UNTANGLING THE BLACK HAIR CARE INDUSTRY

From the afros of the 60’s and 70’s - to present day wigs and weaves – Jheri curls, locs, braids and many other styles in between - hair has always been a cornerstone of Black beauty.

Mintel estimates that Black consumers spent about $2.5 billion dollars on hair care products in 2016. Within the next five years, the market research firm predicts that sales may increase to $2.75 billion.

The roots of the Black hair care industry can be traced back to a Louisiana plantation in 1867.

That’s where Sarah Breedlove – who eventually became known as Madam C.J. Walker was born.

In her 20’s, she began suffering from a scalp ailment that caused her to lose most of her hair.

She experimented with many homemade remedies and store-bought products – including those made by Annie Malone, another Black woman entrepreneur.

After changing her name to Madam C.J. Walker, she founded her own business and began selling her products door to door – eventually becoming first Black woman millionaire in America.

And today, Walker’s legacy lives on at Sundial Brands.

In February 2016, Sundial launched Madam C.J. Walker Beauty Culture exclusively at Sephora.

“I have always been inspired by Madam C.J. Walker’s legacy, her accomplishments, and the sheer incredulity of the possibility that she breathed into an era of impossibility,” says Richelieu Dennis, founder & CEO of Sundial Brands. “She truly defied the limitations of her time and did something that no woman had ever done in beauty or business.”

Sundial Brands – which also owns the Nubian Heritage and Shea Moisture brands - is a company with its roots in Africa.

Dennis’ grandmother Sofi Tucker, who was from Sierra Leone, was left to raise four children after becoming a widow at age 19. To support her family, she began selling natural skin and hair care preparations to villagers and missionaries all over the countryside.

Born in Liberia, Dennis came to the United States to attend college. Driven by his passion for entrepreneurship, Richelieu started Sundial Brands with his college roommate Nyema Tubman and his mother – Mary Dennis. They began making soaps developed from his grandmother’s recipes and sold them on the streets of Harlem, New York.

In 2015, private-equity firm Bain Capital took a minority stake in Sundial Brands, keeping the company a Black-owned business.

"Despite many offers to sell our company, we consistently said no," says Dennis. "But we also recognize that many Black-owned businesses do not have that option. Part of what is missing in our community has been businesses that have resources that allow them to scale."

Mintel multicultural analyst Toya Mitchell attributes Sundial's success to the Bain Capital investment.

"It is our estimate that they may have reached $100 million dollars last year – which is extraordinary," says Mitchell. "They are going gangbusters in terms of sales.”

Mintel says Sundial is the largest Black-owned hair care company followed Luster Products – the maker of the Pink and S-Curl lines.

Over the past two decades, the "texture" of the hair care industry has changed, as a number of high profile Black-owned businesses were sold to large corporations.

In 1998, the L'Oreal Group acquired Soft Sheen Products - which includes the Optimum and CareFree curl product lines.

In 2000, L'Oreal then acquired Carson - adding brands such as Dark & Lovely, Gentle Treatment, Magic Shave and Ultra Sheen. With the 1998 and 2000 acquisitions, L'Oreal joined the two divisions creating a new unit: Soft Sheen-Carson.

Also in 2000, Alberto-Culver Company completed its purchase of Pro-Line Corporation.

With the purchase, Alberto-Culver combined its TCB and Motions brands with Pro-Line's Soft & Beautiful and Just for Me.

In one of the more recent deals, Carol’s Daughter was sold to L’Oreal USA in November 2014.

Lisa Price began Carol's Daughter more than two decades ago in her Brooklyn, New York kitchen.

Price transformed the home-based business into multi-million dollar empire with celebrity investors such as Jay-Z, Will Smith and Jada Pinkett-Smith.

Price said she experienced backlash from the Black community when the sale to L'Oreal USA was announced.

"Just because someone decides to sell a business, it doesn't mean they sold out,” said Price in a 2015 interview. “It's Black-owned and that means something different to different people and it's not supposed to be shared. It's going to take generations for us to build wealth. A lot more people are going to have to sell things. So we are going to have to get comfortable with that.”

Sundial Brands founder & CEO Richelieu Dennis says while Black-owned beauty businesses are largely controlled by global conglomerates, the deals present a unique opportunity for smaller Black-owned hair care companies.

"This opens the door for the emergence of smaller entrepreneurial businesses that are focused on the consumer and, most importantly, on effectively serving the different needs of a rapidly changing, largely multicultural demographic.”

Enter Black-owned companies such as Miss Jessie’s, Ailkay Naturals and My Honey Child. As the Black hair care industry undergoes a transformation, those companies have attracted loyal customers.

“There has been a precipitous fall in relaxer sales in the last couple of years,” says Mintel multicultural analyst Toya Mitchell. “We calculate a 31 percent decrease in sales from 2011 to 2016. Black consumers, specifically women are abandoning relaxers every year. We believe it’s because they are moving to more natural hair styles.”

Not only are natural styles moving to the forefront, so are naturally made products. Sundial, Soultanicals and Naturalicious are among the Black-owned companies touting their creations.

As natural becomes the order of the day, another chapter in the story of the Black hair care industry continues where it began with Madam C.J. Walker: in Louisiana.

Dee Carter grew up there watching her mother Rebecca (affectionately called Red) heal herself with herbs. Red's health took a turn for the worse when she was diagnosed with cancer in both breasts. The doctor scheduled Red for surgery on a Friday. At a church service on Wednesday, she was approached by a woman who advised her not to go under the knife. The church member told Red she could be healed with herbs instead. Red followed her advice. One year later when Red's breasts were tested, the doctors discovered she was cancer-free.

That's when Carter became a believer in the power of natural healing. She began experimenting with herbs and oils for her young daughter's skin. While working as a nurse, she would give her creations to patients undergoing chemotherapy. With her products, their hair began growing back sooner than they expected. One day, someone asked Carter why she wasn't selling her potions. That's when something clicked. She stepped out on faith and left her career in nursing to focus on the business full time. Two months later, Red's Kitchen Sink was up and running.

"You can't be an eagle and soar and be on the ground clucking with chickens," says Carter. "Sometimes you are forced into doing what you know you have to do, so I followed my gut."

Red's Kitchen Sink has sought to differentiate itself from other hair care businesses by focusing on hair growth products - which remain Red's top selling creations. Initially, the items were marketed to just African-Americans. With the help of her husband Bernard, a chemical engineer with years of consumer products experience in corporate America, Carter began expanding Red’s customer base. She started creating products for people with different hair types. Carter also added a men's product line. That's when the popularity of Red Kitchen Sink exploded. Customers are snapping up her merchandise all around the world in countries you might not expect: Australia, Croatia, Russia and Singapore - just to name a few. The company's YouTube channel has more than 1.3 million views and counting. Red's Kitchen Sink's is not only known for its hair growth products, but also it's hair styling and skincare line. Carter's focus on naturally made products is not only a smart business move, it's a way of life. In addition to hair related YouTube videos, Carter also posts information about healthy living and eating.

“Companies that are able to start out with Black consumers and branch out to multicultural consumers and have communication that feels authentic - I think those are the companies that will see success,” says Mintel analyst Toya Mitchell.

As Red’s Kitchen Sink grows, products made with natural ingredients and herbs remain the driving force behind the business. Straight or kinky – pressed or permed - blonde or brunette – Dee Carter is looking to make her mark on the hair industry one strand at a time.

"Our company is different because there are a lot of products out there for natural hair, but there are not a lot natural products for natural hair," says Carter. "A lot of people are using African-American products besides African-Americans. You have to be inclusive of everybody and every hair type.”