When The Estée Lauder Companies paid $1.45bn for indie makeup brand Too Faced, Wall Street sat up and took notice. With additional investments worth hundreds of millions of dollars in other beauty startups, this conglomerate is one of several that is betting its future on the power of a new kind of brand.
These brands are independent, with compelling stories, and catering to under-served, emerging consumer niches. They aren’t always found in traditional retail establishments, and getting one’s hands on them can be a badge of honor for a consumer who considers herself discerning and sophisticated. These brands often trade on a growing consumer interest – especially among millennials – in purchasing from “ethical” brands using natural ingredients, responsibly sourced.
Sound familiar? It should. This very much mirrors the same shifts that other verticals have had to weather – most notably, consumer packaged goods (CPG).