Subscribe
Share
Share
Embed
Every Tuesday on the CosmoFactory podcast: Discover the latest innovations along the cosmetics and personal care supply chain. Hear thought-provoking conversations with top beauty industry experts from around the world. Learn about next-level solutions and find inspiration to turn your own ideas into industry-changing innovations.
A PRODUCTION OF Cosmoprof Worldwide Bologna
CosmoFactory is the first podcast from Cosmoprof Worldwide Bologna—the most important beauty trade show in the world. Dedicated to all sectors of the industry, Cosmoprof Worldwide Bologna welcomes over 250,000 visitors from 150 countries and regions and nearly 3,000 exhibitors to Bologna, Italy, each year. It’s where our diverse and international industry comes together to build business relationships and to discover the best brands and newest innovations across consumer beauty, professional beauty, and the entire supply chain. The trade show includes a robust program of exclusive educational content, featuring executives and key opinion leaders from every sector of the cosmetics, fragrance, and personal care industry. Cosmoprof Worldwide Bologna is the most important event of the Cosmoprof international network, with exhibitions in Asia (Hong Kong), the US (Las Vegas and Miami), India (Mumbai) and Thailand (Bangkok). Thanks to its global exhibitions Cosmoprof connects a community of more than 500,000 beauty stakeholders and 10,000 companies from 190 countries and regions. Learn more today at Cosmoprof.com
CosmoFactory was co-developed in collaboration with supply-side expert Deanna Utroske, Host of the CosmoFactory podcast and Editor of the Beauty Insights newsletter.
[00:00:00]
Deanna: Today's Cosmo factory episode is a popular selection from the archive. My interview with Intercos group's Chief Innovation Officer Arabella Ferrari, originally aired in October of 2024, and while the Cosmo factory team is on winter break, this episode is a great listen for anyone curious to learn more about this widely influential company.
You can find the full Cosmo Factory Archive over 80 episodes on cosmoprof.com. We have covered so [00:01:00] many aspects of the beauty industry, supply chain, whatever your interest, you'll find amazing episodes there. We will be back with more informative and inspiring episodes at the start of 2026. And at Cosmo Pack in Bologna, Italy, this coming March 26 through 28.
You can find me recording episodes live in the Cosmo Factory Podcast booth on the show floor. I hope to see you there. In the meantime, please enjoy my conversation with Arabella.
In this episode, we're talking about makeup and skin care manufacturing, creativity and design, about formulating products with regional relevance, how the experts anticipate trends years in advance, and about new ingredient development. With me today on the Cosmo Factory podcast is Arabella Ferrari, Group Chief Innovation Officer at Intercos.
Welcome.
Arabella: [00:02:00] Thank you. Excited to be here and happy to be of help, support, and tell you our story and our excitement.
Deanna: Yeah, I appreciate it very much. Thank you. So, um, Intercos is a contract manufacturer, but I think your business model very much centers on creativity and design. Can you tell me what that means at Intercos?
Arabella: Yeah, sure. I think, uh, the most, um, interesting thing is that we created, we invented, created, and developed this business model in the last 50 years. I think my father was extremely visionary. And in a world where this type of, uh, business didn't exist, he conceived a company that would think of product, um, on a day to day basis and, um, would, would think of product and be relevant to the most important people Companies in the world through creativity through R and D through innovation and through anticipating market needs and anticipating client needs.
I think what he created in the last 50 years was really [00:03:00] understanding the markets, the regions and drilling innovation, drilling creativity and innovation and passion and product. Like no one else, never before, uh, in a company. So we think of a product, um, uh, we conceive a product, we ideate a product, and then we make it, we, we search the ingredients, we search the raws, we make the raws, we build, we We build, we build machineries, we build equipments and we actually make it happen.
I think there's a lot of trend bureaus and there's a lot of consulting companies and there's a lot of people that, um, I think are capable of identifying trends. But I think what we're really strong in is actually transforming what we see as a product today, uh, into the, and, and, and visualize it, uh, visualize it.
Portrayed further as we, as we, um, in, as we, um, I think in my turn, I mean, think into a new version, actually turn into a real product, [00:04:00] um, through the help of, um, all the, um, all the divisions in the company. So it starts from market, it starts from a client, a market, a distribution, um, and then it turns into going to an R and D and, and, and briefing and R and D who simultaneously will.
Uh, think of ingredients, but next step ingredients, next step, uh, next step. Next up ingredients to, to, to improve the product that's on the market and actually make it better and, and, and propose the next generation. So it's, it's a vision to go forward. It's a vision of projection. It's a vision of invention, creation, and then, of course, passion and product.
Deanna: right, right. Excellent. I love that. And you mentioned all the various sorts of divisions that are involved. Um, but I'd like to think a little bit more about the company structure. Intercost is a sizable company, I would say. Um, you have headquarters there in Milan, Italy, but can you help us think about where the teams are [00:05:00] located?
What other facilities do you have?
Arabella: Sure, so the company was built in Italy because of its craftsmanship, artisanship and creative strength. Um, it then, so the, all the main, um, R& D, the global, I mean, the global R& D, the main divisions, all the corporate divisions and the European divisions are here. However, we very rapidly expanded into, um, uh, U S obviously, uh, which was, uh, after Europe, a second biggest market and then Asia.
on a regional, uh, on a regional basis. It's a 16 commercial offices and 16 plants worldwide. Uh, today you think of us as 3 regions. So 3 main continents. So US, Europe and Asia. Within these, uh, we have located antennas that act as our commercial offices, but also that are situated in the markets to understand the brands, the clients, the distributions, the trends, you name it.
So deep rooted into what the actual region, regional needs are in contact with over 700 clients [00:06:00] worldwide. Um, and then, um, funneling what the needs are of these markets and clients, um, to. A global global to a global head, which then redirects to the regional lab. So through the 11 labs, then actually develop products on a regional basis.
So to make an example, um, Korea, um, formulates. Uh, found, uh, formulates complexion for the Asian market. It's not Agrata headquarters R& D, which formulates for, um, for Asia, but it is Korea and China that formulate for Asia. Um, so then these products are then made on a regional level. So all of the technologies, the equipments, the machineries are all delocalized.
Formulations are transfers, technologies are transferred. So today we can produce the same formulas across the world, across the 16 factories with the same machines, the same ingredients, the same raws. It is very, very complex. Um, so technology is born here in Agrate through the global R& [00:07:00] D centers. It is then passed on to the 11 R& D centers in the world.
They will understand the local need, develop formulations, which then are produced in their regions. All center, all sort of directed from. Okay.
Deanna: Wonderful. That's amazing. Now, listeners to the CosmoFactory podcast know that we like to talk about how ideas become innovations here. Um, in an earlier conversation, you mentioned one of your most iconic products. I believe you described it to me as a long wear, food proof lip gloss with high shine and comfortable wear.
Can you help me think about the idea for this product, um, that the original concept, but as well, maybe some of the challenges that your team had to overcome to make it a reality? Yeah. Absolutely.
Arabella: This was one example. I wouldn't call it the most iconic product.
Deanna: Thank you for correcting me.
Arabella: No, you asked me for an example of how we identify market need, and then we develop ingredients, um, to actually that ingredients to, um, create it and to beat the [00:08:00] performances of what is on the market. So that was the example.
So back, While ago, um, it wouldn't, it was not conceived that a consumer would use two products to get to a finish. And so we, and so, um, a big multinational company launched a double ended lip gloss, lipstick, lip gloss, two step, uh, and patented it and patented it. So the market could not have it. So back then.
We had to begin by, okay, there was a need on the market. How do we, how do we, um, overcome the patents and so develop certain polymers that could actually get to that result and improve it. Um, and we did to get a similar product and then we opened the market up and obviously, um, supplied it to all. But if I may say the most iconic product, if I can make.
Really, one of the big examples, Intercost is known for powder production and has always been, um, leaders in powders. That's how we started back 50 years ago. Um, at a certain point, you know, a powder is just a [00:09:00] powder and there's however much we do in terms of treatment, um, treatment of ingredients, treatment of raws, coatings, um, uh, ingredients, it was still a powder.
