With uncertainty around movement to update cosmetics oversight in the U.S., big-box retailers emerged as surrogate regulators in 2013, announcing programs to address safety and transparency concerns related to cosmetic ingredients.

The year also saw industry members taking action to phase out use of controversial substances, in some cases despite the lack of compelling science demonstrating health risks.

Such developments were among topics driving stakeholder interest in 2013, based on analysis of “The Rose Sheet” website activity, and depict an industry increasingly influenced by, and responsive to, public perceptions and demand.

Regulatory Modernization

In the U.S., the push continued in 2013 for modernized cosmetics oversight. With pressure mounting from NGOs and draft legislation emerging that would impose significant burdens on cosmetics manufacturers, the Personal Care Products Council, the Professional Beauty Association and other industry representatives entered into discussions with FDA in December 2012 to devise a legislative plan of their own.

In September 2013, industry hit a snag in its negotiations with the agency, but PCPC maintains that its commitment to updated requirements for cosmetics manufacturers has not wavered ([A#02131028009]).

According to Lisa Powers, PCPC’s senior vice president of public affairs and communications, “we have spoken with FDA and are finalizing our written response (draft bill language) to them.”

The group, which has been working to schedule an in-person meeting with FDA reps, expects continued discussions with the agency in 2014.

PCPC’s senior leadership indicated previously that the proposed framework under development will likely include mandatory registration and ingredient filing with FDA, while authorizing the agency to enforce Good Manufacturing Practices and order product recalls Also see "PCPC, FDA Negotiate Oversight Bill With Possible State-Law Preemption" - HBW Insight, 19 July, 2013..

It could also require firms to report adverse events, a practice that is voluntary under the current system, and require FDA to review selected hot-button ingredients for safety.

To industry’s benefit, the proposal could include language toward state-law preemption, prohibiting and/or nullifying conflicting cosmetics safety requirements at the state level, according to PCPC.

Such laws have been cropping up at a rising rate, posing a growing burden on manufacturers and making federal preemption a top priority for industry advocates.

In Europe, July 11, 2013 marked the deadline for manufacturers and importers of cosmetic products to be in compliance with the EU’s new Cosmetics Regulation, which replaced the unwieldy Cosmetics Directive from 1976, streamlining and harmonizing oversight across European member states Also see "EU Ushers In New Cosmetics Regs; Experts Offer Perspective" - HBW Insight, 29 July, 2013..

The regulation frames the European Commission’s expectations for cosmetic safety assessments, with subsequent guidelines published Nov. 26 to clarify the requirements for companies Also see "New EU Safety-Assessment Guidelines Clarify Cosmetics Regulation" - HBW Insight, 23 December, 2013..

It also mandates that firms designate a “responsible person” for cosmetic products placed on the European market, charged with ensuring compliance with rules for safety assessments and labeling and serving as custodian for Product Information Files.

Further, the regulation includes provisions for enforcing the EU ban on cosmetic animal testing, which entered into force in March 2013 Also see "EU Hopes To Make Animal-Test Ban Global Model" - HBW Insight, 18 March, 2013..

India and Israel have followed suit with bans of their own, and Cruelty Free International predicts that ASEAN countries may be next to harmonize the region’s animal-testing regulations with those in the EU ([A#02131202004]).

Meanwhile, Russia has clarified that alternative testing strategies are acceptable under its cosmetics safety regime, and China issued a final notification in December eliminating the animal-testing requirement for non-special-use cosmetics produced domestically [see related news brief, p. 14].

According to China-based consulting firm Chemical Inspection and Regulation Service Limited, it is unclear whether similar exemptions will be extended to manufacturers of special or imported cosmetics, but foreign companies may be able to market cosmetics in China sans animal testing by finding a toll manufacturer to produce them locally.

Ingredient Concerns Drive Action

Concerns about cosmetic ingredients continued to draw media attention in 2013, prompting action from regulators, industry and retailers.

Reports in the U.K. of a growing “epidemic” of allergic reactions to preservative methylisothiazolinone and related substance methylchloroisothiazolinone, particularly as used in personal-care products, were the focus of a session at the British Association of Dermatologists’ Annual Conference in Liverpool in July 2013.

Following an Dec. 12 draft opinion from the European Commission’s Scientific Committee for Consumer Safety, which determined the preservatives unsafe for use in leave-on cosmetic formulas, trade groups in the EU released statements advising firms to discontinue use of the substances in such products ahead of anticipated regulatory action ([A#02131223011]).

