Welcome to The Chemical Show, the podcast where Chemical means business.
I'm your host, Victoria Meyer, bringing you stories and insights
from leaders driving innovation and growth across the chemical industry.
Each week we explore key trends, real world challenges, and the
strategies that make an impact.
Let's get started.
Victoria: Welcome back to The Chemical Show where Leaders Talk Business.
I am recording this episode in the timeframe between InCosmetics and NYSCC
suppliers Day, and we are giving this a personal care ingredients focus.
And because of that, I am speaking with an expert in the market, so Sunanda,
Sunnie, Desai is the Vice President at Kline and Company where she leads
the global chemicals and materials practice and oversees the firm's
advisory service in the chemical sector.
So Sunnie is an expert in go to market and growth strategies, and she
works extensively with clients across personal and consumer care industries.
We're gonna have a great conversation about what's happening.
The personal care ingredients market.
It says it gonna be a great tea into folks going to Supplier's Day, and to folks
that aren't going to Supplier's day, but are just interested in what's happening.
So Sunnie, welcome to the Chemical Show.
Sunanda Desai: Thank you for having me, Victoria.
It's a pleasure to be here.
Victoria: I am so glad to have you here.
So let's just start with your origin story.
I love to start every episode with this.
What's your origin story?
How did you get interested and engaged in chemicals and specifically in
personal care and, consumer care?
Sunanda: so I've always, enjoyed analytical, uh, topics
and, I come from a family.
Um, my, both my parents, have education in mathematics and the sciences.
I.
So, I have a little bit of a typ, atypical, uh, background for the
chemicals and materials industry.
I actually started my career as a software developer in Silicon Valley in California.
I have a math computer science undergrad degree.
And, really enjoyed actually the, the analytical aspect of, of
programming and software development.
And eventually I found my way into consulting.
And, I really like the energy of consulting.
The aspect of solving problems, answering questions with a great degree
of intensity, uh, working in a team.
I, I really enjoy all of those.
Aspects of consulting and, I felt a lot of passion for chemicals,
materials, and ingredients.
I think, this is an industry that touches every aspect of our lives.
And, when the opportunity came to work with client and company on two
favorite areas, essentially consulting and the industry, I, I took it and,
um, as they say, the rest is history.
Victoria: Yeah.
Well, and, and I think that's really cool 'cause we don't necessarily
have a lot of data scientists, or at least, how about this?
We didn't used to have a lot of data scientists in the industry,
and I know that's a growing field.
And I would not often think of people going from Silicon Valley to, uh.
The chemical industry even as a consultant.
So I think that's a great leap.
And really just kind of interesting journey that you've taken.
Let's talk a little bit about Kline and Company.
'Cause a lot of people may not be familiar with them.
Sunanda: Absolutely.
Kline is a global, management, consulting, advisory, market research firm.
We've been active in the specialty chemicals, materials, and ingredient space
Victoria: I.
Sunanda: 65 years.
We have a global presence.
We're headquartered in New Jersey.
We have offices all over in Europe and in Asia.
And, essentially from a personal care and consumer perspective, we
cover the entire beauty value chain, starting from the ingredients, the
raw materials, the ingredients, all the way down to the brand owners,
the distribution, and the retailers.
The business covers the entire personal care value chain.
Victoria: That's really cool.
I've been familiar with Kline for probably about a decade, um, but I definitely
think of them, think of Kline as really, especially chemicals, and really just
bringing a lot of data and insight to.
Markets and products that maybe are sometimes difficult to understand.
Um, and I know I will say, I am just going to tell you, I like when people
ask me for, you know, Hey, do you know how to find this information?
I'm like, I don't, but you know, let me send you over to somebody
at Kline because maybe they do.
Sunanda: We are very good at going deep within the important aspects of
the personal care ingredient space,
Victoria: Yeah.
Love that.
Sunanda: and as well as the breadth.
Victoria: So with that, what are you seeing in the market today?
What are the key trends that are affecting personal care
ingredients in 2025 and beyond?
Sunanda: So, um, let me characterize the personal care ingredients industry.
So this is about a $30 billion ingredients industry.
Okay?
So from the manufacturer's perspective, and if you look at it, there's
the actives, specialty actives, which are very much a concept cell.
You have more of the commoditized ingredients, and then you have
the entire specialties, which are
Victoria: Hmm.
Sunanda: that are highly differentiated.
This is where client focus is.
Now, if we talk, think about the trends that are affecting the market,
sustainability continues to be an important trend in this space, and
Victoria: Yeah.
Sunanda: is essentially natural ingredients.