So at one point, the powder business was also sort of slowing down. Um, and we, Um, invented, created, ideated a new structure, which was called, which we call as, we call it Prisma, um, Which is a new technology we invented about 10 years ago, which actually generated a new category on the market, which was a powder that was that was, um, positioned, um, in between using all of the existing technologies, but positioned as a new category in between, uh, It was taking all the expertise that we had across all the technologies and generating a completely new structure, which generated a new category on the product on the market.
It was the 1st gel powder. So we incorporated a gel in a [00:10:00] powder, which had never been done before because the powder is made a powder is normally composed of, um, gel Dry excipients of powders and binders, which are oily substances, which hold the powders together. So we substitute it by trying by using a new transformation process, a new manufacturing process.
We were able to incorporate gel. So that was one of the biggest innovations that we had, which, which we have, which we've patented because we were leaders in powders. Then the lipstick example I made you is also is sort of overcoming a hurdle of a patent. product where consumers really needed, really wanted that type of performance.
And we've taken that further and further and further, um, in the sense the long wear category, um, today is not, you can have a long wear, no transfer, high shine lacquered product in one. So from when we developed ingredients and polymers to actually Get the performance in 2 step today. It's actually possible through the continuous [00:11:00] research in ingredients to actually get the same performance in 1 product.
Um, so this for us is a never ending process.
Deanna: Yeah. No, I love it. I love both of those examples. Thank you. And thank you for sharing the powder example. That's super impressive. Both of those products. Also seem to, um, you know, address the market demand, but really, I would say, create new consumer expectations, right? Of what's possible with a product.
What is your involvement there in terms of working with your partners, maybe to educate consumers or, you know, to help change gesture and application practices? Are you involved in that piece of it?
Arabella: Um, so it's, it's our constant quest to think of, um, to think of new products, new categories, uh, new applications, new packaging, uh, everything that's, that's around, that's around the use of makeup. Of course, our priority would always be linked to the formula. Uh, so we [00:12:00] always, Our strength is that of the formula, less of edge and less of delivery.
However, we do have categories that use deliveries a lot, such as pencils and mascaras and liners and sort of that category. So within that category, yes, we do try to, um, Uh, continuously add new formats, new shapes, um, whether it's for brow, whether it's for lining, whether it's eye lining or lip lining, um, but that's really very much packaging driven.
So where our strength, which of course is important and of course. It will be part of our creative process, creative process, design process, packaging, scouting, packaging, development, packaging, designing. So absolutely we do all that. However, then we, um, work with outside vendors that will manufacture. Our strength always lies in the actual ingredients formulation and performances of the makeup product.
Deanna: Amazing. Thank you. [00:13:00] Uh, you mentioned earlier how, um, international the intercost team is. Can you talk a little further about how you're formulating products that have regional relevance? How are you addressing, uh, the variations, um, in markets around the world?
Arabella: Oh, my God, today there is so much variation and we just come out of a 2 week round tables with all of our markets. It is so exciting because we have. We have all of our marketers, which work for months around presentations to tell our R and D centers and our, and our market on our local, on our corporate marketing here, what their needs are.
And, um, what, what actually results, what actually the outcome is, is that. Trends are global, of course. Trends travel very fast and they are global, but never like before. They really, you know, they, there's, there's, there's a real need to interpret the trends from a very local standpoint. I mean, uh, whether it's, um, whether it's the habits, the culture, the traditions of every region, [00:14:00] um, everything from the, uh, from, from, from climate, from what we eat, from, from what we do, from how we live our life, live our lives.
I mean, it impacts so much what we put on our faces and how we do our makeup. Um, so even, um, if you take foundation, I mean, foundation is so different from Asia to Europe to us. We'll all be looking for long wearing foundation or anti aging foundation or, um. Uh, but the actual characteristics of that foundation have to be incredibly different.
So this is what we learned from the regions and, uh, not only foundations on lipsticks, on powders, I mean, you name it. So it's really, uh, important to understand what the product, I mean, every foundation has an objective. That of covering imperfections powders have an, um, um, have a mission of mattifying, but within that, then to go deep and understand the market, uh, the consumer you're targeting the brand, the branding, the brand you cover.
I mean, [00:15:00] there's so much more to, you know, to, to actually then going in and developing the product with the region. Um, so we also do, so that's the part on formulation on trend. On the trends we host once a year our beauty event here in Agrate where we showcase, um, our trends for the upcoming year and a half.
So right now we're working on trends for 26, um, and we'll be showing them here in March 25. And that is a wonderful story of how Uh, we've developed an internal trend team, which is dislocated, which is dislocated across all the regions. And there's very varied people that are part of that. And they're the ones that continuously research to anticipate the trends and they're so capable of, um, of.
Of creating, of creating newness out of what is there today, because data gives us what is there today. We have to take the data and take the [00:16:00] information and evolve it and projected and sort of think forward. Um, it's very important to, uh, have a team of people that, uh, Um, really are able to have a vision and project ideas and concepts into the future.
And again, future is short term, medium term and long term. So it's, it's, you know, so innovation from a formula standpoint will project me to, um, long term innovation. So long, long term, what is my foundation in three years? Trend concepts really helped me to position products to what consumers, uh, or my brands are looking for, um, short to medium term.
Deanna: Yeah, no, thank you for that distinction. That's super important, it's very helpful. Um, I did promise everyone listening that you and I would also talk a bit about ingredient development. I believe, uh, it was this year actually at CosmoProf Worldwide Bologna that you, announced a partnership with the skincare brand called Amari that is very much devoted to valorizing every bit of the coffee [00:17:00] plant.
I'm hoping you can talk about, um, how you're working with that company and, and what you've created. I know they work, um, hand in hand with the team at at Ely cafe.
Arabella: Yes, um, so this was an example of our open innovation that we, um, started a number of years ago. So open innovation for open innovation for us is part of our R and D innovation, um, um, system whereby, um, we scout outside, uh, for technologies that we, uh, do not cover in house.
Deanna: Sure.
Arabella: So in this case, we know that in the last, I would say five to seven years, eco design has been, you know, sort of eco design, sustainability, clean, um, has been the, um, main, um, focus to drive all of our innovation.
So when we found Illy, um, it was part of our brief. To find companies within the open innovation system that would allow us to, uh, [00:18:00] use ingredients that were a byproduct or, or a waste of, um, other industries. Um, so, um, they had, um, started to work on a byproduct of s um, on byproduct of. roasting coffee. Um, and so we, which actually turned out an incredible success because, uh, by this ingredient that they gave us, so it's the silver skin ingredient, which holds emollients, which gets discarded, just gets wasted during their toasting process.
Um, By giving us this ingredient, the oils and the emollients within this peel actually turned out to be great excipients in makeup. We would never have thought so. Um, so the peel of coffee that gets thrown away. Um, when given to the food chain, reused in powders turned out to give us the most emollient, creamy, um, [00:19:00] comfortable powders and substitute binders like never before.
And on top of it, allowing us to be clean, sustainable and natural. Um, so this is just one example because we're doing it with tomato skin. We're doing it with avocado peels. We're doing it with less or lemon peel
Deanna: Uh huh.
Arabella: doing it with other. Other not avocado, but lemon. We're doing it with other ingredients. So, um, this is a real strive that we started a number of years ago, and it's really proving successful, um, whereby we are able to.
Substitute a very high percentage of our ingredients with natural blends and byproducts, um, byproducts, um, ingredients in, in products, in, in makeup. But it's, it's actually proving to be better than before. Because to be natural, to be clean, you have, if you end up If you end up having a product that's not as good as it was before, you know, we're still makeup users and we're still makeup lovers and makeup junkies.
Uh, so it needs, I mean, [00:20:00] fine, we can, we can claim natural for the, for the non makeup user, but for the makeup user, you want those performances and you want them right. And where we've gone, the level we've gone to actually is, it's, it's phenomenal because it's actually improving the previous performances.
