2014-04-15 14:28:55

Unlocking the Advantages of Turnkey Packaging

2014-04-15 14:28:55

 Written by Joanna Cosgrove, Contributing Editor

In the fast-paced beauty and cosmetic environment, speed to market is paramount. But creating a product from scratch takes time and resources. That’s where the turnkey process comes in. According to the providers of turnkey formulations, packaging and related services, the convenience of the “one-stop shopping” process is only one of its many benefits.

“Quality, on-time delivery, support, and cost/value are the areas that cosmetic and personal care brands are most concerned with when considering a manufacturing partner,” says Fahad Siddiqui, RNA Corp., Blue Island, IL. “Coincidentally, these areas realize the most benefits from turnkey operations.”

The quality of a finished product is not only determined by the chemicals or processes used, but also by the packaging selected for labels, bottles, and dispensing caps, says Siddiqui. “When manufacturers are responsible for the purchasing of packaging and chemicals, they can utilize quality control procedures to select the best vendors for both, resulting in a higher quality finished product.”

HCT Packaging’s “one-stop shop” philosophy afforded Sephora the ability to concentrate on pure product development, branding and marketing during the creation of its Pantone Color of the Year Collection.

Turnkey service providers like RNA routinely perform in-depth vendor evaluations to maintain control over the entire supply chain, including raw material procurement, packaging build quality and consistency—all of which keep a lid on just-in-time delivery and lead time variability.

And, Siddiqui adds, when a company has access to all the information of the supply chain, it grants better visibility and ability to communicate the status of a project. “Since turnkey operations place all the logistics responsibility on the manufacturer, costs are reduced for brands allowing them to focus on creating and capturing more value from the market,” he says.

Turnkey suppliers can also bring cutting-edge innovation to customers that may not have specific core competencies in their wheelhouse. “Utilizing a company that offers full services can offer expertise and resources that they may not have internally,” says Karla Horton, marketing manager, Unicep, Sandpoint, ID. She adds that the flexibility and responsiveness of a turnkey service provider can also help customers navigate potential pitfalls. “A company that offers turnkey services is typically very flexible and agile,” she says. “For cosmetic and personal care companies, the specifications and project scope may change from beginning to end. Having a flexible partner can make a huge difference.”

In most cases, the customer can be as hands-on (or off) as they want to be during the turnkey manufacturing process. “The most attractive aspect of the turnkey process for our customers is that they have every step of the way managed for them—the only thing a customer has to do is review and approve,” says MaryEllen Bohren, marketing supervisor, Verla International Ltd., New Windsor, NY. “This is especially important for clients who are new to the industry and don’t feel they have the knowledge or ability to get their products to market without assistance from experienced professionals. They may have a concept, but don’t know how to turn their ideas into reality—we make that happen for them.”

Topline produced Pixie Powder Nail Polish and Glitter for Claire’s Boutique, a 2-in-1 nail polish with shimmer in the cap.

Sandra Hutson, sales and marketing director, Topline Products, Wayne, NJ, agrees. “Outsourcing the creative process, in itself, improves creativity for the brands as it gives them access to an outside expert who can provide a new point of view or solution.”

Jack Rodriguez, president, JMR Development LLC, New York, NY, points out that the turnkey route is a flexible fit for companies both big and small. “For smaller entities it’s typically about financing, and having access to full service support. For medium size companies it’s usually about product expansion without adding overhead,” he says. “For larger companies it’s often about cost savings, or bypassing internal red tape and accomplishing speed to market on a new innovative product. In short, everyone has something to gain from third party turnkey support, once they can understand and identify what benefits them most.”

Ready-Made Solutions

Whether it’s an initial launch for a small start-up company or a line extension for a long-lived, globally renowned brand, turnkey services providers can accommodate just about any need.