In the U.S., long-standing concerns about antimicrobial ingredient triclosan – and a related lawsuit filed against FDA by the Natural Resources Defense Council – came to a head in November 2013 when a federal appeals court ordered the agency to finalize its position on triclosan in the OTC topical antimicrobial drug products monograph.

FDA followed with a Dec. 17 proposed rule to amend the tentative final monograph for OTC antiseptic products, calling for safety and efficacy data by December 2014 showing that antibacterial soaps are safe for long-term, frequent use and that they more effectively prevent illness than plain soap and water Also see "FDA Says Antiseptics Need Testing Or Face Reformulation, Relabeling" - HBW Insight, 23 December, 2013..

Without that data, manufacturers of more than 2,000 such products may have to reformulate or re-label their offerings down the line.

Aware that federal rulemaking and legislative efforts related to cosmetics safety can take considerable time, retailers and some industry members have elected to address consumer concerns through initiatives of their own.

In August 2013, Procter & Gamble Co. unveiled a plan to eliminate triclosan and diethyl phthalate (the last remaining phthalate in its ingredient palette) from its personal-care products by 2014. While maintaining the safety of the ingredients, the Cincinnati-based firm suggested that it is important not only for consumers to be safe, but to “feel safe” ([A#02130930001]).

Johnson & Johnson adopted a similar stance in 2012, pledging to remove or reduce levels of triclosan, phthalates, formaldehyde and other controversial chemicals from its beauty and baby-care products by the end of 2015 due to consumer demand.

Such moves have been viewed critically by other industry members. At PCPC’s Science Symposium in October, panelists and attendees expressed concern that removing ingredients based on consumer sentiment and NGO pressure, rather than compelling scientific data, could be setting an unfavorable and unsustainable precedent Also see "Chemicals Crisis: Industry Messaging Needed To Counter Misinformation" - HBW Insight, 4 November, 2013..

Retailers Assume Gatekeeper Role

Manufacturers are not the only ones feeling pressure to conform to consumer demands with regard to controversial ingredients.

P&G presented its plan for phasing out chemicals of concern just weeks before Walmart announced an initiative to improve ingredient transparency and target substances for removal from personal-care and household products carried in its stores Also see "Walmart Program Seeks Greener Beauty, Greater Supplier Transparency" - HBW Insight, 16 September, 2013..

In 2014, the mega-retailer aims to devise a list of priority chemicals and begin monitoring manufacturer efforts to reduce levels in formulations or replace the substances in question with green alternatives. By 2018, products on Walmart shelves that still contain substances deemed potentially hazardous will have to declare their presence on labeling.

The Campaign for Safe Cosmetics hailed Walmart’s program as a “victory” for consumers concerned about chemicals safety and identified Target as next in its sights, with an online petition asking the retailer to “clean up” its beauty aisle.

In October, Target answered with the introduction of its Sustainable Product Standard, under which it will reward marketers of products with the best environmental and health profiles – based on labeling transparency, ingredient safety and other factors – with preferred placement and marketing. The retailer has indicated that a cosmetics-specific standard is in development for release in 2014 Also see "Target To Reward High-Scoring Personal Care Under Sustainable Standard" - HBW Insight, 4 November, 2013..

Retailers’ power to impose policy on the marketplace, in the absence of regulations, has been demonstrated in the natural/organic sector, where Whole Foods introduced body-care standards in June 2010 that require products making organic labeling claims to be certified to the U.S. Department of Agriculture’s National Organic Program or NSF International’s NSF/ANSI 305 standard Also see "New Whole Foods Policy Requires USDA Certification For Organic Body Care" - HBW Insight, 14 June, 2010..

Since implementation of the standards in June 2011, the worst cases of organic “fraud” in the marketplace have been addressed, according to Dr. Bronner’s Magic Soaps, formerly a crusader for increased federal oversight to ensure fairness and truthful messaging in the organic personal-care space.

Target noted in the context of its announced Sustainable Product Standard that the program was developed in response to shoppers increasingly eager for means to identify sustainable, good-for-you products in the retailer’s selection.

Digital Evolution Prompts Changes

The emergence of sustainability and ingredient-safety standards from major retailers illustrates the public’s unprecedented power to shape the marketplace at a time when digital innovations are connecting consumers in new ways and allowing their voices to carry for greater influence than was possible in the past.

