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The beauty industry is still failing people of colour, says the BeautyUnited coalition. Its goal is to transform DE&I (diversity, equity and inclusion) from an industry weak spot into a strength — with an estimated $2.6 billion upside.
BeautyUnited, which is US-based, has plenty of clout behind it as it moves towards a new phase — offering direct financial support for its mentees, known as fellows. Its network includes conglomerates The Estée Lauder Companies (ELC), Procter Gamble (P&G) and Unilever. This year, ELC and P&G have renewed their initial two-year commitments of $100,000 and $50,000 respectively, while Too Faced has given $30,000. A third fellowship programme is currently underway, backed by mentorships and donations from founders and executives at Goop, Tata Harper, Violet Grey, Thirteen Lune, Dr Barbara Sturm, Olaplex and Humanrace.
Analysis by consultancy firm McKinsey suggests that developing a more equitable beauty market and addressing racial inequity in the industry represents a $2.6 billion opportunity — largely unaddressed by brands. Multiple friction points remain, including the ongoing frustrations experienced by founders of colour, a lack of shelf space for BIPOC brands, fewer executives (particularly in higher positions) and a lack of financial support. Better service for consumers of colour and improved support for beauty companies with BIPOC founders could create all kinds of wins, benefitting shoppers, entrepreneurs, retailers and investors, McKinsey notes.
BeautyUnited started as a grassroots effort in April 2020 when 60 high-profile executives, including Goop founder Gwyneth Paltrow, Milk Makeup co-founder Zanna Roberts Rassi, Beautyblender founder Rea Ann Silva and Beautycounter founder Gregg Renfrew, united on a private Whatsapp chat to explore how to navigate the Covid-19 pandemic. They discussed how to make sense of the crisis and how to keep their businesses afloat while keeping their teams safe and secure, both mentally and physically.
“It was the first time that the industry came together to collaborate,” recalls Moj Mahdara, former CEO of high-profile beauty festival Beautycon, who led the conversations with Kendra Bracken-Ferguson, co-founder of prominent talent agency Digital Brand Architects (DBA). Participants broke through the barriers of corporate confidentiality to openly discuss third-party logistics and share details of their vendors, with the view to finding mutual solutions, Mahdara says. “Those calls went on every Tuesday for the first year.”
In June 2020, political protests about systemic racism swept through the US in response to the killings of Ahmaud Arbery, Breonna Taylor and George Floyd. Mahdara and Bracken-Ferguson were prompted by the fallout — in which multiple brands across many industries including beauty found themselves under pressure — to formalise BeautyUnited. “The beauty industry needed a unifying voice and a platform for community that holds a commitment to diversity at its core,” says Gwyneth Paltrow, a founding member of BeautyUnited and founder of wellbeing and lifestyle empire Goop.
BeautyUnited’s close relationships with brands allows for honest feedback and an opportunity to privately address their biases. The approach is inspired by academic and activist Loretta J Ross’s strategy of “calling in” versus “calling out”, which is rooted in compassion and accountability, explains Julee Wilson, who became executive director in 2022, joining from Cosmopolitan. “We’re not pointing a finger or putting you on the spot. We’re solutions-oriented rather than saying ‘you’re wrong, you should be cancelled and no one should buy your product’,” she explains. “Our community is here to help each other. Competitors are exchanging information about how they run their business. That doesn’t happen often.”
At launch, ELC, P&G, Unilever and Revlon agreed to a two-year commitment, helping BeautyUnited to raise almost $1 million within a week. Today, BeautyUnited continues to run its “411” programme hosting various guest speakers for its community of executives (now monthly rather than weekly), alongside a fellowship programme for selected BIPOC and Latinx entrepreneurs and intrapreneurs in beauty and wellness. Fellows have access to a weekly themed curriculum and monthly one-on-one sessions and guidance from mentors. “There’s a white space for mentorship,” says Mahdara. “The Council of Fashion Designers of America [CFDA] exists for fashion, but not for beauty.”
Mahdara s track record drew in Humanrace co-founder and CEO Rachel Muscat in as a mentor and the brand as a donor. "I have always trusted and respected Moj for the multiple projects that she takes on, and I was excited to be part of something new in the industry. Coming from the streetwear and fashion world, I don’t know of a forum that is as open and inclusive as what BeautyUnited has created. It’s refreshing to see this trust within the beauty industry."