Topline’s team manages the entire product development process from concept to final delivery. The specialists manage all aspects of packaging design, formulation/R&D, logistics and quality control to ensure the development process runs smoothly and, most importantly, on time. “We produce 3D renderings and mock-ups to help brands visualize what the end product will look like which is enormously more efficient than conventional trial-and-error processes,” says Hutson. “As we are a global company with manufacturing locations in the USA, Mexico and Asia, we have the ability to effectively launch products anywhere in the world, adapting to the unique needs of each customer. Offering this kind of flexibility and agility has been essential to help brands maintain their competitive edge.”

Topline recently produced a turnkey item called Pixie Powder Nail Polish and Glitter for a customer that was looking for a unique product to add to their nail category. “We proposed a 2-in-1 nail polish and shimmer product that allowed the consumer to customize her manicure using Topline’s patented sprinkle shimmer cap,” says Hutson. “This was an ideal solution as it was quick and easy to use—apply nail polish and then before it dries, sprinkle on the glitter ‘Pixie Dust’ top coat.” 

Because Topline managed the entire process from beginning to end, the company was able to react quickly and adapt easily to the changing demands from the customer. “Developing a project that required complex logistics while maintaininga cost-efficient price would have been a horrendous challenge for a typical, non-turnkey supplier,” says Hutson. “We were able to handle all of the logistics in our internal facilities—filling and assembling the glitter cap in our factory in Asia, then filling the nail polish and packing out the finished product at our Mexico facility—while still maintaining a competitive price and on-time delivery to the customer.”

For JMR Development, the definition of turnkey is broad and evolutionary because it adjusts to fit each customer’s unique needs. “Rarely are two templates exactly alike,” says Rodriguez. “For example, we have clients who consider turnkey to be the procurement of all primary and secondary packaging for any given program from one single source. Then we have clients who consider turnkey to be the development of a complete product from the creative and marketing development, to the technical package and product development, to final fill, assembly and packout of ready-to-ship goods. Then there is everyone else in between. Ultimately it’s our goal to understand their DNA, see where the void is, and fill it seamlessly.”

Recently JMR convinced a veteran U.S. customer to re-evaluate its elaborate global manufacturing process. “One of their star products [was manufactured via] shipping components to America from China, filling and packing the goods state-side, and then shipping it back to sell in the Asian market,” says Rodriguez. “[It] was killing their cost of goods, speed to market, and ultimately their profits.”
Within six months JMR set up and managed fulfillment for the company in Hong Kong, bringing in all packaging components from mainland China and the product bulk from the states. “This cut months off their lead-time, reduced their overall COGs by nearly 40%, and opened the door to more retail partnerships in Asia as they were now able to meet a greater demand that they couldn’t do under their old logistics model,” says Rodriguez. “This story, although not very sexy in respect to development, led to substantial revenue growth for this particular product, which is very sexy!”

Verla International offers complete turnkey options including marketing assistance, cosmetic manufacturing, blister, shrink and cello wrapping. The company’s R&D lab provides quality formulations based on the customers’ requirements, while its innovation team will assure that the customer furnishes the most up-to-date and innovative packaging and design. The company also handles the logistics of shipping the finished product, including drop shipping and its pick and pack facility, which has complete EDI capabilities, making shipping to multiple locations easy.

Verla’s broad suite of services was no doubt a key consideration when the company was approached recently by a prospective client in need of a unique mascara formula to be showcased in a creative package. “We, along with other U.S. and European labs, submitted a formula and packaging prototype that they blind panel tested,” says Verla’s Bohren. “Our product was selected and ultimately became an award-winning formulation. Together, with our help, this company has been able to sell large quantities of their product and make a name for themselves in the very competitive beauty industry.”

For two decades, HCT Packaging, Santa Monica, CA, has provided turnkey solutions out of China and Italy, but recently broadened its comprehensive catalog of formulations by forging partnerships to provide specialty formulations from Japan and Korea. The company’s “one stop shop” philosophy afforded Sephora the ability to concentrate on pure product development, branding and marketing while still directing the creative elements of the brand, during the creation of its Pantone Color of the Year Collection. 

Unicep’s turnkey production services can be helpful when it comes to unit dose and product sampling endeavors.

