In President Trump’s first 100 days, his trade policies have jolted global supply chains, driving up costs on key ingredients for beauty and personal care products.
The consequences have shaken beauty brands. The industry’s biggest players, such as L’Oréal, Puig, Estée Lauder Companies (ELC), Coty and Shiseido, have all spoken out in recent earnings to warn investors that slower growth, product price increases, and sourcing and manufacturing changes are on the horizon. Otherwise, for big beauty and smaller, independent companies, global ingredients sourcing (critical to everything from fragrances to serums) is now subject to volatile pricing and logistical complexity, as tariffs risk derailing cost efficiencies, innovation pipelines and product launches.
Three of the most popular ingredient notes in fragrance face new regional tariff complexities. Vanilla, mainly exported from Madagascar, is currently subjected to a 10 per cent tariff (with a 90-day pause on the initial 32 per cent proposed in April). Jasmine, a major export from India and Sri Lanka, faces a 10 per cent tariff price hike (the regions were originally threatened with 26 per cent and 44 per cent, respectively) and the same 10 per cent levy is also placed on ylang-ylang, sourced primarily in the Philippines, Indonesia and Malaysia.
Some skincare ingredients are also facing similar challenges. Laura Whitaker, founder of Canadian skincare label Wildcraft, reports a 20.5 per cent price increase on organic sunflower oil sourced from Spain and a 67 per cent spike on organic golden jojoba oil, supplied via a Canadian distributor importing from Israel. Tiffany Salmon-Mills, founder of Glow Hub skincare and creative director of Amelia Knight, a private-label turnkey company for beauty brands, says niacinamide, sourced from China and India, has jumped between 25 and 40 per cent in price. Knight estimates that panthenol, primarily sourced from China and Germany, will go up in price between 15 and 25 per cent. Jane Goldrup of Purana Skincare reports a 35 per cent increase in a rare Swiss alpine flower stem cell extract that makes up the brand’s bestselling product, Eternal Youth.
In response, brands are being forced to rethink sourcing, reformulate with less differentiated ingredients, or absorb costs at the expense of already tight margins.
“There’s no doubt that US tariff increases will reshape the economics of beauty starting at the ingredients level,” says Michael Appler, VP of marketing at analytics platform Trendalytics. “Many of the industry’s most innovative products rely on globally sourced components.” Asian botanicals, Korean bio-fermented actives and European laboratory-grade peptides are now pricier to import and export, he says. “If tariffs add costs to an already stretched global supply chain, the impact on innovation, especially for emerging brands, will be significant,” Appler warns. While large conglomerates may negotiate better terms or offset costs through scale, smaller indie brands have little room to manoeuvre.
“Tariffs are forcing labs to rethink their strategies, such as ingredient swaps, simpler formulas and local sourcing,” says Roseann Fernandez, a global marketing consultant. “While this may fuel creativity as brands have to rethink formulas, don’t be surprised if your favourite ultra-lightweight moisturiser or multi-action serum doesn’t feel the same again,” she adds. Some brands have been forced to halt shipments to the US because of tariffs, meaning some products will be less available. “Unfortunately, we’re all navigating a lot of unknowns. Shipping pauses are inevitable as prices remain at an all-time high, and inventory shortages will follow,” says Kiana Basset, VP of sales at skincare brand Glow Mood.
Not all ingredients are affected. According to the US Trade Representative’s published exemptions list, certain components are spared from tariff surcharges, including azelaic acid, benzoic acid, mineral oils, glycyrrhizin (liquorice derivatives) and oils such as soya lecithin. Vitamins A, C and E; peptide and protein derivatives; and sunscreen filters zinc oxide and titanium dioxide, are also excluded. Natural oils, waxes and botanical infusions (including olive oil and coffee grounds) have escaped penalties, too.
Yet the exemption list is limited, exposing other popular ingredients from the likes of hyaluronic acid, panthenol, niacinamide and specialised ingredients (such as the Swiss alpine flower stem cell extract) to face pricing challenges, while forcing brands to navigate the unknown.
Under pressure
Hiked ingredients costs, supply chain volatility and unpredictable tariffs force beauty brands to make tough decisions. The UK’s Cosmetic, Toiletry and Perfumery Association (CTPA) explains that ongoing economic and tariff pressures may leave brands with no choice but to raise prices. “Businesses may need to pass some of the cost to consumers,” a CTPA spokesperson tells Vogue Business, adding that the organisation is working with a roster of government bodies to voice industry concerns over the compounding pressures facing the sector.
