EP79. The indie beauty challenge of sourcing natural ingredients

Finding ingredients is one of the first challenges faced by every formulator. After all, we want our ingredients to be natural, sustainable, efficacious and ideally available in small minimum order quantities when we first get started. However, the big wide world of cosmetic ingredient suppliers has not set itself up to cater for the indie players in our communities. They've lost sight of the fact that today's indie formulators may become tomorrow's industry giants. In today's podcast, I talked to Timo Von Bargen of Cavallo, a comprehensive search platform that connects beauty brands with suppliers of ingredients, packaging and services such as contract manufacturing, formulation, regulatory compliance and testing. The struggles faced by scaling indie brands should be brought to the forefront of the conversation, which is why I encourage you to listen to this whole episode so you can find out how new formulators can have access to a huge ecosystem of cosmetic ingredients. Welcome to Green Beauty Conversations, the podcast that challenges you to think about how you buy, use, make and sell your natural beauty formulations. We tackle topics that will make you think and encourage debate about green beauty with your friends, family, followers or customers. I'm your host, Lorraine Dallmeyer. I'm a chartered environmentalist, biologist and the CEO of award winning online organic cosmetic formulation school Formula Botanica. We have thousands and thousands of students in over 175 countries worldwide who study with us to become organic beauty formulators and entrepreneurs. Visit our website@formulabotanica.com to try our free online formulation course. So today's episode is an interview with Timo Von Bargen, the co founder and CEO of Cavallo, a one stop shop platform that's used by thousands of brands and contract manufacturers around the world and has more than 40,000 indexed beauty ingredients with unique sustainability, certification and performance claim filters. Timo runs Cavallo out of Zurich in Switzerland and is joining me on the podcast today to talk all things ingredients. Hi Timo, welcome to the podcast. How are you doing today?

I'm doing very well Lorraine. Thanks for having me on the show.

Great to have you with us. Let's start off. Could you please give me a brief overview of what Cavalo is and does?

Sure. Kovalo is a platform that connects brands, personal care brands to different types of suppliers, like ingredient suppliers, then also different service providers such as contract manufacturers, formulation houses, testing companies, packaging companies. Our goal is to provide brands like a comprehensive view of the market so that they can basically find all the relevant suppliers that they are looking for in order to speed up their development from idea to market.

So why did you start Cavallo, what was the whole objective behind it?

So we started Covalo as part of a digital program at the Swiss specialty chemical company Clarion. That was back in 2017. And back then we went out different customers of Clarient in their personal care unit and asked them about the frictions they would have when interacting with companies like Clarient. And with that, on that route, we got to know that the exploration of new ingredients of new suppliers for brands still was back then quite a hustle. So they often didn't get replies from suppliers, they didn't get up to date information, they had to wait very long on sample requests. And overall, like most of the platforms that were out there, they were not designed for personal care as a segment, but rather for like a lot of different other chemical segments like plastics and coatings or catalysts, but not for personal care only. And that was our entry point where we then said, okay, let's build a better to use comprehensive up to date index for personal care ingredients. That was our starting point. That's what we've been started in 2017 under the brand Camberry. And then over time we developed further and further. Also found out that being owned by one chemical company is just not the right setup to be for growth and to be positioned independently in the market. And that's why we then decided to spin off to rebrand. And that's what we now did. And since March 1st this year, we are Covalo, which is a company based out of Zurich, Switzerland, ready to change and accelerate innovation in personal care.

Very exciting. So just before I go into my other questions, I just wanted to ask you, where does the name Cavalo come from?

Covalo is a made up word, but we took the origin of the covalent bonds, which are basically two electrons coming together and building a match, like a bond between each other. And as we are a matchmaking platform, we thought that is quite a nice analogy. That's the background of it.

I love that. I love that so much. So then, building on what you've just said, I mean, obviously it can be a real challenge when you're a new formulator. When you're a new brand, it can be often very difficult to connect with those ingredient suppliers, particularly the bigger ones. It can be quite hard to get a hold of paperwork, et cetera. Be hard to get hold of really good information too. So with indie beauty trending and there's more solopreneur formulators coming onto the cosmetics market, clearly it's welcoming to see more portals for Personal care services and ingredients. But most portals are aimed at serving larger brands. So what does Cavallo offer to the indie sector?