The product assortment features brushes from HCT Brush in Tianjin, cardboard and paper products from the company’s partner suppliers in China, and plastic packaging from both partner and HCT facilities. Metal and jewelry items came from both HCT metals and partner factories, with the fabric elements contributed by Sephora’s chosen European suppliers. The makeup formulas came from HCT facilities and/or European and North American supplier partners mandated by Sephora. 

“The logistical challenges in coordinating all of these various products across the globe are obviously huge and in our experience can only be overcome by utilizing this ‘turnkey’ model,” explains Alberto Acquati senior vice president and Nick Gardner executive vice president, HCT. 

A long-time customer of RNA recently went through a major overhaul of its organization, converting their business strategy to focus on pure marketing and branding. The reorganization led to the customer completely removing themselves from logistics responsibilities, except for new product development and formulation. To meet the new needs of this client, RNA ramped up its technology and business process to take on full responsibilities for chemical and packaging purchases for over 200 SKUs. At the same time, the customer went through a major branding overhaul with a new logo and reformulations to be Prop 65 compliant, which meant over 150 new product labels and formulas had to be recreated.

LL Cream (Liquid Lip Cream) is one of Lady Burd’s best-selling non-branded quality products. The highly pigmented, semi-matte gloss is infused with a blend of oils that refresh, cool, and soothe lips while applying a smooth layer of rich color.

“Technologically, RNA revamped its ERP systems to handle the additional workload caused by purchasing, receiving, and inventory management,” says RNA’s Siddiqui. “One very important improvement made was the ability to track packaging consumption on the production line in real time. RNA also changed its technology and business process to meet or exceed ISO 9000 standards.”
The resulting adjustments allowed RNA to control more of the supply chain, resulting in just-in-time purchasing, higher packaging options, and decreased plant cycle time for the customer. “By controlling the purchasing decisions, RNA could accurately place orders so the packaging deliveries match the production demand, reducing stagnant inventory in the warehouse and inventory turnover times,” says Siddiqui. “Furthermore, since our team wasn’t locked into any one vendor, we were able to find the best quality suppliers that allowed for a higher quality and more consistent product. Lastly, by removing the logistics responsibilities, we became more of a partner with our customer than before and trust between the companies became stronger.”

Turnkey production services can also be helpful when it comes to unit dose and product sampling endeavors. Two companies with expertise in these applications are Unicep and Whippany, NJ-based Le Papillon-Bioplan.

With competencies in formulating, compounding and unit dose contract packaging, Unicep offers tubes, pouches/sachets, syringes, blow-fill-seal unit dose packaging that can be customized to support any brand. “Our blow-fill-seal unit dose packaging options are very popular with our cosmetic customers right now,” says the company’s Horton. “We can offer our standard shapes and sizes (ready to fill) with color and label branding to match their product brand. From a formulation perspective, we have customers that bring us an ‘idea’ and we team with them to create a formulation; we also have customers that bring us a formulation that they would like us to assist with improving.” 

Le Papillon-Bioplan has made structured acquisitions to give the company the ability to provide full turnkey for all beauty, fragrance, and cosmetic markets within sampler, promotional or miniature packaging. “Under the Ileos group of companies, Le Papillon Bioplan has the unique ability to offer turnkey (full or partial) sampling and promotional packaging solutions to our customer base for the large global projects, as well as still keep the expected high level of service and attention for our smaller local customers,” explains Shannon Payne, the company’s vice president of sales and marketing. “Our capabilities specific to the U.S. include spray/plug vial on card; rollerball and miniature spray packaging; form-fill and seal blister packaging; packette development and fill; tube filling; fragrance blending; gift set assembly, as well as engineering of all the primary and secondary aspects of these sampler and promotional packages.”

“Almost anyone will benefit from doing turnkey projects,” concludes Roberta Burd, CEO of Lady Burd Exclusive Cosmetics Inc., Farmingdale, NY, a company with a long history of creating and manufacturing a full range of color cosmetics, skin care and mineral makeup products. “Why reinvent the wheel when you can have a team of experts who have been doing this for decades do it for you.”