By Aisha Al-Muslim
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (March 12, 2019).
For years, Procter & Gamble Co. has been adding more blades
to its Gillette razors. But in December P&G bought a startup
that sells a single-blade razor.
The reason? The small firm's shaving products are designed for
men with coarse or curly hair, like many people of color. It is a
market that P&G and other consumer-products conglomerates are
pursuing by acquiring black-owned brands, many of which have loyal
followings for their niche products.
Walker & Co. Brands, the startup P&G acquired, was
founded by 34-year-old entrepreneur Tristan Walker to make its
Bevel shaving products in 2013. The company also has hair-care
products for women of color with curly or textured hair.
"I started the business...to serve a community that I felt
deserved to be spoken to authentically and deserved products that
worked," Mr. Walker said. He will continue to lead the business,
which will operate out of Atlanta as a subsidiary of P&G.
African-American shoppers accounted for $507 million of the $4.5
billion spent on hair care in the U.S. last year, according to
Nielsen research. Black consumers also accounted for $489 million
of the $3.6 billion spent on skin-care products, Nielsen found. The
spending is largely in line with demographics, as blacks represent
14% of the U.S. population, according to Nielsen.
"Insurgent brands have very close-knit consumers," said Monisha
De La Rocha, a Bain & Co. partner who focuses on private
equity, retail and consumer products. "A lot of brands have
founder-led storytelling that is the secret sauce."
Several black-owned consumer brands were created in the 1990s to
market to black women at the same time many women stopped
chemically relaxing, or straightening, their hair and started to
wear their hair naturally, but had a hard time finding styling
creams and deep-conditioning treatments. While corporate buyers can
expand a brand's distribution, they also can turn away customers
looking to support a minority-owned business.
"I would hate for some company to take over and not care about
the customer like we do," said Wendi Levy, who co-founded Mixed
Chicks, a hair-care company launched in 2004. She said she has been
approached about selling the Canoga Park, Calif.-based firm but
would feel uneasy about "selling to the wrong person," which is why
she would want a role in the new company.
To address such concerns, P&G and other conglomerates have
largely kept founders in place. "We realized the importance with
this consumer that the connection comes first," said Lela Coffey,
P&G's director of multicultural brand building. "They want to
understand that these are products that are made for them by people
who truly understand their needs."
Unilever PLC left a co-founder in charge of Sundial Brands --
maker of the SheaMoisture and Nubian Heritage beauty products,
aimed predominantly at African-Americans -- when it acquired the
company in 2017. Richelieu Dennis, who started the business in
1992, serves as chief executive of the stand-alone unit.
"We structured a new kind of deal in which our purpose -- to
provide opportunities for economic sustainability and reinvestment
in our communities -- was put at the core of the agreement," Mr.
Dennis said. The companies created a $100 million fund to back
women-of-color entrepreneurs and promised to expand Sundial's
supply chain in Africa.
Months before it was bought by Unilever, Sundial faced
social-media backlash over ads in 2017 that showed SheaMoisture
hair-care products being used by mostly white women. The company,
then partly owned by private-equity firm Bain Capital, had been
trying to be more inclusive in an effort to expand its
business.
"We are happy for the company that wants to go mainstream and
wants to grow, but we feel you can't besmirch us as your original
customer base," said branding expert Karen Taylor Bass, who began
to wear her hair naturally in 1989.
Mr. Dennis said he is grateful his customers have "not allowed
one moment to redefine who we are and who they know us to be -- and
neither will we."
Tasha Bramwell, a 33-year-old accountant, said she largely
avoids SheaMoisture products after finding out that the brand was
owned by Unilever. "I love their products, but part of the reason
why I loved it is because it was a black-owned business," said Ms.
Bramwell, who lives in Brockton, Mass.
Cosmetics giant L'Oréal SA's 2014 purchase of Carol's Daughter,
a brand of natural hair and skin products, raised similar concerns
from some customers. Executives at L'Oréal said founder Lisa Price
is still involved in key decisions of the brand, which expanded
from 2,000 locations to more than 30,000 in two years.
"It's important for consumers to understand this is not a notion
of selling out," said Erica Culpepper, general manager of L'Oréal's
multicultural beauty division. "It's about having additional
resources to help grow and expand the brand."
Some shoppers said as long as the product quality doesn't
change, they aren't concerned when a brand changes ownership.
"It used to matter that my hair products were black-owned," said
social worker Thea Flowers, 37, of the Bronx, N.Y., who uses
SheaMoisture and Carol's Daughter. "So many of them start off
black-owned and then get sold. It doesn't stop me from using their
product. I use what works for my hair."
Write to Aisha Al-Muslim at aisha.al-muslim@wsj.com
(END) Dow Jones Newswires
March 12, 2019 02:47 ET (06:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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