Deanna: Yeah, yeah. No, that's amazing. That's amazing. Um, and I think it's so important to that, uh, you know, a manufacturer like intercost is working with new ingredient innovations, um, and working hard to partner with companies, maybe to develop those, but also to bring them in for your customers. I, I hear so often from brand leaders, um, as well as from ingredient suppliers throughout the industry, how difficult that sort of adoption of new ingredient innovations is.
And, you know, You know, even just it sounds like, you know, looking for benefits and opportunities, you're facilitating that.
Arabella: Well, we also have a raw material lab, which we've, the past 25 years, [00:21:00] um, and again, because we soon enough realized that to innovate, not necessarily could we get all the ingredients that we needed. And so at some point we had to, uh, be creative in house and start, um, developing, um, more than developing, but modifying, treating, coding, um, or actually developing certain ingredients that we couldn't find.
So that's what's really differentiated us from, um, a lot of the competition, but also makes us a point of interest for the brands, because when you manufacture a new ingredient, you need to have a certain number of brands that you can sell it to, and they can't invest in house to, you know, for one brand alone, it makes complete sense.
Um, so the idea for us to be so, um, so active in sourcing, um, New ingredients and and having these type of collaborations is also because we have a very active raw material lab, which not only [00:22:00] scouts, but also is also doing our own developments. Then we also have our joint lab. We have joined labs with universities. We, a joint lab with universities is also working in the biotech world. They're also bringing us technologies from other fields. Um, we have a lab up in the Netherlands in Maastricht, also working in a biotech environment. So we're also working with scientists and chemists that are not in cosmetic or in pharmaceutical and in other, in other fields that also bring in and also bring in, um, Uh, technologies, um, so opening up to all this, Maastricht, you know, but Bacolod University, joint labs, open innovation, all that in a very integrated system, you know, never losing focus.
One is makeup, knowing which categories are our main and knowing what regions are our main and what customers we need to address. It's really, really integrated [00:23:00] to, uh, and focused in order to get, um, relevant information, relevant innovation.
Deanna: Yeah. No, it's so impressive how integrated your company is, but also so intentional with these, you know, other aspects that we might think of as outside of your specialty, but you've, you've really, you know, taken so much on it's, it's really impressive.
Arabella: Thank you.
Deanna: Yeah, um, we did touch more on sustainability there at the end with your ingredient partnerships.
Um, because many, many that you mentioned seem to have to do with what I would think of as upcycling, but I'm wondering, as we wrap up our conversation here, if there are any other environmental sustainability initiatives that you'd like to share. Sure,
Arabella: , I can talk to you about again about, um, about, um, sustainable all the effort that we've done in terms of all the changes in legislations that have happened that are happening in the last, um, in the last year is concerning talk concerning microplastics. [00:24:00] Silicones, I mean, the whole nature of makeup is changing.
Uh, the whole configuration of what we use as ingredients in the past hundreds of years is now, is now being, um, put under examination and having to change. So, uh, unless you have a strong, Um, R and D strength or a strong R and D that's capable of replacing these ingredients. There's not that many ingredients out there that are available to actually, um, reformulate.
Uh, so I think where our strength is, is having anticipated this, um, starting before COVID and today having, um, 1 to 1 replacements and in some cases also overperforming. Um, and all of our products are literally are, are. Um, clean in the direction that the market's asking. So as I said, no silicones, microplastics and tough.
Um, and there's even more that are coming, you know, there's mica, there's, there's, um, sorry, there's silica. Um, there's [00:25:00] more, also more ingredients are coming that way that we are ready to substitute. So that, that's the strong, that's the toughest thing right now that we are, that we are facing.
Deanna: Yeah, no, that's, that's important to a lot of it has to do with, uh, customer safety concerns, um, and ingredient replacement. That makes sense. That makes sense.
Arabella: And then changes of regulations, um, uh, across, changes of regulations across, uh, continents, um, constant, um, raw material discontinuations, client blacklists, I mean, formulating today is, is, has become very complex, um, and again, unless you have a very strong focus on, uh, ingredients, regulatory ingredients, and working together to try to, try to overcome these, um, it's, it's, it's, It's, it's, it's making complexity even bigger.
Deanna: Yeah. Yeah. No, there certainly are a lot of formulation challenges these days. I appreciate that.
And in an earlier conversation, you told me that Cosmoprof Worldwide Bologna has been an important show for Intercos over the years. Please tell [00:26:00] us about that.
Arabella: yes. No. So I think we've come, I mean, we, we came, I've only been here 30 years, but, but we started coming well before I came here, say it's about 40 years that if not more, 40, 45 years that we go to Cosmoprof. And when we started, this is an anecdote, my father had to move his actual furniture because, you know, we didn't have means.
So whenever, you know, for him to be known and for him to get it, to get visibility at the time, he, he would actually, um, take his, um, his furniture, his desk to Cosmoprof and, and showcase. So we've come a long way from there. He was, um, In a very visionary mind. So he came a long way. So I think Cosmoprof for us is, um, really represents the, uh, the most important show, uh, cosmetic show in the world.
It's a one place where you have to be. Uh, it's a one place where it really brings together all of the, um, all of the industry. Uh, it has gone to very high levels. It has really [00:27:00] become, um, and you know, an exquisite professional and, um, Very high standard show. Uh, we, we traveled to a few other ones, so we can really see that this one is, you know, that, that this one really stands high in terms of, uh, in terms of, in terms of, um, image.
Um, having said that, um, having said that for us at one point, we, we backed out for about 10 years, um, but only because we really wanted to invest in Here in terms of, um, showcasing, um, and, and really getting the customer one on one and working one on one, having more time. But then we, we, we bet we went back, we went back and very happy to be back.
And it is the only place where you actually meet new customers, new opportunities, uh, but also you, you, you see, you actually see the whole industry, which for us is fundamental. Even seeing our competition
Deanna: Mm hmm.
Arabella: Um, meeting our competition, being friendly with our competition that also, that also helps. [00:28:00] Um, so it is the one show not to miss.
It's the one place to be. Um, and I think we'll, we'll always do it. Definitely, I think, um, Europe has really, Italy and Europe has really developed as, you know, the number one show in the world.
Deanna: Arabella, we've learned so much from you today. Thank you for joining me on the CosmoFactory podcast.
Um, and then, like I said, I will start off by listing some topics that we'll cover. Um, I will get to the point where I say [00:29:00] with me for today's episode, Shara Tiku, co founder and CEO of C16 Biosciences. I will say welcome. That's your cue, um, to dive in. Um, and I will ask questions from there, um, with a bit of conversational nonsense in between so that, um, it flows a bit. I can see that you are more than ready. So I will find my spot, set my timer.
Shara: I have like five beverages this morning also, so I'll try not to make a lot of noise as I set them down.
Deanna: That's the way I like to roll. It's so funny.
Shara: Someone brought, I had a latte and then someone brought me like a yummy Pandan matcha latte, which is, I don't know, great for the summer.
Deanna: Right? Oh, fun. Um,
[00:30:00] okay. So we'll get started. This episode is about the future of palm oil. It's about specialty chemicals as well as commodity chemicals. It's about fungus, yeast, and fermentation technology. It's about the environmental and regulatory realities of deforestation and much more. With me for today's episode of Cosmofactory is Shara Tiku, co founder and CEO of C16 Biosciences.
Welcome.
Shara: Thank you. Thanks for having me, Deanna.
Deanna: I'm glad you're here. Thank you. Um, will you please just start by giving us a quick introduction to C16 Biosciences and what the company does.
Shara: Yes, gladly. Z16 is a New York City based biotechnology company that produces high performance ingredients [00:31:00] that leverage the best combination of natural and scientific innovation. Thank you again. for consumer products, including beauty and personal care,
Deanna: Wonderful. Nicely done. Um, now, because we can't all be chemists, and I'm fascinated by words, um, I want you to tell me if I have this right, uh, palm oil is rich in a fatty acid that's known as palmitic acid, and each molecule of this palmitic acid is made up of 16 carbon atoms, uh, 32 hydrogen atoms, and 2 oxygen atoms, so my presumption is that the C 16 company name is a reference to those 16 carbon atoms, yes?
