The cosmetic industry is poised to see 7% annual growth over the next five years and is expected to reach a market value of more than $800 billion by 2023. As the industry grows and welcomes new entrants, it is more important than ever for cosmetic stakeholders to comply with the latest regulations regarding ingredients of concern, such as allergens, parabens, and residual toxins.
With this in mind, the Cosmetic Compliance Team surveyed 600+ industry leaders to uncover where cosmetic compliance is heading in 2019. The report uncovers the industry’s leading compliance challenges, priorities, investments, and much more. Based on our survey results, here’s a look at the top three compliance challenges for beauty brands in 2019:
International regulations are the largest compliance challenge for cosmetic brands in 2019, with 60% of survey respondents indicated this as their largest challenge. As those in the cosmetics industry know all too well, international regulations rapidly change, which means regulatory and quality officers have to continuously stay up to date. Just last year, China announced the establishment of the State Administration for Market Regulatory (SAMR) which covers cosmetics as well as food and drugs. As the second largest cosmetics market globally, the impact of tighter safety monitoring and new cosmetics classifications is still rippling through companies operating in or seeking to enter the Chinese market. Failure to comply with new regulations can result in fines ranging from $25,000 to upwards of $250,000. For smaller independent brands, fines like these can easily put them out of business.
The survey found claims substantiation to be the second largest compliance challenge for cosmetic brands in 2019, with 49% of respondents indicating this challenge on a company-wide level and 52% indicating it on an individual level. Claims substantiation is a growing industry challenge due to the increasing popularity of “natural” and “organic” cosmetic products. Presently, there is no formal definition for “natural” products in cosmetics, which has increased the potential risk factor for claims. That being said, it’s difficult in today’s regulatory climate to write truthful claims supported by adequate scientific evidence with no formal definition for “natural” cosmetic products. How are product claims managed at your company today? If you’re like many companies, it may be through a mix of excel files, email records, and documents stored in multiple locations.
Testing and Ingredient Requirements
The third largest compliance challenge for cosmetic brands in 2019 is testing and ingredient requirements, with 41% of respondents indicating this challenge on a company-wide level and 39% on an individual level. This challenge can be largely attributed to the two new bills regarding testing and ingredient requirements that have come to light in recent years. The first bill, known as the bipartisan Personal Care Products Safety Act3, sponsored by Sens. Dianne Feinstein (D-CA) and Susan Collins (R-ME), would give the FDA more oversight over the industry in general. This bill would require the FDA to test at least five ingredients a year for safety; companies would have to submit their ingredient lists to the FDA; and companies would be required to report adverse events to the FDA, among other things. Sen. Orrin Hatch (R-UT) has also proposed a cosmetics safety bill, known as the FDA Cosmetic Safety and Modernization Act.