The Renewed Strategic Importance Of BOMs In Beauty

In an era of shifting supply chains and escalating environmental scrutiny, the bill of materials (BOM) has quietly emerged as one of the most strategic tools in the beauty industry’s arsenal. Once relegated to the unglamorous fringes of product operations, the BOM – essentially the detailed inventory of everything that goes into making a product – has taken on a new strategic significance. 

Today’s BOM isn’t a dusty Excel file buried in a procurement tool. It’s a living system (and ideally a live one, centralised and accessible to the right users within PLM). And more than just enumerating ingredients, it’s tracking costs, flagging risk, feeding AI, and proving the product story under the withering gaze of consumer and regulatory scrutiny. From the world’s largest cosmetics conglomerates to emerging independent brands, a renewed emphasis on completeness, extensibility, dimensionality, utility, and radical transparency in the bill of materials is reshaping how products are conceived, priced, and delivered. In many ways, the BOM has become a hidden engine: quiet and geared towards a narrow cohort of technical professionals, but becoming profoundly influential to wider teams and product outcomes.

In response, forward-looking brands are already revising their supplier strategies, adding redundancies, regionalising manufacturing, and signing long term contracts in the hope of stabilising pricing. But to make such decisions with confidence, brands must know precisely what is in their products: where ingredients come from, how much they cost, and how vulnerable they are to disruption. This level of operational clarity and fact-based operational risk identification is only possible with a transparent, up to date BOM as the foundation.

What was once a reactive tool for procurement teams, is now being reimagined as the basis for a proactive dashboard for strategic decision. In the most advanced organisations, BOMs are reviewed not just during production but during early product development, allowing finance, R&D, and sustainability teams to collaborate around choices of ingredients, sourcing partners, packaging and much more from the outset.

Few developments underscore the changing framing of the BOM more clearly than L’Oréal’s high profile partnership with IBM. Announced in early 2025, the collaboration centres on a generative AI model that will analyse over a century’s worth of L’Oréal’s formulation data, with the aim of enabling faster, cleaner, and more sustainable product development.  The AI system is designed not simply to suggest new formulas, but to evaluate ingredient swaps for their performance, sustainability footprint, cost, and supply risk. 

This kind of scenario modelling, once the realm of pure speculation or heavily manual what-if comparisons, is now becoming a core part of product development strategy. Teams can test hundreds of variations of a single formula, optimising for any number of criteria, based on a huge spectrum of different variables, before a lab batch is even created. 

The implications of this shift in the window beauty places around the bill of materials could be enormous. With a change in weighting, and an improvement to how different elements of the BOM are described and surfaced in the decision-making process, brands have the possibility of building frameworks to allow them to respond to ingredient shortages or regulatory bans at speed. They could redesign products to meet new sustainability targets without compromising efficacy (or at the very least with informed and measured alterations to claims). And, perhaps most significantly, they can build more collaborative relationships between operations and innovation, something long considered a structural challenge in the beauty sector. 

Of course, tech, by itself, does not create the kind of agility that would be needed to raise these issues or respond to them: connected systems and changes in mindset do. BOMs are now wired into PLM, ERP, AI tools, even sustainability dashboards, turning what used to be a static record into the foundation behind real-time control panels. Working with, and obtaining value from, the modern BOM is no longer confined to sourcing teams; the same data foundation to inform marketing claims, retail partnerships, compliance documentation, and ESG disclosures. A single change in the BOM –  a packaging material, an emulsifier, a preservative – can create impacts that ripple across the business. With digital systems in place, that ripple becomes a manageable flow rather than a chaotic disturbance. 

This change is particularly crucial as new regulations emerge around ingredient transparency, recyclability, and ethical sourcing. Companies that can instantly retrieve detailed data on their BOM components, like origin, certification, or lifecycle impact, are better prepared to meet compliance standards and answer scrutiny from both regulators and the public. 

Like a lot of technology-reframing initiatives, while legacy brands are quickly mobilising to replace older infrastructure with digitised BOM systems, younger companies have the leapfrog opportunity to start with this mindset. For many independent beauty labels, BOM transparency is not an operational challenge, it’s a competitive differentiator, made easier by them building company systems from the ground up. Start-ups are building products with digital-first infrastructures. From day one, they select ingredients not just for performance or cost effectiveness, but for ethical sourcing, traceability, and low carbon impact. Their BOMs are lean, auditable, and ready to scale. And because these choices are increasingly woven into their brand narratives, consumers, too, see them not as back-end operations but as part of the product promise. 

This ability to articulate the ‘how’ and ‘why’ behind product development is increasingly powerful. In a saturated market, trust and transparency are currency. Start-ups that can say, “Here’s exactly what’s in the product, where it comes from and how it was made,” build credibility that advertising budgets alone can’t buy – especially if those budgets wind up creating additional costs by straying into “greenwashing” territory when they are found to lack “adequate and verifiable evidence”.

The cultural shift toward transparency is reshaping the BOM’s role in brand strategy. Once seen as a confidential technical document, the BOM is increasingly becoming a tool for story telling. Consumers are asking more nuanced questions: not just “Is this safe?” but “Is it ethical?”, “Is it sustainable?”, and “is it justifiable at this price point?”. And the answers they want are not subjective, wooly ones, but responses that are fully substantiated through the brand’s own systems.

Blockchain-enabled traceability platforms can, at least in theory, also help brands answer these questions. By creating immutable data trails for each BOM component – down to the farm, mine, or lab – companies can share their sourcing practises with confidence. The BOM then becomes a translation tool, turning backend complexity into consumer facing credibility. (We should note that a blockchain alone does little or nothing for substantiating consumer-facing claims; it solves a data transport problem, not a data integrity problem that can only be solved by a brand having a fully accurate bill of materials.) 

As we explored recently, forward thinking marketing teams are beginning to build campaigns around this data. A launch might highlight not just a new formula, but a new ingredient partner, a packaging innovation, or a reformulation that cuts carbon by 40%. This level of detail is increasingly appreciated by discerning consumers, and increasingly expected. 

The bill of materials may not be flashy, but in 2025, it’s one of beauty’s most powerful tools – a source of truth, a lever for agility, and an unsung launchpad for innovation. It doesn’t just document what a product is. It shapes what it can become: financially, ethically, and creatively. And as the pressure to deliver performance, responsibility, and speed all at once intensifies, brands are realising that sophisticated products demand equally sophisticated systems. At the centre of those systems in the BOM.