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Celebrities aren’t satisfied simply to become brand spokesmen. They want to own it too. Social media allows stars to connect directly with consumers, so it appears that everyone in Hollywood is pounding alcohol, snacks, makeup, shapewear or diaper.
Haley Bieber, fashion model, influencer and wife of pop star Justin Bieber, is one of the few who managed to create a side hustle and secure a 10-digit exit from there. She sold beauty brand Lord, famously for pushing “Glazed Dunuts” skin trends, to the beauty of the major elf of makeup for up to $1 billion. This is an eye-opening price for the company that launched three years ago with two skincare products and lip gloss.
Beaver’s success highlights the two-sided battle that global consumer brands are fighting for. American shoppers trade for cheaper private labels for everything from pasta to toilet paper. But at the same time, they are attracted to more expensive items from emerging brands. Companies selling medium-priced brand name products are losing out. Procter & Gamble, Colgate-Palmolive, Kraft Heinz and WK Kellogg have reported a decline in sales in the recent quarter.
The Rebel brand – a fast-growing startup with at least $25 million in annual revenues – accounts for a disproportionate share of consumer goods growth last year. According to Bain & Co, a consultant who created the Rebel label, they took 27% of food growth, over 32% of non-alcoholic beverage growth and 45% of personal care growth.
This makes them a fertile hunting ground for large businesses looking to buy a path to expansion. Deals such as the $1.3 billion acquisition of actor Ryan Reynold’s Mint Mobile by T-Mobile is a great headline, but most large-scale acquisitions include emerging brands of uncelebrity. Think of Rao pasta sauce and Alaninu energy drinks.
For Lord, who built a consumer business of $222 million a year, the elves’ dive is about as much as tapping on a loyal follow of a brand among the generation of alpha born after 2010.
In an industry that fades as quickly as “IT” brands come into play, bets focused on celebrity brands aren’t without risk. Adidas and Gap had to end their partnership with Kanye West after the now-known rapper made anti-Semitic comments. Jessica Alba’s Honest Co. value has been reduced from over $2 billion to under $500 million, following the 2021 IPO. However, if the consumer giants can’t raise the rebels themselves, they have little choice but to shop for them at a high price.
pan.yuk@ft.com
