Consumer Packaged Goods Practice

Black representation in
the beauty industry
Black beauty consumers and brands face deep challenges when
it comes to equity. Removing those barriers can lead to greater
opportunity for everyone in the industry.
by David Baboolall, Tiffany Burns, Kristi Weaver, and Ammanuel Zegeye

© Osato Dixon

June 2022
 Hair, makeup, and skin care: for billions of people
worldwide, beauty products are a fundamental
part of how others view them and how they see
themselves. With taglines such as “because you’re
worth it” and “making life more beautiful,” the
beauty industry promises to enhance not only
people’s appearances but also their lives.
Beauty also happens to be a very lucrative business.
Over the past decade, Americans have spent more
than $500 billion on beauty products. Last year
alone, the US beauty industry was worth $60 billion,
and with a compound annual growth rate (CAGR) of
5 percent, it’s expected to reach $73 billion by 2025.
Likewise, spending on beauty is robust among Black
Americans, a diverse and growing group of 41 million
people with increasing spending power. In 2021,
they spent $6.6 billion on beauty. That’s 11.1 percent
of the total US beauty market, lagging slightly
behind the 12.4 percent Black representation in
the total US population. Yet, despite significant
spending by the Black community, the prospect of
equity in the beauty industry, like in so many other
industries, has been elusive. Our analysis shows
that Black people’s experience within the beauty
industry is markedly more frustrating than that of
other people and filled with multiple friction points
that non-Black consumers, entrepreneurs, and
brands are less likely to face (see sidebar “Black
beauty at a glance”).
Consider, for example, that Black brands—defined
as either Black-founded or Black-owned—make
up only 2.5 percent of revenue in the beauty
industry, yet Black consumers are responsible for
11.1 percent of total beauty spending. Or that Black
consumers simply don’t see themselves in beauty

Black beauty at a glance

Black people’s experience within the beauty industry is markedly more frustrating than that of non-Black people and filled with
multiple friction points:

— Black brands make up only
2.5 percent of revenue in the
beauty industry. Yet Black
consumers are responsible
for 11.1 percent of total
beauty spending.
— Black consumers are three times
more likely to be dissatisfied than
non-Black consumers with their
options for hair care, skin care,
and makeup.
— Black consumers show an affinity
and preference for Black beauty
brands and are 2.2 times as likely to
conclude that products from those
brands will work for them. However,
only 4 to 7 percent of beauty brands
carried by specialty beauty stores, — Addressing racial inequity in the
drugstores, grocery stores, and beauty industry is a $2.6 billion
department stores are Black brands. opportunity. Better serving Black
consumers and supporting Black
— From entry-level to the C-suite and beauty brands could lead to
from retailers to beauty houses, only greater equity across the entire
4 to 5 percent of all employees in the beauty industry—for shoppers,
US beauty industry are Black. entrepreneurs, large beauty houses,
retailers, and investors.
— Black brands in the beauty industry
raise a median of $13 million in
venture capital, substantially less
than the $20 million that non-Black
brands raise. Yet today, the median
revenue of those Black brands is
89 times higher than what non-
Black beauty brands return over
the same period.

2 Black representation in the beauty industry

 advertisements on TV, in magazines, or on billboards
because of a lack of diversity in ad campaigns.
Black consumers also don’t have access to quality
beauty products the way that non-Black shoppers
do, and when they do, it is harder for them to find the
products they are looking for.
Such frustrations emerge in parallel to the
experiences of Black entrepreneurs looking to
make headway in the beauty sector. In theory,
Black brands—whether Black-founded, Black-
owned, or both—are well-positioned to serve
the needs of Black consumers. But the beauty
industry has not historically fostered a hospitable
ecosystem supportive of Black-run businesses.
Entrepreneurs often lack access to important
market data and research, and there is a lack
of Black representation across all levels of
management among retailers, large beauty brands,
and investors. Perhaps most critically, there’s a
dearth of funding for Black beauty entrepreneurs
at all stages of development, even when Black
brands have proven to be more successful than
their non-Black beauty start-up counterparts.
To better understand why the Black beauty
experience is so challenging—and to dig into
the massive opportunity to better serve Black
consumers given their significant spending on
beauty products—we conducted two surveys and a
focus group about the consumer experience in the
beauty sector. We analyzed retail-store placement
among Black and non-Black populations and
examined the placement of Black beauty products
within stores. We also conducted dozens of
interviews with insiders at beauty companies to hear
more about their experiences (see sidebar “About
the research”). And we collaborated with several

About the research

We took a quantitative and qualitative approach to our research on Black representation in the beauty industry.

The bulk of our quantitative findings
came from two McKinsey surveys. The
first survey queried 1,268 Black beauty
consumers about their satisfaction
with current beauty offerings and their
willingness to spend on more tailored and
effective beauty products. The second
survey of 6,200 Black consumers asked
more general questions about spending
habits and customer satisfaction. We
also conducted a virtual focus group
of 110 Black consumers who purchase
at least $20 of beauty products each
month. They helped us understand the
motivations behind Black consumer
beauty purchases and how these
consumers view both Black and non-
Black beauty companies. Our geospatial
analysis compared retail store locations
with the Black population concentration
in those locations. We visited 102 retail
outlets across the country that Black
beauty consumers commonly frequented
and assessed product placement,
brand promotion, and sales associate
knowledge of Black beauty consumer
needs.
Our analysis went beyond crunching
the numbers, so we could better
understand the richness of experiences
for both Black beauty consumers and
entrepreneurs. We conducted in-depth
interviews with more than two dozen
beauty industry insiders—including
Black beauty founders, retail executives,
and Black chemists—covering
everything from the unique challenges
faced by Black beauty consumers to
the financial, experiential, and logistical
hurdles impeding the success of Black-
founded and Black-owned beauty
brands. Finally, we collaborated with a
select group of nine prominent Black
beauty industry leaders, including
founders, CEOs, and top executives at
influential beauty brands.
Unless they agreed to be named, we
granted our interviewees anonymity
so they could speak openly about their
personal experiences.
Our research follows previous McKinsey
reports that explore the disparities and
discrimination that Black consumers
face in America today while also
pointing to the opportunities created
by serving the community. Last year,
McKinsey published “A $300 billion
opportunity: Serving the emerging
Black American consumer” and “Black
consumers: Where to invest for equity.”
Our colleagues also took a deep dive
into the entertainment industry with
“Black representation in film and TV: The
challenges and impact of increasing
diversity.”

