Domestic manufacturing continues to gain ground in the U.S., often making the headlines—primarily due to President Obama’s push for industrial revitalization and job growth, and Walmart’s pledge to spend billions of dollars buying North American-made goods.

For beauty brand manufacturers, advantages of working with domestic suppliers can include speed to market, supplier collaboration, tightening the supply chain, overall quality and consistency, stocking, easy re-orders, shipping, lead times and expedient turnkey solutions. Advanced deco techniques in the U.S. have also opened up opportunities for stateside production that may not have existed previously.

Still, every cosmetics launch differs and in today’s global market, many cosmetic-industry packaging suppliers are finding that a mix of domestic and overseas options is necessary to meet brands’ needs.

Brian Tauber, CEO, CPP Global, says, “In an effort to maximize the value we can provide to our customers, offering a domestic and overseas supply option is absolutely critical.” He says not only are there cost differences that may dictate one location over another, but many of their customers have either their own or contracted filling operations in countries that are in or closer to their markets. “If we can provide a single source that matches their objectives,” says Tauber, “we enhance our value as a supplier and potential partner. Once we achieve a true partnership relationship, we—and our customers—can both jointly invest in activities that benefit both companies.”

Tauber explains further: “First and foremost, we feel that having a U.S. manufacturing option is just good business. There are definitely products that are more tailored to an overseas supply strategy, but offering the lead-times, quality and service levels of a U.S.—and global—solution is where the customers realize the greatest value across all of their products, electing which ones to purchase domestically and which ones are appropriate for overseas.”   He says CPP Global expanded over the years to ensure that they could offer their customers both options, allowing them to minimize their supply base and maximize the benefits of working across a much larger platform. “We love manufacturing in the U.S. and providing jobs to our associates, but doing so requires us to have the business fundamentals to be competitive and maximize the value we provide to our customers,” says Tauber.

Ultimately, the ideal situation for optimum production and delivery can be local manufacturing within each regional market.

Essel Propack Americas, LLC is a global company with production facilities from the U.S. to China to India. Wendi Caraballo, marketing manager, says, “Our goal is to supply our tubes within our area/country. For example, our  Virginia plant will supply all of the United States, and our Mexico plant will supply that area to keep shipping costs down for our customers.”

As a global tube manufacturer, Caraballo says their various locations can share innovations and tube capabilities. “If we don’t make a particular tube size in our U.S. plant, we can look to one of our other locations to bring that particular size or option in to complete the customer’s order,” she explains. “That allows us to keep the majority of the business here in the U.S. with only having to look to one of our other locations if we can’t do it here.”

Joe Cicci, president, Color Optics by Arcade, says, “A true global packaging supplier will have manufacturing facilities on different continents with equal production capabilities to provide consistent line image graphics for the brands produced.”

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Cicci says that while Arcade Beauty is a global packaging provider, the stateside turnkey requirements are very important to Color Optics by Arcade. He explains, “With lead times ever shrinking and graphic decorations expanding, domestic supply of qualified high-end packaging suppliers is vital.” He adds, “Many customers are very interested and committed to turnkey suppliers with multi-capabilities and innovative packaging.”

A strong collaboration between Color Optics by Arcade and Arcade Beauty resulted in Urban Decay’s unique package that cross-markets line extensions with having a sample as an integral part of the package. The customer gets to trial a new product sample, as it is part of the purchased package. Arcade Beauty produced the sample and Color Optics applied the sample while in carton production, in Rockaway, NJ.

The same domestic-global criteria apply to machinery. Robert Patetta, regional sales manager, Norden-Kalix-Citus-Volpak-R.A. Jones, says Norden is the No.1 supplier in both the USA and worldwide for tube filling machinery. He explains that cosmetics and personal care products are often different from country to country so usually these products need to be produced in the domestic market they are for, in addition to shipping and rapid time-to-market needs. Patetta says Norden has a presence in every market worldwide “through direct sales or highly qualified agents.”

Neenah Packaging was founded in Neenah, Wisconsin in 1873. Mark Sng, director of marketing, says, “We are proud to be U.S. born and raised. That rich heritage comes into play in every single thing we do.”

Neenah’s products are now available on six continents, and Sng says, “We remain true to our roots no matter where business opportunities take us—authenticity speaks in every language.”