Shara: right? Yeah. So, so palmitic acid is, is colloquially known as C16 fatty acid, and it is not the only fatty acid in palm oil, but it is the most present and the namesake, which is, uh, the reason for our namesake as well.
Deanna: Excellent. Cool. I love that. So, Shara, if I recall correctly, you and I first met at the Society of Cosmetic Chemists [00:32:00] annual meeting in New York City a few years back. I also remember not meeting you for what felt like years, maybe it was only a matter of months before that particular SCC event. And this is because C16 Biosciences was making headlines in beauty industry trade publications well before you launched your first ingredient.
I was very curious to learn more about what you were doing. So I'll ask you now to Please tell us about the early work your team did to develop your biomanufacturing platform. What was going on in the early days at C 16?
Shara: Yeah, I mean, we're, we're a biotech company and that requires research and development. It requires innovation. It requires a big idea and then proving that you can actually make it work. And in the early days of building the company, we were very heads down on proving that our big idea could actually be validated, could be technically viable, economically viable and scalable.
Before we launched. [00:33:00] So we did get some headlines. We actually tried to stay sort of under the radar, um, working on a big problem that people wanted to talk about, but we did decide to wait many years to commercialize until we really felt the product was ready to bring to market. And so what we were doing was really working in the lab.
Um, and if you come visit our lab, which is 20, 000 square feet in Manhattan, Overlooking. Hudson Yards and the Hudson River, you'll see things similar but different to what you might find in a cosmetics formulation lab. So you'll find things like agar plates and shaped flasks and bioreactors for growing microorganisms to produce sort of what we call the new natural ingredients.
And in the early days, that's what we were working on was the, the basic It's biology. There's some chemistry to, um, to develop what we call our bio manufacturing platform.
Deanna: Yeah. Very cool. Thank you for that. And your microorganism [00:34:00] is a yeast. Is that true?
Shara: Our primary microorganism is a yeast. We have looked, we work mostly with yeast, but we've also explored, yeah, I think you mentioned bacteria and algae as well. Um, and the basic premise of what we do is leveraging those natural microorganisms. For us today, it's, it's a yeast to make high performance, highly sustainable ingredients.
Deanna: yeah, yeah. So we know that not all biotech ingredient innovation relies on fermentation the way that yours does. Um, my question for you then is why did you opt for a fermentation based platform? Why was that the right choice?
Shara: So, you know, when we started our, our namesake is C16, when we started our, our ambition was really around palm oil and looking at palm oil as a highly ubiquitous ingredient. It's found in about 50 percent of products on supermarket shelves, actually in cosmetics and personal care. It's, it's found in about 70 percent of products.
So the number's even higher. And [00:35:00] as we looked at that ingredient, we realized it was. It was a really valuable player, right? Like it was doing a job that was unique, hard to replace with other ingredients. Workhorse super important for functionality across multiple products, and all of that was really good.
But what was bad was the way that it was being produced, which involved industrial monoculture deforestation of tropical forest to clear that land, which, you know, palm oil can only grow in really, really specific areas right around the equator. Massive amounts of greenhouse gas emissions. loss of biodiversity, et cetera, et cetera, et cetera, to make this vegetable oil.
And so when we started the company, I met my co founders, um, at the MIT Media Lab in, in Boston. We were, the three of us were at Harvard and MIT in grad school for Different things all touching biology in different ways, but we were looking at palm oil [00:36:00] and said, this is a great thing. The only problem is the way that it's made.
Could we make it a different way? And, you know, I think we had a hypothesis around using microorganisms to make it. Just like plants, the oil palm plant can naturally make these fatty acids. There are some microorganisms, including some yeast, which naturally make these fatty acids. And so we tapped into that basic idea and said, could that be possible?
What would have to be true? And we approached it that way. So I think, you know, we were very problem centric. We weren't tied to the technology being fermentation, but we had a strong hypothesis early that it could work and could scale similarly to plants. And so we gave it a shot.
Deanna: Yeah. Yeah. Very cool. You mentioned there that a palm oil sourcing does come with some ethical and environmental challenges. Can you share more about what I might think of as the state of palm oil today and remind us why we love using it so much? Uh, [00:37:00] and more about why it's problematic as it's conventionally sourced.
Shara: Yep. So today, palm oil alone is about a 70 billion industry. It is the most widely used vegetable oil in the world. And as I mentioned, it's found in about 50 percent of products on supermarket shelves, but about 70 percent of cosmetics and personal care products. Palm oil is really unique. You hit it right at the beginning in terms of its fatty acid profile.
So we won't get too much into the chemistry, but the composition of fatty acids in palm oil. allow it to perform so well in end products. And so it can be used as a whole oil, or it can also be used as a sort of platform or intermediary in which it's broken down into composite parts, fatty acids, or fatty alcohols, and then transformed into dozens of different ingredients that show up on the back of things.
Labels that are include [00:38:00] emollients, emulsifiers, esters, surfactants, and then as we look in food, a lot of the, again, emulsifying properties, um, or even stabilizers. And so. The unique properties of palm oil, which are different than every other vegetable oil, it's got a really, really unique profile, help drive performance benefits like.
Oxidative stability and shelf stability, it makes it really good at formulating and other ingredients. You can take the C 16 and C 18, or even the C 12 and C 14, and turn those into surfactants, which are required for anything in body care or laundry care. And you really can't get those molecules elsewhere.
So palm oil is really critical. Everybody likes the performance of it, but like I alluded to earlier, the problem is really just the way that it's made, which requires Land right around the equator. That land is primarily home to [00:39:00] tropical rainforest and historically growers have been slashing and burning that land, clearing it to convert it to oil palm.
Pretty much everybody in the industry knows about this problem, has deemed the problem. Has frankly tried to commit to sustainable sourcing of palm oil. So sourcing palm oil and its derivatives that don't engage in deforestation of high carbon stock land. It's just been really hard to do that. The supply chain is.
Really opaque, it's nearly impossible to know if. You know, the emollient in my lip balm came from a plot of land that did or didn't engage in deforestation. Supply chains are way too complex and opaque. And even though we've had efforts at certifying sustainably sourced palm oil, that's really capped out at less than 20%.
And so that is not a global solution to this [00:40:00] problem. It can help one player solve the problem, but it's not, it's not a global solution. And It's been a big push from consumer groups. There's been a big push from NGOs like Greenpeace, um, Forced Corporate Change, and many of the consumer goods manufacturers themselves have made the push, but we haven't really seen solutions.
And, you know, I think that's part of, that's part of why we're here today.
Deanna: Yeah. Yeah. Thank you for all of that. And folks who are paying attention to this issue will know that, um, by the end of this year, 2024, the EU deforestation regulations, uh, that affect palm oil sourcing will take effect. And you've, you've touched on deforestation there quite a bit, but help us understand what beauty makers will be faced with in the regulatory landscape going forward.
Shara: Yeah, so I'll talk about, um, the EU regulations for POM and maybe I'll even just hit on regulation more broadly. So EUDR, EU Deforestation Regulation, and there's there's 2 [00:41:00] more, um, laws that have just been passed by the European Commission, uh, EU, uh, um, Sustainability Due Diligence, around Sustainable Due Diligence and Sustainable Supply Chains are the regulations coming into play.
And basically, this is elevating the Expectation or the sort of barometer in which companies can claim that they have sustainably sourced ingredients. And so for in particular, this is covering 7 key crops, including palm oil and oil. And any company that's sort of importing those ingredients and using them in their products now has to prove that the palm oil did not come from deforestation and the standard that many companies use today, for example, a mass balance standard, which says, you know, At least 51 percent of the palm oil that came to me did not come [00:42:00] from deforestation and it's certified by this 3rd party.
That's not good enough. So EUDR has really elevated the standard for claiming sustainability and companies that fail to meet it can actually be fined up to 4 percent of their annual revenue or turnover. Which is material. So this is a really, really big landmark piece of legislation covers palm, but it also covers crops like coffee and cocoa and things like this.
