A look at what happens when a small, personal care company gets acquired by the big guys.
The story of Burt’s Bees is humble enough. In the 1990s, a woman named Roxanne Quimby met a beekeeper named Burt Shavitz, and together they launched a small line of honey and beeswax products, which they sold at craft fairs in Maine.
But soon after, Quimby took the reins, buying out Burt’s shares, growing sales, and ultimately selling Burt’s Bees to the Clorox Company for $913 million in 2007. Wait, Clorox as in bleach? Yes, the very same. It sounds like a classic story of the little guy selling out to the big guy. Or is it? This week’s Behind the Label takes a look at the surprising results of corporate acquisitions in the green space.
From the start, Burt’s Bees has described itself as an “earth friendly, natural, personal care company” that operates in alignment with what it calls The Greater Good™.
The Greater Good™ is the highest ethical choice any of us can make to maximize our overall well-being. That means doing what’s best for you, your family and the environment. At Burt’s Bees, ensuring The Greater Good™ for our consumers, our employees and the world around us is a hard job, but we do it by adhering to a strong set of beliefs that we apply to every choice we make, every day.
In line with this principle, Burt’s Bees produces more than 150 products, most with a honey or beeswax base and all produced with natural ingredients and socially responsible business practices. A sampling of these practices can be found by examining one of Burt’s Bees’ best-selling products, their replenishing lip balm.
Among its clearly outlined beliefs and commitments, Burt’s Bees believes that natural products should be 100 percent natural. Together with the Natural Products Association and other leading Natural Personal Care Companies, Burt’s pioneered The Natural Standard for Personal Care Products, a set of guidelines that helps to define what a “natural” personal care product is and what it is not. Products that fill the bill are branded with a Natural Seal, which indicates that the product has met guidelines related to natural ingredients, safety, animal testing, and packaging. While only half of Burt’s Bees’ existing products qualify as 100 percent natural, the company is open about working toward complicity across the entire product line, and each product’s “percent natural” is clearly indicated on its packaging.
Burt’s Bees also works to ensure safe working conditions in the sourcing of its ingredients, maintain a strong stand against animal testing, and use packaging made with high levels of post consumer recycled materials. The company also pledges at least 10 percent of all burtsbees.com sales revenue to partners through The Burt’s Bees Greater Good Foundation.
In 2007, Burt’s Bees was acquired by the Clorox Company for a reported $913 million. The Clorox acquisition allowed the Burt’s Bees brand to expand throughout major retailers across the country, including Walmart, Target, and CVS. The Clorox Company highlights Burt’s Bees as a success story in the media, and the company continues to report Lifestyle Brand sales growth in its fiscal reports.
But that hasn’t stopped environmental groups and conscious consumers from labeling Burt’s Bees as a sell-out and dismissing its products because of negative connotations associated with the Clorox brand. The Clorox Company is one of the largest consumer packaged goods companies in the country, with a large portfolio of brands like 409, Liquid Plumr, Pine-Sol, and Tilex. Not to mention its flagship brand: a bleach product that environmentalists say is harmful to the environment (the company maintains that Clorox bleach is perfectly safe, since bleach essentially comes from and degrades into salt).
What good could possibly result from this acquisition?
As it turns out, there’s more than might meet the eye. In 2006, the Clorox Company identified sustainability as one of four mega-trends that it wanted to pursue in terms of potential business opportunities. Soon after, the company acquired Burt’s Bees, repositioned Brita as a sustainable brand, and launched Green Works, a line of “green” household cleaning products.
When Clorox acquired Burt’s, it was explicit about its desire to learn more about sustainable business practices and become a major player in the green space by introducing sustainable household products, like the Green Works line, into the mainstream. According to GreenBiz.com:
Clorox attributed the success to the company overcoming three common consumer complaints about green products: They don’t work, are hard to find, and cost too much. “The products that are explicitly green we want to get them to same prices as conventional products,” (Clorox CEO Don) Knauss said. “If we could give people a natural option at the same price that they would pay for a conventional cleaner, for example, we think we could explode the category and really make it part of the mainstream.”
This kind of commitment to making sustainable products accessible is pretty incredible. And according to Knauss, the acquisition of Burt’s Bees has inspired Clorox to incorporate more sustainable practices across the board, from setting new goals to cut greenhouse gas emissions, energy consumption, water use, and waste, to replacing its sales cars with hybrids.
So while Burt’s Bees may have “sold out” by joining the Clorox Company, the deal may have had much more positive consequences across the corporation’s brands than was immediately evident. And while purchasing power is better spent on honey and beeswax products from a vendor at a crafts fair, in a pinch and if your only option is the local Duane Reade, at least a Burt’s Bees purchase will confirm to Clorox that sustainability is a solid investment.