In this environment, industry is faced with the challenge of educating consumers and policymakers to protect its interests.

Developing digital platforms also have manufacturers and their retail partners scrambling to keep up with consumers’ evolving shopping behavior, particularly their use of mobile phones to access information and purchase products in-store and on the fly. The phenomenon has given rise to a new “omnichannel” retail model, with brick-and-mortar, online and mobile retail converging to enable consumers to shop whenever and however they please Also see "Firms Face New Retail Challenges In Post-Recession Climate – RILA Exec" - HBW Insight, 16 December, 2013..

In December, specialty retailer ULTA outlined a plan for growth that includes investing in its digital presence, among other measures to improve its competitive position and convenience proposition to consumers ([A#02131216005]).

The announcement followed the launch of e-commerce giant Amazon’s luxury beauty portal in October and Target’s purchase of Dermstore.com in August 2013, which provided the big-box retailer with its first beauty-focused website and an e-tailing platform featuring more than 750 cosmetic brands ([A#02130819002]).

Meanwhile, sites such as MyBeautyCompare.com are emerging to offer curated personal-care collections supported by customizable search tools and customer rankings and reviews ([A#02131209001]).

Other digital innovations are launching to help guide shoppers’ purchasing decisions with regard to product safety. Introduced in 2013, the Think Dirty mobile app scores products by comparing their labels against a list of chemicals of concern, taking a more conservative approach than the Environmental Working Group’s Skin Deep rating system, according to its creator.

PCPC criticized the app as “trivializing” safety issues and potentially misleading users Also see "App Targets “Dirty” Cosmetic Ingredients To Inform Consumer Decisions" - HBW Insight, 21 October, 2013..

Advancements in digital technologies – and their growing accessibility to consumers around the globe – are enabling personal-care firms to extend their reach with targeted messaging for one-on-one consumer engagement. Unilever PLC announced a partnership with mobile marketing firm Brandtone in September to cultivate meaningful connections to consumers in emerging markets by incentivizing and rewarding individuals for sharing information and interacting with the company’s brands ([A#02130930006]).

As companies’ digital outreach expands, the Federal Trade Commission has gotten involved with guidance to help firms stay compliant with advertising regulations amid challenges – including limited space – posed by mobile and online formats ([A#02131014006]).

Claims Litigation Flare-Up

A series of FDA warning letters to cosmetics firms in 2012 underscored the fact that personal-care claims are being scrutinized. In 2013 reminders came from a number of class-action suits and settlements in the sector.

Legal experts have suggested that the FDA crackdown in 2012 may have drawn attention to the personal-care industry and inspired opportunistic litigation Also see "Aggressive Claims, FDA Warnings Make Beauty A Bull’s Eye For Litigation" - HBW Insight, 1 April, 2013..

In any event, The Estee Lauder Companies and The Dial Corporation were among firms targeted with suits claiming false advertising in 2013, the former for alleged overblown language suggesting that its Estee Lauder Advanced Night Repair line awards drug-like benefits, and the latter for implying that its Dial for Men Magnetic body wash virtually guarantees attention from women – a promise that was not fulfilled, according to the disgruntled plaintiff (Also see "Plaintiffs Suffer Setback In Suit Disputing “Magnetic” Dial For Men Claims" - HBW Insight, 2 September, 2013. and Also see "Estee Lauder, N.J. Law Firm Tangle In Second Suit Over Anti-Aging Claims" - HBW Insight, 16 September, 2013.).

Natural and organic claims also came under fire in 2013. Vogue International agreed either to rename its Organix brand of hair- and skin-care products and drop the word “organic” from promotional materials or boost the line’s organic content under a proposed settlement in California court Also see "Organix Branding In Question Under Proposed Class-Action Settlement" - HBW Insight, 23 September, 2013..

Other class-action suits called into question the validity of Kiss My Face organic claims and natural claims made for sunscreen and personal-care formulas under Johnson & Johnson’s Aveeno brand (Also see "Suit Challenging Kiss My Face Organic Claims May Proceed – Calif. Court" - HBW Insight, 7 October, 2013. and Also see "Aveeno Faces Class Actions Over “Naturals” Claims" - HBW Insight, 28 October, 2013.).

Top Stories Of 2013: Retailers, Firms Self-Regulate As Consumer Power Grows

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