You know, naturalness and natural ingredients are still important, and I.
The interesting aspect of sustainability though is the impact that sustainability
has on natural ingredients have vary by ingredient category.
So in, for instance, surfactants, emollient, actives that actually have
very good natural alternatives to offer and where there is an opportunity to make
a claim or uh, or branded as a natural product, definitely has much more of that.
Push from naturals or it has that, uplift, but there's certain,
categories like preservatives or UV ingredients where it's a little bit
Victoria: Hmm.
Sunanda: because there might not be suitable natural alternatives
that perform at the same level of efficacy that is needed.
Victoria: Yeah.
And so then the, um, the formulators, the brands and the formulators are
making decisions based on that, based on availability and efficacy.
Sunanda: They are, they
Victoria: Yeah.
Sunanda: Um, as you know that there have been recent announcements, by certain
big brands such as L'Oreal have made announcements that there's going to be a
significant portion of their ingredient.
Formulations are going to have natural ingredients.
By 2030.
So there's definitely those types of announcements and the brand
owner pushes that are basically in pushing the industry, towards
more natural ingredients.
Victoria: Yeah.
What other trends are you seeing?
Sunanda: From a consumer perspective, there's definitely
a trend towards wellbeing.
And so what that means from a, a beauty perspective is neuro cosmetics are
actually of interest and neuro cosmetics actually are topical cosmetics, right?
So they're topical, products that are applied to the skin, but they interact
with the nervous system of the skin to essentially produce a desired effect.
It could be enhanced mood, it could be relaxation.
And there's different ingredients that are formulated with these products to
give that there could be neuropeptides, there could be cannabinoids, there could
be different ingredients that confer this particular effect to a neuro uh, cosmetic.
Victoria: Is this a generational thing?
I, 'cause I gotta be honest, I'm a little freaked out by
some of this, um, personally.
But is it, is it, do you see this trend cutting across.
Demographics or is it localized or is it just still starting and therefore will
become widespread um, in a few years?
Sunanda: I mean, if you think about aroma therapy, right?
Like there
Victoria: Hmm.
Sunanda: this, this aspect of using.
Essential oils or, or other aspects to kind of enhance your
surroundings, enhance your mood, and, you know, support relaxation.
So it is essentially, there has been that movement for a while now.
Victoria: Yeah.
Sunanda: we're seeing is essentially using more neuro cosmetics to
kind of produce that, from a skin, from a topical perspective.
. Victoria: So, who's regulating these products?
So when I think about these actives, and having neurological effects,
what agencies or how do, are they getting regulated differently
than other personal care products?
Do they, or is it all part of the same ecosystem?
Sunanda: Well, all the products have to meet the requirements that are
mandated for any personal care product to go out into the market, you know?
So,
my understanding is it's not that they're not that I, that they're not being FDA
regulated or I do not know if the FDA is
Victoria: Hmm.
Sunanda: of these.
, But they have to meet the basic requirements to be able to be
marketed as a personal care product.
Victoria: Got it.
Makes sense.
One of the things we were talking about earlier is the role of digitization in ai.
And that's certainly a trend that, is here.
And when we think about cutting across the industry, how do you
see, personal care companies and personal care ingredient manufacturers
harnessing, uh, digitization and ai.
Sunanda: So digitalization and AI is, is an important trend.
To, to keep track of and definitely, there's various ways in which
AI is actually being used.
Now.
The most, maybe the aspect of it that's been most known to
more people is personalization.
So the use of AI driven tools to essentially, um, hyper-personalized
offerings based on certain skin types or, hair types.
So that's actually the, the consumer end where you're actually targeting
Victoria: Yeah.
Sunanda: to certain consumers.
other uses are more behind the scenes supporting ingredient, say ingredient
assessments to essentially really quickly assess ingredients for efficacy.
and there's also essentially optimizing formulations.
Now, while all of these have been, you know, raised and discussed in the press as
Victoria: Yeah.
Sunanda: you know, ai, uh, uses, this point, it is unclear how
much of this is being, you know, actually implemented within, the
companies that we're looking at.
But there are several high profile announcements on partnerships in
the public domain between beauty brands and, you know, AI suppliers.
So we have to see how much of this really is, being used.
Victoria: So one of the things I've, I've, I've observed when I've talked
to leaders across the industries.
Number one, everybody's grappling with.
How do they really utilize and execute AI and bring it into their systems, right?
So people are, experimenting and I think that would align with perhaps what
you're saying is people are experimenting and yet the biggest companies are
embracing and experimenting even more So.
