SheaMoisture’s Tangled Future

27 Nov SheaMoisture’s Tangled Future

Sundial Brands CEO Richelieu Dennis was between meetings at a conference in Phoenix last April when his phone buzzed with a text from his 20-year-old daughter: “Dad, WTF?”

A commercial for SheaMoisture, Sundial’s flagship haircare brand, had ignited a controversy on social media. In the ad, four actresses—three white women with long tresses and a light-skinned, apparently biracial woman with silky curls—bemoaned what they call “hair hate,” offering brief anecdotes about being picked on for having red hair or waking up with bed head.

This is typical fare for a haircare commercial. But SheaMoisture is not your average haircare company. The founders (Dennis, his mother, and his college roommate) were refugees of the brutal Liberian civil war who had begun selling Dennis’s African grandmother’s natural soaps on the streets of Harlem, and they’ve built their venture into a $700 million company. To SheaMoisture’s core user base–black women who love its moisturizing and curl-enhancing products and had embraced the brand’s authentic African heritage–the black-owned, family-run company signaled with the ad that it would be chasing white consumers. Many of SheaMoisture’s key fans worried this shift would distract the company from their needs. An array of black influencers tore mercilessly into the company on Facebook, Twitter, and YouTube, creating viral memes such as a photo of Rachel Dolezal—the polarizing figure who became famous in 2015 for claiming she had become a “transracial” black woman, though she was born white—with the caption “More Shea products for me!” Desus & Mero, the comedy duo and internet personalities, lampooned the spot, describing it as a remake of the Wayans brothers comedy White Chicks and joking that Sundial’s VP of brand strategy, Christine Keihm (a white woman), probably attended Howard University and had an ankh on her business card. “It was just baffling to me,” says Elle, owner of YouTube channel Quest for the Perfect Curl, of the women cast in the SheaMoisture ad. “If you want a seat at the table, that’s fine. But you can’t kick me out of my seat.” Sundial employees began referring to the uproar as Hate Gate.

Sundial quickly went into crisis mode, posting an apology on Facebook that began with “Wow—so guys, listen, we really f’ed this one up.” Dennis offered a mea culpa on the African-American-centric cable network TV One’s news program. But the CEO, whom a friend of his has nicknamed “Chillary” because of his academic, distant, and rather Clintonian disposition, sat steel-faced on set and adamantly defended the ad, citing the brand’s 24 other commercials focused on black women and arguing passionately that he needed to “expand our market to protect our core.” He specifically referenced two ads from much larger, non-minority-owned corporate rivals, Dove and Pantene, each of which targeted women of color, that he had watched on TV One just moments before his appearance. “Of course there’s this calling-out culture,” says Patrice Grell Yursik, creator of the long-running blog Afrobella and one of the leading voices of the natural-hair movement, “but Shea’s response added to the pile-on.”

Sundial had unwittingly parked itself at the dangerous intersection where identity politics and brand expansion frequently collide, sparking internet outrage. Throughout 2017, companies have been crashing here, from HBO to the NFL. Meanwhile, for African-Americans and other people of color, the stakes extend far beyond seeking a fair representation in the marketplace. Recent white supremacist marches, anti-immigration policy, minority voter suppression attempts, and a 20% spike in hate crimes across the U.S. are threats both existential and real–a society’s attempt to erase their history, their identity, their contributions.

The reason the SheaMoisture ad triggered so much anger, says writer and activist Michaela Angela Davis, who has worked as a consultant for Sundial, “is that it is happening on the backdrop of the Movement for Black Lives, and gentrification, and Sandra Bland, and Trayvon. In this world we’re living in, people feel like, ‘You’re trying to take our stuff. And now you’re trying to take our SheaMoisture, too? You can’t have our shea butter. You can’t have our culture.’ ”

For an entrepreneur like Dennis, this cultural challenge goes to the heart of the future of his business. Can a minority-owned company, composed mostly of minority employees and serving mostly minority customers, grow beyond its core community? How does it extend its appeal without losing its unapologetically black identity?