Um, and I would say, you know, most companies are aware of it, are working swiftly to find solutions. And really, the only answers we hear, and we talked to a lot of people in the supply chain, which I think is an ingredient manufacturer, it gives us some unique insights, but formulators, CMOs, distributors, brands.
Most of them realize at the very least, it's going to be materially more expensive to do this traceability if they can do it at all. And I think this is where solutions like [00:43:00] ours, we're not the only solution, but biotech driven solutions, alternative types of solutions. Ways of making ingredients that don't come from these extractive agricultural processes, in addition to improved traceability in agriculture, all have to come, come about.
And I'll just hit quickly on 1 more,
Deanna: Sure.
Shara: the New York State Assembly bill. enacting the sort of beauty justice act, which is about regulating ingredients and personal care and cosmetics, which again, many of your listeners are probably aware, but it's also going to restrict certain ingredients, one of which is ethylene oxide, EO, right?
And so again, as we talk to a lot of these end product manufacturers, mostly brands, They're worried about this. They're saying, okay, this legislation is restricting some really important workhouse surfactants that we never thought would get taken away. If that's going to go away, what else in my toolbox might [00:44:00] go away?
And I think that just opens a broader conversation about ingredients and about supply chains and about sourcing to say, we've taken for granted where our ingredients come from, but there's actually this whole set of innovative options, and actually it's a place where sustainability can drive innovation to unlock.
Both drop in ingredients, so ingredients that replace things we use today, but also totally novel, better performing ingredients. And I think that's just a really exciting place to be in, in the sort of beauty and personal care world.
Deanna: Yeah. Yeah. Let's talk about your ingredient in that context. So, tarula oil, if I were to briefly describe it, I would say it's an antioxidant rich emollient, um, which might be, might be accurate. You'll help me know. Um, but it helped me help us think about how it functions as a drop in replacement, but rather how it also really stands alone as a novel ingredient that can maybe just happen to also do the work of palm [00:45:00] oil.
Shara: Yeah, and I think true oil is I love it as a product. Obviously, I use it on my face every day. Um, but I think I like it because it's like a really good microcosm or capsule of what biotech can unlock in this industry. You know, with ingredient companies, people often ask, you know, is it a replacement ingredient or is it a new ingredient.
And with biotech, the answer can be both. And so we started out looking for a palm oil replacement. So we said, okay, it needs to be this workhorse oil, but this chemical profile, let's see if we can make it. And we did pretty well at that on our first go, but we also along the way learned that these natural microorganisms that were, we were using to produce the oil, had a whole bunch of untapped resources that we could actually.
Explore and extract through our sort of technology set. So with to rule oil, it's an oil. So [00:46:00] think about a wide range of oils used in cosmetics, Marula oil, squalane, buckthorn oil. It's operating like that. So texturally formulation wise, it does all the things you want an oil to do. Although with biotech, you can actually create for these novel oil profiles.
So to rule oil is deeply moisturizing, but it's light. It sinks into skin really quickly. It has almost a silicone like slip or texture, but it's not just an oil. It's a, it's a bioactive oil is what we, what we call, but yeah, antioxidant rich. So it contains these essentially novel historically quite rare carotenoids in particular that promote healthy, vibrant.
skin. So carotenoids, as you mentioned, are antioxidants that neutralize harmful free radicals in the body and reduce oxidative stress. We're probably most familiar with carotenoids like beta carotene, which is found in carrots and makes carrots orange, but also drives a lot of the [00:47:00] health benefits and nutritional benefits of carrots.
But in skin, beta carotene is converted into vitamin A, which is crucial for skin health as well. And so with tarula oil, we make beta carotene, but we also found that the yeast that we Discovered and commercialized also produces sort of two rare, not previously commercialized carotenoids that help do so many cool things in terms of barrier protection, natural defenses of the skin, immunity boosting, anti aging.
And, uh, we can talk about some of those for different applications, but I think it's just such a cool example of. Biotech setting out to actually replace ingredients and along the way you can actually find all the cool novel things that didn't exist before and produce sort of net new benefits or even novel, novel performance ingredients.
Deanna: Yes, yes, that's wonderful. Thank you so much. Um, and I believe your tarula oil is, um, essentially on [00:48:00] the shelf in some consumer products now. Always very exciting for new ingredient makers. Congratulations on that. Um, can you share a bit about the brands or products that have been formulated with tarula oil?
Shara: Yeah, so it's really interesting about true oil is that it's really flexible and so you'll see it in a wide range of sort of. Form functions and people are using it. Brands are using it for different benefits. So, um, some of the products on shelves are, you know, liquid, like the nourishing oil for face, body and hair that we actually launched ourselves.
Um, you'll see it in creams and moisturizers. Um, so one company, lo this year launched a barrier repair product featuring Toru Oil at a, um, very high, uh, inclusion level. It's really the hero ingredient in the product, and you'll see it in soaps. So, uh, Panaya, which is actually a. A fashion brand moved into personal care for the first time together with [00:49:00] Hale's, uh, super cool UK based brand to launch a soap, a rewild body block bar featuring Toula Oil.
And then Hagels actually just launched their second product featuring Toula Oil, which is a sun care product. The seaweed Solar Protect SPF 50. It's a, it's a sun care oil using Toula oil. Um, that one's very cool because we've run clinical studies on to rule oils, benefits and some care and those carotenoids.
We were talking about boost SPF performance. So that's a very big category for us. Um, and then the last 1 that's coming soon is an oil cleanser product. So we're working with, I would say some of the most innovative brands in this space. I have loved getting to work with many of these founders who are really pushing the envelope in terms of.
Sustainability as a driver. Of innovation, really questioning the ingredients and the packaging choices that they're making for sustainability. Um, and they've [00:50:00] just been, they've been really, really fun to work with and launch products with.
Deanna: that's exciting. Thank you. Um, for some cosmetic formulators listening, I'm hoping you can just briefly tell us quickly about things like color, scent, temperature, parameters, those sorts of details about Tarula oil.
Shara: Yep, we hit on the sort of oil properties before. And again, it's, um, it's got a unique mix of fatty acids. And so it blends in solid form functions like soaps, but also liquids like oils and creams in between, um, I would say color is probably the most interesting part. So, um, the oil itself has this sort of reddish orange sun setty.
type of color. And that's exactly because of those antioxidant carotenoids we were talking about. The vibrant color is really Mother Nature's way of telling us something really nourishing is inside. And so we sell the ingredient with the color. Um, and there are, I think, a lot of Benefits driven marketing claims that brands and [00:51:00] manufacturers can use leveraging that, um, but we do also have a neutral color for those that are more traditional, which is a sort of, you know, neutral, um, ivory type of color.
Color. Um, scent. It has a slight oily scent. And again, I think maybe just one thing that's interesting here is sort of the battle between natural and synthetic. I think a lot of people want to talk about C 16 and what we do as synthetic or lab grown. Um, but actually what we do is. Highly natural. And and with that, you see the sort of naturally oily scent.
Um, so it's there. But again, I think you can use the product. Maybe just one surprising thing for formulators. It's a bioactive oil. It contains active ingredients. We expected people to be using it at pretty low inclusion levels, but we've seen people using the product up to 40 percent inclusion. So, you know, I think all of these things, color, scent, and performance can be [00:52:00] modulated up or down.
You're using it at 40%. It's really different than using it at
Deanna: Yes,
Shara: Um, so it really hits a wide range, and we spend a lot of time with formulators, chemists, CMOs, and brand owners themselves talking through different application sets.
Deanna: Yeah, very cool. Um, so based on our conversation, um, I'm going to presume that C 16 will not be a single ingredient manufacturer. Before we wrap up here, I just want to ask, uh, what is in your development pipeline? What can you share with us about the future?
Shara: Yeah, so so true oils are first ingredient and it's been it's been really fun bringing that one to market. Um, what's next, but not yet on the market is a broader range of specialty and commodity ingredients, including of course sort of back to our roots and our original mission, which are many of the traditional palm oil derivatives.
