Inequity still a pressing issue for Black beauty consumers and brands: McKinsey report

Racial inequity in beauty continues to be a pressing issue impacting Black consumers’ shopping experiences, a recent report from the McKinsey Institute for Black Economic Mobility found—and addressing it represents a $2.6 billion opportunity.

Room for more: The report included a survey of 7,400 Black beauty consumers (conducted in September 2021), plus interviews with 20+ industry execs, such as Tracee Ellis Ross, who started her own natural hair-care line, Pattern, and Lisa Price, founder of Carol’s Daughter, a natural hair-care and beauty brand.

• Black consumers spent $6.6 billion on beauty products in 2021, accounting for ~11% of total US beauty spending.

Yet, their needs haven’t been adequately met. “What I discovered working in person and one-on-one with a chemist is that the efficacy of products is actually based on what straight, blond hair does,” Ellis Ross said. “The clumping, slip, and hydration your hair gets—those three terms were something these chemists have never heard of—and so if they didn’t know what those things were, there was no way to translate the information I needed.”

Stumbling blocks: The report also highlighted the challenges faced by Black founders, execs, and employees within the industry: In 2021, Black-owned beauty brands only made up 2.5% of the revenue within the US beauty industry, which McKinsey valued at $60 billion.

• A disparity in private-equity funding and lack of diversity among industry workers and ads were some of the top concerns raised by the beauty insiders McKinsey spoke to for the report.

It also found that Black-owned beauty brands that receive VC investment raise an average of $13 million in VC funding. By contrast, non-Black-founded beauty labels raise an average of $20 million.—JS