Big, established brands are strengthening their ethical credentials by buying up smaller, eco-aware companies. Lucia can der Post examines why these acquisitions are on the rise.
When it comes to innovation it is readily observed that it’s easier to be nippy and creative, if you’re small. It’s also easier to be green and organic. Big companies, by their very nature, get set in their ways. They, too, of course were once small and innovative and grew successful because they had a great new idea. But once they’ve become a big, established brand it’s not easy to change tack without alienating or, at the very least, disorientating the existing customers they already have.
Take a great cosmetics company like Estée Lauder – once it was Estée alone with her lotions and potions, brewing up dreams, but over the years it grew into a multi-billion-dollar corporation, part of the cosmetic establishment, with reliable, well-understood classic products. By its very nature it couldn’t then start doing what Aveda and Jo Malone and Bobbi Brown began to do – which is to offer hipper, cooler, alternative ways of approaching beauty. Estée Lauder understood that perfectly, but it also knew that it needed a stake in the future and started buying up some of these bright new upstarts. Aveda, Jo Malone, Mac and Bobbi Brown are all now part of the great Estée Lauder empire, separately marketed and nurtured, but an intrinsic part of the stable.
It’s not just in the world of cosmetics that big, established companies want to buy into younger companies known for their ethical stance and their counter-culture approach. Green & Black, the organic chocolate brand, for instance, is now owned by Cadbury-Schweppes. Ben & Jerry’s, the ice-cream makers, are part of the Unilever empire, whilst Rachel’s Organic is owned by Dean Foods, the American conglomerate. Until now it has been the innovative producers of food and cosmetics that have been the chief targets of the big multi-nationals hoping to acquire some ethical kudos. But nowadays, as smaller fashion brands with a strongly moral and environmental stance emerge, the evidence is that the big boys are eyeing them up. It’s a sign of the times that as big a player as LVMH has taken a minority stake in Edun, the clothing company started by Ali Hewson and Bono which aims to provide sustainable employment for those living in sub-Saharan Africa. It should be a win-win situation – LVMH basks in a little of the ethical halo surrounding the brand and Edun acquires some vital investment. The key to the success of the venture has to lie in LVMH protecting the qualities that made them value the brand in the first place – that is, Edun’s commitment to fair-trade and employment for some of the world’s poorest people – and in Edun managing to keep faith with its original vision, and yet grow the company in the way that LVMH presumably has in mind.