At the inauguration event of Capsum’s brand new manufacturing site in Austin, Texas, CEO Sébastien Bardon sat down with Luxe Packaging Insight to discuss the French formulation company’s roadmap for its US business.
As of 2020, Capsum, a French formulation company specialized in microfluidic encapsulation technology—a process that suspends oil-phase droplets or bubbles within the water-phase of a formulation—has been manufacturing cosmetics and personal-care products in North America. But it wasn’t until April 2022 that the team at Capsum opened the doors of its own facility there, at a greenfield site in Austin, Texas. “We're here to bring our technology to the US market via a sustainable manufacturing solution,” CEO Sébastien Bardon tells Luxe Packaging Insight.
“The situation in the US is very different from Europe, where most of our customers have their own R&D and manufacturing facilities. Most of our sales there are products that our clients can’t make on their own, mostly microfluidic products. But in the US, a lot of our customers don't have their own production sites or labs,” he says. “Another distinct difference is that our customers in the US send us five or even 10 briefs, whereas European customers tend to work with Capsum one product at a time.”
Bardon explains that most brands in the US are driven by time-to-market, so being able to work on the American soil is helpful. “In addition, like every company, they like to see their production and if they know the facility, it’s helpful to build trust. And because of CO2 concerns, we believe that more and more international brands are going to produce locally.”
A greener production footprint
This environmental consciousness is a key component of Capsum’s Texas site. Entirely powered by the solar panels on the factory’s roof, the company expects to have a precision indoor farm in operation and generating ingredients by 2023 for use in its product formulas. (Capsum first began working with sustainable indoor agriculture in 2019 and produced its first active ingredient derived from cultivated microgreens in 2021.)
But perhaps the most notable feature is the site’s ready access to what is called Sustainable Water or Solar Water. The company drilled a well on the site to tap into a salt-water aquifer 1,200 feet deep. The water is desalinated via a solar energy powered process and supplies the entire facility, including for the product formulations.
Designing packaging for microfludic formulas
What role does packaging play in Capsum’s strategy? In 2015, the company debuted its IsoBulle Technology and co-created skincare products with 21 brands—all of which required airless packaging to stabilize the formula. Two years later, thanks to modifications from the R&D team—adding gelling agents, manipulating the bulk of formulations, thickening the bubble membrane—products manufactured using Capsum’s microfluidic encapsulation process could be filled into atmospheric beauty packaging.
“Getting away from airless packaging was a big step because it tends to be very limiting, even in luxury. Aesthetically, airless packs are quite restrictive, which meant that we couldn’t access some accounts simply because of the packaging,” explains Bardon. “When we made the bubbles compatible with ‘normal’ industry packaging, the market opened, and the company began seeing significant growth.”
The question today is how brands are approaching sustainable packaging. “Every brief we receive calls for ‘sustainable packaging’, and every brand has a different interpretation of what that means. A lot of luxury players are opting for refillable packaging, which is compatible with what we do. Although refill formats can add costs because they call for more assembly operations, that is the only limitation.”
Differentiating the formula
Capsum’s surfactant-free emulsion alternative stands out from more traditional formulas, both visually and in terms of “skin-feel”, notes Bardon. “Separating the oil in the water at millimeter scale and avoiding the use of a surfactant makes for a completely new skin-feel; it’s both fresh and non-sticky. Another element is visual, simply because these formulas are quite beautiful. Then there is the encapsulation story behind it. But I think the skin-feel is key and a big reason consumers repurchase the product,” he says.
Skincare is currently the bulk of Capsum’s business, while color cosmetics (which it has been manufacturing for just three years) accounts for only about 15% of the company’s revenue. Bardon sees haircare as the next big category for the manufacturer. Chanel, Elizabeth Arden and Erno Laszlo (to name a few) have partnered with Capsum on select products in their portfolios.
While Capsum’s manufacturing facility in France, which was expanded significantly last year, has a capacity of 40 million units per year, the US site can turn out at least 50 million units a year. “This year, we’re forecasting production of about 5 million, so we’re at 10% capacity,” notes Bardon. “The US is a huge market and this site is designed to meet the requisite demand. Our 126,000 ft2 facility stands on a 50-acre site, so we have ample room to expand. Everything is designed to be double in size, compared to where we are now!” Bardon concludes.