This post is the first of a series called “Thoughts & Things” where Nature’s Pulchritude will weigh in on relevant topics related to natural and organic beauty and food.
Deep. Sigh. Finding out that one of your favorite indie/small/niche brands has been bought out or funded by a large privately held entity typically causes loyal supporters to let out a collective deep sigh as they often feel the quality of their favorite brand is soon to decline. It is not always true, but it most definitely is not uncommon.
I remember the aftermath in the blogosphere after a well known nail polish brand was acquired by a large beauty company (
OPI & Coty). I also cannot help but recollect when a niche hair and skin brand ( Carol’s Daughter) had celebrity investors, changed its marketing strategy, abandoned its core customers, and the debacle that occurred when the brand’s quality declined. Needless to say, many of the brand’s loyal customers jumped ship once they figured out what was happening. Said brand went bankrupt before being acquired by a major beauty corporation ( L’Oreal). That brings me to the controversy surrounding the announcement of Bain Capital investing in Sundial Brands LLC which produces SheaMoisture and Nubian Heritage. Many on the internet have been abuzz about this and have been vociferous about their discontent with the investment partnership. We have seen this movie before, or have we?
SheaMoisture is a beauty company that was founded in 1992 that produces hair and skin products that has until recently been exclusively marketed to women of African decent to meet their unique hair needs. SheaMoisture uses 4 generations old recipes that date back to 1912, started by the founder’s grandmother. SheaMoisture became a household name natural hair brand when their Curl Enhancing Smoothie became the go-to product for natural hair gurus.
SheaMoisture is widely available at Walgreen’s, CVS, Walmart, Sally Beauty, Ulta and a host of brick-and-mortar and online retailers. Their hair and body products are sold at an affordable price point (typically $10, $20 for professional series) and can often be found on sale. SheaMoisture has over 20 different collections (including men’s, kids, men and women’s shave, hair color, and makeup), many of which have been introduced in the last 2 years. All of the hair and skin products contain fair trade and certified organic ingredients, most notably the namesake ingredient (Shea Butter), which is often one of the first 5 ingredients.
Sundial Brands (SheaMoisture’s parent company) is valued at $700 million , with annual venue’s of $200 million, according to Wall Street Journal (via MarketWatch). Bain Capital’s investment amount is unknown.
SheaMoisture “Sells Out”
The worst case scenario is that SheaMoisture “sells out.” What exactly is selling out? SheaMoisture abandons its core customer base for the sake of becoming a “renaissance brand,” its formulas gradually begin to change and the organic and fair trade ingredients slowly but surely disappear, then silicones, mineral oil and the whole gang begin getting added into formulas, etc. You get the point. SheaMoisture will go the route of
Carol’s Daughter and will lose the quality and integrity that attracted early and loyal customers in the first place.
Many SheaMoisture fans are greatly concerned about the choice of investment partner, as Bain Capital was founded by a former republican Presidential candidate (in the US). Frankly, I am not sure why this is an issue for some. If you look at various different organizations it is not unlikely you will find a senior level executive(s) with “eccentric” world views, or some “questionable” practices. Yes it is very much possible that this particular investment firm may not “understand” the mission and values of SheaMoisture and its customers, but that is the responsibility of Sundial Brands to be firm in their values and establish investor criteria that support those values.
SheaMoisture Stays True to its Mission (and Customers)
Power. Move. The best case scenario is the SheaMoisture will stay true to its loyal customer base and ‘self’ as a brand, though they are persuing means to increase their profits, valuation, and market share. Or in other words this is just a good business move. It should be noted that Sundial Brands was receiving offers to be purchased (wholly acquired), so perhaps it should be heartening that they chose a minority stake investor instead.
Ideally, once SheaMoisture reaches the financial level they desire they will pay back their investment, buy out Bain Capital’s minority stake, and continue to make quality products. They will continue to offer products that meet the hair and skin needs of their core customer base, but will also have offerings that will suit the hair and skin needs of other demographics. SheaMoisture is no longer aiming to be a great “niche” brand but is instead looking to become a beauty powerhouse that happens to have “clean/natural” formulas and use organic and fair trade ingredients in their products.
This partnership could go either way, but it is likely to go one of the two. Sundial Brands CEO has noticed and responded to the backlash, trying to ensure customers that SheaMoisture and Nubian Heritage products will retain their integrity.
What are your thoughts on this partnership? Leave your thoughts in the comments!