Beauty companies—from large industry players to niche ones—are turning to “turnkey” providers for a variety of reasons, including cost incentives, speed-to-market, innovation, and overall harmonious production.
“Smaller companies might not have the staff or experience for a particular project.Companies also outsource when they have too much “on their plate,” enabling them to not have to postpone a particular launch. Often a turnkey approach can bring a product to market much faster than if it was handled ‘in house,’ ” explains Mike Daum, director of sales and marketing at VPI, which provides turnkey solutions in skin care, color cosmetics, fragrance, brushes, and retail GWP/PWP programs.
“Fresh ideas and innovation are often natural outcomes from reaching out to a turnkey manufacturing partner. Turnkey doesn’t have to negatively affect the bottom line,” he says, adding that turnkey partners can be given a budget to meet, just as companies would do internally.
The terms “turnkey” or “full service” are used to describe the utilization of an outside company to bring a company’s concept or product to a market-ready state.“It’s similar to “outsourcing” without quite the negative connotation,” Daum says. “The service can be expanded to the point that the full-service partner also participates in the branding and marketing of the product, which is a service that VPI provides.”
“We are a turnkey company, and turnkey has taken on many forms. We offer turnkey from a variety of locations—product from Italy, the U.S., China and Japan,” says Anthony DeMarco, executive vice president HCT East Coast. “The flexibility to fill domestically or internationally offers our clients huge advantages when launching in different markets or meeting tight time constraints.”
Flexible Services on the Rise
The range of services varies depending on the customer, according to David Wormser, chief operating officer, of Wormser Corporation. “Our turnkey services can start with brand development and marketing, include product formulation and filling services, packaging design and development, and finally logistics including the possibility to handle all distribution.”
Client interest in turnkey services has increased in recent years. “Brands realize that there are economies associated with turnkey partners. They can focus their resources on marketing and the development of their brand while letting the turnkey provider handle all the operational aspects of their business,” he says.
Overhead costs need not be incurred for these activities. “This trend started with smaller niche players in the market, but is now beginning to penetrate the larger, corporate brands,” Wormser adds.
While turnkey advantages include cost savings, that’s not the only benefit. “Turnkey partnerships allow product and package to be developed in a more harmonious fashion. Innovations in both formula and delivery systems can be coupled to provide brands with extremely interesting new product stories.Also, brands can take advantage of sourcing opportunities in regions where they may not be familiar with the supply base, such as Asia,” Wormser explains.
Most recently, Wormser Corporation has seen a heavy demand for multiple product kits that can be used either to promote open stock products or as a main line item themselves.Also, the nail category has experienced a lot of activity.
Sandra Hutson, sales and marketing director, at Topline Products Co. Inc., has also seen a rise in demand for turnkey services.“As brands are streamlining resources, it has become even more important for companies to deliver a service that saves them time and makes it easier for them to add new products to their portfolios,” she says. “Topline has a dedicated team built around the specific needs of each customer, committed to delivering a perfect beginning-to-end service. We can manage the entire process from conceptualization and design to final delivery—developing the product concept, packaging and formulation while controlling all manufacturing, filling and assembly, and logistical requirements.
“Turnkey partnerships allow brands to outsource the creative process of developing new products especially as we can provide input from concept creation and then continue to develop and deliver a finished, ready-to-go product. Also, it gives brands another source of input for innovative ideas that they may not have thought of internally,” Hutson explains.
Speed to market, of course, is another key advantage. “Turnkey services not only offer quick turnaround, but also, coupled with a global partner like Topline with its strong international network, the ability to efficiently launch products in virtually any market worldwide. This type of flexibility and agility makes our turnkey services so attractive for customers, she says.
Betti Ann Catino, director of product development for World Wide Packaging (WWP), has also seen an increase in turnkey service demand. “Because most package manufacturers are overseas and we are in New Jersey, World Wide Packaging can offer attractive pricing when bundling component and formulation services.It becomes easier for the customer—especially for niche brands—and comes with the cost and convenience benefits of having a “one-stop shop” at work for the customer,” she says.
