Seven steps for formulating on a budget

In times of financial hardship, consumers continue to purchase smaller, more affordable luxuries. This is known as the lipstick effect, a trend identified by Professor Juliet Schor in 1998 and later supported by claims from Estée Lauder’s Leonard Lauder, who noted that their lipstick sales had increased in line with recessions triggered by the 9/11 attacks and the 2008 financial crash.^1,2

 The trend is also seen across eyeliner, mascara, and other relatively inexpensive treats,³ but not across personal care as a whole. Mintel have reported that 54% of consumers are reducing their spend on beauty products, and 25% are ‘trading down’ by buying cheaper versions of products and services.⁴ At the same time, the cost of raw materials, packaging and production is also increasing, leading many brands to reduce the costs of their formulation. 

Replacing expensive materials with cheaper alternatives is a popular way to reduce the cost, but this also comes at a price. Cheap alternatives are often less refined and may contain more impurities, which can wreak havoc with the stability of the formulation. For example, cheaper natural oils and butters may initially work well in existing formulations, but will oxidise more quickly than more refined products. This could cause discolouration, rancidity, and instability, leading to consumer complaints and, ultimately, damage to brand reputation.