Stephan Kanlian describes the situation at the world’s biggest beauty market as “extremely challenging.” Yet, it’s a great potential for export for brands that know how to navigate it. Here’s how.

Kanlian is the founder of the master’s program in cosmetics and fragrance at FIT (Fashion Institute of Technology) in New York, originally an idea by Leonard Lauder from Estée Lauder to support mid-career executives in the beauty industry, so that they could continue to work and go to school part-time at night. Today, FIT houses the only cosmetics and fragrance laboratory on a college campus in the United States. Almost a year ago, the school opened a dedicated 5000 square foot (500 sqm) Beauty Center, aresearch facility for the industry that’s run by the master’s program. 

– It’s a great opportunity for us to take the research that the students do and distribute it even more broadly, Kanlian explains. We’ll also be able to do much more high-profile and quantitative research. In the fall, we’ll probably publish our first quantitative research from the program.

You’re visiting Stockholm and Stockholm Fashion District with your master’s degree students. Why?

– I have a great deal of respect for Helena (Waker, the CEO, Ed’s note) and the team here, and we have been coming here since around 2012. The facility itself is quite amazing to us as Americans. I started my career working as a diplomat for the government so when I see something like this that is—a public private partnership—I’m very impressed with the ability of the government and private sector to work together to promote industry, hosting Fashion Week Trade, trunk shows, fashion fairs, training and development. 

What else have you done during your days in Stockholm?

– We spent some time with Oriflame, says Kanlian. They’ve had a very big pivot in the last two years, so it was super interesting for us to hear about the new kind of brand direction and the new vision for the company.

– We have been noticing, over the last 10 years that we’ve been coming here, how the brands—beauty brands, as well as the fashion brands—in Sweden have been able to somehow capture a sense of what is their Swedishness in their brands. It’s a respect and a love of the outdoors and of nature and local ingredients, same as is present in the very innovative culinary scene here in Stockholm, and on sustainable packaging. There is a huge opportunity for Sweden to be a real powerhouse in developing and launching brands with a strong point of view on sustainability, on authenticity, which makes Swedish products all the more interesting and authentic to consumers in other countries. It’s really, really been fun to watch over the last 10 years or so how much the country and the manufacturers have embraced that kind of messaging.

The second-year FIT students do a global research study that they present to around 700 people from the industry in June of each year. 

– One of the groups is looking at Gen Alpha and Gen Beta. In the US, we missed a little bit the moment of Gen Alpha really making an economic impact in the industry. Youngsters who were shopping with their parents for fine fragrance and skin care was a big surprise to people. So one group is looking at that phenomenon and what we can expect from Gen Beta, the babies born at the beginning of this year, moving forward. 

In Sweden, there’s been a huge debate on young children shopping advanced skincare products. But you’re saying that US brands missed the opportunity with parents shopping with their kids?

– I’m sure, as it is in most countries, that marketing to anyone under 18 is highly regulated by the government. So, the industry as a whole does not speak to children. We speak to their parents. We speak to young adults aged 18 to 24. We speak to people a little bit younger through partnerships with the gaming industry—and just through the interest in our brands—so the industry is very careful to stay away from younger consumers. So it was a big surprise to find young people shopping for brands of that level of price point and quality, to see young people as young as 6 years old shopping for fine fragrance at Sephora, and having an expertise and influencing their parents’ buying habits. 

– It’s also very interesting to us trying to figure out, is there a responsibility for the industry inherent in that? How does the industry react to that appropriately, given that you know this is something that is very much hands-off? It’s a very difficult subject to step around and try and figure out. I don’t see that regulation changing, nor do I think it should, but obviously, if young kids are really beginning to engage with the industry at that level, you begin to wonder as a brand, what is your responsibility? Perhaps it is to speak to the parents. Perhaps it is to change packaging and indicate how safe skincare ingredients are to a certain level of sensitivity. That’s some of the things that they’re (the students, Ed’s note) exploring.

You just came from Helsinki and will also visit Oslo after Stockholm. What else have you noticed about Nordic beauty from an outside perspective?

