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1 CBI Buyer Requirements: Natural ingredients for cosmetics in Europe CBI Market Intelligence Product Factsheet Cloves in Germany 1
2 Introduction To bring your natural ingredients for cosmetics to the European market, you must source in a sustainable way and comply with international conventions concerning the supply and trade in plants. You must also provide detailed information on your company, processes and products to ensure compliance with legislation on cosmetic products and their ingredients. Buyers are likely to impose additional requirements with regard to quality, documentation and CSR. With which requirements must you comply in order to export cosmetic ingredients to Europe? You will not be allowed to bring your products to the European market unless you: Comply with the European Union Cosmetics Regulation (Regulation (EC) 1223/2009) Provide the proper documentation Comply with legislation on the Registration Evaluation and Authorisation of Chemicals (REACH) Comply with rules for Classification, Labelling and Packaging (CLP) Follow rules for claim substantiation Cosmetics Regulation (EC 1223/2009) The Cosmetics Regulation covers the safety and efficacy of cosmetic products, including claims. Although it applies to finished cosmetic products, it also carries implications for suppliers of ingredients: There are lists of prohibited and restricted substances, allowable colourants, preservatives and UV filters. Start by consulting these lists in order to learn the status of your ingredients. You will be expected to provide your buyers with detailed product information. Buyers are required to include this information in a Cosmetic Product Safety Report and a Product Information File. You will be expected to provide information on the physiochemical, microbiological and toxicological properties of your ingredients. Given the essential character of product safety and transparency with regard to safety in Europe, requirements concerning allergens are becoming stricter in terms of labelling and the inclusion of more allergens. Data on efficacy can increase the value of your raw materials. Manufacturers are highly interested in data that substantiate specific cosmetic benefits resulting from known concentrations of particular ingredients (or components thereof) in finished products. The EU Export Helpdesk provides a full list of requirements. Select your specific product code under Chapter 12, 13, 15 or 33. Ask your buyers which information they require and in which format they prefer to receive it. Cosmetic manufacturers and ingredient producers may assign you responsibility for the information in safety reports and information files. If you can provide all of the information that is needed, you will be able to offer a better package to your buyers. European buyers communicate their requirements in different ways. Some buyers have extensive supplier manuals that describe all requirements in detail, while others provide very little information. Do not test any new ingredients on animals. Find alternative methods. Even though there are some exceptions in the marketing ban in the European Union, buyers usually want to avoid animal testing altogether. Consult the Raw Material Information Form published by the Personal Care Products Council for guidance on the requirements. Use the Plan of the Toxicological Assessment file template published by UNITIS as a reference for the information that you should provide to your buyers. The EU Export Helpdesk provides additional information on marketing conditions for cosmetic products. If you produce botanical extracts, use suitable solvents and use only approved preservatives or no preservatives at all. If your ingredients are used in preservative-free cosmetics, you should acquire expertise in microbiology, as these cosmetics have their own quality liabilities. See our tips for finding buyers and tips for doing business for additional information. Documentation In order to comply with legal requirements, buyers need well-structured documentation on products and companies. You should supply detailed specifications and support them with: Certifications of analysis Technical Data Sheets (TDS) CBI Market Intelligence Buyer Requirements:Natural ingredients for cosmetics in Europe 2
3 Safety Data Sheets (SDS) These data sheets are becoming increasingly long and complicated, because of all the information that is required in order to comply with legislative requirements. European standards for SDS are also likely to be used in other regions. European buyers will also expect you to complete supplier questionnaires. Buyers use these questionnaires to trace their products back to the source and to obtain the information they need in order to comply with legal requirements. The length of these questionnaires is increasing as the legal requirements become more complicated. Topics in such questionnaires concern the type and origin of ingredients and how they are produced, as well as policies and practices in relation to labour and the environment. If you supply essential oils, you will also be expected to compose an allergen declaration in accordance with the Cosmetics Regulation and standards of the International Fragrance Association (IFRA). If you supply vegetable oils, you should pay attention to the protein content and allergens in your oils. Prepare a commercially oriented Product Data Sheet containing photos, information on the product s origin and bibliographic references. Buyers will appreciate this. For your own internal purposes, you should prepare a more detailed dossier containing all technical and commercially relevant data from both primary and