EP46. Are Indie Beauty Brands Selling Out by Selling Up?

Welcome to Green Beauty Conversations, the podcast that challenges you to think about how you buy, use, make and sell your natural beauty formulations. We tackle topics that will make you think and encourage debate about green beauty with your friends, followers or customers. I'm your host, Lorraine Dallmeyer. I'm a biologist, environmental scientist and the director of award winning online organic cosmetic formulation school Formula Botanica. We have thousands of students in over 150 countries around the world who study with us to become organic beauty formulators and entrepreneurs. Visit our website@formulabetanica.com to try our free formulation training in today's episode, we're talking about the increasing number of indie beauty brands being bought by large multinationals and asking whether it's possible for indie beauty brands to partner sustainably with major corporations. You can't have missed the stories about Dermalogica Schmidt's Naturals Too faced Tatcha and many others being snapped up by major multinationals such as such as Unilever, L', Oreal, Estee Lauder, Procter Gamble. Over the last five years, these huge beauty corporations have spent billions on acquiring beauty brands from across the world, including many successful indies. And recently, of course, the whole beauty industry has been Talking about Drunk Elephant's 845 million dollar sale to Shiseido, which has certainly sparked debate in our communities too, ranging from people being seriously impressed by Drunk Elephants achievements, including me, to perhaps rather unfairly suggesting that the founder was only ever in it for the money. And this led me to wonder whether the majority of indie beauty founders would ever consider a sale to a major multinational. I know from experience that the majority of beauty entrepreneurs that I work with tend to view their business as something bigger than themselves that can change the world, rather than just a way of making money. So I decided to investigate. I recently polled our community and asked people what they would do if a company such as Unilever would offer to buy the indie beauty brand that they had painstakingly spent years building from the ground up. Over 230 people took part and the results were fascinating. Only 9% of people flat out said yes, I would sell my business. 41% immediately said no way. The remaining half of people who took part said it would depend on a variety of factors, including of course, the price. However, what was so interesting in the feedback I received is that the biggest concern beauty brand founders have is that their formulations and their brand ethics would be changed after a sale. So that's what today's podcast episode is all about. Why are so many Indie beauty brand owners opposed to the idea of selling their business? And are the indie beauty brands that do sell up actually selling out? My first guest on today's podcast is Julie Longyear, founder of Blissoma Botanical Beauty in the USA. Julie founded her brand in 2001 and creates raw plant based pure skincare by hand using herbs and essential oils in her herbal Studio in St. Louis, Missouri. I've interviewed Julie before and I know that she feels very strongly about buyouts and investment in the green beauty world. So I am thrilled to welcome her onto the podcast today.

Hello.

So let's start at the beginning. The first will come a point in every business owner's life that they will need to exit their business. So in your opinion, should every indie PC brand owner have an exit strategy? In other words, should they have a plan for what they'll do when one day they intend to leave their business or their business intends to leave them?

Ah, yes, it can go both ways, I guess. So I definitely think, I think plan is maybe a little bit more concrete than you may have the privilege of really knowing for sure, because it's really hard to know what direction your business is going to take completely from the very beginning. And then as you grow, things can change from year to year a lot for a small business. And so I think that what probably people should have in mind is some ideas about what they think might be fitting for them and their business so that they have at least thought through some options. Because you may, it's kind of like giving birth to a baby. You, you plan, you make, you have this idea of like, here's my birth plan here, here's how I want this to go. But then a lot of other things can come up along the way that like maybe you had to have a C section because something didn't go like you thought. And so I, I think that having some ideas about various avenues that things could take or like what feels good to you would be the best idea. Because, I mean, it's hard to know everything about what you're going to feel like once you actually get to that point or the life changes that could come up in the meantime. But I definitely think it's something that people should be thinking through the same way that you would think through a business strategy you want to think about, because it's a step that's going to happen at some point. You will not live forever. Even if you decide to run your business until you're 80, there will come a point where you will no longer be able to Health wise or time wise or, you know, skill wise or some other reason to be able to own or be at the helm of what you do. And so having some thoughts about what that next step is, is the best plan for both you and your employees to at least have thought it through?

Absolutely. And I was laughing as you were talking because I've given birth twice and I had very detailed plans both times the way I wanted them to. So I totally appreciate what you're saying here. When it comes to you, then you personally, what would you do if you were approached by a major multinational who wanted to buy your.

I think I would ask a lot of questions. There would be a lot of dialogue. And for me, I would need to feel really confident in the entity that I would be passing on my work to, to where I would need to know for sure that they share the values that I have infused into what I do. And I don't think that that's something that you can find out quickly about somebody. Like, I would want to go in deep. It's a lot like getting married to somebody, except for, you know, you may. You may or may not have a lasting working relationship with them after the fact, but still, it's an important life decision that involves your work as well as the lives of your customers. So it deserves a lot of time and thought, you know, as to if. As long as you can give it. Like, if you had like a serious medical problem come up to where, like, you really had to get out quickly, I mean, that might change your decision making. You know, that's. That's again, one of those life decision, life situations that you can't necessarily predict coming up. But I think there would be a lot, a lot, a lot of discussion. Kind of like dating, you know, you want to sit down with them and get a feel for what their goals are and what your goals are and see if those two things match up. Well, yeah.