Our model builds on innovative brands searching for new ingredients for formulation idea to market cycles get shorter and shorter. And as indie brands drive innovation, they are super important for this model. But what do we offer them? We know that minimum order quantities moqs are always a topic. So we started to onboard distributors. We're taking care of also smaller order quantities for a lot of suppliers. I mean that certainly adds a lot of complexity on our side because we need to make sure that we reflect regional distribution agreements. But we are on that. And beyond that, we actively encourage ingredient manufacturers to also engage with indie brands. So we always ask them as part of the onboarding process if they have a history of working with indie brands and and also to get a better feeling on what their focus is. In the end, indie brands could be their next big customers. Then another point is the service provider index. So we, based on indie brand feedback, we started to build a service provider catalog where we list contract manufacturers, formulation houses and which are then all topics large brands typically would do in house. But indie brands would not be ready to do this by themselves. So we want to support indie brands in finding the right contract manufacturers to launch their first product line. We want to connect indie brands, once they expand to new regions with finding regulatory support to make sure their products comply with local regulations.

I love it. Well, of course you're right because the small formulators and brands of today may be the future industry giants. So that's why it's fantastic to hear that you are providing that level of support for those brands. So then looking at the ingredient suppliers, the companies that you list, what's the relationship that you have with them? How do you work behind the scenes with them?

So we currently list more than 700 ingredient suppliers and about 300 service providers. And we are in direct contact with most of them. But the first step to listing them is always that we crawl publicly available information from their websites. And these crawlers, they run then every day basically and always scrape the website for new information. So whenever like a manufacturer would take a product out of their portfolio, we would recognize that and then reflect that direct in our index. But then not all information is available publicly. So we let them verify contact information to make sure that they are responsive to incoming requests. And then in the third step, we let them add data that goes beyond the data that is publicly accessible, such as adding MSDs, technical data sheets or brochures. And yes, I think there we still have a lot to do, but we are constantly working on it to improve this index.

And I think that can be one of the biggest challenges for indie brands when they first get started. Getting that paperwork is incredibly challenging at times. I mean, not all indie brands have the potential to work with those big suppliers. Sometimes they go through resellers who sell in small, very, very small minimum order quantities and many of them will not provide the paperwork. So it's fantastic to hear that you're putting that on the platform and that is then accessible. So then building on that question, what are the most innovative features of the Cavallo portal and the ones that you feel distinguish you from other platforms that offer this type of service?

Yeah, just touched on our ingredient index. I mean that's really the core of our application and we want to be the most comprehensive index. And this is both the breadth of the ingredients and with more than 40,000 ingredients we are today have the largest index, but it's also the depth. So we have up to 30 attributes per ingredient and these could be rather technical related attributes, but then also a lot of marketing and sustainability related attributes.

The sustainability attributes, that's quite interesting. Can you give me an example of one?

So we split the sustainability attributes into different criteria. I mean, one would be claims that suppliers give their ingredients natural, plant based or upcycled. And we have quite a long list of claims. But then there's another layer which would be certification. So different sustainability certification bodies like Cosmos, Metru, with which we also partner to get always their, their latest certified ingredients. And that all together then builds quite a comprehensive overview of sustainability.

So then building on that question further, I mean natural ingredients are in such hot demand right now, not just by indie, but also mainstream brands. So can you tell us more about Cavallo's role in helping promote innovative green beauty solutions, which is obviously what our listeners are most interested in.

Absolutely. So the first question is, what does innovative green beauty mean? Are we talking only about plant based natural ingredients? But what is then about the origin of the ingredients? I mean if they are associated for example with deforestation, like we would not agree that they would be green, but. And so what about the performance? I mean, our solution then again is that we aggregate as many data points as possible, like the mentioned sustainability claims, certifications, both ingredient and company level, and then we constantly add new attributes to it. That's one aspect. Then another aspect is the content. So we want to provide a lot of educational content on our blog, on our newsletter, where we have a Clear focus on green beauty related topics which would not include only environmental sustainability but also social sustainability or supply chain transparency. It's a lot about education as you clearly know, understanding the specifics, understanding the chemistry. This could also mean that for example it might be that a synthetically produced ingredient is not necessarily less environmentally friendly than a naturally derived ingredient. And then lastly we are building like currently a new layer on our search, like an intelligent search that helps to suggest then greener alternative to showcase green formulations. With that we believe that we have quite some different entry points to the topic of green beauty.