So. emollients, emulsifiers, surfactants. These are, they're different than chlorella oil, right? Chlorella oil is a novel [00:53:00] ingredient. It's high performance. It's driving claims on front of PAC about the benefits. A lot of what we want to grow into next are these sort of workhorse ingredients. And so these are large volume markets and we're really working with some of the largest players in the space to bring this to market.
So sort of a different strategy than bringing to rule oil to market, but you will see some more. Ingredients like to rule oil coming to market that have this sort of novelty high performance angle. Um, but we're also very, very excited about bringing some of these large volume palm oil replacements to market, especially given the timeline when we started the company.
You know, climate change was not top of mind. There was definitely no regulation forcing these ingredients out. I think with and some of these other mandates coming. A lot of our customers are actively seeking solutions, alternatives for things like [00:54:00] Palm. And so we are now operating at scale. We want to help them bring those to market.
Deanna: Yeah, no. And I think that's so important. You know, it might be fair to say that functional ingredients and commodity chemicals in some ways have been overlooked in the biotech conversation. So it sounds like you're doing very important work there. Yeah, well, I thank you so much for joining me. I, this was a fantastically informative interview.
Shara, thank you for being on the Cosmo Factory podcast today.
Shara: Thanks for having us at FluBuy.
Deanna: Yeah, indeed. Um, good. So really, thank you. And, um, if you give me a minute, I can predict when this will air. That's usually people's next question, which I remember right about now. So, um, see, I have 4, 000 things open. Let's do it this way. Yeah.
Okay.[00:55:00]
Shara: I know also, I think your, um, assistant or someone on your team had sent through a couple of requests for maybe assets and a signatures. So I've seen that, but so I will, I will that
Deanna: thank you. We definitely need the signature. Um, and the other materials, um, will mostly be used, um, on, on file at Cosmoprof, um, for, uh, any press outreach that comes, you know, based on our conversation or, um, the podcast in general. So they like to have all that material on hand. I think we're looking at a late September, early October for your episode and you will, you know, you will get an email, um, and link and some, uh, graphic assets if you want to
Shara: sounds great. Late September climate week. So it's always good [00:56:00] timing. Um, and just let us know. So, so yeah, my due date is September 1st. Um, but I'll be around, you know, I have a non traditional job. So it's a non traditional maternity leave. So I'll be around and we'd be of course, uh, super happy to help promote.
So just give me a heads up and I'll make sure my team's on it.
Deanna: Yeah. Wonderful. Thank you. Um, yeah, no, thank you for doing this. I'm wishing you all the best. Um, yay. Um,
Shara: you.
Deanna: yeah, I think that's it.
Shara: Okay. Perfect.
Deanna: it.
Shara: So late September, early October.
Deanna: Yeah. Yeah.
Shara: I'll add a little note here, and then we'll let my team know. But awesome. We're excited. Thanks again for having us. And you probably won't see me around at some of the sort of early fall events, but you might see my co founder or some other people on the
Deanna: Okay. Okay. No, that's fair. I hope you, I hope you're enjoying it. Yeah, I know.
Shara: going to put it by ear. So,
Deanna: Indeed. Good. Good for you.
Shara: Thanks so [00:57:00] much.
Deanna: No, have a good day.
Shara: YouTube, I love you.
Deanna: Bye now.
Um, and then, like I said, I will start off by listing some topics that we'll cover. Um, I will get to the point where I say with me for today's episode, Shara Tiku, co founder and CEO of C16 Biosciences. I will say welcome. That's your cue, um, to dive in. Um, and I will ask questions from there, um, with a bit of conversational nonsense in between so that, um, it flows a bit. I can see that you are more than ready. So I will find my spot, set my timer.
Shara: I have like five beverages this morning also, so I'll try not to make a lot of noise as I set them down.
Deanna: That's the way I like to roll. It's so funny.
Shara: Someone brought, I had a latte and then someone brought me like a yummy [00:58:00] Pandan matcha latte, which is, I don't know, great for the summer.
Deanna: Right? Oh, fun. Um,
okay. So we'll get started. This episode is about the future of palm oil. It's about specialty chemicals as well as commodity chemicals. It's about fungus, yeast, and fermentation technology. It's about the environmental and regulatory realities of deforestation and much more. With me for today's episode of Cosmofactory is Shara Tiku, co founder and CEO of C16 Biosciences.
Welcome.
Shara: Thank you. Thanks for having me, Deanna.
Deanna: I'm glad you're here. Thank you. Um, will you please just start by giving us a [00:59:00] quick introduction to C16 Biosciences and what the company does.
Shara: Yes, gladly. Z16 is a New York City based biotechnology company that produces high performance ingredients that leverage the best combination of natural and scientific innovation. Thank you again. for consumer products, including beauty and personal care,
Deanna: Wonderful. Nicely done. Um, now, because we can't all be chemists, and I'm fascinated by words, um, I want you to tell me if I have this right, uh, palm oil is rich in a fatty acid that's known as palmitic acid, and each molecule of this palmitic acid is made up of 16 carbon atoms, uh, 32 hydrogen atoms, and 2 oxygen atoms, so my presumption is that the C 16 company name is a reference to those 16 carbon atoms, yes?
Shara: right? Yeah. So, so palmitic acid is, is colloquially known as C16 fatty acid, and it is not the only fatty acid in [01:00:00] palm oil, but it is the most present and the namesake, which is, uh, the reason for our namesake as well.
Deanna: Excellent. Cool. I love that. So, Shara, if I recall correctly, you and I first met at the Society of Cosmetic Chemists annual meeting in New York City a few years back. I also remember not meeting you for what felt like years, maybe it was only a matter of months before that particular SCC event. And this is because C16 Biosciences was making headlines in beauty industry trade publications well before you launched your first ingredient.
I was very curious to learn more about what you were doing. So I'll ask you now to Please tell us about the early work your team did to develop your biomanufacturing platform. What was going on in the early days at C 16?
Shara: Yeah, I mean, we're, we're a biotech company and that requires research and development. It requires innovation. It requires a big idea and then proving that you can actually make it work. And in the early days of building the [01:01:00] company, we were very heads down on proving that our big idea could actually be validated, could be technically viable, economically viable and scalable.
Before we launched. So we did get some headlines. We actually tried to stay sort of under the radar, um, working on a big problem that people wanted to talk about, but we did decide to wait many years to commercialize until we really felt the product was ready to bring to market. And so what we were doing was really working in the lab.
Um, and if you come visit our lab, which is 20, 000 square feet in Manhattan, Overlooking. Hudson Yards and the Hudson River, you'll see things similar but different to what you might find in a cosmetics formulation lab. So you'll find things like agar plates and shaped flasks and bioreactors for growing microorganisms to produce sort of what we call the new natural ingredients.[01:02:00]
And in the early days, that's what we were working on was the, the basic It's biology. There's some chemistry to, um, to develop what we call our bio manufacturing platform.
Deanna: Yeah. Very cool. Thank you for that. And your microorganism is a yeast. Is that true?
Shara: Our primary microorganism is a yeast. We have looked, we work mostly with yeast, but we've also explored, yeah, I think you mentioned bacteria and algae as well. Um, and the basic premise of what we do is leveraging those natural microorganisms. For us today, it's, it's a yeast to make high performance, highly sustainable ingredients.
Deanna: yeah, yeah. So we know that not all biotech ingredient innovation relies on fermentation the way that yours does. Um, my question for you then is why did you opt for a fermentation based platform? Why was that the right choice?
Shara: So, you know, when we started our, our namesake is C16, when we started our, our ambition was really around palm oil and [01:03:00] looking at palm oil as a highly ubiquitous ingredient. It's found in about 50 percent of products on supermarket shelves, actually in cosmetics and personal care. It's, it's found in about 70 percent of products.
So the number's even higher. And as we looked at that ingredient, we realized it was. It was a really valuable player, right? Like it was doing a job that was unique, hard to replace with other ingredients. Workhorse super important for functionality across multiple products, and all of that was really good.
But what was bad was the way that it was being produced, which involved industrial monoculture deforestation of tropical forest to clear that land, which, you know, palm oil can only grow in really, really specific areas right around the equator. Massive amounts of greenhouse gas emissions. loss of biodiversity, et cetera, et cetera, et cetera, to make this vegetable oil.