So, slightly controversial question then. If you were looking to sell up, and I think I know what the answer to this will be already, but if you were looking to sell up, when would you simply consider the highest bidder?

Uh, no, definitely not. So, yeah, absolutely. Um, so, I mean, for me, it could be a little different too, but. And I think a lot of independent entrepreneurs get into business for reasons other than just money. Like, you want to be able to make a living, but you also have a reason, and sometimes it's a very personal reason for being in the business that you're in. I know a good few cancer survivors who have started personal care businesses based on the fact that they really wanted to take their personal experience and offer people healthier options that they felt like would be safe and wouldn't compromise their, their health in the same way that maybe they thought some more commercially made products were doing. And that is something that, so you're driven by things in the beginning other than just money. And I think that that concern probably is going to translate for a lot of people up to the next level in terms of, you know, figuring out what's the next right step. So, you know, you, for me personally, it would be hard to take this entity that I have put a lot of my passion into where I am, you know, getting up every day and working almost more as an activist than I am as a business person. Like, I make business decisions where, like, I have to consider what my costs are and expenses. And I, you know, I'm technically a for profit business. Although it could be said that there were some years that I ran more like a nonprofit and it takes a lot of investment to get to that next level. But I think that there are reasons that a lot of us are here other than just money. Some people do get into business with just a business idea, just hoping to sell. And for them, their, their trajectory may be very different. Like they may be saying, yes, you know, I want to sell and get out in three years. Well, that's, that's one type of plan. But for me personally, money is just one of the considerations that I would look at in terms of if the, if the situation was right. And certainly I don't feel like the ideals that my company is founded on. I don't think that they should be for sale in that way. Like, I think that if, if they're getting passed on to somebody else, I have to be a lot more sure that the guardianship of those concepts is going to be with the right people.

Yeah, I understand that. And, and I think that also reflects the way a lot of people in our community feel. So one of the points that quite a few people raised with me when I recently polled our community on this topic was that people were very concerned about their formulations post sale. So do you think it's possible for a beauty brand owner to step out of their business entirely and then give up those formulations to the new owner? And then shouldn't that new owner simply be able to decide what to do with the business given that they've just paid for it?

Yeah, I think, I mean, formulations are one of those tricky things that there's a lot of different recipes out there already. And a really talented chemist can reverse engineer almost anything. So formulation uniqueness is one of those things that is not quite as unique as some people may think it is. Unless you have developed a totally unique process or like unique supply lines that go with your business. I think that it is difficult for people to completely step away from something that they've invested this kind of time and energy into. And I. And I think that the emotional impact of doing that is something that a lot of small founders probably don't think about in the beginning because you really have a lot more emotional energy tied into it than you might anticipate. I went through a situation this last year where there were. There were actually a couple of separate situations, not, not investment related that caused me to have to look at what it would look like if my business just ended. And the piece of me, you know, that was wrapped up in that. I got to look back at like the last 15 years of investment that I've made in my company and like all of the moments that I gave up with my daughter because, you know, as she was growing up, because I needed to go to work and like work on this business that I'm trying to grow. The sacrifices sometimes are just hard to measure. And so you do have a lot of yourself wrapped up in it. And I think there's an emotional closeness that is hard to step away from. I think that the, the terms of the sale, really, it depends on each party involved in the sale. I've not gone through a complete negotiation like this before, but I would imagine that there would be, you know, contract, like sale contract stipulations that you could set up that would help protect important aspects of the brand and the company, including potentially the formulations as that transitions to the new owner. But you have to be working with a new owner on the other side of the transaction that is interested in respecting that. And I think that some people buy with the intention to revamp and totally gut a business and redo it the way that they think it should be. And some people buy with an intention of preserving what is already there. And you know, the person on the other side of the transaction, the buyer, they have their own reasons for getting into a purchase situation like this versus like starting something from scratch. And it like, I've not bought somebody else's business either. So that's an interesting position to be in. I don't know that I would want to. I mean, I, I like doing the beginning work of things, but for other People, you know, it does feel more comfortable for them to come in with a partially built sales engine and, and all of that already in place. So I think it depends on the agreement between the buyer and the seller. And if you can't find that right person, then maybe you don't sell to, you know, somebody that you don't feel comfortable with. I do think you should feel comfortable with who you're passing a business on to.

Yeah, it's like you said, it's a bit like dating. I suppose you have to find the right partner that you want to potentially sell your brand to. So following on from that, do you think it's possible for indie beauty brands to sustainably partner with major multinationals? Because that's really what, what we're talking about in this podcast.

