By Sabrina Lynch
- A $2.6B opportunity is being slept on by not addressing the beauty industry’s racial inequity
- Currently, Black-owned beauty products make up less than 7% of what’s featured on shelves in retail stores
Black consumers are not shy when it comes to purchasing beauty products that take prime place in their self-care routines. However, despite accounting for more than 11% of beauty customers throughout the country, Black-owned beauty brands account for only 2.5% of total revenue accrued from the industry. Given that 11.1% of beauty sales comes from the pockets of Black Americans, this is not a good look considering the $2.6 billion opportunity that’s being slept on by not addressing the beauty industry’s racial inequity.
Why This Matters: The progress companies promised to make on building racial equity has fallen flat. Black people represent 12.4% of the U.S. population and yet, despite the strength of the spending power within this community, the promise of delivering more opportunities for Black-owned businesses to grow has not been met. Currently, Black-owned beauty products make up less than 7% of what’s featured on shelves in retail stores.
When you consider that 92% of Black consumers have made it clear that supporting Black-owned brands is important to their buying decisions, a sentiment supported by Gen Z (56%), who are also wielding their buying power to benefit Black entrepreneurs. This begs the question: if the demand is there, why is there no support to grow the supply?
Beauty brands owned by People of Color raise an average of $13 million in venture capital, which is significantly less than the $20 million raised by non-Black brands. Out of 213 venture capital-backed beauty companies, only 16 of them were Black-founded.
Situational Awareness: Retailers are doing what they can to grow consumer reach for new beauty brands on the block. eBay launched a dedicated hub to Black-owned beauty brands, Sephora reshaped its in-house brand accelerator program to focus on founders of color and Ulta Beauty (ULTA -1.47%) aims to increase their workforce of Black employees by 15%.
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