One of the beauty industry’s rarest ingredients is under threat

Michelle Ranavat, the founder of eponymous skin and haircare brand Ranavat, recently travelled from Los Angeles to India’s Kashmir Valley to meet with producers who supply her business with one of its key ingredients: saffron. It was her first time meeting with farmers who grow and harvest the spice that derives from the delicate threads of the crocus sativus flower. This process kicks off a supply chain that ends with a gram of saffron per bottle in the company’s brightening serum and resurfacing masque treatment. “It all starts there, and everything is hand-picked,” says Ranavat. Ranavat sources from India, which is among a handful of countries that contribute to a small portion of the global saffron market. Spain, Greece, Afghanistan and Morocco are a few of the others, while Iran is the world’s largest producer of the spice, supplying some 90 per cent of the market. Historically scarce, saffron is one of the world’s most expensive resources, which costs $1,600 a kilogram, which uses 17,000 flowers to produce. Now, the already rare spice is under threat. Geopolitical turmoil and climate change has affected Iranian production, putting pressure on the global price of saffron at a time of growing demand from the beauty and wellness industry. A long, hot and dry period from 2022 to 2023 led to water scarcity when surface wells dried up, creating drought-like conditions, says Bhimu Patil, director of the Vegetable and Fruit Improvement Centre at Texas A&M University. Yields in Iran fell to 80,000 kilograms in 2023 from 400,000 kilograms the previous year, says Patil. Meanwhile, the global saffron market is estimated at $602.2 million and is expected to grow at a compound annual growth rate of 7.1 per cent over the next six years (from 2024 to 2030), according to Patil. Sisley Paris, YSL Beauty, Kosas and many other higher end brands carry saffron-loaded products, from face masks to body creams and serums. YSL’s Or Rouge La Crème, made using saffron pistil extract harvested in Morocco, costs $440 for 50 mls. Founders of indie beauty brands say they’ve observed an increase in searches and interest in saffron on social media and in beauty circles. At the same time, prices have increased. Ranavat ended up absorbing $20,000 of increased saffron prices this year without passing on the cost to consumers. “So you know the next time this happens we may not be so lucky, but we did buy a year’s worth of supply at that time,” says Ranavat. “For us, that was the right approach because we didn’t want to stress about it.” House of M Beauty, which was founded by Anne Oliver after witnessing the skin-brightening properties of saffron following medicinal use, produces just four skincare products, and all of which incorporate saffron sourced from Afghanistan. Beauty companies like Oliver’s that procure among the highest grades of saffron, test each batch for purity and potency before the production process begins. For House of M, the raw material is sent to France for testing before extraction; production then begins in France. Oliver’s Afghan suppliers apply and receive a Good Manufacturing Practices certificate every year to ensure that quality is maintained at the facility where the saffron is processed. In the seven years since she started her business, her suppliers have raised the prices three times. The first two times were 5 per cent each, and then it doubled (10 per cent) due to saffron’s growing demand. “In the beginning when we started out they were pretty new and not a lot of people knew about them yet,” says Oliver. “They are more popular now, is what they’re saying.” Still, Oliver has chosen to grow her business slowly, increasing production by a few thousand bottles a year. Now, House of M produces 20,000 bottles annually of its Saffron Miracle Serum. The war in Ukraine has impacted prices at Greek skincare brand Korres, which has an exclusive contract with the Cooperative de Saffran in Greece, where they source only the red stigma, which is the active and the most expensive part of the plant. In return for exclusivity, Korres commits to buying a significant amount each year. The price is usually protected as part of the contract, but large market disruptions can have an effect. The cost of energy and the cost of organic fertiliser went up significantly in 2022, when Russia invaded Ukraine, in turn affecting the price of saffron, which rose by about 30 per cent, according to Korres founder Lena Korres. “Saffron is only one example of rapid and unexpected price increases. In the last five years, with Covid, the wars and a huge disruption in supply chain, the availability and the cost of raw materials has also been seriously disrupted. Situations like that are very difficult to handle,” Korres says. “On one hand, you need a crisis plan that involves sourcing and testing alternative raw materials as fast as possible. On the other hand, you need a proactive plan of shifting the business to a core assortment so that the company can focus its resources on less raw materials and thus be able to handle the price increases.” Saffron is a finicky crop. It is drought tolerant, but must be irrigated in drier regions of the world. The bulb from which the crocus grows is very sensitive to temperature change. The blooms are harvested once a year, usually in autumn when the saffron crocus flowers bloom. It is also labour intensive. The flower is harvested at dawn and must be hand-picked to prevent damage to the delicate stigma from which saffron is derived. About 31 per cent of global production (400,000 kilograms) is classified as premium or grade I. The premium segment of the global saffron market is expected to grow to $341 million by 2030 from $213 million in 2022, at a compound annual growth rate of 6.1 per cent, according to Tal Wilk-Glazer, CEO of Saffron Tech, an agricultural technology company that is using indoor vertical farming to grow the saffron flower all-year round. Its first farm is based in Israel. The goal is to take the technology mainstream, making saffron more available, but that’s dependent on various factors: agricultural policies and buyers’ embrace of these farms. Part of saffron’s allure is that it’s hard to produce, making it rare. Buyers may be wary of more available saffron, which would ease prices for the spice, but also reduce its exclusivity. Still, plant factories can offset the unpredictability that comes with outdoor agriculture and climate change. A controlled environment takes care of variables such as temperature and quality. A key indicator of growth for Saffron Tech is the rise of saffron extraction, a process by which half a kilogram of saffron can produce 4.5 kilograms of extract. “This opens new markets in nutraceuticals and beauty products,” says Wilk-Glazer. “We see a strong future in saffron extraction as it aligns with consumer trends towards premium and health-conscious products.” The saffron extraction process allows active ingredients to slowly dissolve into the solvent, producing a product that is more concentrated with actives, which is highly sought after because it amplifies saffron’s myriad benefits, including its anti-inflammatory and antioxidant properties. People in the industry have observed similar trends with other ingredients, such as acai berries from the Amazon rainforest, coconut and quinoa, to name a few that have shown staying power in recent years. Right now, in skincare, turmeric is on the rise alongside saffron. To protect themselves from price rises, brands can deepen their relationships with farmers, especially small-scale farmers, to guarantee supply and pricing. Currently, most high-end skincare companies produce small batches, but at some point, demand or price rises will tip the scales and they will have to pass on the rising cost to the consumer. “Historically, supply has often fallen short of global demand,” Wilk-Glazer says. “As more consumers recognise the quality and health benefits of saffron, the gap is likely to increase.” Comments, questions or feedback? Email us at feedback@voguebusiness.com.

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