01 AI-Assisted Formulation Is Accelerating Cosmetics Product Development The need for faster formulation and product testing is increasing the use of AI in cosmetic R&D, where algorithms can assess ingredient interactions and predict formulation performance before physical laboratory testing. L’Oréal and NVIDIA reported in 2026 that their AI-driven computational chemistry system can simulate ingredient performance and test thousands of variables simultaneously, with the company targeting a 100-fold faster discovery process than traditional methods. This transition can shorten formulation cycles, reduce development iterations, and help ODM providers deliver new products to brands more quickly.
02 Hyper-Personalized Cosmetics Are Expanding ODM Customization Capabilities Consumer demand for products tailored to specific skin conditions and individual preferences is increasing the need for highly customized formulations and diagnostic-led product development. L’Oréal’s Cell BioPrint analyzes five protein biomarkers in about five minutes, while its AI-powered Beauty Genius uses personalized skin and hair diagnostics to generate tailored product recommendations. This shift toward data-driven personalization is expanding ODM opportunities for customized formulations, targeted active ingredients, and products designed for specific consumer profiles.
01 Expansion of Indie Beauty Brands Is Increasing Demand for ODM Manufacturing Services and Outsourcing of Cosmetics Production Is Increasing Demand for ODM Partnerships The expansion of indie beauty brands creates demand for ODM partners that can provide formulation, packaging, testing, and manufacturing support. Limited in-house production capacity encourages emerging brands to rely on established ODM facilities for faster market entry and scalable production. The outcome is higher demand for flexible manufacturing services, particularly for skincare, haircare, and color cosmetics products. For example, an emerging skincare brand can use an ODM partner to develop and manufacture a private-label serum without building its own production facility.Outsourcing of cosmetics production allows brands to reduce investment in manufacturing facilities, equipment, and specialized production teams. This demand supports partnerships with ODM providers that offer formulation development, ingredient sourcing, production, packaging, and quality-control capabilities. The outcome is greater utilization of ODM manufacturing capacity and broader demand for end-to-end outsourced production services. Established beauty brands can outsource selected product lines to ODM manufacturers while focusing internal resources on branding, marketing, and distribution.
01 High Product Development and Manufacturing Costs and Stringent Cosmetic Regulations and Compliance Requirements High product development and manufacturing costs can increase the expense of creating and scaling customized cosmetic products. Formulation trials, specialized ingredients, testing, packaging, equipment, and production requirements can raise costs for ODM providers and brand clients. These cost pressures can limit product launches, discourage smaller brands from outsourcing, and slow market expansion.Stringent cosmetic regulations can increase the complexity of developing and commercializing products across different markets. Safety testing, ingredient restrictions, labeling requirements, product documentation, and regulatory approvals can extend development timelines and increase compliance costs. These requirements can delay product launches, restrict market entry, and slow the adoption of ODM services.
In April 2026, Cosmax started using AI across R&D and manufacturing to dramatically speed up cosmetics development from formulation to production.
In February 2026, Cosmax acquired a 51% stake in Keminova (Italy) to expand its European ODM manufacturing base and strengthen skincare production capacity in the EU.