INGREDIENTS SUPPLY
virgin coconut oil like a tonne of bricks: “Not only did prices go through the roof, but there was the fact that the containers could not leave, meaning many containers built up in ports.” Getting materials from A to B quickly is especially important for suppliers working with natural feedstock. As Kerfoot explains: “We deal with extremely volatile ingredients and we want them on the water for as little time as possible.” That said, O&3 is used to accounting for the possibility of natural disaster disruption when it comes to sourcing from countries and regions that are hit by extreme weather events on an annual basis and Kerfoot tells Cosmetics Business that the company “calculates for that”. The unusually strong bushfires that burned approximately 46 million acres across Australia at the start of last year, however, presented rather more of a curveball. “We do lemon myrtle [essential oil] out of Australia,” says Kerfoot. “In most cases for our products, we have multiple sources, but with that product it was a case of pretty much all the growers were out because their crops were incinerated. When this happens with something like essential oils, it’s usually not such an issue because essential oils have an extended shelf life and we do have the ability to stockpile to an extent. But when you have scarcity on the market and people are in desperate need, people lock onto it quickly and prices are inflated.” Ironically, this scarcity of lemon myrtle coincided with Covid-19 driving a spike in demand for citrus essential oils’ antibacterial properties. In addition to lemon myrtle, Ecovia Intelligence’s Sahota notes that the coronavirus pandemic has elevated demand for (and prices of) tea tree oil and aloe vera, also widely used in hand sanitisers.
Sahota observes that, compared with food, the cosmetics industry is in a relatively good position when it comes to riding out temporary local shortages. He explains: “In most cases, there is a diversified supply base of such raw materials, so it is not common to see shortages over a prolonged period. These ingredients also tend to have a relatively long shelf life, unlike food crops, so we do not experience the same immediate shortages as the food industry.”
Speaking in the run-up to Christmas 2020, he added that the food industry is “currently experiencing a shortage of ground ginger because of a poor harvest and labour issues in China – this is affecting the supply of ginger to make gingerbread men during the festive season and prices have increased because of the shortage”.
PREPARING FOR EVERY EVENTUALITY David Smith is General Manager of Southern Cross Botanicals, a Lucas Meyer
16 January 2021
Monsoons in Sri Lanka (right) heavily impacted the supply of virgin coconut oil, causing prices to soar; meanwhile, lemon myrtle (below) took a blow from the Australian bushfires as demand simultaneously surged for citrus essential oils due to Covid-19
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With natural disasters, it’s very simple. With the parts of the world that we know are affected year-on-year, we plan for the worst
Cosmetics-owned company located in Australia, while Jean-Philippe Bourgeois is Supply Chain Manager at Lucas Meyer Cosmetics’ head office in Canada.
While Lucas Meyer Cosmetics did face some temporary material scarcities in 2020 “as we can’t be prepared for all scenarios… like the sudden reduction of available flights or governmental decisions in a specific country slowing down commercial activity”, Smith and Bourgeois assure Cosmetics Business that the company has a plan for every critical material.
For Lucas Meyer Cosmetics and Southern Cross Botanicals, the essential element is good communication both externally and internally, with the representatives noting: “It’s a well-known fact that the robustness of a chain is limited by its weakest link. If communication across the chain is obviously important, communication within an organisation’s departments is also indispensable.” Germany’s Henry Lamotte Oils extracts oils, vegetable butters, waxes, seed flours and oleoresins directly from natural products that are sourced from across the globe. A spokesperson for the company similarly stressed the importance of frequent, honest communication in avoiding the negative impacts of disasters, natural or otherwise.
“Our suppliers from all over the world report to us daily on weather conditions and extreme weather events that affect the quantity and quality of their harvests,” says the spokesperson. “Mastering logistical challenges, such as strikes, has also always been part of our business.” While the Lucas Meyer Cosmetics team adds that material availability has rarely been an issue
cosmeticsbusiness.com
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