Adapting to Tariff Challenges: Insights from Industry Leaders

Tariffs have quickly become one of the most pressing topics, dominating conversations across the beauty industry. Brands are racing to strategize and understand how these trade policies will impact their sourcing options, inventory levels and, most critically, profit margins. While there is no universal solution to this issue, the urgency for action is undeniable. Companies must determine their path forward by deciding how to adapt and integrate these added costs into their financial projections to stay ahead in today’s market.

Beauty brands are facing the challenge of managing additional costs they may not be able to completely absorb and have to make critical decisions on how to operate their companies. The key question is: how can companies adapt without shifting some of these costs to consumers while maintaining the quality their customers expect?

Carolyn Naporlee-Cipolla, Director and Co-Leader of Anchin’s Beauty, Health, and Wellness group, spoke with Divya Gugnani, CEO and Co-Founder of Wander Beauty about today’s challenges who stated:

“As a beauty brand with global supply chains, the proposed tariff increases present significant challenges for our industry. At Wander Beauty, we’re focused on maintaining product quality and accessibility for our customers while navigating these changing economic conditions. We’re working closely with our suppliers to minimize disruptions and exploring innovative solutions to mitigate potential price impacts. The beauty industry has always been adaptable, and I believe companies that prioritize transparency and customer value during this transition will emerge stronger.”

While some brands roll out solutions to help maintain their production quality and costs, others feel that this is an opportune time to take a step back and examine how they are efficiently producing their product and determine of the current market conditions should serve as a catalyst to refresh their brand.

Symone Wright, Operations and Project Manager from Kreyol Essence states: “The beauty industry can expect to be greatly impacted by tariff changes ranging from supply chain strategy to formulation and compliance. Some companies may have to explore diversifying suppliers and raw materials from other regions and scout domestic options. Naturally, this will affect operational costs for inventory management, demand planning, and even finished product costs at the consumer level. This can be an opportunity for some companies to explore reformulation and modifications to packaging to offset challenges, as well as an opportunity to be creative in launching new products. Being adaptive and innovative will help beauty brands maintain integrity and resilience in the changing market.”

Beauty brands stand united in their dedication to meet customer expectations. While tariff-driven price increases may be anticipated, brands that are transparent with their loyal followers may have a competitive edge in implementing those changes. More established industry players may be better positioned to absorb costs, yet growing companies could be nimble enough to implement change quickly and forge a new direction as new information emerges, actively exploring all potential paths forward.

Tariffs may significantly impact beauty, health and wellness companies by increasing costs and disrupting supply chains, but strategic approaches can help mitigate these challenges. In the face of adversity, the industry, and its leaders, continue to showcase their ability to adapt, persevere, and prosper!

If you have questions about this article or would like to discuss the impact of tariffs on your business, please reach out to Carolyn Naporlee-Cipolla, or your Anchin Relationship Partner.