These questions became even more central to Sundial’s future in late November, when the company announced that it was being acquired by Unilever, purveyor of consumer brands including Dove, Axe, and Hellmann’s. Although it will operate as a stand-alone unit within the multinational conglomerate, fans feared that SheaMoisture–like so many black haircare brands before it–was handing over its heritage and history to a company that sees growth as paramount.

In mid-July, Dennis–wearing a red SheaMoisture T-shirt, shorts, and no shoes at all–stands before a crowd of thousands of women of color gathered for Curlfest in Brooklyn’s Prospect Park, flanked onstage by five women adorned head to toe in Afrocentric regalia. He lavishes words of affirmation upon his listeners.

“You guys are amazing. You’re beautiful,” he tells the attendees of the annual gathering of kinky- and curly-haired women from across the country. SheaMoisture has been an advertising sponsor of the event, organized by Curly Girl Collective, since 2015, and this year, Sundial is a “presenting sponsor”: Marketing materials for the event include the footnote “emPowered by SheaMoisture,” and the brand is using the occasion to launch several men’s grooming products. This year’s event boasts more than 20,000 attendees–up from just 5,000 last year.

“This natural-hair movement has opened up the door for us to do so many things, for us to have conversations that we weren’t able to have. We need this in our communities,” Dennis tells the crowd. “We need to be able to express ourselves, and to show the world who we are and how we are. I’m looking forward to making it not only bigger next year, but better. But don’t worry,” he reassures the audience, “better is already [right] here.”

While lines for $35 SheaMoisture gift baskets (for $100 worth of product) snake across the park, it isn’t hard to find attendees who are still feeling stung by the “Hair Hate” ad, using words like “disappointed” and “checked out,” not to mention other decidedly more profane phrases to describe Dennis.

Black hair has always been political, from fists raised alongside spherical afros in iconic Black Power imagery to oppressive workplace and classroom grooming policies. (Some schools and employers continue to ban afros and braids, and only this year did the U.S. Army allow dreadlocks for female soldiers.) The business of black hair has been just as tangled, stretching back to the first African-American entrepreneurs. There was almost always a white-owned company waiting to pounce on any success: In the 1920s, the Memphis-based Hessig-Ellis Drug Company created a separate company with a fictional black founder, Madam Mamie Hightower, appropriating the success of America’s most accomplished African-American female entrepreneur of the era, Madam C.J. Walker. (Walker’s beauty products company ceased operations in 1981, but in 2016 Sundial launched a new brand named in her honor.)

Over the past five years, black consumers’ spending on chemical relaxers has plummeted by more than 30%, according to the analyst group Mintel, and more than 79% of those consumers report wearing a natural hairstyle–‘fro, braids, locs–within the past year. Having traditionally neglected the specific and varied hair needs of black consumers, multinational corporations such as Unilever are throwing more resources behind entries into the space (and occasionally stumbling badly over racial land mines, as Dove did with a controversial TV ad in October). Two years ago, PDC Brands, the maker of Calgon and Dr. Teal’s, acquired Cantu, a favorite brand of naturalistas. A year before that, Carol’s Daughter—founded by former Cosby Show writers’ assistant Lisa Price and boasting such celebrity investors as music mogul Jay-Z and Will and Jada Pinkett Smith–was scooped up by beauty giant L’Oréal. And earlier this year, Pantene, owned by consumer-goods titan Procter & Gamble, unveiled the Gold Series, its “first haircare collection co-created with a team of African-American PhDs, scientists, stylists, and dermatologists.”

Sundial has been on a stellar run. Employees have doubled to 400 over the past two years, and revenue has more than tripled since 2013, exceeding $200 million. Its family of brands–which includes SheaMoisture, Nubian Heritage, and the recently launched prestige label Madam C.J. Walker Beauty Culture–are sold at more than 50,000 distribution points, including Sephora, Target, Walmart, and Whole Foods. To help fund that growth, the Long Island–based company sold a minority stake to private-equity firm Bain Capital in 2015, which valued Sundial at a reported $700 million. That investment has become another point of contention for SheaMoisture’s critics, who connect a deal with the firm cofounded by conservative Mitt Romney with Shea’s pursuit of mainstream dollars. Dennis brushes aside that notion, pointing out that Sundial’s board includes another Bain executive, Deval Patrick, the former two-term governor of Massachusetts, who is black. Dennis says he is positioning his brands for growth and survival. “Right now, the battle is fought on our territory, with our consumers,” says Dennis. “We have to be able to fight the same way that [multinational corporations] are able to fight.”

