SheaMoisture’s Playbook for Being a Purpose-Driven Brand

Why it matters:

• In 2022, Black and Latino founders received only 1% and 1.5%, respectively, of total U.S. venture capital funding, according to McKinsey & Company. SheaMoisture is out to even the playing field.
• SheaMoisture aims to become a $1 billion beauty and personal care brand, proving purpose-led businesses can simultaneously be successful.
• One of its initiatives, the Next Black Millionaire Fund, not only provides funding and mentoring but also access to retail distribution.

Seven in 10 consumers make it a priority to support brands that donate money or supplies to causes important to them, according to Amazon/Environics Research. Purpose-driven marketing is gaining traction in the beauty and personal care industry.

“What was once a differentiator has become a non-negotiable for many beauty consumers,” said Marie Driscoll, adjunct professor at The New School. “Values have become important as a way to connect and keep them involved, especially in today’s competitive landscape.”

According to Driscoll, a case study in purpose-driven marketing is SheaMoisture, a brand that understands the assignment with a commitment to “authenticity, heritage, community, and real entrepreneurship.”

Taydra Mitchell Jackson, Chief Marketing Officer of Sundial Brands, the parent of SheaMoisture, shared some of the company’s marketing strategies with CO— recently. “You need to start with something that is important to your consumers,” Mitchell Jackson said. “People have the ability to discern when the purpose is authentic and not just a ploy to get sales. It doesn’t need to be a big investment, she added as advice for budding brands. “You can start small, but it should be meaningful and support your credibility.”

Brands don't need deep pockets to give back. But what they do need is to align the effort with the brand’s positioning, she explained. SheaMoisture's beginnings are a case in point. Giving back has been part of the brand's ethos, dating back to its inception in 1991.

[Read: Why Google, Amazon, and Other Businesses Are Launching Accelerator Programs to Help Women-Led Startups]

A founder-led startup journey: From selling beauty care in Harlem to becoming a Unilever brand

Company founder Richelieu Dennis started selling hair and body care products in New York City’s Harlem neighborhood, which were created by his grandmother from Sierra Leone in West Africa. He ensured a percentage of sales went back to the women supplying his shea butter.

When Dennis sold SheaMoisture to Unilever in 2017, he included provisions in the deal to continue support for Black entrepreneurs by establishing the New Voices Fund.

Each year, the company, which aims to become a $1 billion brand, reinvests at least 1% of net sales directly into economic opportunities for underserved entrepreneurs and Black business owners, according to Mitchell Jackson. To date, more than $10 million has been invested in supporting Black businesses.

[Read: How Three Startups Scored Millions in Funding]

SheaMoisture’s Next Black Millionaires Fund: Coaching entrepreneurs on breaking into big retail and landing funding

One initiative, the Next Black Millionaires Fund, represents a half-million-dollar investment providing businesses with $100,000 in funding.

The Next Black Millionaires Fund was born out of a vision and mission to help close the $11 trillion racial wealth gap and bring financial equity to overlooked and underserved communities, said Mitchell Jackson.

In 2022, Black and Latino founders received only 1% percent and 1.5% percent, respectively, of total U.S. venture capital (VC) funding, according to McKinsey & Company.

For recipients, it’s more than just a check, Mitchell Jackson said. Brand owners receive retail distribution consulting, mentoring and coaching, access to an investment pipeline, and other support to work toward becoming million-dollar businesses. The entrepreneurs selected for the inaugural class—LaToya Stirrup, Cofounder of Kazmaleje; Neil Hudson, Cofounder of Scotch Boyz; and Dorian Morris, founder and CEO of Undefined Beauty— also got their products into 600 Target locations—an accomplishment that typically takes years to achieve.

“The SheaMoisture Next Black Millionaires Grant was a game-changing experience for us and equipped us with the capital, tools, and resources needed to accelerate our business,” said Kazmaleje’s Stirrup.

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here.