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Good morning! It's Monday, May 20th. Today’s post looks at a company that has exploded in the beauty space and had a massive acquisition.

THE FEATURE

In 2012, Tiffany Masterson, a stay-at-home mom from Texas, found herself frustrated by her skincare struggles. Inspired by the myth that elephants become drunk after consuming marula fruit she created the beauty brand Drunk Elephant, driven by a commitment to clean and effective ingredients.

Masterson believed that skincare should be simple, yet highly effective, and that less is more when it comes to achieving healthy, radiant skin. She also believed that the main culprits of toxicity in beauty brands boiled down to six key ingredients.

The Drunk Elephant Difference

At the core of Drunk Elephant's philosophy lies a dedication to formulating products with clinically-effective ingredients that are free from the "Suspicious 6" – essential oils, drying alcohols, silicones, chemical screens, fragrance/dyes, and SLS (sodium lauryl sulfate). Instead, the brand focuses on powerhouse ingredients like vitamin C, peptides, and plant oils that work synergistically to nourish and transform the skin.

One of Drunk Elephant's standout products is the T.L.C. Framboos Glycolic Night Serum a potent blend of glycolic, tartaric, lactic, citric, and salicylic acids that gently exfoliates, refines texture, and minimizes the appearance of pores while you sleep. On the heels of products like this combined with the power of social media and utilizing UGC, the brand has exploded in recent years.

Expanding the Herd

Since its inception, Drunk Elephant has expanded its product lineup to include a comprehensive range of skincare essentials, from cleansers and moisturizers to serums and sunscreens. Each product is formulated with the same attention to detail and commitment to clean, effective ingredients that have become synonymous with the Drunk Elephant brand.

In recent years, Drunk Elephant has experienced rapid growth and widespread acclaim, becoming a favorite among beauty enthusiasts and skincare experts alike. The brand's dedication to transparency, sustainability, and innovation has earned it a loyal following, especially on social media. Drunk Elephant also has an incredibly streamlined sales process, with most of its sales coming from Sephora or their website.

Capitalizing on Sales

In 2019, Shiseido Group announced that it would acquire Drunk Elephant for $845 million, a valuation that was 8.5 times their annual sales. The beauty industry is annually worth over $500 Billion, so many saw this as a smart play. Since then, they’ve been doing enormous numbers and continued to solidify themselves as one of the new pioneers of clean beauty.

But in late 2023 they faced some controversy. As their social channels continued to explode and make their products desirable, it made younger social media interested in the company. Primarily using TikTok, tweens saw Drunk Elephant as trendy and cool, putting their products atop their wish list. This caused parents to be wary over whether the ingredients were safe for youngsters and be cautious about the high price tag.

It seemed that the very thing that helped Drunk Elephant pop - social media and the warm reception it received - had also become the very thing negatively affecting the brand as negative UGC and negative reviews started rolling in. Youngsters even started to damage the packaging and products in Sephora in an apparent attempt in joining in on the online fervor.

Although they’ve had a rocky road recently, Drunk Elephant shows no signs of slowing down. It’s clear that in today’s market, consumers value their health and the products that they use on their body. Drunk Elephant is trying to be at the forefront of that, regardless of what direction social media takes them.

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