Beautycounter Builds From the Ground Up29/10/2019
For clean beauty pioneer Gregg Renfrew, Beautycounter isn't just a brand, it's a movement.
Based in Santa Monica, Calif., she built Beautycounter on the pillars of health and wellness, community and political activism, which has extended to lobbying the U.S. Congress for more regulation of the cosmetics industry, and advocating on the state level for California’s safer fragrance bill and Hawaii’s ban on coral-harming sunscreen.
The most-searched beauty brand on Google in 2018, the direct-to-consumer Beautycounter is sold through stores in New York and Denver, and through 45,000 independent consultants, which sources say did $325 million in peer-to-peer sales in 2018. The company is on track for 35 percent year-over-year growth for 2019.
It specializes in California natural, minimalist-looking products such as Dew Skin Tinted Moisturizer ($45), CounterSun Mineral Sunscreen ($39), Sheer Lipstick ($32) and Cleansing Balm ($69), all created without 1,500 harmful ingredients on the company’s “Never List.” This summer, Beautycounter made a push into performance products, executing its biggest product launch to date with antiaging skin-care line Countertime, which has garnered more than 3,000 product reviews averaging a 4.9 out of 5 rating on the web site, where the brand shares stories about everything from packaging impact to supply chains.
WWD talked to founder and CEO Gregg Renfrew about leadership lessons, overcoming failures, her take on the beauty M&A environment, and what’s next for her brand.
WWD: What was your aha moment when you decided to start the business?
G.R.: I watched “An Inconvenient Truth” in 2006 at the urging of my friend, fashion designer Lela Rose, and became aware of the fact we were doing things detrimental to the earth. Over the next two years or so, I watched so many of my friends struggle — with fertility issues, with giving birth to children with significant health issues, having different types of cancer themselves, and it occurred to me something had gone terribly awry. I started to do research, and came to understand we had introduced over 85,000 chemicals into commerce, and that less than 10 percent had been tested for safety and human health. I started making all these changes in my life, changing my nonstick pans to stainless steel, getting rid of plastic containers, changing my household cleaning products to Seventh Generation. But when it came to skin care and color cosmetics, I couldn’t find any products that met my needs. There was this huge white space. There were brands that existed pre-Beautycounter from mass market to luxury and some very niche, eco-friendly brands. But they were kind of preaching to the choir as opposed to reaching those not yet aware they were putting chemicals of concern on their bodies every day.
WWD: In the beginning, your point of differentiation was clean, but has it evolved now to also include green?
G.R.: As a B corporation, we’ve always put an emphasis on people, planet, profit. But we now know this is incredibly important to the consumer. And it’s complicated. But we are rolling out more product in glass packaging and in our most recent Countertime launch, we removed plastic liners that go into the lids of bottles. Some people complained that the product was transferring or migrating up to the lid. But eliminating that liner saved over 1 million little plastic discs going into the earth this year. So you have to balance meeting the needs of delighting your consumer with also doing what’s right for the earth.
WWD: Any new product launches you can share for 2019?
G.R.: The number-one ask from Day One has been deodorant, that’s something we will be launching in the first half of next year. We took our time really working on the formula, making sure it met our safety and performance standards. That’s one product where performance is king! We also are focused on creating refillable packaging. For us, the next step as a leader and pioneer in this movement is to look more holistically at what clean is. It’s inclusive of sustainability
WWD: A lot of DTC brands are opening brick-and-mortar stores. You have two; will you be opening more?
G.R.: I actually feel pretty bullish on brick-and-mortar expansion, not just for Beautycounter but in general. Today’s consumer wants to shop single brands through multiple channels, how, when and where he or she wants. You cannot dictate how people shop your brand. Having a physical presence has been not only a great way for us to acquire new clients, but also a way for people to come and play, test and feel all the products, be educated, and feel fully immersed in the brand. There will be multiple new locations coming next year. We were supposed to open on Abbot Kinney in L.A. in the fourth quarter, but there was a snafu so now it’s Q1 of 2020. We are also looking at opening smaller footprint, smaller-format stores like the one we have in Denver. So many retailers have been so focused on New York, L.A. and San Francisco and they have not looked at smaller cities. That’s appealing to me.
WWD: You have some new executive hires, tell me about them.
G.R.:We have been working on growing our leadership team for about the last 15 months. We hired Patty Wu as chief commercial officer, who was most recently chief commercial officer of The Honest Company, and prior to that was at Mattel. She will be overseeing all of our channels of distribution, our independent consultant channel, e-commerce channel, retail channel, and retail partnerships. Ann Bidell joined us as chief operating officer from Starbucks. She will be overseeing information technology, corporate strategy, social mission and supply chain. I’m really excited to have them join my team.
WWD: What are your priorities for next year?