secondary research. Cooperate with buyers who can help you with paperwork and safety tests. You could also seek qualified advice from specialised service providers with regard to preparing Safety Data Sheets. Consult the websites of European companies (e.g. The Soap Kitchen) for SDS examples. Consult the Raw Material Information Form of the Personal Care Products Council and/or the Toxicological Assessment File of UNITIS (as mentioned above) for examples of the documentation required. See our study on preparing a Technical Data Sheet for natural ingredients for cosmetics for additional information on documentation requirements. Study an example of a supplier questionnaire from Ceres, in order to see what type of questions your buyers might expect you to answer. REACH Chemicals, including natural cosmetic ingredients, are covered by the REACH (Registration Evaluation and Authorisation of Chemicals) legislation. European manufacturers and/or importers might therefore require them to be registered according to these regulations. To register new chemicals, their hazards must be evaluated before they are authorised for use on the European market. Not all cosmetic ingredients are required to be registered. Naturally occurring substances (e.g. vegetable oils and ingredients imported in volumes of less than one tonne per year do not require registration. To use one of these exceptions, European producers or importers of cosmetic ingredients must prove that their ingredients meet the specified conditions. You can export no more than one tonne per year to any importer without registration. Common ingredients are probably already registered under REACH. Registration of new ingredients is the responsibility of a Europe-based company or representative. This is a costly process, and your business partner might also require you to supply safety data. You can register new cosmetic ingredients yourself, by establishing your company as an Only Representative of your company in Europe. This will provide you with additional protection as a supplier, as it will ensure that you are not dependent upon one importer who holds the appropriate registration. It is important to note, however, that registration will cost more than 10,000, possibly even reaching several 100,000. CBI Market Intelligence Buyer Requirements:Natural ingredients for cosmetics in Europe 3
4 If your ingredients are registered under REACH, ask the European Federation of Essential Oils (EFEO) about which parties are allowed to import them. These companies could be potential buyers for your ingredients. If your ingredients are not registered under REACH, determine whether they should be. Are they exempted from registration? Consult the guidance for exemptions, published by the European Chemicals Agency. If your ingredients should be registered, decide whether registering them yourself would be worth the investment. What volumes could you supply? What is the value of your ingredient? Are they sufficient to pay for your high investments? Discuss with current or potential European business partners whether they are willing to form an alliance to go through the registration process with you. Note that your partners are likely to request exclusivity in order to be first to market. If you would like to register a new ingredient, consider hiring a consultant (e.g. through EFEO) to help you with REACH registration. Learn how you should implement REACH and CLP for your product ECHA website, under the heading Identify Your Obligations. This site provides a practical, step-by-step guide. Additional information about REACH is available at the EU Export Helpdesk. See our study on REACH for additional information and suggestions. Classification, Labelling and Packaging (CLP) Because they are categorised as chemicals, cosmetic ingredients must be labelled and packaged in such a way that any potential dangers are evident to workers and consumers who might use them. The specific requirements that apply depend upon the classification of the ingredients you export. The European Union has established packaging and labelling requirements for chemicals: the Globally Harmonized System of Classification and Labelling of Chemicals (GHS). You can use these requirements to learn how your ingredients are classified and which pictograms and other notices you will be required to include on their labels. You will also be required to include information on any potentially hazardous properties of chemical substances on a Material Safety Data Sheet (MSDS). The MSDS provides workers and emergency personnel information on procedures for safely handling or working with specific chemicals. The following information is required: Physical data (e.g. melting point, boiling point, flash point) Toxicity Health effects First aid Reactivity Storage Disposal Protective equipment Spill-handling procedures The websites of natural-ingredients companies (e.g. The Soap Kitchen) contain examples of MSDS. Consult the website of the ECHA, which includes a classification and labelling database. This database is a useful tool for determining which symbols and warning phrases apply to the substances you are trading. On the site, you can search for specific substances and find their symbols and warning phrases. Substances can be found by name, through using the European Inventory of Existing Commercial Chemical Substances (EINECS) or by their Chemical Abstract Service (CAS) number. The SpecialChem INCI Directory provides information on cosmetic ingredients, based on either the relevant INCI name (International Nomenclature of Cosmetic Ingredients) or the relevant CAS Number. The EU Export Helpdesk provides additional information on Classification, Labelling and Packaging (CLP). Claim substantiation (Regulation 655/2013) You will not be allowed to make claims concerning cosmetic products unless you can substantiate these claims. The Cosmetics Regulation specifies criteria with which you must comply with regard to such substantiation. Cosmetic manufacturers are increasingly looking for ingredients with proven efficacy. This is increasing the focus on efficacy, especially for active extracts. CBI Market Intelligence Buyer Requirements:Natural ingredients for cosmetics in Europe 4