Black representation in the beauty industry 3

 prominent Black beauty industry executives to get
their input as we developed our research.
In this article, we share the findings of our
research and suggest a path forward. This work
complements and builds upon a broader body
of research conducted by McKinsey’s Institute
for Black Economic Mobility to understand the
structural challenges facing Black people and the
vast untapped economic opportunities, including
better serving Black American consumers, creating
an environment where Black-owned businesses
can succeed, and exploring how consumer-facing
companies can invest for equity. Our analysis
suggests that creating a path to a more equitable
beauty market represents a $2.6 billion opportunity,
and the road forward—while perhaps not easy—is
clear. We describe several changes that the
beauty industry can undertake, from starting
with better research about Black consumers to
increasing representation in the industry, from the
sales associate up to the C-suite level, to better
partnerships with, support of, and investment
in Black brands. By taking some bold steps and
opening the gates to more Black entrepreneurs who
can innovate with products for Black and non-Black
consumers, the beauty industry can enact authentic,
permanent, and beneficial change and create
substantially more economic upside in the quest for
greater equity.
The Black beauty consumer’s
shopping experience
As with any product, the consumer should always
be at the center of all considerations. As Desirée
Rogers, current CEO and co-owner of both the
28-year-old beauty brand Black Opal and the
56-year-old Fashion Fair, told us, “We have to start
with the needs of the consumer. They’re not only
telling us what they want, but they’re also telling us
where we’re falling short.” From finding out what hair,
skin, or makeup products are available to seeking
out a specific product, buying it, and potentially
becoming a repeat shopper, the Black consumer
encounters multiple points of friction throughout the
entire purchasing process. These barriers include
4 Black representation in the beauty industry
a lack of marketing, poor access to stores, limited
availability of products, and poor customer service.
Marketing. Advertising often sets the tone for
the consumer experience with a beauty brand.
According to a Nielsen survey, only 2 percent of
the total money spent on advertising in the United
States from 2011 to 2019 went toward Black-
oriented TV stations, magazines, and websites.
In our focus group, we found that many beauty
advertisements—regardless of whether they were
on TV, in print, or online—didn’t resonate with
Black audiences because they neither portrayed a
diverse population nor spoke to people with more
melanin in their skin and curls or kink in their hair.
Tracee Ellis Ross, founder and CEO of natural-hair-
product company Pattern Beauty, recalls that the
beauty advertisements of her childhood offered
help for curly hair but didn’t do what they promised
for her type of curly hair. “The marketing for hair
products didn’t reflect images that looked like me,
nor did the products provide what my curly and
coily hair needed.”
Fewer than half of the respondents in our focus
group had positive feelings toward advertisements
from non-Black beauty companies, saying they did
not feel represented. In contrast, they felt a much
stronger connection to Black brands, responding
with sentiments such as, “I feel it’s inclusive and
represents me” or “It makes me think how beautiful
Black people are.”
Our focus group research suggests that 75 percent
of Black beauty consumers can be persuaded
to purchase beauty products by ads that feature
various skin tones across all races. Conversely,
75 percent can be dissuaded from purchasing a
product when an advertisement does not reflect
racial diversity. Our research also suggests that
Black consumers have an affinity toward Black
brands and are 2.2 times more likely to conclude
that products from Black brands, as compared with
non-Black brands, will work for them.
Lack of accessibility to stores. Many Black
neighborhoods are in “consumer deserts” with
insufficient access to goods and services. That
means when it comes to finding retail outlets that
might offer higher-quality beauty products, Black
consumers have fewer options and have to travel
further than White consumers. For example, there
are nearly three times the number of specialty
beauty stores within a mile of predominantly White
neighborhoods than there are within a mile of Black
neighborhoods. On average, Black consumers
travel 3.36 miles to a specialty beauty store, about
21 percent further than White consumers. Black
consumers also need to travel more than 17 percent
further than White consumers to department stores
to access expert customer service from behind a
makeup counter (Exhibit 1).
Lack of product availability. Once Black
consumers find their way to a retail location that
sells beauty products, it’s hard for them to find
what they’re looking for. There aren’t enough
brands on the shelves suitable for melanated
skin or Afro-textured hair. When stores do carry
them, oftentimes, Black beauty brands are out of
stock, and what’s in stock is often poorly placed
on shelves. “I go into a drugstore right now and I
cannot find my shade. Can’t find it!” said Black Opal
and Fashion Fair’s Rogers.

