Coffee N° 5 with Lara Schmoisman

Episode: The Hard Truth About Beauty Innovation with Steven J. Edelstein
Date: August 26, 2025
Guest: Steven J. Edelstein
Host: Lara Schmoisman

Episode Overview

This episode delves into the complexities and realities of innovating within the beauty and wellness industry, guided by the insights of Steven J. Edelstein, an expert with 25 years of experience spanning beauty, health, pharma, and private equity. Host Lara Schmoisman and Steven engage in a candid conversation about the fusion of beauty and wellness, the genuine challenges of product development (from formulation to pricing and supply chain), and the critical importance of knowing your audience, truly innovating, and crafting a brand story that lasts.

Key Discussion Points & Insights

1. Evolving Industry Boundaries

[01:46 – 04:57]

• The lines between health, beauty, wellness, and pharma are increasingly blurred.
• Brands must think holistically: wellness products need beauty angles, and vice versa.
• Everything starts with the formulation, but true success means understanding and serving a specific audience, and integrating the product into consumers' daily lives.
• Steven on Product Purpose:

  "You have to look at how is that product...going to fit into the daily lives of the audience. And this is very important—the demographic audience that you're intending to sell your product to." (02:22)

2. Formulation and Knowing Your Audience

[03:13 – 04:57]

• Creating products blindly—without understanding customer needs or cultural context—sets brands up for failure.
• Data-driven decisions on ingredient trends help manufacturers and brands build greater relevance.
• Steven on Cultural Connection:

  "The cultural connection is absolutely critical...the connection with your consumer is absolutely paramount. Having a story is probably more important than anything else." (03:44)

3. Pricing and Positioning: It’s Not Just About Quality

[04:57 – 08:29]

• Price point flows from audience understanding and market segment (mass, masstige, prestige, luxury).
• Backward-planning: Reduce cost of goods as much as possible, aim for a 5–7x markup of cost to MSRP.
• Case study: A client with costly formulation and no brand equity was doomed; no margin meant retail was impossible.
• Steven’s Blunt Take:

  "If the consumer is not believing it and they don't see the value in the product, it'll never go anywhere." (08:13)

4. Supply Chain Realities and Early-Stage Pitfalls

[08:29 – 11:22]

• The supply chain must support your business model and allow for scalability.
• Starting small, centralizing, and ensuring consistent replenishment is key before scaling up.
• Many startups rush into retail far too soon, a mistake that is often fatal.
• Steven’s Warning:

  "[Going] too fast into retail—stupid, stupid, stupid, stupid...That's the last place I go." (10:01)

5. Retail: Mirage or Opportunity?

[11:22 – 12:52]

• Retail exposure is expensive: heavy slotting fees, trade marketing, and retail support needed.
• Only about 7% of brands have enough equity to succeed in retail.
• Failing at retail often means permanent brand damage.
• Steven:

  "If you fail in retail, you're done. It's a kiss of death." (12:48)

6. The Right Trade Show Approach

[12:57 – 15:31]

• Brands often waste resources at the wrong trade shows.
• True innovation means finding your unique audience—even if it’s at nontraditional venues (e.g., surf community trade shows for beauty products).
• Steven on Niches:

  "You have to find your niche...scientifically formulated products, understanding who your audience is, niche orientation." (14:14)

7. Differentiation, Specialization, & Brand Architecture

[15:31 – 18:44]

• Modern beauty is less about “one-size-fits-all” and more about intelligent, active ingredients with clear problem-solving functions.
• Communication and packaging should differ between professional and consumer lines.
• Brands sometimes struggle with diluted messaging if they try to be everything to everyone.
• Steven’s Advice:

  "When you start laying out the architecture of your business, you need to think about these particular areas of focus and set up separate corporate structures for those entities." (17:42)

8. Longevity, Loyalty, and Emotional Storytelling

[18:45 – 20:00]

