Shaking Up the Ethnic-Care Aisle

Small Brands and Big Players Alike Broaden Their Marketing Approach

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Tristan Walker, founder of Walker & Co., is among the markers looking at personal-care with fresh eyes.
Tristan Walker, founder of Walker & Co., is among the markers looking at personal-care with fresh eyes.

Former Foursquare executive Tristan Walker's trips to the drugstore over the years taught him one lesson.

Having to go to the ethnic aisle, which is really a shelf, picking up a package that's dusty and incredibly outdated -- that just needs to change," Mr. Walker said. "I felt there was a need to build a consumer packaged-goods company around the needs of people of color, leveraging all that I've learned in Silicon Valley."

As an outgrowth of becoming entrepreneur-in-residence at venture-capital firm Andreessen Horowitz in 2012, last year Mr. Walker founded Walker & Co. Brands and launched Bevel razors and shave products. The 90% repeat rate for customers has convinced him there's a market. And he's now planning to launch a second brand focused on a yet-to-be-named new category later this year.

The space is ripe for new players, he said, because it doesn't readily offer the billion-dollar opportunities big players prefer, and because e-commerce makes it increasingly easy to cater to the market's specialized tastes. Tastes he believes are ignored by the giants of personal care and retailing.

Silicon Valley's interest is only one factor shaking up what was once an arguably dusty corner of personal care. Changes in African-American hairstyles and a less ethnic-focused approach to marketing are playing a role too.

"In the past four or five years, hairstyle trends have changed dramatically," said Cyrus Bulsara, CEO of Professional Consultants, which analyzes beauty with a particular focus on the salon hair-care category. "Blacks used to have straight hair, relaxed hair or curly permed hair. They used to do a lot of chemical processing. But now natural, 'fro and locs are the three top trends."

Only around 20% of African-Americans currently straighten their hair, Mr. Bulsara said, down from as high as 70% at one point. "And all the ancillary products that were used, like neutralizing shampoos, sprays and conditioners," he said, "sales of those have gone down."

The trend, combined with a poor economy that hit black consumers particularly hard, pushed revenue at salons down as much as 20% in five years by his estimates. And it led Sally Beauty Supply, a chain heavily dependent on the African-American market, to focus more on private-label competition in the general market, he believes, pressuring such brands as Procter & Gamble Co.'s Clairol and Wella.

Mr. Bulsara says those style changes have been a major factor in the sluggishness of the entire U.S. hair-care industry in recent years.

Others, however, see a rosier outlook. Research firm Mintel pegs the decline in sales of hair relaxers at more than 25%, to $152 million, between 2008 and 2013. But African-Americans have increased spending on moisturizers, setting lotions, curl creams and pomades, according to the firm. Mintel says, overall, the market for products formulated for African-American consumers is $774 million, up 12% since 2009.

"It's true that the ethnic category has dramatically transformed over the last five years, and not all of the traditional players and retailers have been able to keep pace," said Nicole Fourgoux, VP of L'Oréal USA's Multicultural Beauty Division, in an email. "However, L'Oréal USA has consistently invested in the category, and 80% of our current offerings on the shelf are either new innovations or renovations."

Those include SoftSheen-Carson's new Dark and Lovely Au Naturale line, specially formulated for natural textures.

"Our heritage brands, like Magic Shave, which was the first brand to tackle razor bumps for African-American men over 100 years ago, has been updated with new technologies and packaging," Ms. Fourgoux added.

Consumers who have shifted to natural hair are actually more dedicated to hair-care regimens than consumers who used relaxers, she said, "and as a result, the ethnic category, as we measure it, has been one of the most dynamically growing" in the whole beauty market.

Many products that address the needs of African-American consumers today, however, aren't overtly positioned that way. Mr. Walker points to this year's launch of Dove Quench products for women with curly hair, which features women of a variety of ethnicities in its advertising. L'Oréal USA's Mizani brand, once positioned as being for black women, stopped advertising along skin-color lines and now focuses on being a hair-care product for people with textured locks, said Kat Peeler, senior VP-marketing for the company's Pureology and Mizani professional division, in a presentation at Princeton University last year.

Speaking broadly of how beauty players are evolving their messaging, Mr. Walker said, "The big reason they don't call out ethnicity is because they don't have to. America is becoming a hell of a lot more polyethnic. And more and more folks have curlier hair."

So Bevel's marketing never says "we're making shaving products for black men," he said. "We're solving problems for men -- and women -- who have coarse and curly hair. We never want to narrow the scope and ambition that we have."

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