‘I go into a drugstore right now and I

cannot find my shade. Can’t find it!’
—Desirée Rogers, CEO and co-owner of Black Opal and Fashion
Fair Cosmetics

Web <2022>
<Black representation in beauty>
Exhibit <1> of <9>
Exhibit 1
Distance of stores
Distance of storesfrom
fromhome
homeleaves
leavesBlack
Blackconsumers
consumers fewer
fewer options
options forfor
purchasing beauty products.
purchasing beauty products.
Average distance from residence to nearest store, US,1 miles
Distance traveled by Black
Black consumers White consumers consumers compared
with White consumers
Department store +17.3%
Specialty beauty +21.4%
Mass/grocery +15.5%
Drugstore –3.7%
0 1 2 3 4 5 6

1
Analysis applied per ZIP code, and for urban areas only to preserve consistent population density.

Black representation in the beauty industry 5

 Forty-seven percent of our survey respondents said that when they were in stock, they were hard to find
they typically buy beauty products at a mass-market (Exhibit 3). And until recently, many chain stores
retailer or a grocery store, yet only 13 percent said kept Black beauty products locked up in cases,
it’s easy to find beauty products that meet their requiring interested consumers to jump over the
needs there. Many prefer to shop at beauty supply humiliating hurdle of asking for permission to be
stores, but as previously stated, those are harder to able to look at the products and packaging.
get to (Exhibit 2).
When product placement is good, it can come as a
Even at beauty specialty stores, which often pride surprise. One Black beauty consumer told us that
themselves on the range of shades they offer, when she visited a drugstore in a predominantly
there’s a mismatch between what they think works Black city, she was surprised to see three or four
and what actually works. “I visited with a retailer that Black-owned brands with their displays at the
we were trying to get into,” says Rogers. “I was told, front of the store. “I had never seen that before,”
‘We win so many awards for our diversity. If you go she recalled. “I saw myself in those displays and
into our stores, you will see we have every shade of spontaneously bought a lip gloss.”
foundation.’ I bought as many colors as close to my
shade as were available. None of them worked.” Poor sales experience. Black consumers often
have a sour in-store shopping experience because
Another barrier is that even if a retailer does carry sales associates lack knowledge about Black
beauty products that meet Black consumers’ needs, beauty products. Personalized advice is critical in
they‘re hard to find on shelves. Seventy-three influencing beauty sales, and sales associates often
percent of our survey respondents reported that have the power to encourage or discourage people
Black beauty products were often out of stock when from purchasing specific products.
they went to buy them. Fifty-four percent reported
Web <2022>
<Black representation in beauty>
Exhibit <2> of <9>
Exhibit 2
Black beauty consumers
Black beauty consumershave
havedifficulty
difficulty finding
finding products
products that
that meet their needs
meet their needs
at the retailers
at the retailers where
where they
they most
mostcommonly
commonlyshop.shop.

Single most common retailer for in-store beauty purchases, US,1 % of Black respondents

Mass/grocery Drugstore Department store

47 20 19 10 3

Beauty supply store Specialty Salon

beauty 0
100%

Share of Black respondents reporting that it is easy to find beauty products to meet their needs
by store type, US, %

Mass/grocery Beauty supply store Drugstore Specialty beauty Department store Salon
13 51 12 22 12 31

1
Figures do not sum to 100%, because of rounding.
Source: Remesh online consumer survey, Sept 8, 2021 (n = 110)

6 Black representation in the beauty industry

 Web <2022>
<Black representation in beauty>
Exhibit <3> of <9>
Exhibit 3
In-store shopping
In-store shoppingchallenges
challengesfaced
facedby byBlack
Blackcustomers
customersinclude
includeout-of-stock
out-of-stockand
and poorly placed products, as well as lack of sales associate knowledge.
poorly placed products, as well as lack of sales associate knowledge.
In-store shopping impressions, US, % of Black respondents agreeing with statement

Products for Products for Sales associates Sales associates

Black customers Black customers are can have sophisticated make knowledgeable
are often harder to find due discussions about products recommendations
out of stock to in-store placement for Black consumers for Black consumers
73 54 23 13

Source: Remesh online consumer survey, Sept 8, 2021 (n = 110)

In our focus group’s experience, sales associates
were not knowledgeable about products
for Black consumers. Only 23 percent of our
respondents said that salespeople could have
sophisticated discussions about Black beauty
brands and products. And only 13 percent said
that sales associates could make knowledgeable
recommendations for Black consumers. That may
stem from a lack of diversity among store associates
combined with insufficient systemized training
of associates on Black customers’ needs and
interests. When there is at least one Black sales
associate in the store, Black consumers are almost
twice as likely to find someone who provides a very
or somewhat helpful answer regarding products
designed for darker skin tones. One Black female
consumer told us how “it’s helpful to have someone
who looks like you doing the consultation and who
understands what a product should look like on you.”
Even after buying a beauty product, there’s no
guarantee that Black consumers’ will repeat their
purchase, usually because the products didn’t work
as consumers hoped they would. One consumer
told us, “Finding the right item takes a lot of time,
money, and effort. I’ve gone through six or seven
foundation swatches trying to find one that matches,
and if it doesn’t work, I’m not going to buy it again.”
Black customers are 5.7 times more likely than
White customers to be dissatisfied with product

‘It’s helpful to have someone who looks

like you doing the consultation and who
understands what a product should look
like on you.’
—Black female cosmetics consumer

