Cosmetics OEM Bay Cosmetics Launches Supplement Division to Address Packaging Material Shortages in the Supplement Industry

Bay Cosmetics Co., Ltd. (Headquarters: Izumisano City, Osaka; CEO: Sota Kato; hereinafter "the Company") is pleased to announce the establishment of its Supplement Business Division on May 15, 2026, following the completion of a supply chain for health food and supplement development that it has been working on. The Company has secured a stable supply line for up to 100 million aluminum pouches, estimated to be about 2% of Japan's domestic demand, ensuring a stable product supply even amidst the tight supply and demand for packaging materials caused by the situation in the Middle East. ■ Background: The "Packaging Material Shock" Caused by the Blockade of the Strait of Hormuz In March-April 2026, the escalation of tensions with Iran led to a de facto blockade of the Strait of Hormuz. Japan depends on the Middle East for about 74% of its naphtha imports and about 30% of its aluminum supply, facing a supply crisis for both aluminum and plastic film, the main raw materials for packaging. ▼ The wave of material shortages also approaches the supplement industry Supplements and health foods widely use aluminum pouches, a material common to the entire food industry, including retort foods and coffee. The outer layer of the pouch uses aluminum, and the inner layer uses polyethylene film derived from naphtha, subjecting it to dual price increase pressures from the Middle East crisis. The supplement OEM market continues to expand due to small-lot needs and an increase in new entrants from other industries, but the stable procurement of packaging materials is becoming a new bottleneck. ■ Overview of Initiatives ▼ We Won't Let Our Customers Say, "We Don't Have Enough Packaging Materials" - Securing Up to 100 Million Aluminum Pouches In the supplement industry, securing aluminum pouches is increasingly dictating the launch timing of products. Foreseeing this situation, the Company, prior to launching the supplement division, concluded long-term supply contracts with multiple material suppliers, securing a stable supply line for up to 100 million aluminum pouches, equivalent to an estimated 2% of domestic demand. Our customers can concentrate on product planning and sales strategy without being swayed by the anxiety of material procurement. For our customers, the worry of "I want to make it, but there are no pouches" is unnecessary. ▼ Supplement OEM/ODM Supporting 6 Dosage Forms Our supplement division can handle contract manufacturing for the following six dosage forms. ▼ Not Just "Off-the-Shelf Ingredients" - Developing Unique Components and Sourcing Original Raw Materials from Overseas The supplement market is often flooded with similar products using the same ingredients and formulations, leading to price competition. The company sought the answer to this challenge "upstream of the raw materials." Development of unique components by our formulators: Our formulators collaborate with raw material manufacturers to develop unique components that can only be sourced through us. This enables customers to design products with a competitive edge using ingredients that competitors cannot imitate. Import of original raw materials from overseas: We have established routes to directly procure original raw materials not yet distributed in Japan from overseas suppliers, supporting the creation of products with a first-mover advantage using ingredients not yet on the Japanese market. Furthermore, leveraging the product development capabilities cultivated in cosmetics OEM, we design everything from "what ingredients" to "what concept" and "who to deliver to" in an integrated manner. We propose a product lineup unique to a beauty brand that spans both "topical" and "oral" applications, including the "inner beauty" area, which is now a market expanding to over 250 billion yen. ■ Supplement Business Leveraging Expertise from Cosmetics OEM The Company will apply the quality control systems and supply chain construction know-how cultivated in its cosmetics OEM/ODM business to the supplement business. With GMP (Good Manufacturing Practice) becoming mandatory for supplement-form functional foods in April 2025, quality control standards have become even stricter. The Company has already established a management system accumulated through its cosmetics GMP compliance and can guarantee the same level of quality assurance in supplement manufacturing. The merits of making supplements with us go beyond just "manufacturing." - Maintaining Brand Worldview: The same staff and team involved in cosmetics planning also handle supplement planning, ensuring consistency between "topical" and "oral" products. - Leveraging Existing Sales Channels for Supplements: You can utilize our sales network, including store shelves at Don Quijote, @cosme, Loft, and platforms like Qoo10 and TikTok Live, for your supplements. - Marketing Team Collaboration from Product Planning: Our team, which creates over 30 plans per month, participates from the market research and concept design stages, preventing situations where a product is made but the sales method is unknown. We have already received many inquiries, mainly from our existing clients, prior to the announcement of the new supplement division. We welcome interested companies to contact us. About Bay Cosmetics - From Manufacturing Partner to "Strategic Partner" We are a cosmetics OEM/ODM manufacturer. We have a system in place to support every phase of a brand's business, from product planning and development to manufacturing, sales channel development, sales growth, and overseas expansion. Our initiatives at each phase: - Initial Consultation: We go beyond confirming specifications to understand business goals, budget, and targets, proposing optimal categories and product strategies based on market data. - Planning & Development: We design products that incorporate market trends and sales strategies. Our cosmetics generation AI (analyzing ~6,000 formulation data points) can propose formulation plans in as little as 5 minutes. - Manufacturing Process: We offer flexible scheduling aligned with promotional plans. We propose a complete package including fixtures, containers, boxes, and design, reducing our clients' coordination workload. - Delivery Speed: We achieve high-speed delivery in 2-3 months. Having our own factory allows for speedy and flexible responses. - Sales Promotion: We support sales even after delivery. We propose next steps such as unique sales menus, support for securing retail shelf space, and leveraging live commerce. - Overseas Expansion: We provide comprehensive support, from selecting a country to enter to local deployment strategies, not just handling paperwork. Our Strengths: - Proven Track Record with Our Own Brands: Our group's cosmetics brands are sold in over 10,000 stores online and offline, accumulating practical sales know-how. - Dedicated Marketing Team: Constantly creating over 30 plans per month. We regularly disseminate research information through seminars and Ebooks and catch the latest channel trends and influencer information through hearings with manufacturers. - Unique Test Marketing: We conduct our own usability tests using beauty advisors (BAs) to verify quality before market launch. - Sales Network: We offer unique promotional menus, such as support for entering retail stores and special collaborative promotions with Qoo10. We can also introduce wholesale companies and support overseas expansion. Bay Cosmetics Co., Ltd. Company Profile: Name: Bay Cosmetics Co., Ltd. Location: 3-3-27 Shimogawaraya, Izumisano-shi, Osaka (Head Office Factory) / 4F Shinbashi 6-chome Bldg., 6-9-4 Shinbashi, Minato-ku, Tokyo (Tokyo Sales Office) Representative: Sota Kato, CEO Established: December 2023 Business: Cosmetics OEM/ODM business, Development and provision of cosmetics generation AI URL: https://baycosme.com