by Nahlah Abdur-Rahman
March 13, 2024
Black beauty brands are taking over, emerging as the go-to companies for shoppers of all races.
A new report has revealed an uptick in sales for Black-owned beauty brands from shoppers of all backgrounds. However, the upward trend comes amid a decline in venture funding for these very companies.
The Economic Advancement Report by the Braintrust Founders Studio recorded that consumer spending reached $142 million in 2023. The data was collected through the studio’s partnership with 209 beauty company founders whose sales reached the amount. Black women accounted for 91% of the group.
The numbers increased by 42% from 2022, with venture-backed companies only accounting for a little under $100 million in sales. The racial diversity of customers and increased profits are assumed to stem from the social media followings of these founders and their companies. The racial makeup of their follower lists reflects the demographics of shoppers.
The news also comes at a time when venture capital funding is scarce for diverse entrepreneurs, especially women, as venture funding for Black founders has dwindled to .05%. While this obstacle has prevented newer Black-owned beauty brands from taking off, it has not stopped established companies from growing.
Fortunately, the data assures that these businesses are not dependent on a majority Black consumer base for profits. In fact, customers of Asian, Hispanic, and white descent combined bought more products than their Black counterparts.
“These data further prove Black entrepreneurs create beauty and wellness products that everyone buys,” explained Kendra Bracken-Ferguson and Lisa Stone, co-founders of the BrainTrust Fund. “Despite the fact that venture funding to Black founders has fallen to a three-year low, Black beauty and wellness entrepreneurs are growing the American economy with new, innovative products and services that drive sales by leading retailers, online and in-store, and create jobs. We are celebrating this commercial and cultural leadership by our members, most of whom are Black women.”
This achievement indicates the profitability and longevity of Black beauty brands. As they find new ways to thrive within the beauty and wellness sphere, they are also forging a path for more diverse founders to come next.
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