Black representation in the beauty industry 7

 Web <2022>
<Black representation in beauty>
Exhibit 4 of <9>
Exhibit <4>
Black consumers
consumersare arenot
notbeing
beingoffered
offeredthe
theright
rightproducts
productstotomeet
meettheir
specialized needs.
specialized needs.
Reported dissatisfaction due to product/service failing to meet racial/ethnic needs,
by specialization category, US, % of respondents
Black consumers White consumers
Makeup
Skin care
Hair care
0 5
Source: McKinsey Black Consumer Survey, May 2021 (n = 6,200)
specialization in color cosmetics and 2.9 and 1.6
times more likely to be dissatisfied with skin care
and hair care products, respectively (Exhibit 4).
Black women can often struggle to find
meaningful beauty experiences with big brands.
That is particularly the case with non-Black brands.
“There is heightened sensitivity around hair and
skin because we were previously excluded [from
these product categories],” one Black beauty
consumer told us. “It’s such a personal and
emotional experience and relationship that we
have with the industry.”
Given all of the pain points when shopping for
beauty products, Black consumers seem open to
the possibility of switching brands for something
different. Ninety-five percent of our survey
respondents say they would consider switching
away from their current brand. Fifty-seven
percent of our survey respondents said they
would intentionally refer Black-owned brands to
a friend; 53 percent would recommend a Black-
founded brand even if it were not Black-owned;
and only 16 percent said they would recommend
non-Black owned beauty brands.
Barriers to building a Black
beauty brand
In theory, Black brands are in a prime position to
gain more business. Black consumers are turned
off by the friction they encounter when it comes to
8 Black representation in the beauty industry
their
Difference
5.7×
2.9×
1.6×
10 15 20
purchasing beauty products and are also drawn to
the promise of what Black brands can offer, with
83 percent of our survey respondents saying they
prefer to purchase Black brands. Consumers have
more to choose from than ever before, with the
number of Black beauty brands in the market nearly
doubling in the last decade alone (Exhibit 5).
But the reality doesn’t seem to live up to this
potential. Regardless of the type of retail store—
whether it’s a drugstore, mass-market store,
specialty beauty retailer, or department store—
beauty products from Black brands make up less
than 7 percent of what’s on shelves. The limited
brand selection serves as an impediment for both
Black consumers who lack choice and for Black
brands that have constrained opportunities to
access a broader set of customers.
Those limitations translate into reduced revenue
too. Black beauty brands capture only 2.4 percent
of revenue in the overall beauty market, lagging
far behind the 11.1 percent of the Black consumer
spend on beauty products, and the 12.4 percent of
Black people in the US population (Exhibit 6). “If we
know that a large percentage of Black consumers
say they would prefer to buy from a Black-owned
or Black-founded company, how do we bring that
to life?” asks Rogers. “Because today we’re not
bringing that to life. And that can’t just be placed on
the shoulders of the Black-owned companies and
the founders. There’s got to be some noise in the
system that will allow the natural evolution for us to
get to 10 percent.”
Web <2022>
<Black representation in beauty>
Timeline for print
Exhibit 5
The number
The number of
of Black
Black beauty
beauty brands
brands in
in the
the market
market has nearly doubled
has nearly doubled in
in the
the
last decade.
last decade.
Black beauty brands by year founded, each square = one Black beauty brand

1960 1970 1980 1990 2000 2010 2020

Note: As of June 10, 2022

Web <2022>
<Black representation in beauty>
Exhibit 6 of <9>
Exhibit <5>

Despite
Despitetheir
their positive
positiveattributes
attributesand
andperception,
perception,Black
Blackbrands
brandscomprise
compriseless
less
percent of
than 3 percent of overall
overall beauty
beauty revenues.
revenues.

Annual US beauty sales revenue by product category,1 $ billion (approximate)

Black-founded, Black-owned company Black-founded, non-Black-owned company Total

60
Hair care Makeup Skin care

15 20 25

1.2
0.4 0.6
0.2

0.1 0.1 0.03 0.23

Sales revenue Aug 16, 2020–Aug 16, 2021; Nielsen, IRI, and Stackline have been matched to beauty categories using the following equivalencies: makeup
1

(face/facial, eye, and lip cosmetics; cosmetics accessories; tinted moisturizers and correcting creams; powder and liquid foundation; face highlighters and
illuminators; bronzers; makeup sets and pallets; makeup-setting powders and sprays; face concealers and neutralizers; blush; face makeup primers); hair care
(hair coloring, conditioner, spray/spritz, styling gel/mousse, shampoo, shampoo and conditioner sets, hair wigs, extensions and accessories, hair care treatment
oils, hair and scalp treatments, other hair care); skin care (eye skin care, facial cleanser, facial-cleanser wipe, facial moisturizer, facial-skin appliances, facial
toner, facial treatment, remaining facial skin care, hand and body lotions, suntan products, facial toners, facial astringents and sprays, facial exfoliators, polishes
and scrubs, facial care sets and kits, facial and sheet masks, facial serums and peels, facial acne treatments, patches and strips).
Source: Euromonitor; IRI; Nielsen; Stackline

When we differentiate between Black-owned
beauty brands and Black-founded (but not Black-
owned) businesses (see sidebar “Black-founded
or Black-owned: Does it matter?”), we find that
Black-owned brands struggle even more to get
market share. Of the 45 Black beauty brands we
identified, nine are not Black-owned, but they
generate 82 percent of the total annual revenue
of those brands. The remaining 36 brands share
the remaining 18 percent of revenue (Exhibit 7).
As a group, Black beauty brands have yet to reach
their revenue potential. That’s because they face
substantial impediments throughout their quest to
go to market and develop a loyal customer base.

Black representation in the beauty industry 9

 Black-founded or Black-owned: Does it matter?
We took a quantitative and qualitative approach to our research on Black representation in the beauty industry.

Although most Black beauty brands—
defined as companies that market their
hair care, skin care, and cosmetics
to Black consumers—were founded
by Black entrepreneurs, many of
them have been acquired over the
years by larger beauty companies
and are not currently owned by Black
businesspeople. When asked if they
could identify which brands were
Black-founded and Black-owned,
most of our Black consumer survey
respondents were unable to get it right.
And only 32 percent identified a Black-
founded or Black-owned brand as their
favorite beauty brand.
Yet 92 percent of our survey
respondents said that supporting a
Black-owned brand was important to
them when choosing what to buy. This
statistic suggests Black owners suffer
from a lack of visibility, since what
should be an advantage for Black-
owned brands is, at best, diluted across
all Black-founded brands. That means
Black beauty founders—who have lived
experience in the beauty industry and
have created brands to serve people like
them better—carry an additional burden.
They not only have to create stellar
products but also have to spend extra
time ensuring that people are aware that
the companies that make these products
are Black-owned (exhibit).