Still, price hikes are already happening. Wildcraft recently implemented a $1 to $2 increase across several bestselling SKUs after prices of aloe juice and gel (a key ingredient in seven of the brand’s formulas) rose 25 per cent due to knock-on tariff effects. Glow Mood’s Basset says there will be a 66 per cent retail price increase on its body lotion, driven by tariff-related cost increases on a single thickening agent, carbomer. “We’re in a holding pattern,” she says. “We don’t want to pass the cost onto the consumer, but we’re dual-pathing alternatives in case policy shifts don’t come soon enough.”
Other founders are holding out for now. Goldrup says Purana has chosen to absorb escalating costs to avoid burdening customers. “It narrows our margin significantly,” she admits, “but our commitment to quality is non-negotiable.” The decision has also come with operational changes, including extended forecasting cycles, tighter supplier coordination and targeted investments in more stable markets to shield against further shocks.
For some, selective price increases are becoming unavoidable. At beauty incubator Slate Brands (its brand portfolio includes Tracy Anderson fragrance, Naked Beauty and Evolve), internal cost-cutting is being combined with pricing adjustments in the range of 6 to 8 per cent, according to CEO and founder Judah Abraham. In fragrance, Eauso Vert is facing acute pressure.
“Our China-based fragrance house notified us of a temporary surcharge starting 1 June,” says Faye Harris Wood, co-founder and CMO of Eauso Vert. “Some of our essential materials come from outside the US, creating immediate cost pressure.” As a result, the brand is rushing orders ahead of the surcharge and absorbing costs to protect customers. “We rely on specialised ingredients with limited substitution options. Smaller order volumes also reduce our negotiating power — so long-term planning is nearly impossible.”
Meanwhile, skincare brand Woo World of Oils fears it may lose access to small-batch, ethical suppliers if costs persist, raising concerns not just about pricing but about brand identity and sourcing values. “I would assume suppliers will want to focus on the bigger players first,” says the brand’s founder Robin Tolkan-Doyle.
The effects also go beyond price increases. Innovation could also become strained, stifling newness in the market down the line. “Trend-driven categories depend on access to global technologies and raw materials,” says Appler. “Tariffs don’t just raise costs, they cut off pathways to experimentation, and brands who have differentiated themselves through next-generation ingredients or processes will find it harder to justify the costs of staying ahead of the curve.” Take red algae: consumer search interest in the ingredient, thanks to its hydrating, barrier-repairing and protective properties, has surged 311 per cent over the past six months, per Trendalytics.
Now, the ingredient, largely exported by China, risks a price hike if imported into the US, as China confirms its 10 per cent tariff surcharge on US goods and the US doubles down on 30 per cent for Chinese imports; other markets importing from China remain undetermined at this stage.
Similarly, demand for moringa oil (typically imported from India to the US) has jumped 85 per cent in consumer search data over the last six months, though temporary relief from India’s initial 26 per cent tariff (now reduced to 10 per cent) offers some breathing room for brands who may want to explore the ingredient within their formulation. But, in its infancy, Appler says the tariff hikes could have deterred brand investment if faced with a 26 per cent duty on imports from India.
An alternative ingredients positioning
Even as tariff policies shift, evolve or soften in the next few months and years, the recent volatility and whiplash have exposed a deeper, structural vulnerability within the beauty industry: an over-reliance on single-sourcing regions or hero ingredients, which is now an ongoing danger for beauty brands. Companies heavily dependent on a narrow pool of suppliers, particularly those concentrated in markets threatened by high-tariff prices, have been disproportionately exposed to cost surges that have rippled to product and shipping delays. The current landscape has made it clear that geographic and ingredient diversification is no longer an option, but is required to build resilience.
“It’s about creating a smarter, more resilient development process, and that mindset shift for brands is a non-negotiable moving forward,” says Shannaz Schopfer, CEO of The Beauty Architect, a company that connects brands with suppliers and manufacturers globally. “Now, we’re working with global clients [brands] to design formulas that can pivot if an ingredient becomes restricted or cost-prohibitive, and to secure alternative packaging, too. Building contingency options early keeps products on track and protects the brand’s bottom line.”
The recalibration is also driving brands to reassess not only where they source, but what they formulate with, and one nascent alternative among experts is synthetics. For Glow Hub’s Salmon-Mills: “Biotechnology ingredients have become increasingly valuable in mitigating sourcing risks, including tariff-related price hikes. Because they are produced in a lab, these ingredients often offer more stable supply chains when compared to agriculturally dependent actives.” As volatility continues across global markets, biotech is proving to be a resilient and scalable option for core actives such as hyaluronic acid, squalane and peptides — “It’s a key opportunity area moving forward,” she says.
