rethink sustainability
Creams of the crop: meet the companies behind the growth of deforestation-free cosmetics
“Ingredients” is a word most of us associate with food, and we pay close attention to those that go into the meals and snacks we put inside our bodies. The same level of attention, however, is not always paid to the ingredients in the products we put on our bodies. Cosmetics often use a wide range of chemicals, some of which have been shown to irritate skin1, while others have been linked to cancer and reproductive problems.2 They are also connected to deforestation because of their use of palm oil.3
Natural cosmetics have long offered an alternative, but they have also been the exception rather than the rule. Now, a new wave of all-natural, deforestation-free cosmetics suppliers are emerging. They are providing ingredients for moisturisers, body butters, hair oils and a host of other products, and are winning over Western brands. Consumer interest in sustainable beauty products is helping; one global survey says two-thirds of buyers see sustainability as a defining factor when making a purchase4. Policy is also making a difference, notably a first-of-its-kind law in the EU banning imports of goods linked to deforestation from the end of 20245.
We spoke to two different producers of natural cosmetic ingredients on two different sides of the world to find out more. BioTara works in Suriname and Brazil and was founded by John Goedschalk, a financial executive turned entrepreneur who also spent nearly a decade as Executive Director of Conservation International Suriname. Over in Indonesia, Forestwise CEO and founder Dirk-Jan Oudshoorn worked in supply chain management and as a project manager for charitable foundations before setting up his own business.
Why did you start companies that create natural cosmetics ingredients?
John Goedschalk, BioTara: I’m an economist, but I’m also an environmentalist and entrepreneur. The question I'm looking to answer brings together all those disciplines – how do you make standing forests worth more to communities than dead ones? Natural cosmetics that use wild oils clarified from nuts are a way to do this. There’s no deforestation, as the nuts are simply harvested from the trees. One nut we use is the Brazil nut. An average tree produces 40 kilograms a year, and the collectors we work with are permitted to take half, to allow the crop to regenerate.
Dirk-Jan Oudshoorn, Forestwise: We work with illipe nuts, kukui nuts and others. Harvesting nuts for cosmetics provides a real economic alternative for people here. Their other options are linked to rubber, palm oil and other sources of deforestation, meaning eventually they’ll run out of income because they’ll run out of forest. Forestwise has been going for six years. We’re profitable, and what we do is profitable for the people here as well as for the planet. Communities make more money now from keeping the forest standing.
Read also: Hope from the ashes: unearthing ancient value in our forests
What ingredients do you make for natural cosmetics and what benefits do they offer?
John Goedschalk: Brazil-nut oil has the highest naturally occurring selenium of any nut or foodstuff; it’s an antioxidant that removes heavy minerals from your body, and it’s great for hair – it gives shine and volume. For your skin, it’s anti-ageing and adds elasticity. Babassu oil is an amazing emulsifier and emollient. Around USD 1.5 billion is traded each year6 and you can find loads of cosmetics made with babassu online. I must also mention copaiba oil; incredible for healing wounds, ulcers, for treating mosquito bites, dermatitis, psoriasis, or to tackle dandruff and hair loss.
Dirk-Jan Oudshoorn: Kukui oil is also great for hair. People in Indonesia say it prevents hair loss and stops hair going grey. Illipe nut oil has superb moisturising qualities. It’s also great for healing skin – scratches, wounds, sunburn. I say that from personal experience.
What business models do you have with local communities?
Dirk-Jan Oudshoorn: We buy nuts from farmers at double the market price. It’s a great incentive for people to move into this line of work. We process the nuts in a local factory and we’re making a profit despite paying high prices for feedstock. One harvest of illipe nuts for someone with two hectares of land can give them 1,000 kilograms – that’s six months’ salary. A harvest like this is possible every two or three years, but in the time between people can diversify into other year-round products used in natural cosmetics such as kukui nuts, arenga sugar and coconuts.