Supplier Collaboration

Sometimes brand manufacturers abroad that are selling/distributing in the U.S. look for domestic suppliers rather than shipping everything from afar. Suppliers are also offering cooperative arrangements and enhanced networking connections to ensure seamless production and delivery.

This was the case with a recent project executed by Disc.

John Rebecchi, senior vice president, Disc, says, “The U.S. personal care product market has become attractive to foreign brands and many are interested in producing their packaging and products domestically. The reasons given typically focus on quality and the ability to quickly respond to market demands.”

“Networking and collaboration are critical in making these relationships work,” explains David Wolf, sales executive, Disc. He says, “We are finding the key to developing this sector is networking. Working with designers, contract fillers, and formulators makes us valuable to potential customers that want help sourcing domestic suppliers.”

For example, Wolf cites Rodial, a UK-based company that is launching their NIP+FAB product line in CVS. “Through a series of connections, we were referred to them as a preferred supplier of folding cartons. We now work with other supply chain members to create a seamless workflow to satisfy their requirements.”

Neenah Packaging’s Sng, also talks about the essential collaborative process between suppliers to get the job done in the most efficient manner. He says when the brand and/or distribution is U.S.-based, there are several advantages to working with a U.S. supplier like Neenah. “First,” he says, “the brand can communicate Made in the U.S. as a tangible customer benefit that aligns with the overarching emphasis being placed on authenticity. Second, the costs of shipping may be significantly reduced. Third, because shipping distances are shorter and often to multiple locations, the brand’s environmental footprint and impact are also reduced. Fourth, the manufacturing lead times and production times are generally shorter than outside the U.S. Finally, the ability to partner with multiple U.S. suppliers on the same project in the States generally makes communication easier. Nothing gets lost in the translation.” 

Supplier collaboration was essential when Reorient, an artisanal herbal house specializing in the creation of one-of-a-kind, edible herbal products, chose Neenah to provide the packaging for its Rose & Root elixirs.

Reorient’s Jess Ng says they decided to source their packaging from a U.S. supplier because “We’ve always believed in a streamlined production process for our products and packaging—the fewer hands involved the better—for efficiency and harmony in design.” She says this is especially true with something as visual, tangible, and personal as paper. “It was really great to have a supplier like Neenah in the country, as well as a local designer such as Aslan Graphics who could work closely with them to test the various options and dependencies for our packaging. Neenah had more options available and of higher quality, and being in the same country, the same time zone, using the same mail service, etc., those things allowed us to move quicker in sampling, selecting and obtaining the right paper for us.”

No Clear-cut Answer

Returning production back to the U.S. is of utmost importance to Transparent Container, according to Eric Clamp, director of marketing. He says, “It’s a topic we’re strongly committed to. We’ve devoted extensive resources to studying the issue, looking for trends, insights, and actionable ideas that our customers and prospects can use in their businesses.”

Clamp says the concept of moving production back to the U.S.—called re-shoring—is steadily gaining momentum in a wide range of industries, fueled by a convergence of factors, including decreasing U.S. energy costs, rising labor costs in Asia, and the public’s increasing expectations for greater customization and faster product cycles in the goods they purchase.

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But he admits it’s not always a clear-cut equation. He says the decision to produce in the U.S. is just as complex as the decision to shift  production abroad. Clamp says this is especially true for brands that have a strong stake in being able to say they’re Made in USA. “Some markets and customer demographics are extremely sensitive to this,” says Clamp. “While many of them readily embrace products made abroad, others bristle at the notion of buying foreign goods.”

Clamp adds that even though many staunch ‘USA-only’ consumers have softened on the idea of buying foreign-made products over the years, most of them would still rather purchase American-made goods to the greatest extent possible.

He says this aspect of Made in USA is hard to quantify. But it’s no less real or significant. “Smart marketers are tapping into this idea increasingly,” he says.

He cites Walmart’s recent initiative to dramatically increase the number of American-made products carried in its stores. The giant retailer has announced plans to purchase $250 billion in products made in the U.S. over 10 years. And at the same time, they’re increasing support for the re-shoring of goods they already buy.

Clamp notes: “With Walmart being one of the more significant barometers regarding consumer goods, we have to interpret this initiative as a billboard-sized indicator that there’s real momentum to the Made in USA trend.”