Yeah, I think it is possible. I think it's more rare, but I do think it's possible because it, it all just depends on the attitude and the goals of the people at the larger company. And if that company has a sincere desire to really like broaden the goals of their company, or if they already have a commitment to doing business in a similar way to what the smaller company is doing, then I don't necessarily think that just the size of the business has to be a conflict in terms of how they go about investing or how they go about doing business. It's really more the attitude that's there. And if they are interested in sustaining the goals and ethics of the smaller company, which large companies and small companies can both have good ethics. It does become a little bit trickier when you have more money involved. And I think that that's often where people go astray, is just the focus on money sometimes distracts from the other focuses that the business may have. But I don't think that size has to be an obstacle. I just think it, it can't like it tends to kind of be. But I mean, even if you sell to another small owner, like say if you find somebody that has a couple million dollars to throw it, buying a small business, which is still kind of rare, that somebody would have that kind of money to just sink into something, then you still have, you know, you just have an individual that may or may not keep to the ethics and goals of the original brand. And in some ways, like a larger structure, you know, in a mid size or larger company could almost protect the ethics because they have more people, you know, backing it up. So it really just depends on the company culture, I feel like, and, and the goals of that larger company because large does not necessarily have to mean corrupt. Look at, you know, a company like Patagonia who has, like, maintained their ethics, you know, despite the fact that they've grown tremendously and they're resynching a lot of their profits into environmental protections and encouraging people to buy less. So I think that size does not have to be a determiner of if a brand is able to maintain the focus and ethics that they originally had.

So why do you think so many indie beauty brand founders are opposed to the idea of selling up to a major multinational corporation? Because when we polled people, the general consensus was, I think about 50% of people said no way or it really would depend. But most people were rather dubious about this concept. So why do you think they're so reluctant?

I think that we've had a good few examples of things not going as well as people might hope where things do get compromised or changed substantially. And so people are reacting to the evidence that they have seen, which is a reasonable thing to do. And it's reasonable to be cautious because oftentimes it has meant fundamental changes to the smaller brands way of working, to their formulations, to the types of choices that they've made. I mean, I remember, you know, it was probably more than a decade ago now that Burt's Bees initially took on. First they took on a venture capital firm in order to grow, and then that venture capital firm decided to sell. And that's when they were sold to Clorox. And there were substantial changes to the formulations and to the brand itself. Like, they used to source gift packaging from women's cooperatives that wove little grass bags. So it was all completely biodegradable. It supported, you know, small producers. And then post investment, the gift packaging all went to being in like, crystal clear acrylic boxes that are, of course, not recyclable at all. And they started including synthetic fragrance in some of the formulations. I mean, I used to, like when I first got into the natural foods business, like, they were sourcing. Their lipstick tubes were like recyclable aluminum. I mean, there was just. There was a quality to what they were doing that you could tell they really cared. And then after the sale, a lot of those changes, like, you could just see it eroding, unfortunately. And that was done just with the goal of expansion and moving more into the mass market. Because as they started to show up in, like, Walgreens and all over the place, I'm sure that the new owners probably wanted something that was either easier for them to, you know, it's easier to source plastic than to go all to these extra efforts to procure it from more sustainable suppliers. And so I do think that we've seen evidence that oftentimes it does not go how we might like. But that doesn't mean that that has to be the only way it can go. I think that it just. It just means that we need to be more thoughtful about how we're doing things on both sides of the deal.

Yeah, absolutely. And I think that's something that every brand owner will have to consider if they ever, ever are fortunate enough to be in the position that I suppose a major multinational would approach them and say, I want to buy you out. So what requirements would you personally set for investment in your business? Because I know you have quite strong opinions on this and I'd love to delve into those a little bit more.

