Chances are that you have something in your kitchen or bathroom from the Unilever family. With brands like Ben & Jerry’s, Dove, Lipton and Vaseline in its portfolio, the multi-national corporate giant boasts that 2.5 billion people use their products everyday. And if it keeps on merging with and acquiring companies at the rapid pace it’s maintained over the past two years, Unilever will have a legitimate shot at being in half the homes of the 7.6 billion people on Earth.
One notable acquisition is a company in a space that is new to Unilever: The “multi-ethnic” market. Enter Sundial, the Black-owned beauty company that houses brands like SheaMoisture and Madam CJ Walker which many Black women trust with their tresses. Sundial, valued at upwards of $700 million when Bain Capital took a minority stake in 2015, is thriving. But this is not a rescue mission deal. According to the official press release, Sundial was expected to turnover $240 million this year.
So what does such an acquisition mean for the legacy and future of a Black company that has achieved undeniable success independently by going from selling products on the street from a van to being on the shelves of major retailers like Target and Walgreens?
Sundial CEO and co-founder Richelieu Dennis spoke with News One about the new developments and how his company is leveraging support from this new deal to benefit not only Sundial, but also the people he called the backbones of the community: Black women.
What does this acquisition mean for Sundial and all the brands under it?
Oh wow. I have to think about how I want to say this because it has such a tremendous impact. Our business has been built on our community commerce model. Our model is, as we scale, we scale our investments in our community. We have a global platform we can scale. Our community commerce model is preserved in this deal as the business scales and grows. We have a $100 million fund for women of color entrepreneurs. That’s just the beginning to get much larger dollars to invest in the backbones of our communities, which are women. This is one business and business model which can now enable hundreds of other black owned businesses to be started. It’s transformational. It’s something that is so necessary. We are in the position make our own decisions. From the business perspective, it allows us to have a global scale, infrastructure and expertise to drive that global scale. This allows us to have … greater impact on what black women consumers can expect and receive. One of the things I’ve always been vocal about is how businesses and entrepreneurs from other cultures come into our communities during the day and spend the money they get elsewhere. We want that same freedom. What this represents is a realization of a model to continuously focus on building and scaling.
Why choose an acquisition instead of a merger or staying on your own? Sundial wasn’t hurting financially.
We are acquiring substantial stock in Unilever. This is not a one-sided deal. We are investing in the growth of our business by investing in a much larger company. It really is a transaction that really seeks to continue our business model. All of these things were considered. We looked out for what the options were. We could go public, but with that, we would have capital but no infrastructure, expertise or capacity. We would have to struggle to get to that over the coming years while competing against others who do have those advantages. Ben and Jerry’s, for example, is a very progressive brand that stands for social justice and invests heavily in issues that concern African-Americans. Ben and Jerry’s has been owned by Unilever for more than 20 years and Ben and Jerry are still there and still investing in the causes they believe in. Our choices were to stay independent and fight with no or very limited resources, go public or find a situation that would allow us to achieve our goals and also gain the capital and expertise we need.
Some of the initial reactions to this have been that the formulas will change now that you have been acquired by a large non-Black company, causing hair care products to no longer work for Black people’s hair.
Our consumers have seen these things happen — businesses being bought out and the product changing for the worse. But this is truly a transaction that is created about value and serving our core consumer. This is a sizable transaction. Unilever is not going to invest in a transaction of this size and then try to somehow alter the product or the service. The benefit to Unilever’s portfolio is that we bring to them the fast growing consumers: the multi-ethnic/cultural consumers and millennials. It would not make business sense to alter what we have created. Our history has been about just what we’re talking about. The challenge is that there has been lip service to multi-cultural consumers — slow downs in service and the like. But this is a highly valued deal. One of the highest in beauty industry this year.
Once this deal is finalized in the first quarter of 2018, would it be fair to say that Sundial will be a Black founded and Black run company that is no longer black owned?
We will be a Black founded and Black run company that has significant investment in a larger company. It will be a stand-alone unit in Unilever.
Both Unilever and Sundial had marketing missteps this year. SheaMoisture and Dove both caught the ire of Black women, especially on social media. Some see this acquisition as a meshing of the worst of both. How do you respond to that?
Look at our history pre- that and post-that. Yes, there are missteps, but that’s not the whole story. Historically, these have been the two companies and brands that have actually stood for diversity and inclusion. These missteps didn’t come out of sinister or systemic patterns. It came out of a desire to thrive and to be inclusive and diverse — to stand up for social issues and social justice. We did have missteps, but they were not deliberate attempts to harm. We listen and we learn.
As a family-owned company of more than 20 years, it must have been a difficult decision to take the acquisition route, even with the knowledge of wanting to scale.
Yes, this was a difficult decision that we spent many years evaluating. We knew we wanted investment, commitment to our community commerce model, which today has some 16,000 women who are directly or indirectly impacted by Sundial. It will be 200,000 to 300,000 women with this deal. The single most important part of all of this, the $100 million investment, is dedicated to women of color.
The 200,000 to 300,000 women — would they be women in the African countries Sundial operates in who cultivate the shea butter, oils and other raw materials?
Yes, we estimate it will be a year to a year and a half to get to 200,000 to 300,000 women. This is a huge life shift because this means many of these women are living above the poverty line for the first time. With this $100 million fund, we expect to do even more.
Tell us more about the fund for women of color entrepreneurs.
We already have the have the Tuck School of Business at Dartmouth College as a robust partner in our endeavors. We are creating an ecosystem of support for women of color. We will start with being focused on the United States, but we will expand. We have a strong, robust program in Africa and Unilever is buying millions and millions of units of our raw ingredients.
This issue of women of color being locked out of entrepreneurship and commerce is a global problem. Up until now, it has not been addressed with this amount of sizable dollars and expertise. After the missteps, we went to around eight different cities and did town halls with hundreds of Black women asking, “how can this community commerce model work for you?” What we were told is that it’s great to give access to education, but we don’t have access to capital. I couldn’t get a loan as a Black man when I was first starting out, so I can’t even imagine what it would be like as a Black woman. I said “Hey I’m starting a fund with my own money to address this right now” and when Unilever came in the conversation months ago, they wanted to get involved and make it even bigger. So now, we have several institutions that want to get involved. I just got off the phone with one well-known institution just now.
So, the $50 million fund, which will eventually be a $100 million fund, will involve universities, corporations, financial institutions and the like to form a real ecosystem?
Exactly, it will be an ecosystem for women of color entrepreneurs. It’s a big idea and it’s one whose time has come. I’ve built a career on investing back into the communities and now we can do that on a larger scale.
I read a great quote from you the other day that essentially said you were sure Sundial was the only brand sold inside of Macy’s and on the sidewalk outside of Macy’s. Can you assure your core consumer that SheaMoisture and the other Sundial brands are still here for “the culture” and will remain so?
[Chuckles] Absolutely. We’re here.