I was at an event recently and somebody from Exxon, for instance, was.
Talking about the AI and digitization that they're using
in their manufacturing sites.
You know, flying drones to get temperature readings and doing other
stuff and things that companies maybe can't necessarily dream about.
I know you've talked about the, the L'Oreal example, and I've
seen similar things from L'Oreal and Unilever's and others, as it
relates to the consumer brands.
And part of it is we need these, um, the bigger companies to, to lead the way and
do some of this testing and figure out.
How it's all gonna work so that it becomes more widespread in
adoption across the industry.
Sunanda: Absolutely Victoria, and that's what it is.
Market leaders will always embrace new technology
Victoria: Yeah,
Sunanda: and try to see where it can take them,
Victoria: yeah,
Sunanda: the rest of the market and the rest of the players
in the space follow suit.
What you're mentioning right now is an example of that.
Victoria: yeah.
So, you know, we're sitting here in 2025 in a period of a lot of.
Turmoil, let's call it turmoil, right?
So tariffs, regulations, you know, we've got the new administration in the us
but let's not forget, we actually have new governments and new governmental
leaders across the world, right?
But certainly if we, we focus in on what's going on from reciprocal tariffs
to non tariffs, to pauses to others, there's just a ton of uncertainty and,
you know, maybe a bit of an uproar.
It seems, at least, at the biggest level, how is this affecting the
companies that you work with?
Sunanda: So that's a very good question.
There, there is a significant degree of uncertainty in the market, as you say,
and the most important thing for personal care companies to think about is how
to manage in the face of uncertainty.
There is definitely various strategies that can be undertaken.
But there is an aspect of agility and making those quick decisions based on
, the situations in the market and what are the no regret moves that can be made.
This is an important way of thinking.
From a personal care, um, for a personal care in industry leader.
If we were to talk a bit more concretely about specifics, really that what that
would entail is when the tariff situation started, you know, there was a lot of
concern in terms of the impact, right?
Increased costs,
Victoria: Yeah.
Sunanda: costs, increased prices, all of that.
So from the perspective of now, we we're seeing some discussions
where there might be some reprieve, but it's still uncertain.
So what does this mean for personal care ingredient suppliers?
Well, it's still the time to be thinking more strategically about what are those
no regret moves that you can make today.
That will still put you in a good position regardless of what the outcome is.
And some of those could be thinking about the supplier base.
Is this a good time to diversify that supplier base?
Is this a good time to invest in some of those relationships with
contract manufacturers so that you can or enhance those relationships
so that there is an opportunity?
To manufacture formulations
Victoria: Hmm.
Sunanda: where those tariff, uh, tariff considerations might not be so harsh.
it's also a time to think about should any ingredient or, or should any,
formulations be visited, revisited, um, to, maybe consider ingredients that might
be negatively impacted by any future.
Um, or even current tariff restrictions.
And as you know, Victoria, the devil is always in the details.
I mean, if you really were to look closely at what's in the
annex, um, there are exemptions.
And then there are not.
So really kind of understanding, you know, are my ingredients falling within
that exemption list are or are they not?
So kind of starting from that point is also very important.
Victoria: Yeah, I think those are great.
And, and, and the no regret moves.
I like the way you frame that.
I was speaking with the, um, a leader recently and, you know, everybody's
always like, well, how's business?
Is business soft?
Is it busy?
Or whatever?
But this person was like, they are so busy.
And part of it is, they're doing a lot of projects with their,
business partners, their customers, et cetera.
And I think a lot of this is around reformulations innovations,
thinking about these things that you've talked about, supply chain,
what products you're bringing in, and how you can be more effective.
So I think that's, you know, it's definitely good news.
I think we're always a little bit worried, and I know that, you
know, market softness is a concern.
The cost of doing business and the cost of raw ingredients and
the effects that has is a concern.
But I think, getting busy.
On these no regret moves is really smart.
Sunanda: You're absolutely right, Victoria.
In light of the current situation, it is also important to think about are there
quick wins that can be taken advantage of?
Are there, opportunities to cross sell?
Are there inorganic opportunities that can be, you know, considered
in light of these changes?
So, um, definitely that's another point to keep in mind, to enhance one's position.
Victoria: Is this a busy time for Kline?
Do you see a lot of.
Clients coming to you with big questions, and if so, what, what are they?
What are the questions that your clients are asking you today?
Sunanda: Yes, it is a busy time for us and, certainly
our clients are coming to us.
One of the things they're coming to us is exactly that, what are the,
are the quick wins in the market that we can take advantage of?