Accommodating Long- and Short- Lead Times

But Made in the USA has evolved far beyond a marketing trend, offering beauty brand manufacturers quantifiable lead-time reduction, supply chain improvements and additional benefits.
Richard Engel, president & COO, Decotech, explains that Made in the USA matters just as much for lead-time reduction and supply chain improvements as it does for marketing messaging these days. “International lead times are becoming a problem as speed-to-market and cash-flow management become more important strategic issues for our clients and our industry,” says Engel.

He explains: “In the U.S., the need for shorter lead times across the board has made Late-Stage-Conversion a must-have strategy in every purchasing manager’s toolbox.”  He says this works especially well for common glass or plastic forms that are used for multiple SKUs, but works just as well for long-life items. In this way, he says, “The long lead-time bottles or jars are purchased and pre-positioned locally by us or by the client. Then the shorter lead-time decoration process is the only thing left to complete.” 

Engel says Decotech has helped clients significantly reduce their re-order lead-times from 16 weeks to four weeks by employing this technique. “In some cases,” he says, “we are pushing forward to get down to three or even two weeks lead-time on items that require rapid response to sell-through numbers. Our ability to offer this strategy as a turnkey service to our clients has made a large impact and makes things much easier on them in terms of supply chain management and the bottom line.”

USA Made Quality & Pricing

Robert Brands, president and CEO, VariBlend, agrees that the Made in USA story has advanced beyond a marketing slant. He says, “Packaging that is made domestically, with U.S. labor, is more than a “feel-good” story today. U.S. brands root for the home team, for sure. But relentless competitive pressure dictates that component quality must be first rate, and pricing must be competitive.”
He says the trend, therefore, is that domestic quality and delivery times can be superior, and—when all factors are considered—the pricing is extremely competitive.

But price is not the only factor to consider when selecting a manufacturer; and it’s no longer taken for granted that Asian manufacturing is always less expensive.

Variblend’s Brands cites customers that have experienced “cost of quality failure” with components sourced offshore. He says after being hurt, these customers now carefully examine all price factors, not just cost-per-piece.

Transparent Container’s Clamp says there are significant advantages to working with a U.S.-based packaging company like Transparent. “By working with a domestic packaging supplier there are quicker lead times, simpler communication, and more efficient management of projects.”

He says these benefits are in addition to the increasingly compelling cost savings that are being seen with U.S. made goods. “Labor in Asia is getting more expensive and less predictable, while these factors are stabilizing in the U.S.,” according to Clamp. He adds, “Altogether, it’s triggering a huge rethinking of where companies choose to produce and package their products. It’s no longer automatically assumed that shifting production overseas will cut costs and improve the bottom line.”

Lean Manufacturing Processes

Lean manufacturing processes are proving to be a turning point in making U.S. manufacturers competitive and desirable.

Barry Rinaldi, director of business development at Schneider Packaging Equipment, says, “American manufacturing is succeeding in competition against low-cost regions that once attracted companies looking to improve the bottom line. It’s accomplishing this by trimming waste and improving lean manufacturing processes that help keep overhead low.”

The concept is simple, says Rinaldi: If a company operates more efficiently, it can pass those savings on and keep manufacturing dollars domestic. He says Schneider is both a U.S. manufacturer, making all of its packaging equipment by hand in the U.S., as well as a source of competitive advantage for U.S. manufacturers, by offering significant competitive advantages while keeping costs low, largely due to its lean manufacturing processes.

As an example, Rinaldi tells of a private label co-packer that was looking for a solution with a challenging product wrapped in loose plastic “that is hard to manipulate.” He says some products and their packaging are delicate and you don’t want to leave marks or alter or damage them. Schneider created a hypersensitive “End Of Arm Tool” or EOAT, solution that would give them the packaging rate they needed while treating the product gently.” 

Domestic Advantages

Tauber of CPP Global says they’ve seen a growing interest among U.S.-based beauty brands for domestic products. “While we have always maintained a strong domestic business, there is definitely a greater effort on behalf of our customers to source more product in the U.S. While the emotional aspect of Made in the U.S. is possibly a factor, the predominant reason is to enhance their businesses.” He says automation, rising Chinese wages and other cost factors are making the U.S. more competitive, narrowing the gap in piece prices. Add freight, a much greater focus on lead-time, service levels, quality and the inevitable air shipments, and he says their customers are making a much more realistic and comprehensive analysis to the true cost differences between the U.S. and China. “For flagship products,” he says, “our customers’ sense of security is far greater when their components are manufactured in the U.S. versus a lower cost country.”