The company is a full-service beauty manufacturer that offers development from concept to delivery, from cosmetic filling straight through to primary and secondary packaging and market readiness. The company provides all types of cosmetic formulas. Lip products are its most popular, but powders, especially customized ones, are in high demand.
“We can offer very competitive pricing when bundling all services together.It is also a plus in terms of logistics—having everything take place ‘under one roof,’ so to speak, means the whole process is right there in front of you and therefore easier to assess,” she explains.
HCT’s full one-stop-shop approach carries tremendous added value, according to DeMarco. “Today, customers want to streamline their development and production process, and by offering turnkey with product from various locations—this has piqued their interest further,” he says. “We are there from the inception of product and package development, through engineering, manufacturing, filling and assembly into finished goods. As many of the factories are owned by HCT, it provides our clients with peace of mind that we are in full control of the complete process.”
CoValence Labs offers clients custom and private label formulations, R&D, packaging, manufacturing, filling, shipping and international services. “We have custom and private label options for our clients, because we have seen where both product strategies have been advantageous for our clients’ success. Private Label offers faster turnaround time for our clients, due to that they can avoid the R&D process and the product Marketing White Papers are already prepared for them. Our account and sales executives are our clients’ advocates at the lab. The AEs and SEs understand their clients’ company philosophies, helping them succeed by taking care of business at the lab,” says Melinda Wochner, COO/VP of marketing at CoValence Labs.
The company also has chemists and scientists in its R&D departments to create innovative skin care products and ingredients. “Our scientific expertise helps our clients stay outside the proverbial box,” she says. “We also carry a variety of packaging for our clients, if they do not want to spend the money nor the time with their own packaging vendors.”
The manufacturing, filling and shipping departments work synergistically to get product out the door in a quick, “turnkey” manner, says Wochner. “Our international department works with our clients to help them navigate the ever confusing red tape when it comes to exporting/importing skin care products. This valued assistance frees up our clients to do what they do best… selling and growing their businesses,” she explains.
On average, CoValence can formulate, fill and deliver a new innovative product in less than four to six weeks after receiving the client’s packaging and/or labels.“We carry a range of bottles, jars, airless and tubes for our clients to choose from, which could speed up a launch date faster than four to six weeks,” she says. Additionally, the company’s Vault (Private Label) division has several private label innovation lines for men and women including, A Few Good Men, Eye Mageddon, and After Hours. Currently, CoValence is working on patenting a number of its own proprietary ingredients, which will help clients stay ahead of the pack, according to Wochner.
The experience turnkey partners bring into the equation cannot be overlooked. This is essential when it comes to innovation and packaging solutions. “The biggest advantage is having the ability to create our packages around formulations,” notes HCT’s DeMarco. “This allows for quick innovations and presenting new innovations as a turnkey.We have a hand in both the product and package and that leads to a proven out solution, which can be taken quickly to market.”
Topline’s Hutson emphasizes that innovation is a key part of helping clients stay on the cutting edge. “Innovation, custom design and tooling are essential in turnkey services. Our in-house engineering team will create custom packaging (both primary and secondary) to suit any customer’s need,” she says. “We have been granted almost 50 utility patents—proof of our innovative accomplishments. Topline thus becomes a true partner to its global customers. Our custom design capabilities are a major value added within our turnkey services.”
Fully Integrated Package
For over 14 years, Nu World Beauty has been a silent partner with some of the beauty industry’s biggest names and most promising start-ups. “More and more people want turnkey service for manufacturing. We give our customers the services of full component and secondary sourcing, art design services and all formula development. We are their partner in the business development and even in shipping and distribution if needed,” says Joe Moreno, senior vice president, contract packaging and development, Nu-World Beauty.
“The advantages to this type of service are offering customers a fully integrated package that allows them to focus on the big picture of their brand while we focus on the sourcing and manufacturing. We also have larger buying power than an individual brand since we are doing turnkey business for many,” says Moreno.