A responsive and responsible supply chain

A multipolar, responsive and resilient organisation

Given the volatile and complex state of the global economy, our model owes its success to an ability to roll out responsive and resilient solutions to sustain the Group’s strong growth. Around the globe, Operations oversee the entire value chain, from supplier partnerships to manufacturing and delivery of our products to consumers. Three key values guide our efforts: quality, to ensure we apply the same standards of excellence to all our products worldwide; safety, to guarantee every employee the best working conditions day after day; and sustainable development, to make sure we protect the environment and create value with communities, suppliers and employees. Drawing on in-depth expertise in science, engineering and technology, our 22,000 Operations employees work as one, whether they are based at a centre of excellence or at one of our many manufacturing sites located close to our markets. They enable the Group to develop and deploy innovations quickly and at scale. Paired with L’Oréal’s expertise in packaging design, this is the key to our industrial responsiveness.

Investing to boost capacity and support growth

To meet increasing demand for inclusive and sustainable beauty and anticipate future needs, L’Oréal is investing to expand manufacturing and distribution capacity and optimise existing sites. Operations have ramped up skincare production capacity to meet booming demand for dermocosmetics over the past few years. We have five specialised production sites worldwide: two in France, one in China, one in the United States and one in Mexico. Having manufacturing sites in close proximity to key markets is a major asset; it boosts our agility and shortens time to market.

The Group is also optimising production capacity to meet the needs of omnichannel activations, with fulfilment centres specially equipped to handle e-commerce orders in record time. L’Oréal opened its first Chinese fulfilment centre in Suzhou in 2023, equipped with state-of-the-art technology. Another is scheduled to open in Nantong in 2024. This investment aims to meet strong demand for luxury products.

Data and artificial intelligence accelerate efficiency

L’Oréal continues to roll out increasingly powerful technologies – augmented by AI – to improve responsiveness across the value chain. Downstream, the SalonCentric order platform for professional hairstylists in the United States is undergoing a major transformation. The goal is to use data and technology to turn the supply chain into a competitive advantage. Upstream, to meet the needs of 1.2 million hairstylists and beauty professionals, our order management system uses powerful technological tools to optimise services, lead times and costs. AI can further improve customer service and assist customer advisors with recommendations and preliminary assessments.

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Packaging designed and developed by our teams

As packaging plays a key role in the consumer experience, from product performance to design and environmental impact, L’Oréal is constantly innovating. The Group has five internal Packaging Labs dedicated to shaping the future of packaging. Our cross-disciplinary teams, made up of scientists, engineers, designers, materials experts, consumer behaviour experts and more, are guided by an unwavering commitment to performance, quality, desirability and environmental responsibility. In line with the L’Oréal for the Future sustainable development targets, 100% of our products will be eco-designed by 2030, and packaging intensity will be reduced by 20% compared with 2019. Fully focused on a “3R” eco-design strategy to “reduce, replace and recycle”, L’Oréal is reinventing packaging with new formats and materials to cut packaging weight, develop refillable bottles and eco-friendly refills, reduce plastic use in tubes, etc.

An open ecosystem to reinvent packaging

The Group has adopted a collaborative approach, working with key partners – suppliers, startups and experts – to develop bold and sustainable new solutions. L’Oréal developed the first cosmetics bottle made entirely of recycled plastic using Carbios’ enzymatic technology, working in partnership with this pioneering company to scale up the technology. The Group aims to bring this innovation to market by 2025. Elsewhere, L’Oréal has partnered with startups like PureCycle, Loop and LanzaTech, which are working to develop plastic materials using advanced recycling technologies.
L’Oréal also joined forces with Albéa, one of its main packaging suppliers, to develop a tube incorporating cardboard with a cap that uses less plastic. La Roche-Posay and Garnier are already using this technology for some of their products.
In addition, L’Oréal is an active participant in the work of the Ellen MacArthur Foundation and a signatory of the New Plastics Economy Global Commitment.

The future of packaging: more responsible and more desirable

In 2023, L’Oréal rolled out a major advance in packaging recyclability: the shampoo and conditioner bottle in the Elvive Extraordinary Oil range by L’Oréal Paris was revamped with a new pump system that does not require a metal spring – a technical innovation that significantly improves the bottle’s recyclability. Available in China, the new system is compatible with a wide range of formulas. It continues to improve the user experience and ensure optimal performance while reducing the pump’s environmental impact.

Garnier’s new Good hair colour line, which aims to enhance the at-home hair-colouring experience, is another example of packaging progress. The cardboard container, which doubles as a mixing tub for the dye and oxidising agent, and minimalist sachets with a patent-protected opening reduce the amount of plastic used by 45%.