Challenger to Watch: Drunk Elephant
Drunk Elephant is a growing brand of skincare products, founded by Tiffany Masterson in 2012 and operating with a mission to deliver clinically effective, biocompatible skincare, without the ubiquitous ‘toxins’, sensitizers and irritants that block the pathway to healthy skin.
Tiffany Masterson, Drunk Elephant’s founder.
Its goal is to educate the consumer that ‘natural’ or ‘clinical’ or ‘scientific’ do not necessarily mean ‘good’ and that every ingredient in your skincare products should be examined for its safety and compatibility to enable truly healthy skin.
After it was reported that the company was on track to deliver sales in excess of $100m in 2018 it was acquired by the Japanese cosmetics giant, Shiseido, for $845m in October 2019. Not a bad payday for Ms Masterson’s 7-year journey to pioneering the segment of ‘clean compatible’ beauty.
Taking a closer look at what drove the rapid rise and success of Drunk Elephant, I see four compelling reasons why Drunk Elephant is a bona fide challenger to watch in 2020:
An authentic founder’s story
Drunk Elephant was born out of personal frustration. Its founder, Tiffany Masterson's skin was prone to breakouts and her T-zone - the forehead, nose, brows, lips and chin, was often oily. "Nothing ever really worked, and if it did, it wasn't for long. I started…teaching myself about ingredients, how skin reacts to them, and what roles each play in a formulation," Masterson says on Drunk Elephant's website. "I identified ingredients that were at the root of my issues. I couldn't find products without [those ingredients], so I decided to make them myself." It's a classic case of a founder looking at an industry with fresh, naïve eyes, and spotting an opportunity to address an unmet need in the market.
Creating a new category
Drunk Elephant created an entirely new category of ‘clean compatible’ products, in which it is really the only option to choose, rendering the rest of the competition as ‘incompatible’ with the pursuit of healthy, natural skin. It’s an excellent example of a challenger changing the rules of engagement in a way that gives itself a substantially disproportionate competitive advantage.
Doing more with less
According to Masterson, she didn’t have the resources to hire an agency to develop the brand, identity, logo or icon. Instead, she decided to sit down at the table with her young daughter, some paper and a sharpie, and she pledged to start drawing until she came up with a logo/icon that felt right. Masterson embraced the constraints of no budget, no time and no drawing experience, and found an opportunistic way to create what has become a distinctive and remarkable brand logo and icon. The next time you consider investing millions of dollars with a brand naming or design agency, you might just consider first taking the same approach Masterson did – try to generate a name and logo yourself that ‘just feels right’ and see if you can create an equally compelling idea and solution.
An “800-pound Elephant”
There’s no question that Drunk Elephant has established itself as a successful challenger brand and business. Not many start-ups or emerging challengers can achieve $100m in sales in just seven years or achieve a purchase price with a 7-8x multiple on sales. Which begs the question – will Shiseido allow Masterson and her team to continue to build and develop the brand in line with the original mission and ambition? Or like too many other corporate acquisitions, will Shiseido impose its own set of rules, conventions, habits, routines and culture on the Drunk Elephant team, running the risk of undermining the brand’s momentum and remarkably distinct point of difference and culture. The stated ambition is to build Drunk Elephant into the next $1bn global beauty brand – we’ll be watching with great interest in 2020.