Web <2022>
<Black representation in beauty>
Exhibit
Sidebar exhibit <1> of <1>

Supporting Black-owned
Black-ownedbrands
brandsisisimportant
importantfor
forBlack
Blackbeauty
beautyconsumers,
consumers,
although aa disconnect
although disconnectexists
existsininidentifying
identifyingownership
ownershipofofBlack
Blackbrands.
brands.

92% 45%
share of Black beauty consumers share of Black beauty consumers
who say supporting Black-owned brands who were able to correctly identify
is important to their buying decisions Black brands as being Black-owned

Source: Remesh online consumer survey, Sept 8, 2021 (n = 110)

10 Black representation in the beauty industry

Web <2022>
<Black representation in beauty>
Exhibit <6> of <9>
Exhibit 7
More than 80 percent of Black-founded brand revenue is captured by brands
More than 80 percent of Black-founded brand revenue is captured by brands
that are not Black-owned.
that are not Black-owned.
Black-founded beauty brand ownership and annual revenue by ownership, US
Black-founded;
Black-owned
36
Number of
Black brands
% of total annual
Black brand revenue1 18
Sales revenue equivalent categories Aug 16, 2020–Aug 16, 2021.
1
Source: IRI; Nielsen; Remesh survey; Stackline
Insufficient data and research. To begin with, all
entrepreneurs should utilize the research and
market data necessary to develop products and
build a business plan. But Black populations are
often overlooked. Says Pattern Beauty CEO and
founder Ross, “There’s never data to support what
we need, how we shop, what we do, and what our
practices are. Folded into that is unconscious bias
against a vast community of people who are often
invisible. Data will help support and give actual
information and knowledge of who we are.”
Many Black beauty ventures are rooted in personal
experience, and sometimes entrepreneurs have
not received the business training that would
help emphasize the importance of leveraging
data. Moreover, those data are costly. Black
entrepreneurs can often start out at a disadvantage
because they may not have the initial capital to pay
for that research. Black households, overall, have
lower income and wealth. Last May, McKinsey
surveyed 25,000 Americans on their views of
economic opportunity. Black respondents were
the most likely to say that their level of debt had
increased in the previous year.
Oftentimes, research or data about Black beauty
products doesn’t exist. Black consumers are
more likely than others to shop at beauty supply
wholesale stores, which typically do not track
point-of-sale data, creating a significant blind
spot in available market data. As an executive at
a growing Black brand pointed out to us, this can
Black representation in the beauty industry
Black-founded;
non-Black-owned
9
82
affect a brand’s valuation or ability to obtain funding:
“Obtaining money is hard because there is a lack of
data quantifying demand since beauty supply stores
are a major distribution channel and don’t have to
provide point-of-sale data.”
There’s also a lack of scientific research for beauty
products geared to Black consumers. For decades,
large multinational beauty brands were focused
primarily on non-Black skin and hair. The beauty
executives we spoke with told us they had trouble
hiring Black chemists to do research in labs and
also that there was underrepresentation of Black
participants in clinical trials. “What I discovered in
working hands-on with chemists is that the efficacy
of products is typically based on what straight,
blond hair does,” says Ross about her early days
in setting up Pattern Beauty. That means there’s
missing consideration for the needs of Black
beauty customers, a deficit of testing opportunities
for product efficacy, and no feedback loop for
product improvements. “The testing done for the
performance of an active ingredient is done on
someone who is Caucasian or Asian 99 percent
of the time,” said one chemist for a non-Black
brand. “There’s rarely data validating the efficacy
on melanated skin. But we’ll put that in a product
targeting melanated skin anyway.”
Lack of representation. Industry networks and
interpersonal relationships can make or break
the future prospects of any enterprise, and
it’s no different in the beauty industry. And
11
 ‘The testing done for the
performance of an active ingredient
is done on someone who is Caucasian
or Asian 99 percent of the time.
There’s rarely data validating the
efficacy on melanated skin. But
we’ll put that in a product targeting
melanated skin anyway.’
— Chemist for a large non-Black beauty brand
here, representation matters—a lot. One of the
challenges that Black entrepreneurs face is that
they’re more likely to be excluded from receiving
information about high-potential opportunities.
Black representation in the beauty industry lags
far behind Black representation in the share of
beauty spending and the population at large: Black
employees make up only a small percentage of
employees in the beauty industry and are also
underrepresented among employees at retailers
selling beauty products (Exhibit 8).
The implications are huge. Previous McKinsey
research shows that if this current inequitable
trajectory continues, it will take about 95 years for
Black employees to reach talent parity across all
levels in the private sector. In the beauty industry, it
means that non-Black employees at large brands
and retailers are deciding what brands to sell
and how to help Black founders, even when they
cannot relate to the Black consumer’s experience.
That affects Black brands’ abilities to establish
themselves, compete, and grow.
For Lisa Price, who founded Carol’s Daughter
in 1993, one of the hardest things when getting
started was trying to get people—whether they
were potential retailers, partners, or investors—to
empathize. “The biggest challenge of being a Black
12 Black representation in the beauty industry
founder was not being able to find people who could
identify with the challenge of being a Black founder.
You have to figure out a way around it. You have to
figure out a way to make it work. You have to figure
out a way to convince people.”
One challenge? It’s harder to build relationships
with retail buyers in an industry driven by informal
relationships. “Connecting with a buyer is half the
battle. You also need to know what the buyer is
looking for,” one executive at a large, established
beauty brand told us. “Typically, you’d be able to
tap into your network to ensure that you show your
most compelling offering.” Growing brands face a
similar challenge in contracting with suppliers. This
is an issue of finding suppliers who are inclined not
only to work with Black brands with whom they have
no previous relationships but also to negotiate fair
prices for key inputs.
Black beauty brands also encounter challenges
in finding high-level talent to staff key positions,
partially because they are unable to lean on
robust industry networks. This challenge applies
throughout the ranks of a company. The lack
of Black representation in the beauty industry
workplace makes it less likely that products
aimed at Black consumers will be stocked and
adequately promoted in stores and also less likely
Web <2022>
<Black representation in beauty>
Exhibit 8of <9>
Exhibit <7>