So with over, I think you said 40,000 ingredients listed in your database, can you give us an insight into what's trending and maybe even predict some future trends for us?

Yes, absolutely. People definitely want to see more natural and plant based ingredients in their beauty products, but they still want to make sure it works effectively. I'm not sure if that's really such a big insight, but we see that very simple solutions often do not deliver performance wise and obviously consumers will then realize this over time and move to other solutions. Then yeah, we see another trend, one that is quite close to my heart as well. So more transparency on the environmental footprint of products like the calculation of the renewable carbon index for some ingredients, looking at local sourcing and then maybe like one trend on an ingredient level we saw in the last year, 300% increase in search volume for Bakuki oil. Yeah, like which is a natural alternative to retinol. That's at least how it's branded our most trending ingredient of the last year.

Oh wow. Well that's good to know. We've been recently teaching on Bakuchiol as well, so that's great to hear. So in terms of the formulators listening to this podcast, how can they best use Cavallo? So can you explain not only how to sign up but also how smaller brands and startups can make the most of Cavallo? So for instance, is it feasible to for indie formulators to obtain samples? Because in the past it's been almost impossible to get this if you don't have a business address or you're not registered as a business already. So how should someone start with Cavalo and how can you make the most of it?

So the first step would be sign up for our Explore package. And yes, you're right, normally we do not allow users to sign up without a business address. But for Formula Botanica students we always made an exception. I mean thus far the process would be that they just shoot an email to infoovalo.com, and we will then send an invite. Maybe we also find like even better or more straightforward approach here in the future then on sample requests. Yes, we see that this is quite a problem for indie brands to get samples. I would have two tips here. In our sample request forms brands can state like the. About the intention of the request, how much they would need. If you then tend to type in a larger quantity that you actually need to sample the ingredient, suppliers might get suspicious. We received supplier feedback in the past where brands requested several kilos of high priced Actives which would probably last them for their first production batch. And then the better approach would be to be transparent on what you want to do with the ingredient, provide details on your product idea, the market it is meant for and then suppliers can better assess if they are actually a suitable supplier for you and that then solves you in the end. Also quite some effort and work. In addition we are working on different ways to also get into the sample fulfillment and maybe even one day we might start shipping samples ourselves.

Well, who knows, who knows where Cavallo will be in the future. So what are your plans for the future? Just to finish off the podcast interview, where do you want to take Cavallo?

Yeah, I mean we, God we have so many like different, different ideas to expand our solution. Definitely we're continuing to work on the index to, to get deeper information. Then like we are about to launch a packaging index where we also list packaging solutions and we have a project tool in the pipeline where basically brands can create projects that they are working on creating a brief. So for example we are working on a paraben free shampoo for the, for the US market with certain primary and secondary claims, packaging a format and then they can organize their work around projects, add ingredients to it, add formulations to it, have communication threads with related suppliers and experts within their team and that all on the platform. So basically what we plan to build out there is a collaboration and project management element of the platform.

So lots of exciting plans for Cavallo ahead. Well, thank you for sharing that with us. So if our listeners want to find out more about you and Cavalo, where should they go?

So definitely to kovalo.com and then we are also on Instagram, on LinkedIn, on Twitter. Twitter the handle would be joincovalo. Obviously they can always reach out to me directly. That's Timovalo.com brilliant.

Well we will include all of those links with the show notes. So thank you very much for sharing this and thank you very much for your time today. It's been really nice chatting to you.

Timo, thanks so much for inviting me to the show and yeah, it was a pleasure to talking to you.

I'd love to hear what you thought of this podcast. If you're a formulator, how do you easily obtain ingredients, data and samples? How do you think the smaller players of today, who may be the industry giants and leaders of tomorrow, can engage with the ingredient suppliers that currently supply to the mainstream industry but aren't yet really supporting the indie sector? I'd love to hear what you think. Please do come and leave us a comment on our social channels as both the Formula Botanica team and I love hearing from you. Thank you for joining Timo and I for this latest episode of Green Beauty Conversations. I really hope you enjoyed it. Make sure you subscribe to our podcast on itunes or Spotify and stay tuned for the next episode. Follow Formula Botanica Formula Botanica on Facebook, Instagram, Clubhouse, Twitter, YouTube, Pinterest or LinkedIn. We are everywhere. Visit our website at formulabotanica.com and sign up for our free online formulation course today.