A taxonomy of the beauty industry
Two years ago, I left a career as a Big Tech PM to join a scrappy seaweed start up selling novel ingredients into the beauty industry.
In the process, I got a crash course on the beauty industry and the different companies and people that make the products that fill our stores and homes. I’m not going to say it’s inscrutable, but it did take some time to get my head around.
In general, I think people write down stuff like this less than they should. It’s not proprietary, it doesn’t take much time to do, and it can be immensely helpful to people trying to learn a new field.
In this spirit (and because I love taxonomies), here is a simple overview of the different players in the beauty industry, the types of people that work at them, and some notes on what motivates them. I’ve put specific examples of these types of players in parentheses below because it always helps me to be able to match a real example to the type.
Of course this is a simplified view of the industry, ignoring some of the ways that organizations in the space play across these boundaries or some of the other roles involved (e.g., regulatory consultants), but I think it’s useful as an initial primer.
Brands (Drunk Elephant): Brands market and sell products to consumers either directly through their websites or through retailers They can be majors (Estée Lauder) or independent (Dieux). Most brands do not actually manufacture products they sell themselves, but do this through Contract Manufacturers. Many of them also outsource their formulation, either to Contract Manufacturers or Formulators. Brands are motivated to grow revenue and build consumer loyalty by launching distinctive, on-trend products that balance performance, cost, and storytelling.
Retailers (Sephora): Retailers sell products that brands make to consumers. They typically do not make their own products or if they do have their own line, it’s just part of what they carry. They give consumers a central place to browse products across brands and categories and create value through their selection. Retailers aim to maximize sales and customer retention by curating compelling assortments that drive traffic and basket size across multiple brands.
Contract manufacturers / CMs (Allure Beauty Concepts): Contract manufacturers make products on behalf of Brands. They buy ingredients and packaging and then turn those into products that people buy for Brands. They frequently hire cosmetic chemists in house to create formulas for the brands that they work for, but will also take formulas Brands have created themselves or through Custom Formulators. Contract manufacturers are focused on keeping their production lines full and profitable by securing recurring brand partnerships and offering value-added services like formulation.
Formulators / Custom formulators (KKT Labs): Formulators are cosmetic chemists that sell Brands a formula that they can take to a Contract Manufacturer and have that made into a product consumers can buy. They are usually independent consultants, but sometimes small teams. Brands sometimes prefer to work with a Custom Formulator because then they own the formula and can shop it across multiple Contract Manufacturers to try and get a better price (when the CM formulates on behalf of the Brand, it is typical for them to own the formula rather than the Brand). Custom formulators are motivated to build trust and repeat work by offering differentiated formulas and acting as an outsourced R&D partner for brands
Suppliers / Ingredient manufacturers (Mibelle): These companies make ingredients for use in beauty products. They sell to Contract Manufacturers, but have to influence Brands and Custom Formulators in order to drive sales. They typically work with Distributors who represent their products to these different groups. Ingredient suppliers seek to grow sales and adoption by getting their ingredients specified in hero formulas and building trust through efficacy data, claims support, and education.
Distributors (Catalyst Technologies): Distributors sign distribution relationships with Ingredient Suppliers to represent and sell their products to Brands and Contract Manufacturers. They try to have a balanced portfolio of different ingredients that makes them more relevant to a Cosmetic Chemist than any one Ingredient company could be on their own. They act as a salesforce for the Suppliers. Distributors are driven to increase sales across their ingredient portfolio by being a trusted, convenient resource for cosmetic chemists and formulators.
2025-06-17