So at this stage of my business, I would prefer to consider a minority investment, whether they are a voting interest or not. That would be up for discussion depending on what I felt like their goals and interests were. But as a minority partner, you know, like, say if somebody came in at 20%, I would still be able to overrule them and make the decisions that I felt like the company needed to make in order to stay true to our initial commitments to our customer base and how we operate. And because I also do think it's hard for an investor to come into a business and immediately know what's right for that business, business. And I think that there should be a little bit of respect for what the existing owner has built. I mean, unless, unless you're buying a company that is utterly in ruin and you're looking, I mean, like, there are people that swoop in and buy companies that are having problems with the intention of revamping them. So, I mean, that's a totally different scenario. But if you're buying at a company that has a successful track record that is growing, that is solid, then I think that there is definitely something to be learned on, on both sides and that the investors should probably take a look at what the existing owner is doing that is working. Because they may think, well, we know better, or like, we know how we can make this really big, but maybe really big, like really, really big may not be the goal for that particular company. Really, really effective might be the goal, or really, really beneficial. Or, you know, there can be other standards besides size and profit that may drive that company. And so I think that spending the time to really get to know one another in that sense is very important. And then so for me, at this stage, like I said, minority investment would be a lot more comfortable because it's not the, it's not the cash influx that I'm opposed to. It's the potential values compromise that would be a little bit more dicey. And then, you know, if the relationship is going well, you could amp it up and like, potentially move in stages, like take a. On a little bit at a time instead of just straight off having to sell 51% and then not having a say in how things go anymore. Because a lot of investment companies do come in wanting that 51% in order to make the investment at all, which I think is a little scary for an independent owner to, to look at, because effectively you all of a sudden you're still in it, but you don't matter anymore. And I think that for me, if a company is coming at me with a requirement that I give up 51%, that would be a red flag to me. That's not a partner that is ready to do business the way I want to do it. So that's, that's my current stage, is that I would consider minority investment. Now, I have had some health issues over this last couple years that did cause me to question, like, how hard I'm working, the amount of time that I'm spending on my business, how much am I going to be able to sustain? What's it going to take to make this more sustainable for me over the long term? And you know, if somebody has something where like, you have a family, a family situation come up where like, you can no longer devote the time that you need to your business, or like, say I wasn't getting any better and I just like, could not sustain the amount of activity and energy that it would take. Then it would start to make more sense to consider a larger investment partner that could put in the energy and time to really grow things if I'm not able to anymore. So, I mean, there are so many things that can affect the decisions. And I mean, if I'm in good health and I'm able to continue on for another, you know, 10 years or whatever, 15, 20 years, who knows? But I think that the decisions at those points also would, would change somewhat. Like, I could, I could say, hey, is my daughter interested in getting into the business? Not many people have situations where they can pass on a business to a child anymore. And I think that's the way that traditionally business used to operate more like, people usually stayed within the businesses that their families held and took over Say their. Their dad's shop or. It was just kind of more assumed, like, you know, 100 years ago, it was kind of more assumed that you would just kind of continue on in the same path that your parents had. That's no longer the case. And it's a lot more rare that someone has a child that could just, like, step in, and it has the leadership abilities and the management abilities to take on a fully formed entity and in conversations. My dad's been in like a business person for a long time, and he used to work kind of at the vice presidential level of companies that he was managing. And from what he was experiencing and seeing, and according to data, he would tell me that basically you have about three generations of that before the children eventually run the business, like, into trouble, not necessarily into the ground, but, I mean, and we have a case of, like Anheuser Busch here. It got passed down several generations, and the third generation was conducting business in just kind of a more wasteful way. They just don't appreciate the initial investments and work that the initial generation put in. So there's even problems with passing businesses onto children because they, you know, if. Or if they just don't possess the management capability that the original founder had, because you can't. You can't just say that just because of genetics that they will. So you may not have that option to move forward in your business. And I don't know how many people would be willing to actually consider just closing if they can't find a suitable buyer or don't have an option to continue the business in the way that they would like. But it is a viable option. The florist business that I bought my current commercial building from, where we manufacture our products, they just decided to close down. And it was because they felt like their business had gotten a little outdated and the competition was too fierce from some of the other suppliers that were around them and that they were going to have to make too many investments to get it up to snuff to be able to consider taking on investment. So they basically just decided that it was better to move on. And I think that that's a possibility that a lot of people don't necessarily think about, but it is there, you know, like, if you can just decide, well, you know, since I'm not able to continue this in a way that suits my goals and desires, you can just close and move on. But I think a lot of people might, like, kind of get a funny feeling in the pit of their stomach about, you know, like, if they're getting enough out of their investment of their time and resources in doing that. And that's a question that each individual person has to ask themselves and kind of do the, the math internally and figure out what you feel like is right for them.

Absolutely. And there's no shame in closing down a business if you feel it's run its course. One final question I wanted to ask you is I, I see some of our graduates raise investment and they're then sometimes set crazy growth figures where they have to deliver on say 300% return within a, on that investment. Do you think that is the right sort of investment for indie brands to attract?

