Inside Estée Lauder’s AI-Fuelled Supply Chain Evolution
The Estée Lauder Companies (ELC) is pressing forward with an ambitious transformation of its supply chain.
The push to overhaul ELC’s value chain comes at a time when many corporations are retreating from their earlier sustainability goals.
But, amid political pressure and an emerging backlash against ESG initiatives, ELC is taking a different path. Despite the shifting rhetoric in boardrooms, the company is doubling down on its commitment to responsible practices.
Rebuilding the supply chain for speed and sustainability
Roberto Canevari, Executive Vice President and Chief Value Chain Officer at ELC, has made clear that his strategy is built around three principles: “safety, sustainability and respect for people.”
Speaking to L’Economia, he explains how the beauty giant is becoming faster, more responsive and more digitally driven – with a vision anchored in Europe but applied globally.
In the interview, he outlined ELC’s shift towards a more agile supply chain that allows the business to respond more rapidly to consumer needs.
“We’re moving toward a much more agile model. More product launches, less inventory,” he says.
Meanwhile, the company is looking triple the percentage of innovation that is launched in less than a year. To achieve this, ELC is streamlining operations across its nine global production sites, including key European hubs in Belgium, the UK and Switzerland.
In Belgium, a major upgrade to the Oevel campus strengthens this vision. The site is a key part of the company’s manufacturing and fulfilment network, with 60% of global product volume passing through the facility.
Energy efficiency measures, improved water treatment systems and new waste reduction strategies are central to the upgrade.
“Oevel exemplifies how we’re committed to advancing sustainability for the long term,” adds Nancy Mahon, Chief Sustainability Officer at ELC.
The European supply chain is not only operationally important but also historically embedded.
ELC’s presence in Italy, for example, dates back to the 1960s, supported by partnerships with companies like Intercos, a long-time supplier of makeup powders. These local ties enable the company to shorten its supply chains, reducing environmental impact while maintaining production standards.
AI as a supply chain catalyst
AI is at the heart of ELC’s transformation as collaborations with Microsoft and Zero100 are driving innovation across the entire value chain.
Together, they’ve launched the AI Innovation Lab – a continuation of their partnership dating back to 2017. That collaboration led to tools such as the Voice-Enabled Makeup Assistant, which helps users apply cosmetics using real-time digital guidance.
Now, AI is helping ELC move from reactive to predictive supply chain management. Machine learning applications are enabling the business to anticipate consumer demand, optimise inventory and improve operational efficiency.
Olly Sloboda, Co-Founder and Chief Executive of Zero100, praised the partnership in a LinkedIn post: “Love what we’re building with Zero100 and The Estée Lauder Companies Inc. And cool to be mentioned as a strategic partner alongside Microsoft."
Zero100’s research confirms that AI is becoming critical to supply chain performance. Its AI ROI Report shows that 90% of large firms are now experimenting with AI in their operations.
Companies like ELC are investing in upskilling employees, with some introducing financial rewards, gamification or fast-tracked promotions for staff who adopt AI skills. The race for talent has pushed leading firms like Walmart, Amazon, IBM and ELC to develop their own internal training programmes.
Staying the course on ESG in a changing climate
While some corporations are toning down their ESG messaging – a trend known as green-hushing – Estée Lauder continues to speak openly about its sustainability goals. This stance stands out in a context where more than $8bn has been withdrawn from global ESG funds in the first quarter of 2025 alone, much of it from US investors.
As boardrooms become more cautious, some companies are scaling back their public commitments to diversity, equity and inclusion (DEI) and environmental action. New research from AlphaSense shows DEI references in US corporate filings have dropped nearly 70%, while climate mentions are down 30%.
Despite this, ELC maintains clear ESG metrics and invests in long-term progress. The business sees AI not only as a technological tool but as a way to reinforce sustainable and inclusive practices.
AI can support more equitable outcomes by improving transparency and accuracy across the value chain, from forecasting to manufacturing.
The company’s financial performance also reflects its supply chain changes.
Roberto points to a 300-point improvement in gross margin during the third quarter, tied to reduced inventory and optimised operations under the internal Profit Recovery and Growth plan. These results affirm that agility and responsibility do not have to come at the cost of profitability.