Black employees
employeesareareunderrepresented
underrepresentedthroughout
throughoutthethebeauty
beautyindustry—a
industry—a
challenge that extends to representation at retailers that sell beauty brands.
challenge that extends to representation at retailers who sell beauty brands.
Black representation in US beauty industry by employment level,1 %

Brands2 Retailers3
Nonmanagement Management Nonmanagement Management
(Entry- to midlevel) (Director/VP/C-suite) Overall (Entry- to midlevel) (Director/VP/C-suite) Overall
4–6 4–9 4–7 6–12 4–19 6–13

1
Lower bound assumes all unidentified are non-Black and upper bound applies share of Black representation to those unidentified.
2
Represents those in merchandising or marketing positions.
3
Represents organizational structure within each company’s beauty category.
Source: Analysis based on publicly available and attributable references to beauty industry job titles across select department stores, specialty beauty stores,
mass/grocery stores, and drugstores, completed Sept 14, 2021

that store associates will represent the diversity
of their communities.
Growing a beauty brand requires navigating a
complicated set of industry-specific challenges.
These can usually be solved more easily when the
brand has the benefit of having encountered them
previously—and Black brands frequently don’t
have the benefit of mentorship or other informal
networks. “It’s a challenge because you’re on a path
that really hasn’t been paved. You don’t have many
role models to look up to, and mentors are hard to
find,” says Price. “It’s a challenge to be a founder
who’s a woman and who’s Black just because
it’s challenging to be that in general. The idea of
the strong Black woman is beneficial and also a
detriment because we never feel like we can fail. It’s
always beast mode, but you can’t be in beast mode
all the time.”
Another executive at a non-Black beauty
brand told us how important mentorship is. “It’s
not just about gaining access to capital. It’s
important to understanding how you navigate
the politics, get contract manufacturers, and
negotiate with manufacturers, vendors, and
investors. You need people who can provide
insight to the fuller ecosystem.”
A hesitation among Black brands to share
information with one another may exacerbate the
absence of mentorship and informal networks.
Often, there is no obvious forum for these
discussions, and some Black brand founders
see the success of another brand as one less
opportunity for them to succeed. “It’s a zero-sum
game,” one founder lamented to us.
Squeezed by expectations. Another challenge
is that Black brands tend to be held to a higher
standard by their target customer base while
simultaneously being seen in a narrow and limited
way by others in the industry.
In response to our survey, Black consumers
expressed high levels of discernment when
purchasing beauty products. They were
44 percent more likely than their White
counterparts to believe quality is more important
than cost and 38 percent more likely to prioritize
brands to reflect personal style. Yet, at the same
time, there can be a perception that products
made for Black people aren’t up to snuff. As one
executive from an acquired Black beauty brand
told us, “Black products from most brands aren’t
high quality. They don’t meet our needs and feel
like they were developed as an afterthought.”

Black representation in the beauty industry 13

 Black consumers were also over 25 percent more products can only be sold to Black consumers.
likely to say they’d fully explore all alternatives According to a former manager at a beauty retailer,
before purchasing a product and prefer shopping in “There’s an assumption that because a brand is
an environment where they can have a sophisticated Black-owned, only Black people will buy it.”
discussion with a sales associate and seek out
better-quality products regardless of higher prices. In fact, since Black brands are typically formulated
These high expectations can prove challenging for to manage curly hair and darker skin, they can
Black brands and may be one of the reasons why benefit anyone with those attributes, not only
they receive a disproportionately small amount of Black consumers. Yet, time and time again, Black
industry revenue compared with Black consumer beauty entrepreneurs are met with skepticism when
spend on beauty products. meeting with executives from large beauty brands.
As one founder of a prominent Black brand told us,
Even when a Black beauty brand gains traction, “It’s like pulling teeth to get the industry to realize
the exacting expectations of Black consumers that these products aren’t just for Black people, but
can create tension as a company’s revenues and for all people with melanin in their skin or with curly
ambitions expand. As with any enterprise, a beauty hair, no matter their race.” Another founder added
brand naturally wants to maintain a connection that her conversations with partners are full of bias.
with its core shoppers while at the same time “Retailers think that prospects are more difficult for
pursuing growth. It’s a hard balance to strike for Black brands because they’re targeting a smaller
any business—maintaining the loyalty of original market, or that the market may not be able to afford
consumers while pursuing bigger business goals the product.”
through, say, going after valuable partnerships
or potential acquisitions. When it comes to Black This misunderstanding drives a persistent
beauty businesses, there’s an additional risk of undervaluation of Black brands. One executive at
alienating an audience that might view you as a beauty retailer told us, “Merchants’ perspective
“selling out” to a larger beauty brand that won’t pay on a Black brand’s true value to consumers is often
attention to the needs of Black consumers. As one skewed because they think that there’s a lack of
sales associate from a prominent brand noted, “Big opportunity if a Black brand is focused only on
beauty companies act like Black women will just Black customers.”
happily buy whatever products happen to be offered
to them.” By wrestling with exacting expectations from their
core Black customers, while at the same time
Suspicions that large beauty conglomerates don’t contending with misperceptions by the broader
understand Black consumers—or the products market, Black brands are squeezed in a way that
developed for Black consumers—are not entirely non-Black brands aren’t and forced to walk a unique
unfounded. That’s because there’s also a persistent tightrope in moving their businesses forward.
myth in the beauty industry that Black-brand

‘Big beauty companies act like

Black women will just happily buy
whatever products happen to be
offered to them.’
—Sales associate for a large beauty brand