I think that's very stressful in terms of what people are setting themselves up for because there's so much that you can't predict or know in, in moving forward. And I get it, Investors, their main business is putting money into something and then wanting to see a return. And there, there is math that goes with that to where like, they have to get a certain number of their things to pay off at a certain amount or else, because there are some businesses that are going to fail where they're not going to get their money back. And so, you know, they have their own concerns to deal with. But I think that, I mean, based on like, what, what my choice has been, my choice has been to take out debt financing that I was comfortable with, that I knew that I had the ability to pay back without being beholden to anybody else. But, you know, the bank commitments that I had made. And so those numbers are all based on my existing finances. Whereas, like investment deals, sometimes they're basing it on what they think you should be making several years out. And that's nice to dream about, but things sometimes don't go the way that you hope that they will go. And the personal care market is incredibly competitive. And some people experience very quick sales growth and other people experience slower growth. My, my company has had slower growth and sometimes no matter how much I have thrown myself at various issues, it has just not gone faster than it has. And there's, I do think that, like, if, you know, there are some marketing initiatives, like if I had been able to pay for them, then perhaps things would have gone more quickly. But you still have to know how to use money, even if you acquire it. So like, say if you have $500,000 to be able to sink into brand growth, you, you still have to know how to leverage that. And so I think that it would be nice if the investment community would also like it and it like it depends on the goals of the individual business too. But it would be nice if the investment community would consider maybe a slower growth model where the influx of money does not mean necessarily a change to the core principles of the business itself. Because if in an effort to survive and like to attain the growth, you have to compromise who you are and what you're doing, then you fundamentally change the nature of the business. And that's not really, that's not what the investor got in for honestly initially. And then it's not what the founder is there for either. And so I think that we have to take care in maintaining a broader view of what the return of a business actually is. Because the return of a business is much more than just the profit that it makes. It is in the satisfaction and jobs of the employees that it, that it holds. It is in the impact that it makes to customers lives. Like I think that we, if we started measuring satisfaction and the number of people that we're benefiting and using other metrics to define how we are of benefit in the world versus just saying profit is the main determiner of if we are successful or not, then we would have a healthier situation for both the, I think the founders that are working to actually grow something. And then as well, I think that investors would get their return. It just might take a little bit longer, but I think that it could also be more successful. And I mean this is math, like, and I say math because it's not all numbers, but like the impact that I make has been something that I've had to think about because profit was a little slower in coming for me. And so every year I had to sit down and go, you know, okay, what am I doing? Am I, what reasons am I here for? Because the outer business world was telling me that profit was the most important and if I wasn't showing it, then what am I doing here? But I was looking at like, well, I've helped thousands of people with their skin. That means something. Like there is meaning to me in that and there are certainly meaning for those customers in it. And I know that there would be people that would be incredibly upset if I just disappeared. And to me the business belongs to those customers as much as it belongs to me. Because without them I don't have a business. And so it's a co creation in my opinion. It's a co creation between all of us. Like they are as much invested in it as I am. And so I definitely consider what their needs are in the decisions that I make like I just play a part in helping manifest something that is good for all of us. And my hope would be to find an investor that understands that type of goal and initiative on my part. Like that this is, it's, it's goodness, like some sort of goodness that's good for everybody rather than just being good for like one party or the other. Like it needs to be sustainable and it needs to be healthy.

I love that. And it's about bringing that triple bottom line into it where you're not just looking at the profits but also looking at the planet, the people around you. And as you say, it's a, it's a co creation. Thank you so much, Julie. That was really insightful. Very interesting. If people want to learn more about you and about blissoma, where can they find you and where can they connect with you?

Yeah, so our website is www.blissoma.com and we also have of course an Instagram page that'somaskin. We do have a Facebook page, although I would say like we're probably doing a little bit more talking with people on Instagram these days. We have an email list, we send out like lots of informational emails and we have a great blog on our site so there's lots to explore. And of course we have a wonderful skincare line that we love to help people discover.

Awesome. Well, I hope you go and buy some of Julie's wonderful creations and help support a small business over in the usa. So thank you so much for joining me on the podcast today.

Thank you Lorraine. I really appreciate it.

Foreign. Thank you to Julie for joining me today to talk about indie beauty brand exit strategies and the complexities of deciding what to do if and when it's time to leave your business. This isn't an easy topic as I'm sure you can tell, so I really appreciate Julie being so candid with us. My next guest on today's podcast is someone who's been there and done that. I'm delighted to welcome Sian Sutherland, beauty brand founder and multi award winning serial entrepreneur. In 2005, Sian created Mama Mio Skincare with her three business partners, the first premium pregnancy skincare range in the UK. In 2014, she launched MIO Skincare again creating a new niche in a saturated market, delivering skin fitness to active women. In 2015, this business was sold to the Hut Group, a gigantic global e commerce company based in the uk. Sian now runs a Plastic Planet, a social impact nonprofit with a single goal to ignite and inspire the world to turn off the plastic tap. Welcome onto the podcast, Sian.

Thank you so much, Lorraine. I'm really happy to be here.

Right, well, let's dive straight in. You sold your skincare brand to a large corporation. Can you please tell us more about your story?

Yes. Well, where to start? If you look back at my track record, I've been in business for many, many years now, and I'm probably what you would call a serial entrepreneur. And I guess if you look at all the different careers that I've had, it's easy to think that they're very disconnected, that they're quite disparate. And how did I go from advertising to setting up a Michelin star restaurant, to having a packaging design company, to getting involved somehow in film production and then co founding a skincare brand that I ran for 10 years nearly. And yet for me, everything is very, very connected. And so much of it was about how do you create a business that really is built through heart rather than for pure financial gain? And how can you open niches in new markets with perhaps a different kind of language? Definitely a different kind of offer? And that's something that I've done in every single one of my businesses. So that you are not just selling more stuff. What I'm very, very clear on is the world does not need more stuff. And in the world of beauty, that's even more evident. I don't know how people choose. You turn up at any kind of beauty store and you look at those shelves, how many eye creams, you know, how many face washes, how many body moisturizers does the world need? And how can you have any kind of cut through and create any kind of clear space in a new market at every single level? And that's really what we. What I think is the pattern that's been made through all of my different businesses and then most recently with the skincare brands.

