The beauty industry is often touted as one of fast-paced innovation, technological advancement and scientific achievement — but is it actually falling short of what it could be accomplishing? Very much so, according to data compiled by product innovation and manufacturing platform Atelier and consulting firm Accenture. A report the two entities released this week asserts that the global beauty industry is missing out on $86 billion of potential innovation and growth-driven profit because of inefficiency across supply chains and manufacturing processes.

“Operational challenges — like process inefficiencies and excess headcount driven by hyper-fragmented global supply chains — permeate the industry, resulting in lengthy innovation cycles vulnerable to trade disruptions,” wrote Nick Benson, founder and chief executive officer of Atelier, in the report’s introduction. “Complexity also obscures the true costs of new product innovation, which must include direct and indirect headcount for everything from development, compliance, regulatory, supply chain, logistics to research and development (R&D).”

Not only are brands failing to keep items on the shelves to sell in the first place, but Benson claims that new beauty launches have simultaneously dwindled because of the struggle to keep up with the quickly evolving appetites of consumers. So in addition to short-term sales losses, these outdated production processes are also hindering overall product innovation, he says.

The report references data from global market research agency Mintel stating that 54% of beauty launches between January and May 2024 were “renovations” and “reformulations,” while only 46% were brand-new launches. In other words, brands are mostly investing in extending well-known and existing product lines (see: Rhode’s new Glazing Mist — a sprayable version of its best-selling Glazing Milk) because they lack the resources needed to more frequently generate and deliver new standalone products.

In Atelier’s report, the platform says that the development of new products from beauty and personal care brands has declined by nearly 20% since 2015. Meanwhile, beauty shoppers’ demand for newness and innovation has accelerated with the progression of social media. Ten years ago, when long-form YouTube beauty content was at its peak and largely responsible for determining whether something would succeed or fail, 63% of all beauty launches were fully new products. Since then, TikTok has taken over, shortening attention spans for video length and beauty trends alike.

As an anonymous executive director at a global beauty company put it in the report, “The consumer attention space is moving at a breakneck pace, but the operating model is too slow to keep up.”

Prada’s beauty brand, which launched in 2023, is one example of a major player in beauty struggling to keep pace. After launching its Astral Pink Hydrating Lip Balm and prominently placing it in Sabrina Carpenter’s viral “Please Please Please” music video, the product sold out from every retailer within 72 hours. More than a month later, the balm was still awaiting a restock at Sephora.

The lippie’s viral-to-instantly-unavailable pipeline revealed “significant supply chain vulnerabilities that risk undermining consumer trust and loyalty,” notes the Atelier report. The data also shows that “64% of consumers want brands to respond faster to their needs, yet 59% of companies take over a year to adapt.”

The digital culture of 2025 demands newness at high speeds — which also means brands must be equipped to adapt and perform promptly, or else risk not just massive sales losses, but also a major hit to brand perception.

“Beauty brands need to better anticipate consumer needs, respond to market changes and deliver products that resonate deeply with consumers at an accelerated pace,” said Audrey Depraeter-Montacel, Accenture’s global beauty lead, in a press release announcing the report. “Through pairing technologies such as AI and gen AI with data, beauty companies can unlock value and drive growth by systematically converting consumer insights into market-ready innovations with precision and speed.”

Of course, Atelier’s motivations in releasing this report are to shed light on the potential value of working with a partner, like itself, who can offer fixes to these issues. The firm says its “composable manufacturing solution” — an AI-led model that claims to increase profitability and expedite innovation — is a crucial tool for meeting modern beauty industry R&D, manufacturing and shipping needs.

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