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

by Suzana Rose

Mar 10, 2020

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.

Spread the word.

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.

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.

Which Brands Are Cruelty-Free?

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+ Show Comments (6) - Hide Comments (6)
  • Jaret says:

    Thank you, “just some guy”. While I was happy to read Suzana’s point of view on this topic for me, money is money. I work hard for my money and L’Oreal does not buy a company to NOT make money off it – which means, bottom line, my money is going to L’Oreal (or any of the PRO cruelty companies)… and just the thought of that makes me ill. And I do understand being introduced to a larger market by selling – but that’s literally what it is: selling out. The selling out of your morals. And in this world it seems the list of people and companies with morals is quite slim to begin with. So for all the reasons you state, I too, will continue to support the smaller guys who retain their morals. Although its sad to ‘break up’ with a company and their products that I’ve loved when they sell out, at the end of the day my morals remain intact. And *that* helps me sleep soundly at night. And I don’t say all this to judge others – everyone is certainly free to decide where they draw the line. But for me personally, I’ve gotta keep supporting the animal-friendly folks. 😀

  • mollipop says:

    I think this is a thoughtful well-considered article. Ethical decision-making often traverses wide swaths of grey area and it’s important to consider other perspectives , whether we end up changing our position or not. Rigidity is sometimes warranted, but it’s not necessarily beneficial.

  • CrueltyFreeStats says:

    I disagree – These mega brands are simply heartlessly picking up market share. It is unlikely that a mega brand will ever fully convert to cruelty free simply because a small minority percentage (cruelty free and vegan buyers Are a statistical minority) wants their cruelty free option. It is more likely that a mega conglomerate will continue to use the money made from the ‘cruelty free brands’ in their portfolio to continue to animal test and engage in the same unethical practices for years, even decades or more to come. This is not really a question but a statistical probability due to the fact that vegans and cruelty free buyers are still a statistical minority by a long shot.. the math does Not support the likelihood of their conversion from a purely business perspective which is how they operate. Don’t get fooled by conglomerates. They Truly don’t care about animals. I will instead continue to support companies who do NOT sell out to parent companies who do horrible things Whenever possible.

  • just some guy says:

    I respectfully disagree that widening your definition of cruelty-free is a solution. You are nothing more than incremental revenue in a previously un- or under-served demographic to a company like Unilever. You are simply widening their customer base. Your support of a cruelty free product is _not_ inspiring them to not test on animals. I’d actually argue the other side of that, which is that if every big company saw an ethical brand acquisition’s sales plummet 90% because of a boycott, it sends a much stronger message that ethical consumers won’t fall for cheap marketing tricks, so they should either change or stop faking it by acquiring these companies. If a large company wanted to be more ethical, it’s actually really easy, you can just do it, instead of feeding gullible consumers lines like “moving towards a more sustainable future” or “working towards being cruelty free*** ***-except in china”. Furthermore, do you really, honestly, truly believe a company like Unilever wouldn’t encourage a brand like Schmidts to maybe use a little cheaper ingredient that had previously been tested on animals in another brand just to push margins? “Schmidts still doesn’t test on animals though” :eyeroll: These people aren’t moral. They don’t care about you and they don’t care about your ethics, unless by ethics you mean that green stuff in your wallet. I would have happily paid twice as much for my soap when I blissfully thought the person responsible for creating it shared my moral values, but I’ll have a tag on my toe before I willfully hand money to a company that’s going to use that money to continue to do awful things.

  • Suzanne says:

    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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