So who did you sell to in the end? And at what point in your business did you reach that decision to sell?

Well, I'm a big believer in reinvention. And I've always had this thing that if I look at my career, every seven years, I've kind of reinvented myself and with all those things that I've just covered. And so seven years into running Mamma Mio was really a point where I started thinking, what is going to be next? And that was also the point where I attended a talk by somebody who was talking about building businesses with triple bottom lines, with purpose, purpose and people being ahead of profit. And that was A little mini wake up for me thinking I want to get involved in a business like that, that is going to be my next journey is I want to build a business that is built on people planet profit rather than always just thinking about the bottom line. Because intrinsically that's always felt very natural for me as a female entre. But I wanted to see what I could do next. And then I thought, hang on a minute, we're running this brand that has such a strong emotional connection to women that is, I believe, answering something that's a genuine need, not just a trend in skincare. You know, pregnancy skincare, where you're going to be putting 30 inches on your tummy in 40 weeks and hopefully losing it again. It's a massive demand on skin elasticity, which is everything in skincare. Maybe we could do it just a little slight pivot in Mamma Mio and make it that kind of business anyway. Because certainly it was a business that was always been built on personal experiences with myself, my three co founders and had this very strong emotional connection to our audience. Because selling skincare to pregnant women, you can imagine there's a very strong emotional bond there. So we started to do a lot more within the business at that point of seeing how we could give a different experience for our employees. Like, we work very closely, we Look Good, Feel Better. I'm giving you such a long answer. I've just realized I do apologise. You asked me one thing and I promise I'll come around to it. Everybody who worked within our team in the US and the uk, they were given a day, a month to work for the charity of their choice. Most of us work for Look Good, Feel Better, which is a fantastic cancer treatment supporting charity that really uses the whole power of makeup and skin care to help women feel a lot better about themselves. I love the feeling of this charity and obviously it's very connected to our industry. So we all dedicated a day, a month to work for Look Could Feel Better. And it just shows that whatever people do, there was so much that they had to give that they didn't really realize was going to be relevant. Like, our warehouse guys completely re racked the Look Good, Feel Better warehouse. Our web tech guys built an app for them. So it was wonderful to see how everybody could get involved in something. So that was the kind of business that we had built. And so then 10 years in, we started to get the calls. It was really when we launched our second skincare brand, which was Mio Skin Care, which was giving, delivering Skin fitness for active women. So again, finding a new niche in market that nobody was really talking about. Skin fitness. It was still very problem solution versus using this very positive language of strong, healthy, fit, bouncy, happy skin. And when we launched Neo, we started to get a lot of calls from people who were interested because wellness was obviously the big thing going back five years ago now, everybody was talking about wellness. How can they bring beauty into the wellness space? And Mia was obviously a great bridge that did that because it was combining skincare and exercise. So we got a lot of calls from a lot of the different private equity firms and I always take those calls and I always have those conversations because you never know. You never know who you're going to meet and what things they lead to. And then we got quite far down the aisle with one particular company who I can't mention now, but they felt like a perfect fit for us. And you know what it's like when emotionally you start to consider that perhaps you're going to be selling a business. It's almost like you say yes to the marriage, you've got the dress, you're halfway up the aisle and then at the altar, these guys couldn't complete, they couldn't deliver. And that was the point where we felt, well, we've kind of emotionally done a deal now, so it feels like we're going backwards for us to not look at perhaps if there's somebody else that could be an equally good partner for us. So we ended up sending to the Huck Group. And as you will know, the Huck Group, massive, very ambitious, built and driven in a very different way to how we had built our business, but hugely successful and a massive online player. So they were very interesting for us because we knew that for the future scale for Mio and Mamma Mio, really, online is the way traditional retail was beginning to struggle and now continuing to struggle as we see today. And having a big force online was very interesting to us. So they ended up being the partner that we married at the end of that aisle.

Fantastic. And many congratulations. What a story.

Well, thank you.

So one thing we hear from many indie beauty brand founders is that they would only consider a single sale of their business if their formulations were retained exactly as they are. Do you think it's realistic to stipulate that your formulations should be kept as they are post sale? And is that even, even possible given that products sometimes need to be reformulated in line with supply or ingredient or stability issues?