14 Black representation in the beauty industry

An uphill battle for investments and
partnerships
The challenges that Black beauty brands face in
building their businesses also extend to difficulties
in finding financial support during various stages
of development. “When you’re going the venture
capital [VC] route, you have to be able to explain
issues around race and unmet needs to people who
don’t understand,” one founder of a Black beauty
brand told us. “Doing that can take a lot of time and
money that many start-up brands don’t have.”
The numbers bear that out. Of 213 VC-backed
beauty companies, only 16 of them were Black-
founded. There’s also a greater attrition rate in
funding for Black brands than non-Black beauty
brands. Black brands comprise 9 percent of early-
stage and 4 percent of late-stage VC investments.
The attrition rate for Black brands from early to
late stage of support is 86 percent, compared with
62 percent for non-Black brands. That suggests a
generalized unwillingness to support later-stage
companies with VC funding and represents the
insufficient funding that these Black brands
typically receive (Exhibit 9).
Web <2022>
<Black representation in beauty>
Exhibit 9 of <9>
Exhibit <8>
Venture capital
capital firms fund Black beauty brands at lower rates
rates and
and amounts
amounts
non-Black brands.
than non-Black brands.
Venture-capital-funded (VC-funded) Black beauty brands by
funding stage, as of Aug 2021, US,1 % of total VC-funded brands
(n = 213)
Total Early stage2
8 9
1
Black-founded companies include both Black-only and partially Black-owned companies.
2
Includes angel and accelerator backing and/or seed rounds.
3
Late stage means company has proven growth and is generating revenue.
Source: IRI; Nielsen; PitchBook data for VC/accelerator/incubator/angel-backed beauty in the US, 2011–2016; Stackline
Black representation in the beauty industry
Even when they do get VC funding, Black brands
in the beauty industry raise a median of $13 million,
substantially less than the $20 million that non-
Black brands raise. Early-stage Black beauty
companies raise 64 percent less in venture funding
than early-stage non-Black beauty companies.
Funding for Black brands decreases as those
companies move further along their development
journey. The difference in funding between Black
and non-Black brands jumps to 85 percent at later
stages, when companies have proven growth and
are generating revenue.
Despite the dearth of funding, VC-funded Black
beauty ventures have a superior track record
of success compared with their non-Black
counterparts. Eleven years ago, Black brands
represented only nine out of the 218 brands that
received VC funding at the time, and they captured
90 percent less funding than non-Black companies.
Yet today, the median income of those Black brands
is 89 times higher than that of non-Black beauty
brands over the same time period.
This inequity is likely due to systemic biases in
the VC process that hurt Black brands’ abilities
to raise critical funds and the result of many of
Median value of VC funding
raised by US beauty companies,
2011–16, $ million (n = 218)
Late stage3
4
All others
50
Black brands1
15
 the knock-on effects of a lack of funding. Those
systemic biases include a geographic mismatch
between the distribution of VC-funded Black beauty
companies and the Black population density in
certain states. For example, last year, half of total
funding for Black brands went to companies based
in California, which is home to only 6 percent of the
nation’s Black population. In contrast, 8 percent of
Texas’s population is Black, but that state has zero
VC-funded Black beauty brands.
Without sufficient funding, and with weak industry-
specific social networks, Black beauty brands can
struggle to recruit and retain top talent, to scale
up, and to operate at their full potential. Being
hampered in this way makes it hard to meet the
operational expectations of retailers or funders,
leading to a vicious circle where the repercussions
of operating below par can lead to a lack of further
funding. One executive at a beauty retailer noted
that they “work with one Black-owned brand that
is lacking in operations. They have a really reduced
staff and are always missing deadlines.”
The rigid and demanding expectations of retail
partners often drive difficulties in scaling up. While
recalling her early forays into the beauty industry,
Nyakio Grieco— cofounder of the inclusive beauty
shopping platform Thirteen Lune and founder of
beauty brands Nyakio and Relevant: Your Skin
Seen—says, “It’s devastating as a brand founder to
get an opportunity to launch into a national retailer
and to have to say no, because you can’t afford it.
But what’s worse is to say yes, and then realize you
can’t afford it.”
Additionally, consumers have said they plan to
increase spending on Black-owned brands, leading
to a mismatch between low supply and high
consumer demands. A typical Black brand–retailer
interaction begins with the brand pursuing a
partnership with a major retailer to increase reach
and revenue. But once the brand reaches shelves,
the retailer demands the same performance metrics
as larger, more established brands—and subjects
them to the same penalties. The Black brand would
naturally look to the retailer for guidance and
support. But often, it comes up empty. The Black
brand is then at risk of substandard performance,
which can quickly result in discounts (the costs of
16 Black representation in the beauty industry
which must be covered by the brand), removal from
shelves, and other potential long-term damage to
the brand.
The path to more equity
Creating a more equitable ecosystem in the
beauty industry is not a straightforward endeavor.
Obstacles are deeply entrenched, and it may take
purposeful, sustained efforts to effect fundamental
change. But by addressing the pain points of both
Black consumers and Black brands, the beauty
industry has the opportunity to not only address
deeply ingrained biases in the sector but also unlock
billions of dollars in revenue.
What would it take, then, to achieve equity for Black
consumers and brands in the beauty industry?
Across the board—from market researchers and
retailers to big beauty brands and investors—
those in the beauty industry can consciously and
deliberately adopt a variety of initiatives aimed at
better serving Black customers and supporting
Black brands more equitably:
— Minimize the occurrence of “beauty deserts.”
Retailers can more strategically locate their
stores near neighborhoods where Black beauty
consumers live. More equitable store placement
will likely allow Black consumers to access
specialty and department stores—where higher-
quality beauty products are sold—more easily
than they are able to do today. And that store
placement should be paired with better store
associate training with appropriate product
knowledge and awareness of Black consumer
needs. This is particularly true for customer
experience: if Black consumers are assisted by
sales associates who understand their specific
needs and can make the right recommendations,
they can purchase products that are the right fit.
— Put more Black beauty products on shelves.
Until recently, very few beauty products offered
on stores’ shelves have come from businesses
run by Black entrepreneurs. In some cases,
there have been none. The percentage of
quality Black beauty products on shelves can
be increased, at a minimum, to reach parity
with the share of Black representation in the
 US population. Founded in 2020, the nonprofit
organization Fifteen Percent Pledge urges
retailers to dedicate at least 15 percent of their
shelf space to products from Black-owned
businesses. More than 25 retailers have signed
up so far. Real estate on shelves also serves
as a form of advertising, which is critical to
understanding and connecting with Black
customers. Accordingly, as the share of Black
brands on shelves increases at stores, the
amount of marketing and advertising should
also increase. Instead of using templatized
approaches to product launches, retailers can
also work creatively with smaller Black brands
on rollouts to maximize reach.
— Increase the number of Black beauty
employees to at least 15 percent. Hiring
shouldn’t just happen for entry-level jobs. For
true equity and fair representation, Black
employees should be hired in positions that
significantly influence product placement
and radiation, including product design and
development, merchandising and brand
management, marketing, and store operations.
From top management down to the sales
floor, higher Black representation at all levels
in beauty companies will likely lead not only
to better hair care, skin care, and cosmetics
products but also to greater sales. If the top
ten beauty retailers and top ten beauty houses
(by revenue) increased the percentage of
their Black employees to at least 15 percent—
matching or exceeding Black representation
in the population at large—that would lead
to 60,000 more Black people working in the
beauty industry. Companies can consider
making these goals public, alongside public
accountability measures.
— Incubate and grow at least 500 Black
beauty brands. Private-equity firms, as
well as retail and beauty organizations, can
further commit to scaling Black beauty
brands by collectively targeting at least
500 Black beauty brands to invest in and
incubate. By supporting entrepreneurs
with financial investment (including funding
for research), networking opportunities,
and managerial advice, investors and
Black representation in the beauty industry
corporations can give new entrepreneurs
a space to innovate and grow under
experienced guidance. This isn’t just a good
thing to do; it’s also a smart thing to do. The
larger corporations investing in these small
companies not only get a cut of revenue
earnings from their early investments but
also can create a pipeline of acquisition
targets. Moreover, funding and production
capacity go hand-in-hand with incubation.
Just a slight shift toward more equitable treatment
for Black consumers and Black brands across
the beauty industry could lead to billions more in
additional incremental revenue for the industry over
the next few years. Black consumers spent $6.6
billion on beauty products in 2021, 11 percent of
the total $60 billion beauty industry. If that share
were bumped up to 12.7 percent—that is to say,
at parity with the percentage of Black people in
the United States—then Black consumer spend
would comprise $9.2 billion of the projected $72.4
billion beauty market in 2025 (Exhibit 10). That
growth is based on a projected 4.8 percent CAGR
(which takes into consideration—and maybe even
underestimates—population growth, inflation, and
increased Black consumer spending on Black
brands due to advances in equity).
The majority of that opportunity is widely available
to any Black or non-Black brand that takes a
leadership role in embracing racial equity across
the industry. Black brands—both Black-founded
and Black-owned—would in particular benefit from
a more equitable market, increasing overall Black
brand share from $1.5 billion (a 2.5 percent share of
the total market in 2021) to $3.7 billion (a 5.1 percent
share of the total market in 2025), which is inclusive
of Black-owned and Black-founded market share.
Aside from being put under extraordinary pressure
to conform to externally imposed standards, Black
people seek to find an authentic connection or
sense of joy from their interactions with beauty
products. Greater representation, inclusion, and
equity are long overdue for Black beauty founders,
owners, and consumers as they take their rightful
place in the beauty industry. It’s both smart and
the right thing to advocate for equity: that includes
advertising more carefully to Black consumers,
17
 Web <2022>
<Black representation in beauty>
Exhibit <9> of <9>
Exhibit 10
A more
A more equitable beauty market
equitable beauty market in
in 2025
2025could
couldmean
meanaa$9.2
$9.2billion
billionrevenue
revenue
opportunity from Black consumers.
opportunity from Black consumers.
US beauty industry market size, $ billion