Neenah’s Sng says they are seeing “a very high number of customers interested in working with U.S. suppliers, and these packaging customers … are emphatic about the benefits and results. “They choose us over non-U.S. alternatives,” he says, “for the overall quality of our materials and manufacturing processes, the customer intimacy we provide, and our renowned consistency, e.g. reorders. They can expect exactly the same packaging whether it was first ordered five weeks ago, five months ago, or five years ago.”

Shipping problems such as the recent labor strikes by West Coast dockworkers have made some brands rethink where their goods are originating.

Essel Propack’s Caraballo, says, “With the recent port issues, we have seen an uptick in customers who were previously purchasing overseas. Customers are willing to pay more to get their tubes domestically. In the long run it can save them money because they will be able to continue to have their product in the market instead of running out of stock because they are waiting on their tubes that are held up with port issues.” Another reason to buy domestic, she says, is that customers also want to support U.S. made products and many will showcase that on their package.

For example, Essel Propack recently provided turnkey services to produce the tubes for Galxee Corporation, which markets Rhemu pain relief products.

Gary Nassiff, CEO, says, “Although we could have gone the way of offshore options, it was always our intent to do business with a U.S. provider in thinking about our  future growth, logistics, delivery time, and banking concerns.” So he was delighted to find and work with Essel Propack.

He explains: “We were trying to source a major six color digital print job for our 6-oz tubes for Rhemu, and were told by our local tube silk screening company that due to lack of U.S.-based full color tube printing technology, the only solution would be China. I was not satisfied with the four-to-six-month lead time, nor was I convinced the order would be handled properly due to West Coast union shipping lane delays at the time. So I proceeded to search for a U.S. solution, which took over four hours to research on the internet, phone calls, and asking a lot of detailed questions. Finally, I found Essel Propak, and they were very easy to communicate with, responsive, and very willing to provide the printing technology required to accommodate our needs.

Nassiff says Essel’s turnkey solution was exactly what they were looking for in the U.S., with all the “whistles and bells” that a professional and competent full color tube printer could offer.

“Obviously,” says Nassiff, “it was quite a relief to know we had sourced this important project in the U.S., and were not forced to deal with China, or some other foreign country and its many potential unknown difficulties and delays.”

Further, Nassiff says the U.S.-based pricing was “excellent, and very impressive as to the manufacturing and printing technology offered in a total turnkey situation, which was exactly what we were looking for.”

Purely Domestic Packages and Capabilities

Providence Metallizing operates exclusively from a domestic facility in Pawtucket, Rhode Island. Richard Sugerman, president says they have an advantage in being able to produce things that cannot be made elsewhere in the world. He has noted some related trends due to the company’s location.

“First,” he says, “when the appearance of a package cannot be reproduced overseas to the brand’s satisfaction, then they seek domestic sources. Also, if the quantity is small and the lead time is short, there may not be time to go offshore.”

Sugerman says for some programs, it is easier to qualify and produce domestically if the requirements are more complex and there could be miscommunication about the exact needs.

Another factor for going domestic: Sugerman says last-minute changes by marketing may not leave enough time to requalify offshore. Additionally, some brand manufacturers want to keep their domestic capacity busy so he says they will source secondary processes in the U.S.

Some of Providence Metallizing’s jobs are for limited editions or small runs. For instance they supplied Victoria’s Secret with a selective metallized coating to the back side of the faceted bottle for the Limited Edition Bombshell Pink Diamonds release last Christmas. After the selective coating, Providence applied a second soft pink overcoat to the entire bottle. This gave the appearance of a mirror when you looked through the bottle from the front side and showed the brand’s name “floating” in the juice.

They also supplied a gunmetal finish to Boom Creative on a glass bottle for a small program. Sugerman notes: “It did not make sense to look overseas because the quantity requirement was small and the glass was already in the U.S.”

Mixed Predictions

While some packaging manufacturers feel confident about the continued rise of domestic production, others see potential pitfalls.

Sugerman says domestic manufacturing is very difficult for the cosmetics industry in general. He says price pressures are always there and “this makes it difficult to compete with low cost-countries in our industry.” He says large investments in plant and equipment are required to satisfy the brands, and as prices are lowered, it becomes challenging to make that money back. In addition, he says, “Sometimes a program may start in the U.S., but get quickly transferred for a lower cost overseas once the brand finds out if the product is having favorable sell-through at retail.”