I'd love to think that you could put that kind of rider on any sale. But the reality is if you sell your business 100%, we were an outright sale, then it's going to be run in a very different way. And having all of us given birth to Mamma Mio, given birth to Mio and had such an amazing experience building those brands and having these very strong relationships with the women that use them. I would meet women and say, oh my God, I can't believe that you're behind Mamma Mio. I've had three babies on Mamma Mia and I still meet women that say those kind of things to me. And that's. And it's such a wonderful feeling that you've been there at such an incredible time in their lives. But when you sell a business, my advice to most people is signify because it will never be run in the same heartfelt way that you have built that brand because it's ready for the next stage and it has to be done in a different way going forward. And much as people say to me, oh, do you hate it? Do you hate seeing it? If I'm really honest, I don't even think about it. And it's something I'm super proud of and I know all the founders are, but we've all moved on and we're all doing different things now and it's been an incredible experience. We've created great friendships through it. But then there comes a point where you move on and you take all of that experience and you can do something else. So rather than worrying about what somebody is going to do and will they actually perhaps devalue your brand and rip the heart out of it, you've got to say goodbye and there's no harm in that because then think of all the experience that you have to go and do something else.

Yeah, absolutely. What is your opinion of the growing number of big multinationals buying up indie brands? How will this shape the future indie beauty sector, in your opinion?

I think it's the only way that they can really have the innovation and the heart of the heart built brands that they want to have. And for every brand, the brand story is the strongest asset that you have. And it's very difficult for big business for some of the big the L', Oreals, the PNGs, Unilever's, the Estee Lauders to create brand stories from scratch. So they buy the brand story and hopefully when they buy it into a business, and there are many examples, I think Ren is a great example, I think that has gone into unilever and I think they're doing great things from inside. So there are some organizations, some of the big guys where if you're bought, they probably just want you to say goodbye and walk away. And if that's the right thing to do, then just go with it. And there are others where they want the founders to stay and to ignite the business from within. And that's a very important part for big business that is as important as buying the asset of the brand itself. They need the ethos of the brand, the spark, the life, the energy of the, of the brand. And often they will want to retain the founder to keep that. It's a tricky journey for that founder. But the people, and often you will find it's not the original founder like Ren. It's not the original founder, it's Arnold now who is running Wren. But he's still doing it with the principles that I think the original founders will be very proud of. So I think it's the way that big business will grow. It's the way that they will be able to give the customer what they want. And you'll see a lot of the big guys like Unilever buying E Corp and when I was talking about the whole thing of people planet Profit, then a lot of big businesses now are buying B corps and hopefully retaining the ethics, the authenticity of that B Corp, so that it's another way that you can change big business from within. So I think it's very positive.

Well, following on from that, do you think big multinational corporations buy out indie brands to eliminate the cost competition? So this is a criticism I've heard frequently and it's been brought up in our communities quite often as well, where some people suggest that big companies buy indie brands to then purposefully change their formulations and eliminate the competition.

I think that's quite a cynical view if I'm honest and having been on both sides of the fence and you know, I work, I work a lot with Unilever type organizations now and I don't think that that is their. Let's be realistic. Look at the scale of something like Clinique. There is absolutely no way that Clinique is worried about buying a tiny indie brand to take them out so that they can't compete and then dumb them down by reducing the quality of the formulation. So destroying them from within. It's absolutely not what they're doing. They would not pay money to squash competition. They pay money because they need innovation within their own business. And maybe the formulas do have to be compromised. Because they're running a different kind of business model. They're probably reducing the price point, they're probably scaling up distribution, and distribution costs money. So it's a different business model entirely. It's definitely not. I think the cynical view that they do that to squash competition. They're really not looking at the indie brands as competition right now. They're on a completely different platform.

Yeah, I understand. So how did you feel personally when you exited your business and moved on to your next project?

Well, I think women particularly are pretty good at reinvention. Biologically, we're better at that kind of transformation process because it's what we do through our, you know, through our own lives, where there's a lot of different stages that we go through way more obviously than mending. So I think the reinvention thing is less scary for us. So leaving Mamma Mia and Mia in the hands of somebody else and then walking away. And then for the first year, I worked with a number of different indie brands, really to try and help them with some of my experience. How could they get to the next level of product and sales and scalability? And that was an interesting time, really, because that was a whole year for me of trying to find what was I going to do next, where do I fit? And that's when the whole plastic thing came along for me. It was at the last stages of Mio and Mamma Mio. It was through that wholesale process that I got involved in the film Plastic Ocean, advising the board on the launch of that film. And that for me was my personal epiphany of thinking, yikes, what have we done and what do we continue to do every single day? Nothing's slowing down. We know all these things that we now know, and yet nothing is flowing. And that for me was then a really incredible opportunity to see could I build a different kind of business that used all my marketing experience and my entrepreneurial experience to perhaps again find a niche in a crowded space of chatter about plastic, to build an organization that again, would have cut through and would literally ignite and inspire businesses from within. Because I think that's where we need to see the change happen.

Absolutely.

It wasn't as hard as I thought. I really thought it was going to be a massive hole in my life that I would. Then how was I going to fill it? You know, like an empty nester. But actually, it wasn't that way at all. I immediately had loads of things that excited me to get involved. And then building a Plastic Planet has been by far of all the things that I've done in my career now I believe this is the thing I've been built for. Everything has helped me to do what I do now. And building and running a skincare brand internationally was a massive part of that because it gives you so much credibility for everything else. Because I'm the first one that can stand up and say, I'm no plastic saint. I have personally been responsible for running a company that has pumped out millions of unrecycled plastic bottles. We didn't know, but now we know it's inexcusable for us not to change. So it's been a fantastic Runway for me and a springboard for me to be able to do what I'm doing now.