Bill Xiang, founder and CEO of US-based manufacturing company XJ Beauty, agrees. “We are actively following developments in this [biotechnology] area because these innovations present opportunities for future-proofing ingredient supply, enhancing sustainability and offering next-generation beauty solutions.” As does Abraham, who says: “We have started to make investments in lab-grown and biotechnology ingredients, and we are also exploring partnerships with some of the sector’s leading partners. Although nothing has been finalised at this stage, we’re seeing that synthetic ingredient strategies have the potential to enhance a brand’s sustainability and resilience in the market.”
Advanced technologies that harness biology were once the preserve of large beauty conglomerates with well-funded research and development labs. Now, they are being opened up to the rest of the industry, driving innovation.
Otherwise, cosmetic formulator Kailey Bradt advises brands to explore synthetic biology, a subset within the biotechnology discipline that builds and redesigns biological systems, offering a bigger portfolio for synthetic ingredient creation. “Synthetic biotechnology allows us to manufacture ingredients anywhere with less environmental impact and tariff exposure,” Bradt says. Common ingredients include bio-engineered collagen, squalane and hyaluronic acid.
In the current climate, hyaluronic acid would benefit from a more cost-effective form given its popularity in beauty products, especially trending K-beauty and having been primarily sourced from Europe, China and Japan, which are currently subjected to 20 per cent, 30 per cent (10 per cent for US exports into China) and 10 per cent tariffs, respectively. “Sensorially, you can maintain the same experience, and if needed, an active can be substituted without drastically impacting the formula’s experience. Swapping an active [in light of a brand facing natural ingredient volatility in the market] is not ideal, but I believe in future-proofing a formula,” Bradt says.
Still, synthetic adoption doesn’t come as an easy alternative for brands. “Our actives are sourced from specialised producers with proprietary extraction and fermentation processes,” says Goldrup. “They’re not easily replicated.” Tolkan-Doyle is even more resolute: “Our brand is rooted in nature and ethical sourcing from Indigenous communities. Switching to lab-based alternatives would compromise our values.”
Many customers also prefer natural ingredients. US-based manufacturing firm The Well Labs’s COO Tag Ceder explains: “Shifting to lab-grown or biotech ingredients isn’t an option, because our customers value naturally sourced ingredients over anything else. Pivoting would risk business health in a time when customer loyalty is critical,” she says. Consumers have learnt to trust naturally sourced ingredients as they have been backed by the industry since their inception, therefore moving wholly away from this structure compromises their brand trust and loyalty, adds Goldrup. However, Whitaker of Wildcraft remains cautiously optimistic. “Canada’s biotech production is still limited, and the cost of research and development and reformulation is still too steep at this stage. Biotechnology is a long-term investment, not a quick fix — but it’s an option to consider.”
Artificial intelligence fragrance house Generation by Osmo is betting on digital scent creation to mitigate tariff risks for perfumery. “What we focus on with our clients is using AI specialised for olfaction, which we call OI [olfactory intelligence], to do proactive reformulations,” explains the company’s founder and CEO Alex Wiltschko. Generation by Osmo uses OI to predict and design molecules that match the right olfactory notes instead of relying on natural ingredients to create the scent. However, Wiltschko says that fragrance is a hard supply chain to break from tradition because many brands and perfumers rely on nature-derived ingredients for the perfume’s blend and marketing.
“If the story the brand is telling is that vanilla from Madagascar is no longer from the region, there is concern they’ll lose the feeling, emotional connection or heritage also wrapped up in the scent,” he says. There are ways around it, just like there are many ways to mix paint to create an image, says Wiltschko, and under the tariffs lens, brands need to explore other methods to retain the bottom line.
Otherwise, experts say geographic diversification is already becoming a necessity as it builds a more resilient, multi-region supply chain and is a smart response to today’s unpredictable global market.
However, Schopfer says (for her US-based clients) that the firm are recommending brands to move all manufacturing (including formulation, sourcing raw ingredients and packaging components) to the EU. The point of difference here for the single-region strategy is, if US brands can move the supply chain to a highly specialised region instead of one single ingredient or manufacturing source per highly tariffed regions, it could cut costs and simplify the supply chain. “Not only do these brands then benefit from world-class formulation expertise, but sourcing from Europe can also sidestep many of the escalating tariffs on raw materials and ingredients,” she explains.
To Schopfer’s point, US brands already heavily rely on Europe for their supply chains, and therefore, one source reduces exposure to the layered tariffs and shipping costs. “The EU’s regulations are the strictest and most forward-looking globally, so working with EU suppliers gives US brands access to a more stable, diversified supply network, especially when it comes to hero ingredients,” she adds. “This means we can build [in] ingredient flexibility from the get-go.” Ami Mezezi, co-founder and CEO of AV Laboratories formulates, produces and packages in Europe. “Because of these choices, we don’t import anything from China, so we are not subject to the impact of those tariffs,” he says.
