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Green Acquisitions Set to Continue

Unilever’s purchase of Seventh Generation this week is the latest in a series of green acquisitions. Organic Monitor predicts the trend to continue as large multinationals look to build a foothold in sustainable product industries.

Seventh Generation is a leading brand in the North American market for natural home care products. The acquisition gives Unilever a presence in the fastest growing segment of the cleaning products industry. It will also help the multinational achieve its sustainability goal of halving its environmental impacts across the value chain.

The trend of green acquisitions is spreading from the food, personal care to home care industries. In July, SC Johnson purchased the natural home care & personal care brand Babyganics. Like Unilever, SC Johnson will look to build distribution of its new green brand in mass market channels.

Unilever however is likely to build synergy between its green brands. It previously acquired the natural skincare brand REN, expanding its international distribution. The multinational is also reportedly seeking to add Honest Company to its portfolio. By doing so, Unilever will be the first multinational to have a major presence in the organic food, natural personal care, and natural home care product industries.

Unilever is not the only multinational to go on a buying spree in sustainable product industries. L’Oreal was the first to make major acquisitions when it bought The Body Shop and Sanoflore in 2006. By buying ‘green expertise’, L’Oreal subsequently developed natural & organic lines for some of its popular brands. Colgate-Palmolive and Estee Lauder have also bought green brands, however not all multinationals have been successful. Clarins bought the organic cosmetics brand Kibio in 2010, only to axe it a few years later. There are also questions on how brands like Jurlique and Burt’s Bees have fitted into their ‘adopted parent’ organisations.

Organic Monitor sees the trend of green acquisitions to continue. As will be presented at upcoming sustainability summits, multinationals will buy green brands as they look to enter fast-growing sustainable product industries. Purchasing ‘green expertise’ also helps them achieve their sustainability goals of reducing environmental and health impacts. The major question however is whether the green brands will thrive or survive under their new parentage.

Contact us for more details on our research & consulting capabilities on green investments, mergers and acquisitions.

Sustainable Cleaning Products Summit
Organised by Organic Monitor, the aim of the Sustainable Cleaning Products Summit is to advance sustainability in the detergents industry by debating key issues in a high-level forum. The next edition will be hosted in New York City on 2-3rd May 2017.

Sustainable Cosmetics Summit
Since 2009, the Sustainable Cosmetics Summit has been covering sustainability issues in the cosmetic & personal care industry.
The North American edition will be hosted in New York City on 3-5th May 2017.

Posted: September 22nd 2016

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