Fantastic. Well, thank you for sharing your story. And finally, what advice would you give to anyone considering exiting their indie beauty brand?

It's always going to be an emotional time and finding the right partner. It is like trying to find a marriage. But don't worry if you're not going to be part of the final solution. None of the people that worked at Mamma Miyoo stayed within the business. We all left pretty much, you know, within three to six months. All of us left and the business has gone on to different and bigger things. But everybody within that business, you know, a big part of my first year after the sale was making sure that everybody was okay, that everybody had great jobs. People have been with me for nine years. So when you do sell, it's not all about what are you getting. It's so much about what's the life going to be for the team afterwards. And I know anyone who's built a business, you care about your team like your own family. So that's, I know, going to be a massive focus, making sure that they either have great jobs to go to within the new existence of the brand or in a new going forward for them, what's their next step. But ultimately everything is a step to something else. And I think it's also a very exciting. It's a closing, but it's definitely an opening of a new door and be excited about that and recognize that it's going to be different. And the reason that you're selling is probably because you're ready for something different. Otherwise why would you do it? Just carry on doing what you're doing and create something that's a wonderful lifestyle business for you and know that everything that you have created within your business will be a catalyst for change within a bigger business going forward. And that's A very positive legacy as well. So all of those things, it's not about the money that you get, it's about what's going to happen with that business going forward and how can that be a real change maker for other people going forward. And I think that that's a wonderful legacy in more ways than you think. And when you're building your brand, know that building it for sale is never the right direction. You know, building it for something that has a genuine need in the marketplace that is incredibly clearly distinguished, that has a very strong tone of voice in every way, that's got to be your goal. And then you've got something that people are going to want to buy. If you're simply building something waiting for someone to knock on the door, want to buy, it's not going to happen. Your focus has to be on making something that's genuinely unique and therefore saleable in the first place.

Brilliant. Thank you. Thank you for those words of wisdom. So if people want to learn more about you and your latest organization, A Plastic Planet, where can they find you and connect with you?

Well, pretty simple. They can either find me on LinkedIn, Sian Sutherland or Twitter or any of our Plastic Planet social media handles and you can see everything on aplasticplanet.com Brilliant.

Thank you very much.

Thanks so much.

Lorraine, what do you think? Should there be a separation between indie and big corporate, or is it okay for an indie beauty brand to sell to a larger company that may not share your similar values? And should the indie sector try to find alternative ways, ways of preserving those values whilst raising investment and operating in the world we live in where multinationals dominate our buying habits? Whatever you feel, I do find that many indie beauty brand owners start this journey without ever considering their exit strategy. They are so focused on starting the business that it often never even occurs to them that one day they won't be able to run it anymore? And make make no mistake, every beauty brand owner will at some point exit their business, either planned or unplanned. They might sell up to a third party or their own employees, they might pass it on to a family member or they might just close it down altogether. However, I found that most beauty entrepreneurs haven't yet thought about having an exit strategy. Which isn't surprising, of course, because for some reason sum having a business exit strategy is a little bit like facing your own mortality. I applaud and admire all beauty brand owners and there is no right or wrong choice as to what they do with their business. Those entrepreneurs who do choose to sell, such as Sian Sutherland or Tiffany Masterson of Drunk Elephant have made the brave decision to reap the rewards and then move on to the next phase of their careers after having invested years of their lives into creating successful businesses that help their customers. There is nothing wrong with selling your beauty brand and recouping payment for all of your efforts. But I also really like Julie's point about seeking a slower model for investment where slower growth is more sustainable and builds more change into the market. Green and independent thought is about asking consumers to change their behavior, but this doesn't happen overnight. If we had an investment culture that was more focused on the triple bottom line of finance, environment and society, the three pillars of sustainability, then that would make a huge difference in how beauty brands raise funding or exit their business. So can the indie beauty sector help to drive positive sustainability sustainable change through the ways brand founders design their exit strategies? I want to hear what you think. Whatever your views on this controversial topic, I want you to join the debate and leave us a comment on our social channels. The Formula Botanica team and I love hearing from you, so come and tell us your views. Thank you for joining me and my guests for this latest episode of Green Beauty Conversations on Indian Indie brand Buyouts. I hope you enjoyed it. Make sure you subscribe to our podcast on itunes or Stitcher and stay tuned for the next episode in which I'll be asking whether you need to be vegan to make and sell vegan cosmetics. Follow Formula Botanica Formula Botanica on Facebook, Instagram, Twitter, YouTube or LinkedIn. We're everywhere. Visit our website@formulabotanica.com and sign up up for a free formulation training class today.