AMDP

To: Clark Hansen, CEO of AMDP
From: Vivian Cardenas, Research & Development Analyst at AMDP
Date: March 05, 2024
Subject: SheaMoisture Investment



As a member of the Research and Development team, I was asked to find a potential investment recommendation that Anima Mundi Development Partners (AMDP) might want to consider. My first contender was SheaMoisture, a Black owned beauty company that prides itself on being socially responsible and environmentally stable. However, after an extensive amount of research, I have concluded that AMDP should not invest in SheaMoisture.

To begin, I will define AMDP's basic fundamentals and detail why they are important to our core business.

AMDP Standards

  • Triple Bottom Line: A fundamental business concept that suggests that instead of a firm solely concentrating on their financial performance and profit generation, they should commit to measuring their social and environmental impact. The concept can be further broken down in the "Three P's":

    • Profit: The financial return an organization generates for shareholders

    • People: An organization's commitment to positively impacting society

    • Planet: An organization's effect on the environment (HBS)

  • Corporate Social Responsibility (CSR): The concept that a business bears a responsibility to the society in which it operates. Companies committed to CSR empower themselves to engage in socially responsible actions that contribute positively to the world. (HBS)

  • Social Enterprise: A business with a specific social objective that serves as its primary purpose. Businesses that identify as social enterprises seek to maximize their profits with the intention of generating benefits for society and the environment. (Investopedia)

  • Carbon Footprint: The carbon footprint refers to the total amount of carbon dioxide (CO2) emissions associated with the activities of a person or entity. This includes direct emissions from fossil fuel combustion in manufacturing, heating, and transportation, as well as the emissions required to produce the electricity associated with goods and services consumed. It is crucial to reduce one's carbon footprint because failing to do so will exacerbate the global climate crisis. (Britannica)

 

With a clear understanding of AMDP's principles, I will discuss whether SheaMoisture either meets or fails to meet those expectations.


Background
SheaMoisture is a leading global beauty brand that follows a “no-compromise” mentality. They use naturally infused products for people with textured hair and melanin rich skin. In addition to their efforts to provide people with ethically sourced products, they make extensive efforts to reinvest into the Black community, providing economic and educational opportunities worldwide.
In 1912, Sofi Tucker began selling shea nuts in Sierra Leone in a local market. However, it wasn’t until eighty years later that Tucker’s grandson evolved his grandmother's business to distributing to beauty supply shops under the name SheaMoisture. Today, SheaMoisture has grown from solely selling skin and hair products and has evolved to also making entrepreneurship and education programs available to the Black Community in the US (SheaMoisture).  

Company Claims

  • Ethical sourcing
  • Organic Ingredients
  • Fair wages
  • Certified B Corporation
  • Equitable Purchasing (SheaMoisture) 


After taking a look at SheaMoisture’s Impact Report, I have concluded that the company is honest to their commitment of closing the racial wealth gap with their initiative of “Wash, Wealth, Repeat”. They have invested over $10 million back into the Black community, delivered more than 50,000 education hours to Black business owners, and invested in more than 250 Black-owned small businesses (SheaMoisture).

Financials
While it proved rather difficult to find SheaMoisture’s financials, I was able to access the 2022 Annual Report for Unilever, who acquired Sundial Brands, maker of SheaMoisture, in 2017. Unilever’s Beauty and Wellbeing Group, of which includes SheaMoisture, has nearly doubled its turnover growth from 11.6% in 2021 to 20.8% in 2022. Turnover growth indicates how effectively the company is expanding its market share, increasing its customer base, or improving its sales performance. Additionally, Unilever’s cash flow from operating activities for 2022 was reported at €10.1 billion ($10.9 billion) (Unilever).

Expert Opinions
Though SheaMoisture has continuously given back to the Black community, it appears that they might be losing the audience that their brand was initially built for. SheaMoisture has suffered much backlash since Unilever acquired the brand in 2017. With the acquisition, many loyal customers noticed that SheaMoisture wasn’t exactly living up to its own standards. In the same year the brand was acquired, a video campaign was released in which it excluded Black women from the ad altogether. Unsurprisingly, this did not go over well with the Black community.

The Guardian
In Lola Okolosie’s article, she talks about the journey that Black w0men take when finally deciding to wear their natural hair. But before coming to this resolution, they endure much pain and discomfort from trying to “pay for hair that was close to ‘good’, flowing, white women’s hair”. With the erasure of Black women from SheaMoisture’s ad, it appeared to be whitewash its image, despite being birthed by a Liberian woman. Many women voiced similar concerns about SheaMoisture’s shift towards catering to Eurocentric standards, trying to be overly inclusive and deviating from the original audience of Black women.

Colored Lines
Ayana Byrd, an award-winning author and journalist didn't hold back in her review for SheaMoisture. As a Black woman, she felt profoundly underrepresented by a brand that claims to advocate for Black women. Byrd suggested that the lack of "representation of the people who had, in effect, paid for the advertising that had erased—and insulted—them" was incredibly insulting. By even going as far as promoting another beauty brand, it is evident that SheaMoisture's inconsiderate advertisement had a significant impact on many Black women.

Personal Opinion
I personally believe that Anima Mundi Devleopment Partners should not invest in SheaMoisture. While the company does make extensive efforts to give back to the Black community, I am concerned that under the ownership of Unilever, the company has strayed away from its original audience. Former loyal customers of the company have admitted that they believe that in addition to products being reformulated from original recipes, the brand shifted their focusing to being more inclusive of White women. Though inclusion is generally positive, in this case, inclusion of more women dilutes the SheaMoisture’s connection with the Black community.



Works Cited

“Nothing New: Shea Moisture Already Showed Us It Wasn’t Fully Here for Black Women [Opinion].” Colorlines, 25 Apr. 2017, colorlines.com/article/nothing-new-shea-moisture-already-showed-us-it-wasnt-fully-here-black-women-opinion/.

SheaMoisture 2022 Impact Report, SheaMoisture, cdn.sanity.io/files/gsxasun1/sheamoisture-stg-us/c6a4870b89a4f309bb350f21cc1b132622c8b477.pdf. Accessed 9 Mar. 2024.

“Sheamoisture Is Just the Latest Brand to Erase Black Women from Our Own Picture | Lola Okolosie.” The Guardian, Guardian News and Media, 27 Apr. 2017, www.theguardian.com/commentisfree/2017/apr/27/brands-black-women-hair-sheamoisture.

Team, The Investopedia. “Social Enterprise: What It Is, How It Works, and Examples.” Investopedia, Investopedia, www.investopedia.com/terms/s/social-enterprise.asp. Accessed 8 Mar. 2024.

“The Triple Bottom Line: What It Is & Why It’s Important.” Business Insights Blog, Hardvard Business School Online, 8 Dec. 2020, online.hbs.edu/blog/post/what-is-the-triple-bottom-line.

Unilever Annual Report and Accounts 2022, Unilever, www.unilever.com/files/92ui5egz/production/0daddecec3fdde4d47d907689fe19e040aab9c58.pdf. Accessed 9 Mar. 2024.

Wash Wealth Repeat, SheaMoisture, www.sheamoisture.com/on/demandware.static/-/Sites-shm-us-Library/default/dw38e412c1/images/homepage/impact-report-2022/SheaMoisture_impactreport_2022.pdf. Accessed 9 Mar. 2024.

“What Is Corporate Social Responsibility? 4 Types.” Business Insights Blog, Harvard Business School Online, 8 Apr. 2021, online.hbs.edu/blog/post/types-of-corporate-social-responsibility.


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