Unilever expands in men’s grooming with Dollar Shave Club acquisition
The California-based company has risen to success by using an online subscription service that first started off supplying shaving products to men’s doors when it was founded in 2012.
In the course of the last year the company's portfolio has been successfully expanded to include both full skin and hair care lines and now has an estimated 3.2 million subscribers.
The acquisition means that Unilever will be extending its footprint into the all-important US personal care market, as well as the fast growing men’s grooming category, which in recent years has demonstrated above industry average growth off the back off significant product innovation targeting younger male consumers.
Right place at the right time
Dollar Shave launched on the market with a no fuss, easy-to-use subscription service that also undercut the price of razor blades offered by the main competitors in the market. This was backed with a snappy social media campaign that captured the imagination of its customers.
“Dollar Shave Club is an innovative and disruptive male grooming brand with incredibly deep connections to its diverse and highly engaged consumers,” said Kees Kruythoff, President of Unilever North America.
“In addition to its unique consumer and data insights, Dollar Shave Club is the category leader in its direct-to-consumer space. We plan to leverage the global strength of Unilever to support Dollar Shave Club in achieving its full potential in terms of offering and reach.”
Growth continues with category additions
Its success has built the business into a major men’s grooming player with a turnover of $152 million in 2015. And building on strong projected growth, the business is on course to achieve a sales turnover in excess of $200 million in 2016, mainly thanks to its expansion into skin and hair care.
Indeed, many experts have pointed to the success of the Dollar Shave Club as the main reason why revenues from men's grooming and shaving have seen a sharp fall at Procter & Gamble in recent years.
The fact Dollar Shave has now been bought by Procter & Gamble’s biggest competitor in the personal care arena should serve to make the dynamics between the two businesses all the more interesting.
Procter & Gamble lawsuit
But given that Procter & Gamble launched a lawsuit against Dollar Shave alleging design infringement at the end of last year, it may not come as a surprise that the business was acquired by its biggest competitor.
The lawsuit stated that Dollar Shave was breaking the law through unauthorized use of patented technology and that the action was taken to protect Gillette’s research and development investments in the field of razor technology.
The lawsuit also specified that the company is seeking damages and an injunction to prevent Dollar Shave Club from the future sale of any products that infringe Gillette’s patented technologies.
The action by P&G resulted in Dollar Shave counter-suing earlier this year, claiming that it had infringed none of the company’s patents.