72.4

1.2
1.4 9.2 ~13%
9.8 of 2025 beauty market
60.0

Black brands 6.6

Non-Black brands 53.4 63.2

Market size, Non-Black Black Incremental Market size,

2021 Black consumer 2025
4.8% market CAGR spend in more
increased consumer spend equitable market1
1
$1.4 billion absolute growth includes $1.2 billion from “willingness to pay” (WTP) by satisfying currently dissatisfied Black consumers and $0.2 billion from
unrealized WTP among satisfied Black consumers.
Source: 2020 US Census; McKinsey Black Beauty Consumer Survey, Sept 2021 (n = 934)

geographically distributing Black products more
equitably to make them accessible to consumers,
educating store associates on Black beauty needs,
and achieving better placement of Black-focused
products in stores. Leaders across industries,
from retail and consumer goods to investment
communities, must accelerate the push for
advancement and invest in the future of the Black
beauty industry.

Find more content like this on the David Baboolall (they/them) is an associate partner in McKinsey’s New York office, Tiffany Burns (she/her) is a senior partner
McKinsey Insights App in the Atlanta office, Kristi Weaver (she/her) is a senior partner in the Chicago office, and Ammanuel Zegeye (he/him) is a
partner in the Bay Area office.

The authors wish to thank Kyleb Bello, Julie Counts, Tafari Mbadiwe, and Ranti Odujinrin for their contributions to this article.

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18 Black representation in the beauty industry