5 This can pose a threat to exporters, as it requires providing additional documentation to new buyers in order to prove efficacy. Nevertheless, validated product claims also provide cosmetic manufacturers with an opportunity to bring innovative products to the market with a clear marketing story, as well as providing consumers with additional security, which is likely to support the product sales and drive demand for the ingredients to which the claim refers. Study the criteria on the justification of claims for cosmetics. These criteria have important implications regarding the evidence that you will need in order to support your claim. Analyse labelling and wording possibilities to ensure that you are selling an appropriate claim. Provide in vitro data (from cell research in a laboratory) on the efficacy of your products, in order to raise interest in Europe. Processors or manufacturers can then include your ingredients in their product-development processes. Your data can also be useful to processors, who can use the information as an intermediary when approaching manufacturers. When justifying the claims you make, you should go beyond documentation on traditional use. Although information on traditional use has strong marketing value and adds backing to the dossier, it is not sufficient by itself. With which global requirements must you comply? You must also comply with requirements based on the following international treaties on using and trading plant resources: CITES (Convention on International Trade in Endangered Species of Wild Fauna and Flora) CBD (Convention on Biological Diversity)/Access and Benefit Sharing (ABS) The European Union has translated these treaties into European law. Your own country is probably also a signatory to these treaties, meaning that you must also comply with them in order to satisfy national law. CITES CITES is aimed at protecting endangered plants and plant products by regulating their trade. CITES provides a list of plant species for which export/import is restricted or prohibited. If your products are listed in Annex A and Annex B of Regulation (EC) No 338/97, you will be required to obtain an export permit from your country s CITES authority. You will also need an import permit from the country to which you will be exporting. Consult the Annexes to determine whether import and export permits are required for your products. If you are not sure whether an import or export permit is required, contact your local CITES authority. If you are working with a new species for the first time, check its conservation status on the CITES Checklist. Additional information about CITES is available on the EU Export Helpdesk website. CBD/ABS The goal of the Nagoya Protocol of the Convention on Biological Diversity (CBD) is to ensure that the benefits of genetic resources and traditional knowledge are shared in a fair manner. This is known as Access and Benefit Sharing (ABS). It is especially important for wild-collected ingredients. The Nagoya Protocol contains terms and conditions for companies wishing to use genetic resources or traditional knowledge. It provides guidelines for accessing these resources and knowledge, as well as for sharing the benefits these companies gain with collectors or growers who supply them. Many countries have signed this protocol, which has since been adopted into national law. If your home country is a signatory, you must comply with these national laws. The importance of ABS has grown in Europe, especially since the European Union adopted these guidelines into European law. As a result, European companies are required to follow the national ABS legislation of the countries from which they source. Buyers will therefore demand proof of compliance from their suppliers. CBI Market Intelligence Buyer Requirements:Natural ingredients for cosmetics in Europe 5
6 Develop a procedure for determining whether ABS applies to every new genetic resource or traditional knowledge that you would like to develop. This includes knowing the local context and officials. Consult the CBD website for additional information, including country profiles. Demonstrate your compliance with CBD principles and offer security to partners/buyers. Contact local officials for additional information. Which additional requirements do buyers often have? Many buyers have additional requirements for natural ingredients for cosmetics. Finding buyers in Europe requires you to demonstrate at least a basic level of compliance, and some suppliers may demand that you meet many more of these requirements. Regardless of the type of ingredients you supply, European buyers demand sustainable sourcing, in terms of quantity, quality and compliance with basic CSR principles. Quality management European buyers expect good quality standards in the production and manufacturing of raw materials: If you farm or collect raw materials, you should follow Good Agricultural and Collection Practices (GACP) before processing. Buyers expect you to follow at least the Hazard Analysis & Critical Control Points (HACCP) principles in your processing facilities. In addition to preventing food-safety hazards, the use of these principles