Read also: Swiss farming – a pioneer in sustainable agriculture
John Goedschalk: I wanted to find economic opportunities that are culturally appropriate. Wild oils tick these boxes, as the plants are already there. Communities can harvest the nuts, but they need help to extract the oils, as the nuts are so hard. I designed a machine to do it – it cracks 15 at a time. We support communities in setting up factories and take a 25% margin on revenues. This gives them a daily wage of USD 30, far above average for Suriname. We have long-term sales agreements to give communities stability. Even small commitments from big companies can help these communities become self-sustaining, while providing these companies with products they need because of changing deforestation regulations.
How can you guarantee traceability and that products are deforestation-free?
John Goedschalk: We use traceability and transparency software that ensures compliance with EU rules. Farmers have a bag with a QR code linked to their ID. The bag is assigned to a tree cluster where they are allowed to collect nuts. The nuts are scanned as they are processed, dried and stored, and this data is uploaded onto a blockchain system hosted by IBM. Anyone who buys from us can scan the barcode and see where the ingredients came from.
Dirk-Jan Oudshoorn: We have an app to verify traceability. The farmers register themselves and their land, and when they sell to us we get their profile and the nuts gets tagged. That tag remains with the product after it’s refined, so buyers can see the source of their oil. This level of traceability is essential not only for meeting regulations but also for attracting large distributors and brands. The new EU deforestation rule helped us sign a deal with a major illipe nut distributor we’d been trying to get the attention of for years.
How much interest have you had from big brands?
Dirk-Jan Oudshoorn: We have numerous contracts in Europe and the US. We work with several large distributors that work with global brands. Some used to buy illipe from another supplier but now they buy from us, so that will get us into a lot more European cosmetic brands. However, the main scale-up for us now is the food industry. We’re suddenly going 10 times higher in volume and our margins are increasing. Illipe is half or even a third of the price of cocoa following its recent price spikes7, and its high melting point makes it a great alternative to cocoa butter.
Read also: Building a sustainable chocolate supply chain
John Goedschalk: Companies that are ahead of the game understand that sourcing directly from communities is the only way to safeguard themselves from traceability issues linked to deforestation. That’s much harder to prove with a supply chain full of middlemen. Lush and Brazilian cosmetics brand Natura are interested in working with communities, but it’s not their speciality to train farmers, so there is a clear opening for people like us. We are giving communities access to technology, infrastructure and markets. We’re also raising a capital round at the moment.
How much market potential do natural cosmetic ingredients have?
Dirk-Jan Oudshoorn: For kukui, arenga sugar and coconut oil, there’s huge supply that’s not being tapped into. For illipe nuts, we’re collecting about 2% of what’s available, so we can go 50 times higher. Everything is done in line with sustainable harvesting practices, leaving at least 20% of the nuts behind for regeneration. There’s a lot of empty land in Kalimantan that could be reforested, with illipe one product in the mix. People want sustainable products and some people will pay extra for them, but not everyone can afford to. Carbon taxes could level the playing field. Shea butter can be bought much more cheaply, but it’s maybe not deforestation-free.
John Goedschalk: The movement towards natural cosmetics is huge. Consumers are willing to pay more for the same product if it's positive for the planet8. Green cosmetics associations are promoting sustainability around sourcing, and big corporates are moving towards this. Cosmetics companies need to see this is not just in their interest, it’s also their responsibility to use their supply-chain power for good. They're not going to lose by doing this, because they’re going to be able to tell a great story about their products and about solving one of the world’s problems for future generations.
1 16 Toxic Chemicals To Avoid In Cosmetics And Skincare – SkinKraft
2 The Toxic Twelve Chemicals and Contaminants in Cosmetics | Environmental Working Group (ewg.org)
3 What is the Environmental Impact of the Beauty Industry? (cleanhub.com)
4 Consumers’ Sustainable Beauty Attitudes | Global Cosmetic Industry (gcimagazine.com); Survey Reveals Growing Consumer Interest in Environmentally Conscious Beauty Products - Environment+Energy Leader
5 Deforestation - Consilium (europa.eu); The new EU Deforestation Regulation - see the wood for the trees - Lexology
6 Palm kernel or babassu oil, crude | OEC - The Observatory of Economic Complexity
7 Chocolate: Cocoa price hits record high as El Niño hurts crops - BBC News
8 Consumers say their environmental concerns are increasing due to extreme weather; study shows they’re willing to change behavior, pay 12% more for sustainable products | Bain & Company
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