Unilever recently announced that it has signed an agreement to acquire a majority stake in hair-growth company Nutrafol. Unilever currently holds a minority stake (13.2%) in Nutrafol through Unilever Ventures.
As part of Unilever’s Compass Strategy, the company defined five strategic priorities, one of which is to “develop our portfolio into high growth spaces, positioning Unilever for faster growth.”
The company has identified Functional Nutrition, including vitamins, minerals and supplements, as a key growth space of the future and has already built a €1.5bn Functional Nutrition business, including €1bn in VMS. Unilever said it is approaching Nutrafol the same way as it has handled its Prestige business over the last five years.
Pump up the volume
Unilever’s chief executive officer, Alan Jope, said he is aiming to triple the size of Unilever’s Prestige beauty business, which includes Dermalogica, Ren, Hourglass, Paula’s Choice and Living Proof, from 1 billion euros to more than 3 billion euros in the next few years.
Beauty and Personal Care was the largest Unilever division by turnover in fiscal 2021, with Prestige Beauty being one of the fastest-growing parts of that portfolio, making double-digit gains over the past year.
During a February conference call with reporters following Unilever’s full-year results announcement, Jope said prestige and wellness products, such as vitamins and supplements, are now making “meaningful contributions” to overall sales growth and the company wants in.
“We’ve already identified what we think are the most attractive growth prospects, and you can see evidence of that in our behavior over the last three years. The bulk of our capital deployment in M&A has been in luxury beauty, health and well-being and in the VMS (vitamins, minerals and supplements) business, and we think those trends are going to continue,” said Jope. “The world is becoming a little bit more affluent, and that’s associated with an increased concern with health and well-being. It’s a secular trend, and we are absolutely resolved to move our portfolio in that direction.”
Unilever told NutraIngredients-USA that it has acquired expertise across VMS, beauty and hair (which now all sit under the Beauty & Wellbeing Business Group), with Nutrafol playing at the intersection of all three–which is where Unilever's expertise could really add value.
Primed to scale
“By acquiring a majority stake, we have incredible access to Unilever resources and support as we continue to accelerate and grow every aspect of our business. As a dynamic company, we’ll be able to maintain company integrity while supercharging growth, product development, research and talent,” said Giorgos Tsetis, Co-Founder and CEO of Nutrafol.
Tsetis told NutraIngredients-USA that this partnership allows Nutrafol to maintain and expand its role. “It’ll also allow us to accelerate growth, product innovation and the potential to reach more people globally. This partnership will also provide more resources and opportunity internally for the Nutrafol team. Without them, this significant moment would not have been possible. The acquisition allows Nutrafol to continue our mission of helping more people, globally, while maintaining the integrity and quality of the Nutrafol product, company and its people."
On the heels of this majority stake acquisition, the hair wellness from within brand is expanding into topical products.
“This week Nutrafol announced a new collection, Scalp Microbiome Support. After years of clinical research, our team of physicians and scientists formulated this suite of products to help to balance the scalp microbiome, creating the optimal ecosystem for healthy hair. This product line compliments our award-winning nutraceuticals and continues our holistic approach to hair health. The collection includes the Build-Up Blocker scalp exfoliating mask, the Root Purifier cleansing shampoo, and the Stress Reliever scalp microbiome rebalancer with soothing botanicals,” said Tsetis.
He added that he will stay on as CEO and there are no planned leadership, operational or larger team changes. The company will continue to stay headquartered in New York City.
“We’ve always been a people first organization, and remain committed to that. People and culture remain critical to the success of Nutrafol.”