As CDA reported, Seventh Generation, a leading natural home care brand in the North American market will give Unilever a strong presence in the naturals market.
With the personal care, home care and food industries focusing on the naturals market, green acquisitions is a continuing trend.
Organic Monitor, a specialist research, consulting and training company that focuses on the global organic and related product industries, predicts that the trend of green acquisitions will continue as multinational companies will seek green brands to enter fast-growing sustainable product industries.
As other businesses, such as SC Johnson, purchased Babyganics, the natural home care and personal care brand as recently as July, this collaboration between the leading natural personal care, natural home care and organic food industries looks set to continue.
As Unilever previously acquired natural skincare brand REN and is now looking into bringing Honest Company on board, brands are also investing in multiple acquisitions to gain a competitive advantage in the natural and organic marketplace.
Unilever is not the only multinational to go on a buying spree in sustainable product industries. L’Oreal, another leading multinational, also made major acquisitions when it bought The Body Shop and Sanoflore in 2006. Through investing in established green brands, L’Oreal then went on to create natural and organic product lines for some of its popular brands. Colgate-Palmolive and Estee Lauder have also bought green brands.
Clarins, however, is one multinational that did not experience the same level of success following the acquisition of Kibio in 2010. In just a few short years, its lack of growth saw Clarins remove the organic cosmetics brand from its shelves.
Green acquisitions help multinationals achieve their sustainability goals relating to environmental and health impacts. However, as more companies acquire natural and organic lines, there have been questions over whether these product lines align successfully with the existing brand. This has been seen with brands including Jurlique and Burt’s Bees.
Notable developments in Asia
“There have not been that many mergers and acquisitions in the natural and organic personal care products market in Asia. Most developments have been in Europe and North America,” said Amarjit Sahota, Director, Organic Monitor.
However, despite this, with Asia coming through as a dominant market, brands are considering their positioning within the APAC region a key factor when making acquisitions.
In May this year, for example, John Masters Organic and its Japanese distributor Stylus were bought by Permira Funds, a private equity firm. “Although John Masters Organic is an American brand, a major reason for the purchase was its Asian presence,” noted Sahota.
Although Asia is behind its US and European counterparts in acquisition numbers, there have been several acquisitions in the Asian market in recent years.
In April this year, the Chinese investment firm Fosun Group bought the Dead Sea brand of natural-based skincare products, following the growing demand for natural and organic products.
Previously, China-based Henan Bijia Industrial Company acquired the German organic cosmetics brand Tautropfen in October 2013.
In 2011, the Japanese cosmetics company Polar Orbis bought the organic Australia-based skincare brand Jurlique.
One year before, leading Japanese cosmetics manufacturer, Shiseido, acquired the US mineral cosmetics brand Bare Escentuals for $1.7 bn.
It was Estee Lauder though which started the green acquisitions trend in Asia, after purchasing a stake in the Indian company Forest Essentials in 2008.
“The reason we have had not so many mergers and acquisitions in Asia is because there are relatively few natural and organic cosmetic brands in Asia. Most are concentrated in Europe and North America,” added Sahota.
The trend of green acquisitions will be discussed at the Sustainable Cosmetics Summit, which will take place in Hong Kong on 14th - 15th November. For more information, visit www.sustainablecosmeticssummit.com