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Exit Strategy: Why Boycotting Brands Like Drunk Elephant Might Not Be A Solution

When a cruelty-free brand gets acquired by a parent company that tests on animals, a percentage of cruelty-free shoppers immediately jump to a boycott. Whether it’s Drunk Elephant getting acquired by Shiseido or Too Faced getting bought by Estée Lauder, the news is met with frustration.

But this topic isn’t cut and dry. The problem I’m raising today is the following: the very customers that are boycotting the brand today due to its acquisition by an industry giant, might be the same customers that contributed to its growth and acquisition in the first place.

What’s An Exit Strategy?

In this context, an exit strategy is when the founder of a brand is planning on growing the business in order to sell it. The end goal is the sale of the company, often to a big corporation (think L’Oréal, Shiseido, or Estée Lauder).

Lately, there have been dozens of acquisitions and mergers in the beauty industry. Drunk Elephant sold to Shiseido. Tatcha sold to Unilever. Kylie Jenner sold 51% of her business to Coty.

Not all brands who get sold plan on it, but for some, it’s their strategy since day 1. For all of them however, their acquisition is dependent on their revenue. The bigger they grow, the more likely they are to be sold.

How does this play out when it comes to shopping cruelty-free?

The Dilemma: Supporting Brands To Make Them Grow So They Get Acquired

If you’re someone who doesn’t support cruelty-free brands owned by a parent company that tests on animals, you might be helping brands get acquired by a parent company company that tests on animals simply by supporting these brands.

If we’re purchasing from these brands, we’re helping them grow. When they grow big enough, they’re at risk of getting acquired.

Why This Is Important

I believe this is a legitimate concern to have, especially now that new indie brands are flourishing. Brands like Drunk Elephant, Schmidt’s Naturals, and Native deodorant have all started as small and “ethical” indie brands and were acquired by industry giants that test on animals.

Experts say that mergers and acquisitions in the beauty industry are expected to boom in 2020. Brands like Milk Makeup, Dose of Colors, Tata Harper, Curology, and even Glossier are prime acquisition targets right now.

Cruelty-free shoppers, in part, are playing a role in the growth of these indie brands since they often market themselves as being more “ethical”, either by emphasizing their cruelty-free status, vegan products, of sustainable practices.

But by supporting them, are we not also contributing to their future acquisition by a less-ethical beauty giant?

Profits Over Ethics Is The Reality In Business

You might accuse these brands of having “no morals” and putting “profits over ethics”. But here’s the truth: whether we like it or not, business as we know it today is about money.

Even if the founder of a business has moral reservations when it comes to companies like Unilever or Estee Lauder, they’re making the best decision for themselves and their business by selling the company. When a company is sold to a giant, it can grow even bigger and have wider distribution.

When it comes to selling the company, founders are left with little choice as to the buyer. The vast majority of the industry leaders who purchase indie beauty brands test on animals, since they sell brands in China. Often times, to remain as ethical as possible, the founders make it a part of the deal for the company to remain cruelty-free.

What’s The Solution?

If you’re someone who boycotts cruelty-fee brands with non-cruelty-free parent companies, you’re left with a dilemma. I suggest you don’t ignore it, because it’s very real: the money you’re giving to cruelty-free brands is turning them into a subsidiary of a company that tests on animals.

1. Go Wider: Open Up Your Definition Of Cruelty-Free

I’ve been someone with a narrow definition of “cruelty-free” before, and I came to the conclusion that a wide definition makes more sense.

See Also

I consider all cruelty-free brands to be cruelty-free, even those owned by a parent company that tests on animals. When we buy from a cruelty-free brand like NYX, we’re showing its parent company L’Oreal that cruelty-free matters. L’Oreal doesn’t own many cruelty-free brands to begin with, which is why I think it’s important to support these brands.

Otherwise, what incentive does L’Oreal have to ensure that NYX remains cruelty-free, let alone to make changes in their other brands so they go cruelty-free?

2. Go Narrower: Buy From Small Brands

If you don’t want to risk contributing to the growth of a cruelty-free brands getting acquired by a parent company that tests on animals, you have to be selective. If a brand is sold in a store like Sephora of Ulta, it could be getting acquired.

If a brand is getting funding, it could be on its way to getting acquired as well. Funding is a possible sign of an exit strategy: some companies’ business plan is to receive funding in order to grow the company quickly, and then sell it.

To find out about a company’s funding, you can use a website like Crunchbase. For example, we can see that Drunk Elephant received $8.3M in funding in 2017, shortly before getting acquired by Shiseido.

To Sum It Up

There are pros and cons to supporting cruelty-free brands owned by a parent company that tests on animals, and I understand why some might jump to a boycott.

However, given some brands’ exit strategy and acquisition, there’s a real dilemma to consider with this approach. My personal stance is to support cruelty-free brands even when they’re owned by giants like Shiseido or L’Oréal, because of the positive impact this can have on the parent company as a whole.

For a list of cruelty-free brands owned by a parent company that tests on animals, visit my recent post here.

View Comments (2)
  • Thank you for this article! It was well written and very eye-opening for me. I only buy cruelty free skin and makeup products. It bothers me how many companies are selling in China where it’s required to be tested on animals.

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