helps to ensure product safety for cosmetic applications. If you would like to do more, you could use the Good Manufacturing Practices (GMP) of the European Federation for Cosmetic Ingredients. If buyers refer to product quality standards in their product specifications, they will expect you to comply with them as well. Examples include standards from the International Organisation of Standardisation (ISO) or the International Fragrance Association (IFRA; for essential oils). Monitor the quality of raw materials before they arrive at your processing facility. This is crucial to ensuring consistent quality. Implement a good management system. At the very least, follow the HACCP principles. You could also consider GMP for cosmetic ingredients. Be sure that you (and your suppliers) comply with the GACP guidelines of the World Health Organisation in all of your operations and activities. In addition, demonstrate that you follow the GACP guidelines in your marketing materials. This can provide you with an edge over your competitors. Prepare analysis reports containing information on the quality of your products. Depending upon the ingredient, European buyers may ask for this information. Sustainable sourcing You should be able to demonstrate that you are a sustainable supplier, in order to ensure the future availability of your ingredients. Although the certification of sustainable practices is not required, it can help you to enter niche markets. Read more about relevant standards under the requirements for niche markets. If you collect plants from the wild, your sourcing practices should avoid over-harvesting (in order to ensure future availability). You will also be expected to provide living wages to your collectors. European buyers are increasingly demanding that their suppliers follow sustainable collection practices, as they are facing supply shortages for a growing number of plant species. The most commonly stated reasons for these shortages are overharvesting, habitat destruction and fewer collectors. CBI Market Intelligence Buyer Requirements:Natural ingredients for cosmetics in Europe 6
7 Conduct a resource assessment and implement a resource management system (e.g. as prescribed by FairWild certification). Detailed information on availability is crucial for buyers. If you supply cultivated ingredients, demonstrate their sustainability by producing according to organic principles. If you supply wild-collected ingredients, consult the status of regulations in your own country regarding the Convention on Biological Diversity. In addition, determine the conservation status of specific species, using such resources as the red list of the International Union for Conservation of Nature (IUCN). Demonstrate that you practice sustainable wild collection. Demonstrate the impact of your company on biodiversity, and provide documentation of sustainable collection practices. Show sustainable wild collection by implementing Good Agricultural and Collection Practices (GACP) through FairWild certification, collecting according to BioTrade Principles and Criteria or documenting sustainable collection practices. Determine your options for domesticating species that are insufficiently available in Europe. Always start by conducting a feasibility study in order to determine the economic viability of such trajectories. Social and environmental responsibility Corporate Social Responsibility (CSR) European buyers are looking for suppliers who are able to comply with good standards of social and environmental responsibility. They select suppliers whose codes of conduct aim to improve their performance in such key areas as child labour and limiting damage to the environment. You can demonstrate your Corporate Social Responsibility (CSR) policies by: Following company-specific policies (e.g. of large manufacturers) Implementing international initiatives from the industry (e.g. the Business Social Compliance Initiative) Developing your own code of conduct According to industry sources, the implementation of social responsibility systems implemented will become a basic market-entry requirement in the near future. You should demonstrate to current and potential buyers that you know how you score on CSR and that you have set targets to improve your performance in this regard. Assess your CSR performance (e.g. by conducting a self-assessment). Compare your performance to publicly available standards (e.g. FairWild or SA 8000). You could also consider obtaining certification according to such standards. At the very least, build awareness of CSR in your company, and comply with the basic principles (e.g. no child labour). If you would like to do more, develop a code of conduct for your company and your suppliers that covers social and environmental performance. Read more about the United Nations Global Compact. Some buyers demand compliance with the 10 principles of this initiative. These principles refer to human rights, labour standards, the environment and anti-corruption. Consult social responsibility platforms, including the Supplier Ethical Data Exchange (SEDEX). These platforms provide a template for the information that is typically required. They also facilitate the sharing of this information with potential customers. What are the requirements for niche markets? If you would like to sell your ingredients to manufacturers of natural or organic cosmetics, your production should follow the guidelines for natural and organic standards. You could also certify your ingredients as Fairtrade. The ITC Standards Map contains a full overview of certification schemes within the sector. Consult the Standards Map videos on YouTube to learn how the Standards Map can help you to identify initiatives that may be useful for your company. CBI Market Intelligence Buyer Requirements:Natural ingredients for cosmetics in Europe 7