Brands maintains that domestic success relies on quality, uniqueness and reputation. He says, “It’s important for us at VariBlend to maintain our reputation as a quality U.S. supplier of innovative dispensing solutions. Our expertise in variable dual-chamber dispensing, combined with Made in U.S. quality, creates a compelling proposition.” He says there is no reason to go elsewhere for dual-dispensing solutions, as they have them all, and they are made right here in the U.S. He emphasizes, “The once-overwhelming cost advantage held by other countries, such as China, is shrinking—and fast.”

Brands says, “Not that long ago, the popular wisdom was to source overseas. China, in particular, got a lot of play. Then, cosmetic brands experienced ‘cost of quality failure.’ The products just were not that good. And OTIF [On Time In Full delivery] suffered. With speed-to-market critical, Made-in-America is a compelling quality and value story.”

He adds: “Thanks to this country’s innovative thinking and work ethic, these days U.S. manufacturing is back. Companies should undertake a rigorous, product-by-product analysis of their global supply networks that fully accounts for total costs. China, for example, is no longer the default option.”

Transparent Container’s Clamp, believes, “Everything goes in cycles, including the question of where to produce and package.” He says, “Now we’re seeing convincing evidence that the pendulum is swinging back in favor of domestic production. We strongly believe there’s a lot of life left in the Made in USA trend.”  

Making a ‘Made in USA’ Product Claim Ads are coming under close scrutiny

Truth in Advertising (TINA.org) is a non-profit organization based in Madison, CT, that guides consumers to protect themselves against false advertising and deceptive marketing.
Recently, they blew the whistle on Revlon for their “Almay Simply American” advertising campaign.

While Revlon denied that the campaign was deceptive, the cosmetics giant made changes to its online presence soon after, substituting the slogan “Almay The American Look.”

Revlon’s actions come just six weeks after TINA.org published the results of an investigation that revealed that more than 95% of Revlon’s Almay line of cosmetics sold on its website failed to meet the legal standard for the “Made in the USA” claim implied by the slogan, “Almay Simply American” coupled with a marketing campaign filled with patriotic symbolism.

TINA.org also recently took Walmart to task on its use of false and deceptive Made in the USA labels found on over 100 products on its website. Walmart is in the process of making corrections.
The basic legal premise is explained here: www.truthinadvertising.org/made-in-the-usa/

For more on Truth in Advertising’s activities in the beauty industry:

www.truthinadvertising.org/category/learn/consumer-information/beauty/

www.truthinadvertising.org/ftc-ignores-pleas-make-loreal-pay/

www.truthinadvertising.org/willa-girls-no-junk-claim/

 www.truthinadvertising.org/tag/made-in-usa/

Websites Promoting ‘Made in USA’ Cosmetics

Many beauty consumers have taken up the torch in support of U.S.-made cosmetics, and there are a number of online retailers that now offer these products exclusively, or in a separate section on their site.

• www.youbeauty.com

• www.cleopatraschoice.com

• www.usalovelist.com/clean-beauty-brands-made-in-usa/

• www.americansworking.com/healthandbeauty.html

• www.vermontcountrystore.com/store/jump/Health_&_Beauty/Made_in_the_USA/cat880024

U.S. Brands and Packaging Designers Get Specific

In addition to customers choosing U.S. manufacturers, Mark Sng, Neenah Packaging’s director of marketing, has noticed specific trends relating to U.S. customers’ packaging requirements.

Sng says, “U.S. brand marketers and packaging designers have long sought to differentiate through color. Domestically we are receiving more queries from brands to help them use a particular color on their packaging and be able to extend that same color across to their brand collateral and marketing materials.” Texture is also important, says Sng. “Cosmetic and beauty brands go to great lengths to test and understand how their product may feel on the skin once it is applied, e.g. smooth, shimmery, glistening, etc. More are thinking about how those same attributes may be integrated into the design of the package through the use of high-touch textured papers and unique finishes.”

Environmentally responsible features have also gained ground with U.S. brands, says Sng. He references a recent study which found that 55% of global online consumers across 60 countries say they are willing to pay more for products and services provided by companies that are committed to positive environmental impact. “U.S. customers, given a choice,” he says, “are willing to put their money where there heart is; brands are continuing to put environmental considerations first. They continue to seek third-party certifications, such as those we offer through the Neenah Green program, to validate their claims across the supply chain.”