Are there, um, inorganic plays that we can
Victoria: Yeah.
Sunanda: You know, are there opportunities for ingredients that
might not have been so, , considered a few years ago that now become relevant
in light of,, more considerations on price, price versus performance?
Victoria: Yeah,
Sunanda: there's, there's, we're getting questions of that
Victoria: that's interesting.
I, those three, those are all really interesting.
Especially this piece about: There may be formulations and
products today that make sense.
That didn't make sense two or three years ago because the
circumstances are different.
So I think it's, it's always a good reminder to, revisit your
pipeline 'cause what you thought was dead maybe is not dead.
It maybe alive and awake again today.
Um, you know, the other piece you talked about, there's inorganic growth.
Do you see, a lot of interest in m and a activity right now.
I mean, it's, again, it's it, you know, these periods of uncertainty, it's hard.
But do you think that's gonna be happening?
You know, if you were reading the Tea Leaves of the World, should
we be expecting some moves?
Sunanda: Certainly I do think there is opportunity for
inorganic, plays in the market.
Um, I was at InCosmetics, a few weeks ago, I guess a month ago at this point.
Victoria: Yeah.
Sunanda: and it's a very vibrant, it was a very vibrant show.
And a lot of players in this space.
So I can absolutely see that there is, I just think there is a lot of, there's
a lot of players in the industry and I think that there is an opportunity for
more consolidation in this industry.
But this is my point of view.
Victoria: We've talked about, uh, maybe some of the, the quick wins
and the no regret moves, but what are the strategies that companies can
and should be employing, um, to be successful here in 2025 and beyond?
Sunanda: Um, so that, that's, that's a big question.
My points were about kind of, um, essentially about taking
advantage of the quick wins about reconsidering formulations.
Bigger picture.
bigger picture thinking is about really reconsidering whether the
manufacturing footprint needs to be changed in light of the way the, the,
Victoria: The way the world is going.
Yeah, yeah.
Yeah.
I think that's interesting.
I think people are grappling with this, right?
Where, what the right investment profile is, what the
manufacturing footprint should be.
I can't decide if we are shifting to a time of more regionalization.
Certainly regionalization of supply chain seem likely
regionalization of manufacturing.
I don't know.
Right?
Because it's a big investment to make, to move, right?
To move plants and assets or to rebuild them.
Is expensive and depending on a company's appetite, depending on frankly whether
they're public or private, right?
Because privately held companies maybe have, they have different time horizons
and different judgment calls about whether they can make those investments.
Whereas despite our best interest in, uh, in every public company,
executive's interest in telling their story and helping their
investors understand investors.
Still by and large want quick returns.
And so navigating to that is tricky.
Sunanda: It absolutely is tricky and there were, there was a lot of
discussion about look reconsidering manufacturing in the light of covid.
But
Victoria: Yeah.
Sunanda: Covid was, over, I mean, none of those changes did happen.
So whether this is going to be the motivating factor is,
is, um, is yet to be seen, but
Victoria: Yeah.
Sunanda: at least reconsidering the supply chain and, and, uh,
assessing the manufacturing footprint.
Would be
Victoria: Yeah.
Makes sense.
Alright, so Sunnie, let's talk about leadership.
And I love to ask this question to people 'cause I love the
responses that we get in.
So do listeners.
In fact, I hear, um, from folks is this is one of their
favorite segments of the show.
So when you think about your career, and how you've achieved
what you have, what advice would you give to a young professional
recently entering the industry about navigating her career in leadership?
Sunanda: the most important piece of advice I would give is to.
Recognize the opportunities as they come to you and as they're presented to you,
and have enough faith in yourself to take advantage of those opportunities to, to
take them head on, even if you feel like you don't know how to kind of execute
against them, and I believe that's what I have done in the course of my career.
So I started, as I said, my career in, in software.
And then, I was able to make the move to an industry that I love
being in and love working in.
And, I was able to achieve that because I did try my best, try my best to be able
to take advantage of those opportunities as they were presented to me.
Victoria: Yeah,
Sunanda: is the, the, the advice that I would give to a, to a
young professional starting
Victoria: I love that.
And I mean, it's a bit of the say yes even when it's really scary.
Sunanda: Yes.
Victoria: Yeah.
Awesome.
Well, Sunnie, thank you for taking time to speak with me and to The
Chemical Show audience today.
It's been really great to have you here.
Sunanda: Thank you for having me, Victoria.
Victoria: And thank Absolutely, and thank you everyone for listening.
Keep listening, keep following, keep sharing, and we will
talk with you again soon.