G.R.: Evolving our direct-to-consumer business model.…We have turned our attention toward our community of consultants and clients, and how we engage with that community in terms of the business side, but also in tying consumer engagement to our brand. You will see an evolved community platform for next year that will look different than it is today. It will always have as its core our independent consultant network, but that network has evolved since we launched and we think there are opportunities for women and men in different ways.
WWD: Is supply chain transparency also a priority?
G.R.: Yes, it’s the idea of going beyond clean to set higher standards for production. We're putting a focus on mica, which is a common base for powder formulations in cosmetics, but can come with a price, including forced labor and child labor when mining it. We've partnered with Sourcemap, a technology platform founded at MIT that is helping us map our entire supply chain to give us fuller visibility as to where our mica is sourced. A lot of people have suggested we just move to using a synthetic, but that doesn’t solve the problem of people who need economic opportunity. So it's how do we get out there and bring our community along this journey as we tackle the mica industry?
WWD: Tell me about a tough day you had to get over.
G.R.: Every day! When you are trying to change an industry every day is challenging. Last year, when we went to launch our New York store, we spent all this money on advertising, activations, in the subways, all over the place. Here we are the leader in clean beauty and we get a phone call and that our store had tested really high for asbestos. So down goes the advertising, we had to delay the launch by six or seven weeks. That kind of thing happens all the time. We created an entirely new color cosmetic collection, and the entire batch had high levels of heavy metals and we had to start from scratch and reformulate. But at the end of the day, we have continued to focus on how to recover, move forward, lead the industry, and bring the consumer along the journey with us. We are authentic and often will admit, this went terribly awry, we tried a new preservative and it failed, but you need to know that we will continue to fail in our effort to succeed.
WWD: Is it harder because when you fail, you are more directly affecting the people selling your product because of the peer-to-peer model?
G.R.: It can be harder because you are impacting people’s lives and they have such a personal relationship, whether it’s in the digital or physical world, and have endorsed your movement and brand so it can be personally embarrassing for them. But I also think they’ve come to learn leadership and disruption are difficult and with that there will be problems…In general, people applaud you for your candor and are asking for you to be transparent and take them along. That’s all we can do as brands is bring the community along with us.
WWD: On the topic of leadership, what’s a lesson you’ve learned from another leader or brand?
G.R.: I look at what Starbucks did with its supply chain and understanding who was growing their coffee, and bringing their stories together and treating their baristas as partners with respect. Or companies like Patagonia who do traceable down stories and focus on their people. I believe in service leadership and those leaders who believe in the well-being of all the people who are around their brand are the ones who are going to be most successful. I’m always looking at those who have been able to create a movement…One of the best examples, and he happens to be someone I have gotten to know a little bit, is Bono. He’s someone who is so powerful but he looks to ordinary people and works side by side with them to eradicate poverty and AIDS. That’s a person I’d strive to become in my life.
WWD: How do you serve your employees?
G.R.: I’ve learned a lot through this process of building a movement. I’ve certainly learned it’s not about me, it’s about combined efforts of a lot of people. In order to be successful in today’s marketplace, you have to understand what’s driving those serving the mission or the company and not project your own personal views outwardly. You have your own objectives but you need to be really focused on what’s driving the team around you. I’m learning to do that better and better. That’s a different way of thinking than people who led 15 or 20 years ago. It’s not just top down, it’s bottom up and side by side — being both aspirational but accessible.
WWD: How do you interact with them?
G.R.: I interact with clients and consultants on Instagram, by direct messaging, I shoot little videos if someone had a great day, or has a moment struggling with a significant health issue. I do physical appearances, go out there and have small meetings with groups in a small city, eight of us having a breakfast, or sometimes I will go out and have a couple thousand consultants together. Sometimes it can be a nightmare, you are sitting in a room and you can’t move for hours, but they are there to tell you their stories and their stories are powerful. The best way to learn what’s going on is to see them and talk to them. I’ve enjoyed it, it’s the best part of what we’ve done. Yes, we’ve set out to eradicate toxic chemical exposure through skin care and cosmetics but building a movement through people that’s powered by people has afforded me the opportunity to know thousands of women and men and I’ve learned a lot from them all.
WWD: What do you think of the beauty M&A environment — Shiseido just acquired clean beauty brand Drunk Elephant for $845 million — and are you interested in being acquired?
G.R.: There has certainly been a flurry of activity. Drunk Elephant, I’m so thrilled for Tiffany’s success. I think what it has proven is that the future of beauty is clean. This will not be the only acquisition you see. It’s challenging for larger conglomerates to grow at a fast clip right now. They have enjoyed organic growth but are also looking to grow through acquisition. For me, it’s how do I build a brand that will endure and take it as far as we can go? I don’t know what the end game is for us, but I’m committed to becoming the best version of ourselves and leading and disrupting this industry.
WWD: Have you seen M&A interest in Beautycounter?
G.R.: You can answer that question for yourself!
This interview was edited and condensed for clarity.
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