And so when we started the [01:04:00] company, I met my co founders, um, at the MIT Media Lab in, in Boston. We were, the three of us were at Harvard and MIT in grad school for Different things all touching biology in different ways, but we were looking at palm oil and said, this is a great thing. The only problem is the way that it's made.
Could we make it a different way? And, you know, I think we had a hypothesis around using microorganisms to make it. Just like plants, the oil palm plant can naturally make these fatty acids. There are some microorganisms, including some yeast, which naturally make these fatty acids. And so we tapped into that basic idea and said, could that be possible?
What would have to be true? And we approached it that way. So I think, you know, we were very problem centric. We weren't tied to the technology being fermentation, but we had a strong hypothesis early that it could work and could scale similarly to plants. And so we gave [01:05:00] it a shot.
Deanna: Yeah. Yeah. Very cool. You mentioned there that a palm oil sourcing does come with some ethical and environmental challenges. Can you share more about what I might think of as the state of palm oil today and remind us why we love using it so much? Uh, and more about why it's problematic as it's conventionally sourced.
Shara: Yep. So today, palm oil alone is about a 70 billion industry. It is the most widely used vegetable oil in the world. And as I mentioned, it's found in about 50 percent of products on supermarket shelves, but about 70 percent of cosmetics and personal care products. Palm oil is really unique. You hit it right at the beginning in terms of its fatty acid profile.
So we won't get too much into the chemistry, but the composition of fatty acids in palm oil. allow it to perform so well in end products. And so it can be used as a whole oil, or it can also be used as a sort of platform or intermediary [01:06:00] in which it's broken down into composite parts, fatty acids, or fatty alcohols, and then transformed into dozens of different ingredients that show up on the back of things.
Labels that are include emollients, emulsifiers, esters, surfactants, and then as we look in food, a lot of the, again, emulsifying properties, um, or even stabilizers. And so. The unique properties of palm oil, which are different than every other vegetable oil, it's got a really, really unique profile, help drive performance benefits like.
Oxidative stability and shelf stability, it makes it really good at formulating and other ingredients. You can take the C 16 and C 18, or even the C 12 and C 14, and turn those into surfactants, which are required for anything in body care or laundry care. And you really can't get those molecules elsewhere.
So palm oil is really critical. [01:07:00] Everybody likes the performance of it, but like I alluded to earlier, the problem is really just the way that it's made, which requires Land right around the equator. That land is primarily home to tropical rainforest and historically growers have been slashing and burning that land, clearing it to convert it to oil palm.
Pretty much everybody in the industry knows about this problem, has deemed the problem. Has frankly tried to commit to sustainable sourcing of palm oil. So sourcing palm oil and its derivatives that don't engage in deforestation of high carbon stock land. It's just been really hard to do that. The supply chain is.
Really opaque, it's nearly impossible to know if. You know, the emollient in my lip balm came from a plot of land that did or didn't engage in [01:08:00] deforestation. Supply chains are way too complex and opaque. And even though we've had efforts at certifying sustainably sourced palm oil, that's really capped out at less than 20%.
And so that is not a global solution to this problem. It can help one player solve the problem, but it's not, it's not a global solution. And It's been a big push from consumer groups. There's been a big push from NGOs like Greenpeace, um, Forced Corporate Change, and many of the consumer goods manufacturers themselves have made the push, but we haven't really seen solutions.
And, you know, I think that's part of, that's part of why we're here today.
Deanna: Yeah. Yeah. Thank you for all of that. And folks who are paying attention to this issue will know that, um, by the end of this year, 2024, the EU deforestation regulations, uh, that affect palm oil sourcing will take effect. And you've, you've touched on deforestation there quite a bit, but help us understand what beauty makers will be faced with in the [01:09:00] regulatory landscape going forward.
Shara: Yeah, so I'll talk about, um, the EU regulations for POM and maybe I'll even just hit on regulation more broadly. So EUDR, EU Deforestation Regulation, and there's there's 2 more, um, laws that have just been passed by the European Commission, uh, EU, uh, um, Sustainability Due Diligence, around Sustainable Due Diligence and Sustainable Supply Chains are the regulations coming into play.
And basically, this is elevating the Expectation or the sort of barometer in which companies can claim that they have sustainably sourced ingredients. And so for in particular, this is covering 7 key crops, including palm oil and oil. And any company that's sort of importing those ingredients and using them in their products now has to prove that the palm [01:10:00] oil did not come from deforestation and the standard that many companies use today, for example, a mass balance standard, which says, you know, At least 51 percent of the palm oil that came to me did not come from deforestation and it's certified by this 3rd party.
That's not good enough. So EUDR has really elevated the standard for claiming sustainability and companies that fail to meet it can actually be fined up to 4 percent of their annual revenue or turnover. Which is material. So this is a really, really big landmark piece of legislation covers palm, but it also covers crops like coffee and cocoa and things like this.
Um, and I would say, you know, most companies are aware of it, are working swiftly to find solutions. And really, the only answers we hear, and we talked to a lot of people in the supply chain, which I think is an ingredient manufacturer, it gives us some unique insights, but formulators, CMOs, [01:11:00] distributors, brands.
Most of them realize at the very least, it's going to be materially more expensive to do this traceability if they can do it at all. And I think this is where solutions like ours, we're not the only solution, but biotech driven solutions, alternative types of solutions. Ways of making ingredients that don't come from these extractive agricultural processes, in addition to improved traceability in agriculture, all have to come, come about.
And I'll just hit quickly on 1 more,
Deanna: Sure.
Shara: the New York State Assembly bill. enacting the sort of beauty justice act, which is about regulating ingredients and personal care and cosmetics, which again, many of your listeners are probably aware, but it's also going to restrict certain ingredients, one of which is ethylene oxide, EO, right?
And so again, as we talk to a lot of these end product manufacturers, mostly brands, They're worried [01:12:00] about this. They're saying, okay, this legislation is restricting some really important workhouse surfactants that we never thought would get taken away. If that's going to go away, what else in my toolbox might go away?
And I think that just opens a broader conversation about ingredients and about supply chains and about sourcing to say, we've taken for granted where our ingredients come from, but there's actually this whole set of innovative options, and actually it's a place where sustainability can drive innovation to unlock.
Both drop in ingredients, so ingredients that replace things we use today, but also totally novel, better performing ingredients. And I think that's just a really exciting place to be in, in the sort of beauty and personal care world.
Deanna: Yeah. Yeah. Let's talk about your ingredient in that context. So, tarula oil, if I were to briefly describe it, I would say it's an antioxidant rich emollient, um, which might be, [01:13:00] might be accurate. You'll help me know. Um, but it helped me help us think about how it functions as a drop in replacement, but rather how it also really stands alone as a novel ingredient that can maybe just happen to also do the work of palm oil.
Shara: Yeah, and I think true oil is I love it as a product. Obviously, I use it on my face every day. Um, but I think I like it because it's like a really good microcosm or capsule of what biotech can unlock in this industry. You know, with ingredient companies, people often ask, you know, is it a replacement ingredient or is it a new ingredient.
And with biotech, the answer can be both. And so we started out looking for a palm oil replacement. So we said, okay, it needs to be this workhorse oil, but this chemical profile, let's see if we can make it. And we did pretty well at that on our first go, but we also along the way learned that these natural microorganisms that were, we were using to [01:14:00] produce the oil, had a whole bunch of untapped resources that we could actually.
Explore and extract through our sort of technology set. So with to rule oil, it's an oil. So think about a wide range of oils used in cosmetics, Marula oil, squalane, buckthorn oil. It's operating like that. So texturally formulation wise, it does all the things you want an oil to do. Although with biotech, you can actually create for these novel oil profiles.
So to rule oil is deeply moisturizing, but it's light. It sinks into skin really quickly. It has almost a silicone like slip or texture, but it's not just an oil. It's a, it's a bioactive oil is what we, what we call, but yeah, antioxidant rich. So it contains these essentially novel historically quite rare carotenoids in particular that promote healthy, vibrant.
skin. So carotenoids, as you mentioned, are [01:15:00] antioxidants that neutralize harmful free radicals in the body and reduce oxidative stress. We're probably most familiar with carotenoids like beta carotene, which is found in carrots and makes carrots orange, but also drives a lot of the health benefits and nutritional benefits of carrots.