Richelieu Dennis grew up in Liberia, and his father, who ran an insurance company, died when Dennis was 8. Afterward, Dennis and his sister bounced with their mother between Liberia and her native Sierra Leone, ducking the growing civil unrest that plagued both countries in the ’70s and ’80s. An excellent student, Dennis qualified for a U.S. scholarship and attended Babson College, in Massachusetts, but by the time he graduated, in 1991, both Liberia and Sierra Leone were engulfed in full-blown civil wars. Dennis says his mother escaped their Liberian hometown, Monrovia, just before his childhood home got blown up. Unable to return to Africa and needing to make a living, Dennis and his college roommate, Nyema Tubman, decided to make soaps and other natural products based on recipes passed down from Dennis’s Sierra Leonean grandmother, Sofi Tucker, who was known as a village healer for her shea butter soaps and salves.

Dennis, his mother, Mary (now Sundial’s treasurer), and Tubman launched Sundial in 1991, and after moving from suburban Boston to an apartment in Queens, New York, began peddling their wares–raw black soaps and essential oils–on the streets of Harlem and Bed-Stuy. “We would sell it on the streets while we were waiting for things to calm down to go home,” says Dennis. They later rented a used Toyota Previa van to move product, eventually through thousands of street vendors and mom-and-pop shops across the country. “We still do, by the way,” he says. “We’re the only brand that sells product in Macy’s, and then on the table [outside] in front of Macy’s.”

But the path from selling haircare products on the street to inside a major department store wasn’t easy. Dennis and Tubman opened three stores in New York plus three franchises called Nubian Heritage but failed to secure funding from investors to expand. (“They’re like, ‘Uh-uh, black people got Vaseline and Jergens, they’re good,’ ” says Emmet Dennis, Sundial’s chief community officer and Richelieu’s cousin.) Sundial focused on selling its products at festivals and partnering with influencers to develop a base and get the attention of distributors such as Walgreens and Walmart. Aligning itself with the natural-hair movement, Sundial touted the organic, curl-enhancing ingredients in its shampoos, conditioners, and new oils that had never been seen before on drugstore shelves. SheaMoisture currently sells more than 750 products across 27 different lines (almost triple the number of just three years ago) and says it has developed more than 30 products within the past 18 months alone that are formulated specifically for thick, curly hair. New lines include the jojoba- and ucuuba-infused Protective Styles suite that can keep a user’s scalp clean without a rinse or make it easier to braid or take down cornrows, as well as Low Porosity products, for consumers whose locks have difficulty absorbing and retaining moisture.

Sundial is also a certified B Corporation, a formal confirmation of the company’s commitment to giving back to its communities: Sundial dedicates a portion of revenue to scholarships for minority students, while its Ghana-based supply chain has over the past two years purchased more than 250,000 kilos of raw shea butter from local, women-led cooperatives, providing a seven-fold increase in income for each co-op member.

Dennis knows he must keep Sundial competitive with the haircare industry at large, which is evolving to focus more on regimen and ingredients than ethnicity alone. (It is not uncommon for two people of completely different ethnic backgrounds to have similar hair texture.) Earlier this year, Walker & Company Brands, founded by Silicon Valley entrepreneur Tristan Walker, debuted Form, a haircare line that collects information on customers such as zip code (for humidity levels) and pregnancy (for hormones that affect hair growth). Last year, SheaMoisture made news after releasing an ad titled “Break the Walls,” which depicted a black woman in a supermarket tipping over the wall of the “ethnic” hair section to get to the general beauty aisle.