– Beauty in the Nordics is fascinating to me. I love bringing my graduate students to the Nordic region because the sociocultural and governmental infrastructure, and the way that the economy is structured, is a real model for the rest of the world. I’ve been saying that for a very long time, and I think it’s more true today than ever. It takes a lot of us by surprise that the health care systems in the US and the UK are struggling as much as they are, and you look at models like Sweden. Here, everyone has access to high-quality health care, university is free, people’s jobs are protected for both maternity and paternity leave at different levels of remuneration for a very, very significant period of time, supported by government regulation. Pre-care and child careis all supported by the government, gender equality, you look at the number of women in high level positions in industry, in government, you look at some of the Nordic countries where there have been women in C-suite positions or even countries (Finland) where women have run all major parties in the government. 

– Obviously, especially after the last election, this is something that I don’t know when that will happen in the US. So I think it’s really interesting for my students—especially since the vast majority of them are young women and young women executives in the beauty industry—to see the model of a country where there is almost complete gender equality, and understand what the possibility of that means.

And what is the current state of the US beauty, given the tariffs, and being such a saturated market?

– It’s a challenging time in the US industry for an exporter to come in as a foreign brand. It is certainly also a challenging time for American companies and brands. The market is very saturated. It is extremely challenged. The heritage brands and the brands that have seen success already in the marketplace, even in the last decade, are being challenged in a very, very significant way, by pure-play online brands, by young brands, by indie brands. And also by brands that encourage co-creation through an online model with their consumers, by brands that have tremendous transparency in terms of their product innovation and product development, and their marketing claims.

– At the same time, I think there is still a tremendous opportunity for brands that come in, especially from markets that have such an authentic focus on local ingredients, sustainability, sustainability in packaging, in ingredient sourcing, and in a limited amount of preservatives in their products. I think the market is very ripe for that in the US. It’s unfortunate that it’s not more regulated so that brands can get more credit for the work that they do to produce those brands and products. But I think we in the US have a very positive view of the Nordic region, of the cultures, of the peace and stability in the region here, of the way that you take care of your own and take care of your people. The respect for motherhood, for children, the sense of family in society, there are a lot of positives that translate from the Swedish branch to the US consumer, and I think some of those have a halo effect on Swedish brands coming into the US. There is much more opportunity for Nordic beauty brands to enter the US market, given the preferences that US consumers have right now for new, for interesting, for local, for authentic, for clean, for environmentally sustainable. These are all areas where Swedish beauty especially, is already very, very strong.

If they, the brands, can afford it. It’s quite expensive.

– It is. There’s always the opportunity that exists for foreign brands to come into the market on an exclusive relationship with a retailer. I think the bigger challenge is not getting into the market, it’s the next step beyond that. It’s how you, once you come to the end of that year or two of exclusive relationship with a Sephora, or a Space NK or Liberty in the UK, or whoever the retailer might be, take the next step of scaling beyond that and how you handle it. How you are able to cover a market the geographic size of the United States, train your sales people, visit your retailers, service your market. It is a very, very big market. The geographical differences are enormous. The consumer in Texas or Southern California is very different from the consumer in the Midwest or the Northeast. So, it’s a big undertaking, and I don’t think it’s so much getting into the market and being a niche player. It’s more that next step of scaling up if you don’t have, for instance, outside investment in order to be able to do that.

Kanlian’s next step is as a partner to Beauty New York. Described as a “New York Beauty Week”, it’s arranged by Lisa Repay and Informa, the owner of Cosmoprof and others, from October 15th to 18th at The Oculus.

– It’s at the tip of the island where all of the subway lines come together. It is an idea that is long overdue in the industry, and the location is a very iconic architectural space that sees 400,000 visitors every day. The consumer activation will be on the 17th and 18th. 

– On the 15th, there will be a gala at the Hall des Lumières, also downtown, and the next morning, on the 16th, we will be doing an all-day industry event, a forum, to bring together industry leaders. It’ll be a very intimate setting, only about 200 attendees, to talk about sustainability, the role of heritage brands, the role of new brands in the marketplace and the changes that they’re making, the role for women in leadership and examples of women in CEO level roles and how they’re making change in industry. A big shout out to the organisers for stepping up and believing in the beauty industry! Kanlian concludes.