With the recent acquisition of Schmidt’s Natural Deodorant by consumer goods conglomerate Unilever, the green beauty community has been in uproar, strongly voicing their opposition over Schmidt’s decision to “sell out”. I personally never cared for Schmidt’s deos, but the same thing happened a few months ago when my favorite natural deo brand, Native, was bought by Procter & Gamble (P&G). Initially I experienced the same frustration that many of you have expressed upon hearing the news about Schmidt’s.
As I was ranting about this topic to my boyfriend, who is currently enrolled in an MBA program at a top business school, we ended up having a really eye-opening conversation about the acquisition. I know that publishing this post is a bit like opening a can of worms within the green beauty community, but I think that if we really want to influence others to adopt clean beauty, we have to be rational and willing to look at things with an unbiased view. Do I despise Monsanto? Absolutely. But I’m preaching the power of green beauty because I want every single person on this Earth to be free to be their healthiest selves. And the truth is that right now, green beauty is pretty exclusive. Keep reading to find out what green beauty gains from acquisitions.
This perspective is from a business standpoint so I want to first discuss some terminology. Almost every company is built with funding from shareholders (owners). These are people have invested money into the company, often times from its inception. Most companies in the US today are C-Corporations, which means that they have a legal obligation to maximize shareholder value, above all. Recently, B-Corporations have emerged to suit the more conscious companies. These corporations not only have a fiduciary duty to maximize profit for their shareholders, but also have equal duty to take responsibility for their environmental and societal impact. Meaning when offers with large premiums are made to acquire a company, it is often hard (if not verging on illegal) to turn down. From the surface, it’s easy for us to see the headlines and say things like, “I can’t believe they sold out! How could they betray us?! Where is their integrity?!”. But when you realize that most companies are legally set up to prioritize the needs of shareholders and profits, you begin to understand why “selling out” is the only option for many companies like Schmidt’s when conglomerates approach them with an acquisition offer.