But in skin, beta carotene is converted into vitamin A, which is crucial for skin health as well. And so with tarula oil, we make beta carotene, but we also found that the yeast that we Discovered and commercialized also produces sort of two rare, not previously commercialized carotenoids that help do so many cool things in terms of barrier protection, natural defenses of the skin, immunity boosting, anti aging.
And, uh, we can talk about some of those for different applications, but I think it's just such a cool example of. Biotech setting out to actually replace ingredients and along the way you can actually find all the cool [01:16:00] novel things that didn't exist before and produce sort of net new benefits or even novel, novel performance ingredients.
Deanna: Yes, yes, that's wonderful. Thank you so much. Um, and I believe your tarula oil is, um, essentially on the shelf in some consumer products now. Always very exciting for new ingredient makers. Congratulations on that. Um, can you share a bit about the brands or products that have been formulated with tarula oil?
Shara: Yeah, so it's really interesting about true oil is that it's really flexible and so you'll see it in a wide range of sort of. Form functions and people are using it. Brands are using it for different benefits. So, um, some of the products on shelves are, you know, liquid, like the nourishing oil for face, body and hair that we actually launched ourselves.
Um, you'll see it in creams and moisturizers. Um, so one company, lo this year launched a barrier repair product featuring Toru Oil at a, [01:17:00] um, very high, uh, inclusion level. It's really the hero ingredient in the product, and you'll see it in soaps. So, uh, Panaya, which is actually a. A fashion brand moved into personal care for the first time together with Hale's, uh, super cool UK based brand to launch a soap, a rewild body block bar featuring Toula Oil.
And then Hagels actually just launched their second product featuring Toula Oil, which is a sun care product. The seaweed Solar Protect SPF 50. It's a, it's a sun care oil using Toula oil. Um, that one's very cool because we've run clinical studies on to rule oils, benefits and some care and those carotenoids.
We were talking about boost SPF performance. So that's a very big category for us. Um, and then the last 1 that's coming soon is an oil cleanser product. So we're working with, I would say some of the most innovative brands in this space. I have loved [01:18:00] getting to work with many of these founders who are really pushing the envelope in terms of.
Sustainability as a driver. Of innovation, really questioning the ingredients and the packaging choices that they're making for sustainability. Um, and they've just been, they've been really, really fun to work with and launch products with.
Deanna: that's exciting. Thank you. Um, for some cosmetic formulators listening, I'm hoping you can just briefly tell us quickly about things like color, scent, temperature, parameters, those sorts of details about Tarula oil.
Shara: Yep, we hit on the sort of oil properties before. And again, it's, um, it's got a unique mix of fatty acids. And so it blends in solid form functions like soaps, but also liquids like oils and creams in between, um, I would say color is probably the most interesting part. So, um, the oil itself has this sort of reddish orange sun setty.
type of color. And that's exactly because of those antioxidant carotenoids we were talking about. The vibrant color is [01:19:00] really Mother Nature's way of telling us something really nourishing is inside. And so we sell the ingredient with the color. Um, and there are, I think, a lot of Benefits driven marketing claims that brands and manufacturers can use leveraging that, um, but we do also have a neutral color for those that are more traditional, which is a sort of, you know, neutral, um, ivory type of color.
Color. Um, scent. It has a slight oily scent. And again, I think maybe just one thing that's interesting here is sort of the battle between natural and synthetic. I think a lot of people want to talk about C 16 and what we do as synthetic or lab grown. Um, but actually what we do is. Highly natural. And and with that, you see the sort of naturally oily scent.
Um, so it's there. But again, I think you can use the product. Maybe just one surprising thing for formulators. It's a bioactive oil. It contains [01:20:00] active ingredients. We expected people to be using it at pretty low inclusion levels, but we've seen people using the product up to 40 percent inclusion. So, you know, I think all of these things, color, scent, and performance can be modulated up or down.
You're using it at 40%. It's really different than using it at
Deanna: Yes,
Shara: Um, so it really hits a wide range, and we spend a lot of time with formulators, chemists, CMOs, and brand owners themselves talking through different application sets.
Deanna: Yeah, very cool. Um, so based on our conversation, um, I'm going to presume that C 16 will not be a single ingredient manufacturer. Before we wrap up here, I just want to ask, uh, what is in your development pipeline? What can you share with us about the future?
Shara: Yeah, so so true oils are first ingredient and it's been it's been really fun bringing that one to market. Um, what's next, but not yet on the market is a broader range of specialty and commodity ingredients, including of course sort [01:21:00] of back to our roots and our original mission, which are many of the traditional palm oil derivatives.
So. emollients, emulsifiers, surfactants. These are, they're different than chlorella oil, right? Chlorella oil is a novel ingredient. It's high performance. It's driving claims on front of PAC about the benefits. A lot of what we want to grow into next are these sort of workhorse ingredients. And so these are large volume markets and we're really working with some of the largest players in the space to bring this to market.
So sort of a different strategy than bringing to rule oil to market, but you will see some more. Ingredients like to rule oil coming to market that have this sort of novelty high performance angle. Um, but we're also very, very excited about bringing some of these large volume palm oil replacements to market, especially given the timeline when we started the company.
You [01:22:00] know, climate change was not top of mind. There was definitely no regulation forcing these ingredients out. I think with and some of these other mandates coming. A lot of our customers are actively seeking solutions, alternatives for things like Palm. And so we are now operating at scale. We want to help them bring those to market.
Deanna: Yeah, no. And I think that's so important. You know, it might be fair to say that functional ingredients and commodity chemicals in some ways have been overlooked in the biotech conversation. So it sounds like you're doing very important work there. Yeah, well, I thank you so much for joining me. I, this was a fantastically informative interview.
Shara, thank you for being on the Cosmo Factory podcast today.
Shara: Thanks for having us at FluBuy.
Deanna: Yeah, indeed. Um, good. So really, thank you. And, um, if you give me a minute, I can predict when this will air. That's usually people's next question, which I [01:23:00] remember right about now. So, um, see, I have 4, 000 things open. Let's do it this way. Yeah.
Okay.
Shara: I know also, I think your, um, assistant or someone on your team had sent through a couple of requests for maybe assets and a signatures. So I've seen that, but so I will, I will that
Deanna: thank you. We definitely need the signature. Um, and the other materials, um, will mostly be used, um, on, on file at Cosmoprof, um, for, uh, any press outreach that comes, you know, based on our conversation or, um, the podcast in general. So they like to have all that material [01:24:00] on hand. I think we're looking at a late September, early October for your episode and you will, you know, you will get an email, um, and link and some, uh, graphic assets if you want to
Shara: sounds great. Late September climate week. So it's always good timing. Um, and just let us know. So, so yeah, my due date is September 1st. Um, but I'll be around, you know, I have a non traditional job. So it's a non traditional maternity leave. So I'll be around and we'd be of course, uh, super happy to help promote.
So just give me a heads up and I'll make sure my team's on it.
Deanna: Yeah. Wonderful. Thank you. Um, yeah, no, thank you for doing this. I'm wishing you all the best. Um, yay. Um,
Shara: you.
Deanna: yeah, I think that's it.
Shara: Okay. Perfect.
Deanna: it.
Shara: So late September, early October.
Deanna: Yeah. Yeah.
Shara: I'll add a little note here, and then we'll let my team know. But awesome. We're excited. Thanks again for having us. And you probably won't see [01:25:00] me around at some of the sort of early fall events, but you might see my co founder or some other people on the
Deanna: Okay. Okay. No, that's fair. I hope you, I hope you're enjoying it. Yeah, I know.
Shara: going to put it by ear. So,
Deanna: Indeed. Good. Good for you.
Shara: Thanks so much.
Deanna: No, have a good day.
Shara: YouTube, I love you.
Deanna: Bye now.