• A true brand is defined by longevity and repeat purchases, not by a single-point ROAS.
• Emotional connection and clear “problem-solution” positioning are essential for loyalty and retention.
• Steven:

  "You better have a great story, you better have an emotional element to it, you better have a problem solution, and you better have a product that people really want to see." (19:00)

9. White Labeling: Innovation Stagnation

[20:00 – 22:39]

• Excessive reliance on white-labeled and private label formulas has led to stagnation—many brands offer “more of the same” with new packaging.
• Large legacy brands have rested on laurels, missing true innovation.
• Steven:

  "Flat. There's no innovation. They like to say they have innovation. Their advertising cites innovation and science. But at the end of the day, they're selling to a very, forgive me for saying this, vanilla audience..." (21:39)

10. The Future of Beauty: Personalization & Disruption

[22:39 – 26:55]

• The future: smarter delivery systems, more tailored products, leveraging tech to solve genuine user needs.
• AI and diagnostics exist, but most products remain generic, not truly segmented for individual needs.
• Economics have held back true segmentation; future advances should enable personalization at scale, improving both consumer satisfaction and margins.
• Steven on the Future:

  "Technology and hardware...are going to become so much less expensive to be able to cater to very specific skin type, eye color, lip color, etc." (25:32)

11. Consumer Loyalty & Industry Cynicism

[26:24 – 27:20]

• Current “deal-hopping” consumer behavior reflects the lack of genuine relevance and storytelling from brands.
• Brands must focus on education, building emotional continuity, and making consumers feel seen—otherwise, loyalty will continue to erode.
• Steven:

  "They're not educating the consumer on...how the product is going to change their lives...most products that do well in market have an emotional opportunity." (26:55)

Notable Quotes & Memorable Moments

• "Having a story is probably more important than anything else. And then keeping in contact with these people, talk to them, listen to them."
  — Steven Edelstein [03:44]

• "If the consumer is not believing it and they don't see the value in the product. It'll never go anywhere."
  — Steven Edelstein [08:13]

• "[Going] too fast into retail—stupid, stupid, stupid, stupid...That's the last place I go."
  — Steven Edelstein [10:01]

• "Only about 7% of the brands have that cachet. The others are all struggling... Failing at retail, you're done. It's a kiss of death."
  — Steven Edelstein [12:35]

• "You have to find your niche...know exactly what the propensity to buy is and understand what your economics are."
  — Steven Edelstein [14:14]

• "A brand is not a collection of products. The brand is longevity—how many times people are willing to buy that product again and again."
  — Lara Schmoisman [19:23]

• "They are not aligned with what the results are. So they're genericizing the product itself...which is nonsense because it's not true."
  — Steven Edelstein [25:07]

Key Timestamps

• 01:46 — Industry borders blur: wellness, beauty, pharma intersect
• 03:44 — Data-driven ingredient trends and consumer connection
• 05:25 — Pricing strategies: understanding market segmentation
• 08:29 — Supply chain realities: centralization, MOQs, scalability
• 10:01 — Rushing to retail: pitfalls for new brands
• 11:22 — Heavy costs of retail, trade marketing, and brand threat
• 12:57 — Trade shows: finding the right audiences
• 14:14 — Niche orientation and true product innovation
• 17:42 — Separate business architectures for pro/consumer segments
• 19:00 — Emotional storytelling and brand longevity
• 20:28 — White labeling as a brake on industry innovation
• 22:39 — Needed: disruption and smarter product segmentation
• 25:32 — Tech-driven, individualized products as the future

Final Notes: Coffee Preferences & Closing

• Steven’s Coffee:

  "I drink my coffee light with milk. Sometimes I use half and half, no sugar." (27:29)

• Closing Thought:
  Hosts agree: true brand value and innovation are about solving real problems, knowing your audience deeply, innovating with purpose, and relentlessly focusing on storytelling and customer relationship.

For more information, visit www.larashmoisman.com or check the episode notes. Don’t forget to subscribe!