Marketing consultant Fernandez agrees to seeing local craftsmanship and sourcing in a brand’s homeland enjoying a revival. “What’s happening from inside the lab with our agency clients is a rise of regional ingredients, and we’re expecting to see a boom around local botanicals,” she says. For Fernandez, ‘Made in the US’ ingredients like jojoba oil, blue agave and seaweed from the Pacific Northwest are becoming intriguing ingredients in formulation. Ceder is also open to onshoring to one region, but she would require the locally based suppliers to have the infrastructure to keep up with demand. Yet, Fernandez warns brands considering the strategy shift: “It’s not just about new ingredients access when onshoring sourcing. Brands should stay abreast of evolving regulatory frameworks to avoid compliance risks.”
Some experts remain hesitant to shrink ingredients sourcing and the supply chain at large to one region for all brands globally. While it may offer some relief from the buoyant tariffs being rolled out on the global stage, total reshoring can be unfeasible economically and operationally, market to market. “Behind every beauty product are dozens of specialised ingredients from up to 15 regions globally,” says Nick Benson, founder of Atelier, an AI-driven product development platform. “Most of these aren’t available domestically and can’t be replaced just by relocating factories.” Appler agrees that domestic manufacturing or onshoring offer no easy fix.
Strengthening the supply chain
As brands face mounting global pressures, adapting the supply chain has become a critical focus, alongside navigating alternative ingredients sourcing.
Wayne Liu, chief growth officer and Americas president of software company Perfect Corp, anticipates more companies adopting a dual-region formulation strategy to manage rising costs. For Liu: “Developing new formulations using less expensive or locally sourced ingredients for regions hit hardest by tariffs, while keeping original formulas in markets that remain relatively unaffected, gives brands the flexibility to adapt without overhauling their entire global product line-up.” However, if reformulation is unavoidable, brands must proactively communicate with consumers about the changes to product texture, efficacy, or sustainability and link these adjustments to evolving supply chain pressures, he flags.
Advanced data sets, hyper-personalisation and remapped infrastructures will be what it takes for the industry to scale and embrace AI’s future.
Experts also point to the growing adoption of AI-powered product lifecycle management (PLM) systems, such as Centric PLM, Aptean and Technia, as a key strategic investment. These tools allow brands to respond dynamically to shifting tariffs and cost forecasts. “PLM systems include modules that help buffer volatility by offering real-time-sourcing visibility, cost modelling, regulatory compliance tracking and agile development insights,” says Liu. Schopfer underscores the advantage of PLM-based geopolitical forecasting. “Now, we can anticipate trade disruptions, regional compliance shifts, ingredient availability, or bans, and build contingency plans into our innovation and go-to-market timelines. Today, agility isn’t just about speed, it’s about resilience.”
As sourcing challenges mount, many founders plan to explore new supplier relationships and diversify geographically. “We’ve started looking more closely at suppliers in the UK and in Europe, particularly as costs from Chinese suppliers have risen by 5 per cent across our supply chain,” says Nuno da Silva, CEO of bodycare and fragrance brand Atenai. “Bringing supplier relationships closer to home is making business operations smoother,” he says. Others are making broader strategic pivots. Goldrup says she’s actively investing in growth markets to future-proof operations, though remains discreet about the regions involved.
The CTPA says that its guidance to brands during this volatile period is clear: diversify sourcing wherever possible. “Securing alternative supply options is key to managing unpredictable cost fluctuations and market disruption.” But that advice comes with a caveat. “Scaling up our diversification efforts is no quick fix,” says Glow Mood’s Basset, “building strong supplier relationships takes years. Finding new partners, especially in unfamiliar regions, is costly, complex and time-consuming.” That’s why experts, including Wiltschko, also stress the importance of reinforcing existing relationships. “Open communication with suppliers on pricing, operational constraints and long-term planning can go a long way in reducing friction and finding workable solutions,” he says. Transparent dialogue may offer immediate relief rather than a risky shift to untested partners.
In the end, brands will need to explore a combination of solutions, whether that means reformulating, regionalising, embracing biotech, or deepening supplier ties to navigate the ingredients unknown. What is clear, however, is that agility will be essential. “Brands capable of building a multi-dimensional, adaptive strategy — one that integrates sourcing, compliance, storytelling and innovation — will be the ones that emerge more resilient,” concludes Schopfer.
