Subject category:
Ethics and Social Responsibility
Published by:
Amity Research Centers
Length: 12 pages
Data source: Published sources
Topics:
Jessica Alba; Honest Company; Unicorn; Household products; Growth; Natural products; Eco-friendly; Ethics; Crisis; Lawsuit; Mothers; SLS; Chemicals; Safety
Abstract
Founded in 2012 by Hollywood actress Jessica Alba, along with Brian Lee, Christopher Gavigan and Sean Kane, The Honest Company (Honest) attracted several mothers with its promise of socially responsible and green consumer products for their homes and children. Its diapers and wipes became so popular that Honest became a 'unicorn' company in a matter of merely three years since its inception. With several rounds of funding, Honest reached a valuation of USD1.7 billion by 2015. But a Wall Street Journal expose revealed that the company had used sodium lauryl sulfate or SLS in its detergent, an ingredient it had said it would never use. SLS was known to cause irritation to the eyes and skin. Further, several customers criticised the company's sunscreen as they felt it was ineffective. While Honest dismissed WSJ's report, the negative publicity resulted in several fuming clients filing lawsuits against the brand, accusing it of misleading its customers. Several analysts felt Honest had failed in living up to its promise of being eco-friendly and safe. The whole concept of 'natural' was in itself confusing to people as the FDA had not directly approved or regulated cosmetics and personal care products, neither defined the term. The bad publicity was expected to negatively affect revenues of Honest. With its image severally tarnished, it remained to be seen if Honest could convince customers of the safety of its products and regain their lost trust. Would The Honest Company rise to the occasion?
Time period
The events covered by this case took place in 2015-16.Geographical setting
Countries:
United States; Canada
Featured protagonist
- Jessica Alba (female), Co-founder
About
Abstract
Founded in 2012 by Hollywood actress Jessica Alba, along with Brian Lee, Christopher Gavigan and Sean Kane, The Honest Company (Honest) attracted several mothers with its promise of socially responsible and green consumer products for their homes and children. Its diapers and wipes became so popular that Honest became a 'unicorn' company in a matter of merely three years since its inception. With several rounds of funding, Honest reached a valuation of USD1.7 billion by 2015. But a Wall Street Journal expose revealed that the company had used sodium lauryl sulfate or SLS in its detergent, an ingredient it had said it would never use. SLS was known to cause irritation to the eyes and skin. Further, several customers criticised the company's sunscreen as they felt it was ineffective. While Honest dismissed WSJ's report, the negative publicity resulted in several fuming clients filing lawsuits against the brand, accusing it of misleading its customers. Several analysts felt Honest had failed in living up to its promise of being eco-friendly and safe. The whole concept of 'natural' was in itself confusing to people as the FDA had not directly approved or regulated cosmetics and personal care products, neither defined the term. The bad publicity was expected to negatively affect revenues of Honest. With its image severally tarnished, it remained to be seen if Honest could convince customers of the safety of its products and regain their lost trust. Would The Honest Company rise to the occasion?
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Time period
The events covered by this case took place in 2015-16.Geographical setting
Countries:
United States; Canada
Featured protagonist
- Jessica Alba (female), Co-founder