleum derivatives)
• NNI = Non Natural Ingredient (these are your nature identical type of ingredients).

New Directions sources ingredients that fit into each of these categories which enables us to meet our objectives of being a one-stop-shop for all types of brands looking for creative and affordable solutions.

New Directions Made.

In addition to buying in ready-to-use ingredients we also manufacture some, including our aloe gel, hyaluronic acid dilution, glycerin derived herbal extracts, solubiliser and essential oil blends. We have developed these ingredients to help make formulating a brand easier, faster, more cost effective and more enjoyable for our clients.

What to expect when buying from us.

New Directions operates in a dynamic global purchasing environment where situations such as changes in the weather (affecting crop growth and vitality), the political climate (affecting access to materials), public tastes (popularity, supply and demand), the global financial markets (price) and the strategies of the larger chemical manufacturers can all influence our ability to maintain our range. In order to counter balance those sometimes negative influences we have diversified our supply chain in terms of where we purchase from, who we have relationships with and how many suppliers we approve stock from at any one time. For customers this can sometimes mean that an ingredient supplier changes between batches and that could manifest as a change in ingredient form from pellets to powder for example or a slight change in product performance. To minimise disruption we have implemented in-house specifications that we aim to have as thorough and tight as possible without restricting our ability to supply. However, there is always the potential for changes in supply or material origin to subtly change finished product outcomes. Our Quality Assurance team has developed an efficient and extensive database of information about each of our ingredients and suppliers meaning that we can always provide customers with further information on our ingredients if required. In addition to that we have our ingredient help desk and in-house chemists to assist when it is necessary to transition between one supplier or form of product to another. We hope that together, we can provide you with a great range of quality ingredients with a high degree of stock reliability available in convenient pack sizes to help support the many and varied projects that our customers seek to undertake.

The Bottom Line.

While what goes on behind the scenes at New Directions to maintain the range is complicated and multi-faceted we do our best to make the front-of-house experience of shopping with us as seamless and enjoyable as possible so that your businesses can continue to thrive and grow!

Amanda Foxon-Hill

9 January 2018