“It’s about finding out what the needs are, and meeting people where they are,” says Richelyna Hall, Sundial’s chief innovation officer and Dennis’s sister, of the company’s R&D process. “How do we help consumers who may not be in our traditional base use our products and understand that these products were made with everyone in mind?”

The challenge for Sundial is to reassure its first supporters, many of whom reached for Sundial’s hand to walk them through their natural-hair transition, while also welcoming new customers. Black women want to know that they won’t be left behind. In future campaigns, Shea should utilize its core consumer to extend invitations to “those who are beyond its root or foundation,” argues Gia Lowe, director of strategic partnerships for the marketing group Curly Girl Collective, and say, “‘Hey, we acknowledge who you are.’”

In August, I meet Dennis for dinner at an Asian restaurant near his home on Long Island. The maître d’ greets him as “Big Dennis”; Adam Sandler and family are seated a few tables away. Dennis seems frustrated by the lingering Hate Gate controversy–that several months later he’s seated with a reporter who is still pestering him with questions about it. “You’re here and you have an opportunity to have a conversation with the CEO of a company that’s changed the black experience in America forever and this is what we’re talking about. What is the fascination? I mean, I really need to understand that. We’re talking about a 30-second commercial.” Hate Gate, from Dennis’s perspective, is the latest example of controversy that flares up whenever he attempts to expand Shea’s consumer base. “The heat that we caught for taking our product to Target was, ‘Oh, you’ve been in the flea market and you’ve been with the vendors and now you’re going to abandon them and go to mass retail.’ No. I don’t have to abandon my people to move them forward. It’s about empowering underserved people and communities. Having to build a brand in this environment, how are there going to be any black-owned businesses?”

Despite his frustration, Dennis does see a path forward. “We need to work with our community so they understand what it is we’re trying to do. I don’t think we did a good job telling that story. I’m not very articulate in telling that story. I need to work on that.”

The company has been making some changes. Two weeks after Hate Gate, Dennis and his team embarked on a seven-stop listening tour in cities from Philadelphia to Oakland, California. Small gatherings were hosted at black-owned restaurants and art spaces and featured panelists such as Michaela Angela Davis and prolific twitterer Jamilah Lemieux. “It was like being at a family dinner at Thanksgiving, and somebody telling their uncle, ‘You hurt my feelings, really bad,’ ” says Davis. “You have all this stuff for me, my baby, my man’s beard, and then you’re gonna bring Becky into our sacred space?” Dennis says that the listening sessions have now become a regular practice at the company, to help Sundial circumvent the reflexive flame-warring on social media and get to know its customers.

Sundial is also revamping its marketing department. Last summer, it hired as chief growth officer Bonin Bough, who earned a reputation for social wizardry while serving in senior digital and consumer engagement roles at PepsiCo and Mondelez. Bough turned Oreo into a brand that could react to cultural trends and phenomena—its “Dunk in the Dark” tweet during the Superdome power outage in the midst of the 2013 Super Bowl was a viral hit. Now he’s taking a similar approach at Sundial: creating digital profiles on customers’ hair regimens and building out a content-creation arm, à la Refinery29 (where Bough hopes to embed his entire marketing staff to spend a six-month residency). “Everybody thinks that ‘real time’ is about Facebook posts,” Bough says, “but it’s about creating a real-time organization that understands what a consumer needs right now–and creates that product tomorrow.” Bough hopes that Sundial can soon generate all of its marketing campaigns in-house, avoiding such missteps as the “Hair Hate” ad (created by VaynerMedia, which declined to comment for this story).

Dennis is focused on creating better internal approval processes and is working with his HR department to revise and update its employee onboarding curriculum, emphasizing cultural competence (for new employees less fluent in the language of natural hair) and cross-team project visibility. “We’ve got to make sure that we have processes and systems in place that allow us to scale,” he says. “We are also now keenly aware that if we don’t tell our story, someone else will–and we’re simply not willing to leave that to chance any longer. I’m truly grateful to our community for opening my eyes even more to that.”

Source: Fast Company