Clean and natural beauty brands are attracting investors around the world as sales are forecast to register steady growth in the future.
In North America, Jessica Alba’s The Honest Company, which was listed on the Nasdaq stock exchange in May, raised USD 413 million and is now valued at USD 1.8 billion. In April, Beautycounter, another Californian company, received investment from The Carlyle Group. The investment firm has taken a majority stake in the natural personal care company, valuing it at US $1 billion. Beautycounter is using the capital to build omnichannel sales, strengthen brand awareness, and new product development.
The private equity firm Berkshire Partners has invested in Mielle Organics. The natural hair company has received over US $100 million to help it expand internationally and reinforce its community development programme. Launched in 2014, the brand has been expanding in mass market retailers such as Target, Walmart and CVS.
For its part, Bain Capital has taken a majority stake in Hand in Hand, a mission-driven organisation that produces sustainable soap products whilst having a positive social impact.
Let’s also note the acquisition of Costa Brazil and EcoFabulous Cosmetics by sustainable materials firm Amyris. Costa Brazil has a range of natural personal care products made using Brazilian ingredients, whilst EcoFabulous Cosmetics specialises in clean beauty products for Gen Z.
In Europe, the largest investment went to Aroma-Zone. The French company sells natural essential oils, aromatherapy products, and DIY cosmetics via its online shopping platform and in its brick-and-mortar stores to over 2 million customers per year. Aroma-Zone has received EUR 410 million (USD 485 million) from the global investment firm Eurazeo to expand its retail footprint and boost international sales.
The French natural refillable brand 900.care raised EUR 10 million (USD 12 million) in seed capital. Based on a subscription model, the company offers natural products in tablet or stick form.
In the UK, Pai Skincare, a London-based organic skincare brand, obtained EUR 7.5 million (USD 8.9 million) from the private investment firm Famille C Venture. It plans to use the investment to expand R&D and manufacturing capabilities.
The trend is the same in other regions. In India, the organic beauty brand Juicy Chemistry has got financing from Verlinvest.
According to Ecovia Intelligence, large multinationals are expected to purchase more natural and clean beauty brands. In 2020, we saw the acquisition of Thayers Natural Remedies (L’Oréal), Drunk Elephant (Shiseido), Stop The Water While Using Me! (Beiersdorf), and Hello Products (Colgate-Palmolive). The consulting firm expects more mergers, acquisitions and investments in the coming months. “Seeing high consumer demand for natural and organic and clean beauty products during the pandemic, the financial community is ‘going clean’ when looking at investments,” said Ecovia Intelligence in a statement.
This month, Ecovia Intelligence will discuss the evolution of sustainability issues in the cosmetics industry at the European edition of the Sustainable Cosmetics Summit, hosted online on 25-28th October. Michael Brenner, Executive Board Member of Weleda, will give the opening keynote. He will share the company’s green journey and give his perspective on future developments.
The role of green materials, the environmental impact of packaging, how technologies disrupt sustainable supply chains, as well as the marketing and customer issues raised by the move to sustainable cosmetics, will be debated during the event.