The Business of Black Hair

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For years, beauty and cosmetics companies have made huge profits on the sale of hair-care products. According to the article “The Great Black Hair Obsession: In Search of Un-nappy Hair,” written by Earl Ofari Hutchinson, Ph.D., for Afrocentric News, beauty product manufacturers racked up more than $10 billion in sales in 1996, with Americans shelling out $1.5 billion for shampoos and more than $1 billion for hair conditioners alone. Blacks bought an estimated one out of five of the toilet and cosmetic products sold, and one out of three of the hair products sold that year.

Hutchinson argues that Black women’s magazines devoted exclusively to hair care play a large role in the gargantuan profits reaped by this industry. The irony is that although Black women continue to be major consumers of the products of the beauty and hair-care industries, the companies that are profiting from these sales are exclusively owned and operated by whites. Key players in the Black hair-care industry, for example, bear such names as L’Oréal, Procter & Gamble, Helene Curtis, Alberto-Culver, Bristol-Myers Squibb and Johnson & Johnson.

L’Oréal Moves In
Although African-Americans comprise just 12 percent of the nation’s population, they spend significantly more on beauty and hair-care products than the typical American. As a result, cosmetic giants such as L’Oréal, which traditionally catered to white women, are now marketing cosmetic shades and beauty and hair-care products for women of color. L’Oréal, the parent company of such brands as Lancôme, Garnier, Maybelline, Matrix, Redken, Ralph Lauren Fragrances, Giorgio Armani Parfums, Kiehl’s and Biotherm, is almost exclusively owned and operated by a white woman—Liliane Bettencourt, the 75-year-old daughter of L’Oréal founder Eugène Schueller. Bettencourt reportedly is the richest person in France she owns 51 percent of Gesparal, the holding company that owns L’Oréal.

Within the last 10 years, L’Oréal has deepened its foray into the Black market, purchasing Soft Sheen in 1998 and Carson Products in 2000. According to Euromonitor, a leading provider of global intelligence and market analysis, the product lines offered by these companies account for approximately 20 percent of the “very fragmented” hair-care sector designed for African-Americans.

In 2003 L’Oréal also opened a multimillion-dollar research and development laboratory in Chicago, L’Oréal Institute for Ethnic Hair and Skin Research, which claims to be the first lab focusing specifically on the beauty needs of people of color. The company is devoting a third of its $360 million R&D budget to Black hair and skin care.

P&G Ups the Ante
Procter & Gamble, owners of Pantene Pro-V Relaxed and Natural Shampoos and Conditioners, which are designed for women of color, took the ethnic hair resource vehicle a step further. Last year, it launched the first ever Academy of Science & Style (www.scienceandstyle.com), a Web site for African-American women with a broad palette of lifestyle topics including hair care, scalp health, skin care, culture, nutrition, fitness, style, well-being and beauty.

“In talking to African-American women, we found out that there was a void of information and women were seeking a go-to research. So that is why we established the Pantene Relaxed & Natural Academy of Science and Style. Our focus is for people to live healthy lives and to better themselves,” says Chiquita White, Academy chair and manager of Pantene research and product development in North America. White, who has a bachelor’s degree in chemical engineering from Massachusetts Institute of Technology and a master’s in the same subject from the University of Pennsylvania, is one of the new African-American corporate faces in the Black hair-care industry.

The Asian Factor
Asians, notably Koreans, are increasingly moving into the business of ethnic hair and beauty care. Chet Bennett, founder and CEO of Canal Systems skin-care products and Bennett Career Institute, the largest cosmetology school in the Washington, D.C., metropolitan area, says they by far outnumber Blacks at his institute.

“The Asian populations are making a lot of money and headway. It’s very difficult to find a lot of African-American nail technicians nowadays. I can tell you there is 1 percent of 11 nationalities coming [to Bennett Career Institute] to take the state board exam to receive their manicure license. If they’ve already captured the manicuring world, what comes next?” he says.

Bennett contends that the Korean monopoly of the nail care industry is attributable to the low prices they charge for their services. “When you have someone who can come in and drastically cut the prices for the same service, what do you think the people are going to do?  If you know that you have been charged, for a good 30 or 40 years, $40 for a manicure, and then you have someone charging $15 for the same manicure, you are obviously going to frequent the cheaper of the two,” he says

Black Companies
Where does this leave Black-owned companies such as Dudley Products Inc., a multimillion-dollar hair care and cosmetics company, and The Bronner Bros. Enterprise, which comprises Bronner Bros. Beauty Products (maker of BB, African Royale and Nu Expressions product lines), Upscale magazine and Bronner Bros. International Beauty Trade Shows? “It definitely puts them at a disadvantage. They are fighting against companies [against whom] they don’t have a chance,” Bennett says. “But in a way it’s a good thing because it makes people like the Dudleys and others realize they have to step up with education and do other things to make sure they get their products out there,” he adds.

The good news is the lucrative Black hair-care market is attracting significant resources from the major beauty conglomerates for the promotion of healthy Black hair. A case in point is the internationally renowned Golden Scissors Awards, founded, produced and directed by Glynn Jackson, president and CEO of Glynn Jackson Productions. This year, the awards, themed “Hairtopia,” has attracted Pantene Relaxed & Natural as a title sponsor for the show’s six-city tour to showcase how African-American women can achieve and maintain healthy and beautiful hair. The dramatic production, which has been held annually for the past 13 years, recognizes some of the industry’s top talents and style influences. It also provides a one-of-a-kind opportunity for stylists, barbers and models to exhibit and compete for cash prizes totaling $10,000. “Hairtopia 2006: The Tour” launched in Philadelphia in January and will continue to Atlanta, Los Angeles, Chicago, Columbia, S.C., and Detroit.

Few and Far
Still, Bennett complains, “The people that are profiting more in the industry are the big conglomerate organizations who have the resources to market in all types of areas and are able to do mass marketing and mass production.”

Korean and mainstream companies even use high-profile African-American hair stylists to market hair products geared toward Blacks. Among the stylists they use are Oscar James, whose clients include Vanessa Williams, Halle Berry, Tyra Banks; Karen Bishop, whose clients include Nia Long, Angela Bassett and Star Jones; and Derrick Scurry, whose clients include Regina King, Loretta Divine and Tomiko.

Even so, Black stylists turned entrepreneurs with their product lines are few and far between and come nowhere near the visibility of mainstream stylists such as Jose Ebar and Jonathan Antin of the Bravo channel’s hit series Blow Out, whose hair-care lines are sold on QVC and Home Shopping Network and sell out within minutes of being shown.

Between the impassioned debate over who really dominates the African-American hair-care industry and the struggle of many of the industry’s Black-owned companies to remain afloat, the business of black hair care has become a hot topic among beauty and cosmetics manufacturers and market watchers. There are real fears that white-owned companies will swallow smaller Black-owned companies as profit margins in Black hair care continue their predicted increase.