How to reduce the cosmetic formula cost?

As a cosmetic chemist, creating highly functional formulas with great aesthetics that please consumers is your main job. But as a formulator who works for a company concerned about the bottom line, you will also likely be asked to make your excellent formulas in a less expensive way. At one time or another, most formulators are given cost savings projects. Here are five strategies you can use to reduce the cost of your formulas without significantly impacting performance and aesthetics.

1. Eliminate unnecessary ingredients

Often, you will inherit your formulas from someone who worked at your company before you, and you won’t know what all of the ingredients do. In reality, there may be some ingredients in your formula that are completely unnecessary. These represent a great opportunity for cost savings not only in terms of formula cost but in terms of raw material storage costs. To figure out if an ingredient isn’t necessary, you should do a knockout experiment and compare the formula with and without the ingredient. If you can’t tell whether a missing raw material is in the formula or not, you don’t need it.

2. Reduce the level of claims ingredients

Another source of cost savings is the claims ingredients that you’ve put in your formula for the marketing story. These feature ingredients are frequently more expensive additions than standard ingredients, so you can save a relatively high amount of money by reducing the levels. If you are using an extract at 0.5% or more, you’re probably wasting money. It’s highly unlikely that a consumer will be able to tell whether your extract is in the formula or not. Verify it yourself by doing a knockout experiment. On a blinded basis, see if you can pick out versions of your formulas that both have and don’t have an extract. If you can’t, then you can reduce the level to almost nothing. For example, using a level of 0.01% of an extract in the formula is not unreasonable when you’re looking to cut costs. You can’t go down to 0% and still list an ingredient in the formula, but you can cut the levels fairly low.

3. Reduce the fragrance level

In many formulas, fragrance contributes the most to the cost of the formula. Also, it’s frequently used at a level higher than required. To get a quick cost savings, try cutting your fragrance level in half and see if a panel of consumers can tell the difference. You will be surprised how few people will notice even a 50% reduction. If people do notice the difference, try reducing your fragrance level by only 20% or 10%. You probably have more fragrance than necessary and when you’re looking for a quick cost savings, that’s an excellent place to start.

4. Find less-expensive alternative ingredients

When formulating, we frequently use the first ingredient that suits our function. And while you may think your specialty emulsifier or ultra smooth emollient is great, it’s likely you could replace them with a less expensive but approximately equal alternative. It is surprising how few differences non-trained beauty product consumers notice. I remember creating a great two-in-one shampoo formula and then compared it to a basic shampoo formula that looked and smelled the same. Unfortunately, 14 out of 15 panelists didn’t notice any difference. To me, the differences were night and day, but to most people, they were the same. So remember, just because you can tell a difference, doesn’t mean your audience will have the same ability. This is also a good time to remind you that whenever you’re doing cost savings work, you should always do blinded studies. You are a biased evaluator and you should not rely on your own evaluations when making decisions.

5. Increase the solvent level

The last strategy to reducing the cost of a formula is to just add water or increase the solvent. This only works for aqueous formulas. However, most personal care products are water-based. When you add water, you reduce the overall concentration of all the other ingredients. This reduces the cost of the entire formula. Depending on the formula, you can add up to 5% more water and not notice any difference. This could be a significant cost reduction. A word of caution with this approach: Don’t decrease the level of your preservatives. Adding more water increases the chance of microbial contamination, so you want to maintain a good level of preservation. Foranhydrous formulas, you can use this strategy by increasing the level of your main solvent likemineral oil or propylene glycol as the less expensive diluent.

While creating new formulas consumers love is a satisfying endeavor for cosmetic chemists, reducing the cost of formulas is also an important role for you at your company. If you can find hundreds of thousands of dollars in cost savings, you will be a company hero.

One final bit of advice: When you are first developing your formulas, don’t worry so much about optimizing them. When the product is successful, your marketing or sales group will no doubt ask you for a less expensive alternative. If you optimize formulas at the start, it will be much harder to find cost savings later down the road.