Investing While Black: Bath, Body, & Beauty
Some of my writing of late has been a bit abstract. So I'm going to start publishing strategies for Black people to start taking dominant positions in various industries. One industry Black people should definitely control is Black bath, body, and beauty consumer products. I thought Richelieu Dennis (Shea Moisure founder) was going to tackle this, but I'm not sure anymore. Either way, it will take more than just one person, company, or fund.
It's really not hard, it just requires a collective effort and for people to stay on code. First, we start at the retail level, building and aggregating demand. We don't need to build this from scratch or beg majority-owned businesses to increase supplier diversity, which we know they will do half-heartedly and ineffectively. We just need to take one over and make them do it right.
This is where Black hedge funds would come in by acquiring a controlling interest in one or more national and/or regional retailers. For example, Target's market cap is only $112B, which is well within our collective reach considering that we only need 51% and not the whole thing.
Next, we would need to consolidate and rationalize production at the individual brand level. Having started a marketplace for Black-owned bath, body, and household goods brands, I can tell you right now that we don't need any more of them. There are too many, and none of them are big enough to matter. We need to focus down to maybe a dozen or so brands and consolidate purchasing, production, and admin while the individual companies focus on R&D and brand building/marketing.
This is where VC and PE funds would come into play. Micro private equity would start acquiring significant ownership in individual brands, while larger PE shops would begin acquiring production capacity, logistics networks, and equipment manufacturers. Then venture firms would invest in e-commerce apps, logistics software, fintech, and manufacturing innovations to increase operational efficiency and reduce transactional friction, especially for the unbanked and international consumer markets.
We would also need Black-owned banks to provide debt funding for equipment and working capital once the brands cash flow has been optimized and are ready to scale.
Once significant scale has been reached, large PE funds and hedge funds would be needed to start securing supply of raw materials and chemical production (e.g. bulk plant oils, sodium hydroxide, citric acid, sea moss, essential oils, etc.).
Finally, lobbyists and political organizations would be needed to secure non-dilutive government funding, incentives, and tax breaks to boost returns and help us get to the point where we can be competitive on a global scale.
Like I said, light work. It just takes vision, leadership, and a genuine love for the Black community with the determination to empower it.
Let me know via email or social media what you think about this strategy and if you know of any investment funds or companies currently working on something similar, even if it's just a small piece of the larger puzzle.