Beauty's $86 Billion Strategic Transformation Opportunity Revealed in New Industry Report

Atelier, in collaboration with Accenture, exposes critical efficiency infrastructure gaps while revealing how composable manufacturing can transform beauty supply chains

NEW YORK, June 10, 2025 /PRNewswire/ -- As demand for new products surges, beauty brands are confronting an innovation crisis costing the industry billions in lost revenue annually. In a new report, "The $86 Billion Wake-Up Call for Beauty Brands," Atelier, the leading product innovation and manufacturing platform for beauty, and Accenture detail how outdated development and manufacturing models are holding the industry back. Digital acceleration, evolving consumer expectations, and mounting supply chain pressures are forcing brands to rethink how they bring products to market.

While business transformation has accelerated by 183% since 2019, beauty manufacturing infrastructure hasn't kept pace. Only 13% of companies report having supply chain capabilities that fully support their business priorities, and just 11% have implemented architected and interconnected systems — leaving most brands with a critical choice: transform manufacturing approaches or lose market share to more agile competitors.

Key Market Pressures:

• Consumer Expectations: 64% of consumers want brands to respond faster to their needs, yet 59% of companies take over a year to adapt.
• Innovation Decline: From January to May 2024, just 46% of launches were net-new products, compared to 63% in 2015.
• Supply Risk: 59% of brands still rely on sole-sourced suppliers, increasing vulnerability.
• Data Gap: 79% of executives struggle to effectively leverage consumer data to offer personalized experiences.

A New Approach: Composable Manufacturing:

In summary, the report introduces composable manufacturing as a solution. This flexible, AI-native model connects the entire manufacturing ecosystem on one platform, allowing beauty brands to rapidly respond to shifting market dynamics. With tools like virtual product creation and digital twins, brands can go from concept to sample in minutes rather than months — cutting cost and time while boosting agility.

Demonstrated Impact

• Supply chain leaders achieve 16.2% EBIT margins vs. 8.6%
• Development cycles shrink from 18 to as short as 3 months
• 2x operating profit margin uplift for SKUs developed on Atelier's platform*
• AI-led R&D yields 25–50% faster time to market and 80% less data processing
• Brands creating enterprise-level value through composable manufacturing are 4.5x more likely to have invested strategically in agentic architecture
• Marketing teams using agentic AI reduce manual work by 25–35%, speeding up 50+ workflows

Three Actions for Beauty Leaders

1. Modernize Product Development: Adopt AI-powered platforms that reduce timelines by 6x.
2. Build Networked Manufacturing: Use platforms offering 8.5 million supply chain permutations to adapt production in real time.
3. Enable Intelligent Orchestration: Use agentic AI to unify siloed teams, optimize resources, and accelerate output.

"The $86 billion opportunity represents a fundamental reimagining of how beauty products are created and delivered," said Nick Benson, Founder and CEO of Atelier. "Composable manufacturing turns brittle supply chains into agile, resilient delivery networks."

The report also introduces the Innovation Multiple, a performance metric that measures the relationship between a SKU's gross profit and its total innovation investment. This benchmark will be featured in a forthcoming industry index that will help brands evaluate and optimize their innovation strategies.

"Beauty brands are facing new challenges due to the shifting global trade landscape, which could further lengthen innovation cycles and put them at risk of losing their competitive advantage," said Audrey Depraeter-Montacel, Accenture's global beauty lead. "Advanced AI, paired with data can help brands anticipate consumer needs and turn insights into high-impact launches with speed and precision."

Download the full report at: https://www.atelier.co/research

About Atelier
Atelier is the largest product innovation and manufacturing platform for beauty, transforming how brands navigate market opportunities and disruptions. Our AI-native composable manufacturing platform, powered by our Manufacturing Knowledge Graph, turns fragile supply chains into resilient delivery networks. With 8.5M supply chain permutations, we deliver unprecedented efficiency—compressing development timelines by 6x while orchestrating from development to the distribution center. Through our multi-shoring approach, brands maintain parallel supply chains across markets, ensuring uncompromising quality while protecting margins and team capacity in an increasingly unpredictable global marketplace. Founded in 2018 by Nick Benson and Nick Hudson, Atelier is based in Sydney and NYC with a distributed workforce. Learn more at: Atelier.co

SOURCE Atelier