Corey Reese, a BeautyUnited mentor who is senior vice president and general manager of ELC-owned Bumble and Bumble, values how BeautyUnited offers direct access, education and resources to diverse entrepreneurs in the beauty industry. “The support we provide to BeautyUnited, including participating as mentors, is helping to create meaningful pathways to success for the next generation of beauty leaders,” he says.
How BeautyUnited helps
So, what’s blocking progress? Brand founders of colour say there is plenty of advice available, but they also need financing support. BeautyUnited wants to provide both. Its fellows are early-stage brands with at least half a million dollars in revenues, according to Wilson. “We figured it would help us keep a cohort that allowed us to make a difference. It’s not about coming to us with a great idea and looking for help to get it off the ground. We want fully actualised businesses and people who are really dedicated to growing and improving the industry.”
The next step is to expand BeautyUnited’s mentorship offer to include financial support through grants for fellows, which the organisation hopes to achieve within the next two years. In preparation, BeautyUnited has tightened up its admissions. There are 12 on the fellowship this year, compared with 24 in 2022 and 50 at launch (the programme now lasts 12 months rather than six). “We’re trying to raise money and give monetary resources to fellows and that’s easier when the cohort is smaller,” says Mahdara.
BeautyUnited is not alone in raising money for Black-owned businesses. In March, Glossier committed $300,000 to its grant programme for six Black-owned beauty businesses, now running in the US for a third year (the brand extended the programme to the UK in April). In the same month, haircare brand Flawless by Gabrielle Union teamed with LinkedIn to inaugurate a grant awarding mentorships and $25,000 each to three Black, female-owned fashion or beauty brands. In June, Ulta Beauty launched the second edition of its Muse Accelerator, offering 10 weeks of industry expertise and $500,000 to eight beauty brands with BIPOC founders.
All this is much needed. Overall, Black entrepreneurs typically receive less than 2 per cent of all venture capital dollars each year, while companies led by Black women receive less than 1 per cent, according to data from startup data platform Crunchbase. Last year, Black beauty brands raised a median of $13 million in venture capital, substantially less than the $20 million raised by non-Black brands, according to McKinsey.
“It has been my experience that in order to apply the education received from mentors, you do need access to funding,” says Kitiya Mischo King, founder and CEO of Mischo Beauty and a former fellow of BeautyUnited. “Oftentimes, what you’re learning and need to apply in order to successfully move your business forward is outside of your area of expertise and may require hiring outside experts in various areas.”
Camille Bell, co-founder of Pound Cake Cosmetics, agrees: “I have so many people that are willing to help me through mentorship, which is great, but founders also need capital to put tips and suggestions into action. Founders of colour are often told to make $1 million within a year before any serious funding considerations.”
Following the 2020 race-related protests, too many BIPOC entrepreneurs were given short-lived “vanity opportunities” that made bigger companies look good, but not enough long-term support that they truly needed, believes Bracken-Ferguson. “Success for us doesn’t mean a billion-dollar exit. It’s about profitability, keeping these businesses afloat and getting to the multi-millions so that they can create generational inheritance and wealth.”
Maintaining momentum
In a challenging environment, some companies may be tempted to roll back their BIPOC and DE&I programmes since “everyone felt like they paid their dues”, says Mahdara. “Keeping the conversation alive is a huge part of what we do,” she says.
Change in the higher levels of management will be a sign of improvement, both founders agree. With the exception of Sue Y Nabi, CEO of Coty, most beauty conglomerates are still led by (mostly white) men, they say.
The goal is to help founders of colour keep their businesses and thrive. “Every single founder of colour who can grow their business has an imprint on our industry and leads to having more diverse leaders that could be at these tables,” Bracken-Ferguson says. “We get so caught up in the glamorisation of big exits and capital investments, but we have to look at the day-to-day work. It’s the small wins that we’re driving every single day that will lead to the big impact.”
Key takeaway: BeautyUnited is a non-profit organisation aimed at creating a more equitable beauty industry. It has the financial backing of The Estée Lauder Companies and Unilever and mentorship support from executives at Goop and Humanrace, among others. However, tackling systemic issues takes time — and results are not easily measurable. Founders of colour face continued challenges with financing, which is now a priority focus for BeautyUnited, with plans to include grants as part of its fellowship programme within two years.
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