8 Natural cosmetics The substances that can be referred to as natural cosmetics are defined according to private-sector standards (i.e. COSMOS and NaTrue). In essence, cosmetics can be certified as natural if they contain a certain amount of natural ingredients and if they follow the guidelines concerning permitted ingredients, as specified in the aforementioned standards. These documents include guidelines concerning the processes and additives that are permitted in the development of natural cosmetics. As a supplier, you should follow these guidelines, so that your buyers can use your ingredients in natural cosmetics. In general, an ingredient can be referred to as natural if it: is derived from naturally occurring raw materials, with minimal processing does not use genetically modified organisms (GMOs) has not been irradiated has not been tested on animals is biodegradable does not use pesticides Initiatives are being taken to develop an international standard for natural and organic standards (e.g. those developed by Natrue and Cosmos). The first part of a draft ISO standard for natural and organic cosmetics has been published. The second part is under development. The final version is eagerly awaited by the industry and regulators. Include the natural character of your product in your marketing tools. Buyers are interested in products with a story. Be sure that the story is true: do not make any claims without scientific evidence. Be sure that your products are traceable and that your production process is transparent. This is increasingly important in order to demonstrate that your ingredients follow the guidelines of natural and organic standards. Review the list of companies that have already obtained finished product certification. These lists are provided on the standard websites. Match the list to the ingredients you offer, to help you decide whether to obtain approval or certification for specific ingredients. Organic As is the case for natural cosmetics, organic cosmetics are defined by private-sector standards. Cosmetics are organic if they contain a specified amount of organic ingredients. The COSMOS standard is becoming the dominant standard in Europe. According to industry sources, 80% of new cosmetic products with organic and natural certification coming to Europe will bear the COSMOS logo in In addition to certifying a cosmetic end product, producers can also choose to use organically certified ingredients. Private-sector standards use European Union legislation on organic production and labelling of food products as a basis for labelling cosmetic ingredients as organic. Certifiers for ingredients for cosmetics include: Soil Association (UK) Ecocert (France) BDiH (Germany) The difference between organic and natural cosmetics is not always clear to consumers. Even though the market for organic cosmetics is growing strongly, the market for organic certified cosmetic ingredients remains limited. If you are unable to find buyers who are interested in organic certification, it might be necessary to sell your certified ingredients without the organic premium. Determine the interest in organic certification for your ingredients before attempting to meet the requirements for certification. Determine the size of the market for your organic certified ingredients and whether you will be able to recover the investment costs associated with obtaining certification for the ingredients. Consult our study on trends for natural ingredients for cosmetics for additional information on the organic trend. CBI Market Intelligence Buyer Requirements:Natural ingredients for cosmetics in Europe 8
9 Fair production Fair trade is becoming increasingly popular in cosmetics, in part because consumers recognise Fair Trade labels from food products. Although cosmetic manufacturers can certify their final products, they are more likely to choose ingredients with fair-trade certification to support the image of their brands. In this case, the final cosmetic product is not certified. Consumers (especially those in the United Kingdom) are increasingly demanding natural cosmetic ingredients with certified fair production. They are also becoming increasingly interested in social sustainability. Examples include: Fairtrade Fair for Life FairWild (wild-collected ingredients) More importantly, European consumers are interested in knowing the origins of cosmetic ingredients. They would like to hear stories about the people who produce these ingredients. You can exploit this trend by addressing fair production methods in your marketing story. Read more about FairWild, Fair for Life and Fairtrade in the ITC Standards Map. Consult the Fairtrade Herbs and Spices list for herbs that can be sold as Fairtrade. In addition, the Fairtrade standard for herbs contains information on the requirements for Fairtrade certified herbs. Use your code of conduct to demonstrate fair labour conditions. Create an authentic story for your company and your products. Use this story to show potential buyers where you are located, where your products come from and how they are collected or harvested and processed. Our study on trends for natural ingredients for cosmetics contains additional information about the importance of Fair Trade in the sector. CBI Market Intelligence Buyer Requirements:Natural ingredients for cosmetics in Europe 9
10 CBI Market Intelligence P.O. Box AC The Hague The Netherlands This survey was compiled for CBI Disclaimer CBI market information tools: July 2016
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