When making powdered makeup, a small amount of oil is needed to act as a binder. The best results are achieved when that oil is spread out evenly throughout the entire batch. The dilemma has always been finding the best way to accomplish those results, since the binder oil wants to absorb strongly on to the powder particles as soon as it contacts them, and too much oil is just as bad for performance as unevenly distributed oil is.
The traditional way to do this has been to spray the oil onto the batch while it’s being stirred in a ribbon blender, and then to pass the powder + oil mixture through a pulverizer several times.
This is a time-consuming process, as one might imagine.
What the folks in that video are doing instead is making an emulsion with the binder oils and water, adding the makeup powders until the mixture becomes a paste, extruding then molding that paste, and finally, drying the water off in an oven. The emulsion and stirring the paste mixture insures a perfect distribution of binder oil onto the powder particles. Since water is bad for pressed powder product stability for a number of reasons, the drying (baking) step is critically important. It’s brilliant to turn that production step into a marketing tool.
Interestingly (at least to me) is that the “baked makeup” process didn’t become feasible until it became unacceptable to use parabens in makeup. Prior to that, parabens were the best (and cheapest) preservatives to use in powders, and since they were soluble in water, the water-based process that you see in the video above would have destroyed the preservative system. The cost difference between parabens and oil-soluble preservatives was enough to kill the potential use of this process. Now, since we can’t use parabens anyway, that cost consideration has gone away.