Sustainable brands are big business for multinationals

Trends of green acquisitions to continue as multinationals look to increase their sustainable product offerings

While it isn’t easy being green for Kermit the frog, if you’re a green brand, the future looks bright.

Take for example London-based Unilever's reported $600 million purchase of natural products company Seventh Generation (Burlington, VT) this week as the latest in a series of green acquisitions. Organic Monitor (London), a research, consulting & training company, predicts the trend to continue as large multinationals look to build a foothold in sustainable product industries.

Seventh Generation is a giant in the North American market for natural home care products. The acquisition expands Unilever’s footprint 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 (Racine, WI) bought the natural home care & personal care brand Babyganics (Westbury, NY). Just like Unilever, SC Johnson will look to grow distribution of its new green brand in mass market channels.

Unilever, on the other hand, is predicted to build synergy between its green brands. It previously acquired the natural skincare brand REN, expanding its international distribution. Rumors are the multinational is also reportedly seeking to add Hollywood actress Jessica Alba’s company Honest Company to its portfolio. If this is the case, 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 first (nor the last) multinational to go on a buying spree in sustainable product industries. L'Oreal (Île-de-France, France) paved the way when it bought The Body Shop (London) and Sanoflore in 2006. By buying 'green expertise,' L'Oreal subsequently developed natural & organic lines for some of its popular brands. Colgate-Palmolive (New York City) and Estee Lauder (New York City) have also bought green brands, however not all multinationals have been successful. Clarins (Neuilly-sur-Seine, France) bought the organic cosmetics brand Kibio in 2010, only to shutter it a few years later. There are also questions on how brands like Jurlique (Mount Barker, Australia) and Burt's Bees (Durham, NC) have fitted into their 'adopted parent' organizations.

Organic Monitor sees the trend of green acquisitions to continue. The research firm foresees 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 parent companies.

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