In addition to functionals, Evonik is increasingly producing active ingredients, called “actives” for short. “There’s an especially big demand for natural and skin-related substances such as ceramides, peptides, amino acids, sphingolipids, and hyaluronic acid, which can have a direct influence on microbiological processes in the skin,” says Boinowitz. Two years ago, Evonik acquired the French startup Alkion Biopharma SAS in order to expand its business with plant-based active ingredients. This subsidiary, which has been renamed Evonik Advanced Botanicals, cultivates plants that produce active ingredients in the form of herbal biomass under laboratory conditions. In this way it produces extracts in especially high concentrations and without seasonal fluctuations in terms of availability or active ingredient content (Reportage).

One new trend in the cosmetics industry is a focus on the skin’s natural microbiome. “Right now we’re learning how this interplay between good and bad bacteria on our skin influences the skin’s health,” Boinowitz explains. Evonik recently launched its first microbiotic skincare product, Skinolance^®, on the market. Established manufacturers such as Beiersdorf AG and the US pharmaceuticals and consumer goods company Johnson & Johnson are also keeping an eye on these new developments. Both of them have bought shares in S-Biomedics, a startup that was founded in Magdeburg, Germany in 2015 and has developed a product that combats acne by influencing the microbiome.

But the most important trend today has nothing to do with active ingredients or skin cells: Digitalization is causing far-reaching upheavals. “Things have changed more in the past three years than they did in the previous 50,” concluded L’Oreal CEO Jean-Paul Agon in a recent interview published by the newspaper Handelsblatt. “Thanks to the Internet, small brands are popping up like mushrooms. In the digital world it’s easier to create a small brand. As a result, there’s a lot more variety in the sector today.” In addition, there are online influencers who in some cases have millions of followers on Instagram or Twitter and set their own trends—and manufacturers have to react to these trends. “It’s a big help if our suppliers can already pull the data about an active ingredient that is suddenly in demand, or even a finished formulation, out of their files,” says Dr. Harald Büttner, Head of Technology Scouting at Beiersdorf.

The good news is that social media is boosting the cosmetics business. For example, about 1.5 billion tubes of lipstick were sold in 2017—an increase of 13.6 percent compared to the previous year. This was partly due to the fact that young consumers today want to be “selfie- ready” at all times and use makeup accordingly. Striking looks, with luscious lips and strong contours, are popular. A flood of makeup tutorials on YouTube shows how it’s done.

In the digital world, services and data are growing in importance. L’Oreal recently bought Modiface, a Canadian tech startup that enables customers to use augmented- reality software to try out different makeup products virtually. The software runs as an app on smartphones, but can also be used for interactive mirrors in a customer’s own bathroom or in a boutique. “We acquired Modiface because we are absolutely convinced that services represent the future of the beauty sector,” said L’Oréal’s Chief Digital Officer, Lubomira Rochet, to the business magazine Forbes concerning the acquisition.

Modern sensors are driving another trend: individualized care for every skin type and every lifestyle. At the beginning of 2018 L’Oreal launched a small UV sensor that can be glued onto a fingernail and wirelessly sends data to the wearer’s smartphone. Evonik is literally going even deeper. It has invested in a startup called mySkin based in New Jersey, USA, which has developed the mobile terminal OKU. This is a handy cube that uses an optical sensor to analyze the user’s skin in depth. A smart app uses this data to create individualized tips about care, nutrition, and lifestyle. On the basis of constantly updated user data, OKU continuously learns—and so does Evonik. “We’re learning what works, and for whom it works,” Boinowitz explains. “As a result, in the future we could also distribute test products to OKU customers and conduct largescale studies of their effects. So far, even the biggest cosmetics producers have seldom been able to conduct such studies.”

Both digitalization and natural trends are being influenced by beauty product customers’ desire for greater personal control. Customers want to know what’s inside the products they buy. Minimalistic formulations with only between five and ten natural ingredients are popular, and there’s a flourishing do-it-yourself scene in which the popular Thermomix food processor is used to create the user’s own care products. The startup The Function of Beauty enables customers to concoct shampoos and conditioners according to their own preferences. The Experimental Perfume Club is an open-access perfume laboratory in London that can turn anyone into a fragrance designer.

“It’s all about creating the equivalent of Nespresso for the perfume industry. We think this is a really hot trend,” says L’Oreal CDO Rochet. In a few years, it may be a matter of course for cosmetics consumers to create their own care products at home at the push of a button—just like an espresso from an aluminum capsule. A skin sensor will provide them with the necessary data. L’Oreal, Beiersdorf, and similar companies will offer the microbiological know-how as a digital service. And Evonik will provide the sustainable natural raw materials.