One trend in the beauty value chain has been the consolidation of small manufacturers by private equity firms with visions of building portfolios. Unfortunately, indie beauty brands are often the collateral damage in such transactions because the first step is often mercenary optimization, leaving brands that cannot hit newly established minimum order quantities scrambling for new partners.

Bucking this trend, Federal Package, a preferred contract manufacturer for many leading personal care companies, has doubled down on its manufacturing capabilities with the launch of FP Labs, putting 40 years of experience into building a complete solution for beauty brands of all sizes. With extensive capabilities and dedication to quality products and customer service, Federal Package is the go-to source for all aspects of contract manufacturing, from packaging to formulation, filling, and everything in between.

“The timing was right to launch FP Labs this year after a two-year investment in R&D and analytical testing capabilities that includes a substantial build-out of our microbiology and quality-control labs, along with greater space dedicated to R&D innovation. These expansions allow us to bring more testing in-house, providing shorter lead times and better cost structures for our customers,” said Melissa Niebes, Chief Executive Officer.

Fully Integrated Agile Strategic Partner

In an increasingly competitive environment where money and resources are tight, formulators and contract manufacturers must be as agile and adaptable as the independently owned brands they support. Recognizing the increased sophistication of the indie start-up ecosystem, FP Labs saw an opportunity to become a contributor across the extended value chain, assisting in product innovation, manufacturing production, supply chain support, claims, compliance and regulatory education, and sustainability, as well as product optimization. 

"In addition to the R&D expansion, we recognized a need to take our project planning process to a new level. This has included two new software programs as well as additional employee resources to ensure we’re on time and within budget. The brands we work with influence every aspect of our business and the foundation of our success. These additions will deepen our relationships with the companies that choose to partner with us,” said Laura Horne, VP of Sales & Marketing.

FP Labs brands are forever manufacturing partners with a model purpose-built to evolve with business needs, supporting, building, and helping the brand to scale. Their decades of industry experience and infrastructure allow them to successfully service brand partners by navigating increasingly demanding regulations and specific retailer requirements while ensuring speed, quality, and compliance.

From Start-Up to Scale-Up “Grow With You” Solutions

Contract manufacturers have long struggled with fully capturing the potential of indie beauty. As a manufacturer, maintaining production efficiencies and profitability at these lower volumes is the great conundrum. This creates a scenario in which start-ups launch their brand with small independent partners willing to run small batches with flexible schedules. These relationships work until they don't.

“When brands gain that first level of success, it is typical for them to outgrow the capabilities of their first contract manufacturing partner. This is usually volume related but can also be issues with the formula moving from manual to more automated processes. We get many technology transfer projects from brands in this situation. Sometimes it is just about small changes in the manufacturing process, other times it may require a small adjustment to the formula to ensure it can scale on different equipment,” said Horne.

With a team deeply rooted in the workings of the beauty space, FP Labs was specifically built to support the needs of emerging beauty brands from start-up through growth mode and beyond. No worries about having to scramble because you've outgrown your manufacturing partner. Having a relationship with a supplier that can flex your business's needs is a competitive edge, removing the friction and stress that most indie brands face as they scale and allowing them to focus on long-term growth.

Providing a Regulatory and Compliance Safety Net

Consumers demand more transparency from brands, and brands respond with tactics like ingredient education and supply chain transparency. From a business perspective, contract manufacturers also need to be more transparent so that brands can deliver on these promises. FP Labs has developed tools to facilitate clear communication and provide access to information throughout the development and manufacturing process.

“We work with small DTC and large beauty companies that require either high levels of sustainability or transparency. We help them source materials to fit these needs. This could be a raw material like sustainable palm oil, or the ability to provide reporting on the PCR content throughout the manufacturing process of our containers to comply with laws and regulations. We anticipate these requests to grow as consumers are demanding it, states and legislatures are proposing new laws, and brands are increasing equity positioning in this area,” said Horne.

The rollout of the Modernization of Cosmetics Regulation Act of 2022 (MoCRA) has raised the regulatory bar. This act is the most substantial expansion of the FDA’s authority to regulate cosmetics since the passing of the Federal Food, Drug, and Cosmetic (FD&C) Act in 1938. This new legislation and the deadlines associated with it aren't optional and are stretching the bandwidth of small independent brands that do not have regulatory expertise in-house. For these brands, having a manufacturing partner like FP Labs that is well-versed and willing to provide regulatory education is a critical factor.

“We help brands understand legal and regulatory mandates and laws so they can be compliant. It can be confusing who is the ‘owner’ or ‘manufacturer’ by definition. For us to be MoCRA compliant, we have to register as a facility along with the brands and products we produce. The brands register as the owner or manufacturer. Similar to how OTCs have been for years, the FDA recognizes that owners commonly use contract facilities to perform some manufacturing activities. When an owner uses a contract facility, the FDA still considers the owner’s quality unit as responsible for approving or rejecting products manufactured by the contract facility, including for final release. We as a facility have to be compliant as well, but we are not putting the product in the hands of consumers so the responsibilities are different,” said Niebes.

As challenger brands redefine what it looks like to shake up the industry, having an entrepreneurial-minded manufacturing partner enables them to move fast and be innovative.

The Future of Beauty

There is no turning back, everything moves faster, and the stakes are higher. The state of the current beauty landscape is one of evolution and disruption where emerging brands can scale fast, keeping the big beauty guys in a scramble to compete. Brands want and need to feel like their contract manufacturer partner is an extension of their team.

At FP Labs, connectivity and closeness are crucial to staying in lockstep with the needs of their clients. The beauty ecosystem is small, and contract manufacturers play a very important role. Partners that are relationship-based rather than transactional makes them a vital extension of the brand's operations and product development teams.