Photograph by Aaron Dyer for Bloomberg Businessweek

Startups, Target Go After the Multiracial Hair-Care Market

In 2009 the comedian Chris Rock created a stir with his documentary Good Hair. The film, about the $684 million black hair-care market, details the lengths women go—from scorching their scalps with chemical relaxers to paying $1,000 for a weave—to achieve soft, flowing tresses.

In its wake, many turned to the Internet in search of alternatives. In chat rooms on websites such as Curly Nikki and Afrobella, women shared tips for grooming afros and compared mom-and-pop product lines catering to women who’d decided to “go natural.” According to market research firm Mintel Group, in the three years afterGood Hair’s release, sales of chemical relaxers fell more than 30 percent.

Target (TGT), the second-largest discount retailer in the U.S., saw an opportunity in the natural-curls trend. In 2010 and again the following year, it invited entrepreneurs who had been selling hair-care products online to make presentations at its company headquarters in Minneapolis. Among them were the founders of Mixed Chicks, a Los Angeles company started in 2004 by two biracial women. Unable to find shampoos and styling creams that suited their hair type on store shelves, they pooled their savings, hired a chemist, and made their own. “The industry was lacking products that help you embrace your natural curls,” says co-founder Wendi Levy.

Target decided to showcase six brands—Mixed Chicks, Curls, Kinky-Curly, Miss Jessie’s, Shea Moisture, and Jane Carter Solution, placing them in a prominent spot at the end of the aisle rather than in the ethnic beauty section, where black hair-care products are traditionally sold. The retailer gambled that the products might appeal to a broader spectrum of customers, given that—as U.S. Census data show—a growing number of Americans identify themselves as multiracial. “The hair-care aisles are really the last bastion of segregation,” says Miss Jessie’s co-founder Titi Branch, who is half-Japanese and half-black.

Target ran an eight-week promotion in 400 stores. The products took off, says Christina Hennington, the company’s vice president of merchandising for health and beauty. To build on the strategy’s initial success, the retailer has expanded the shelf space devoted to the brands and now sells them at 700 stores. Marketing for the section features blown-up photographs of women of different races, whose curls range from kinky to soft ringlets.

Last year, CVS (CVS), Rite Aid (RAD), and Duane Reade (WAG) also began carrying some of the products. Combined annual revenue for the five hair-care lines has soared from less than $10 million in 2009 to about $150 million today, estimates Michael O’Neil, vice president of sales at Ultra Distributors, which supplies the products to Target and other large retailers.

Helping drive sales are people like Lynne Wise of Columbia, Ohio. The Red Cross employee decided to stop relaxing her hair after seeing Rock’s documentary. “It made me reflect on all the pain I’ve gone through,” she says. Wise, 43, became a self-described conditioner junkie, trying out different brands she bought online. But the high shipping costs, long waits for delivery, and no-return policies ate at her wallet and her patience. When Target started selling the multiethnic lines, Wise was so excited she rounded up a group of friends from church for a shopping trip. “I wanted to spread the word,” she says.

The multinationals that rule the $7 billion U.S. hair-care market, including Procter & Gamble (PG) and L’Oréal (OR:FP), are catching on to the curl trend. Yet mom-and-pops still dominate, in part because they’ve cultivated a shared sense of identity with customers. The label on a bottle of Mixed Chicks conditioner reads, “Finally, a curl formula designed for ‘us’—whether you’re black, white, Asian, Latin, Mediterranean, or any glorious combination of the above.”

While black hair products typically sell for about $5 for a bottle of styling cream, comparable multiethnic products go for double that. According to Noliwe Rooks, a Cornell University professor who studies black women, companies such as Miss Jessie’s and Mixed Chicks have managed to bridge worlds. Their customers, Rooks says, “weren’t women that went to the same beauty parlor or considered themselves similar in any other context. It’s a masterstroke of marketing.”

The bottom line: With the help of Target, a handful of small companies have created a fast-growing niche in the U.S. hair-care market.

Dwoskin is a staff writer for Bloomberg Businessweek in Washington. Follow her on Twitter: @lizzadwoskin.

Expo Milano 2015 a unique opportunity for your business

Expo Milano 2015 offers you and your business a unique opportunity to take part in an unparalleled global event.
There are countless ways to participate. Many different industry sectors will be involved, from tourism, construction, and event management, to food, agriculture and the service industry. Being part of Expo 2015 means that, not only can you showcase your business products or services to a global audience, you can also build strong relationships and strategic alliances with institutions, influencers and key players in your industry.

What’s more, by being associated with the positive values of Expo Milano 2015 and other partner companies, you’ll be able to boost your brand image and corporate reputation.

Discover a wealth of business opportunities on offer in this section; whether you are looking to become an event partner or sponsor, or participating in tenders for products, services and works. Here you can also find a range of catalogs that will provide you with all the information you need. Expo Milano 2015 really is an outstanding opportunity that is open to you today.

Malcolm Gladwell: Choice, happiness and spaghetti sauce

“Tipping Point” author Malcolm Gladwell gets inside the food industry’s pursuit of the perfect spaghetti sauce — and makes a larger argument about the nature of choice and happiness.

Detective of fads and emerging subcultures, chronicler of jobs-you-never-knew-existed, Malcolm Gladwell’s work is toppling the popular understanding of bias, crime, food, marketing, race, consumers and intelligence. Full bio

Martin Jacques: Understanding the rise of China

Speaking at a TED Salon in London, economist Martin Jacques asks: How do we in the West make sense of China and its phenomenal rise? The author of “When China Rules the World,” he examines why the West often puzzles over the growing power of the Chinese economy, and offers three building blocks for understanding what China is and will become.

Writer, columnist
Martin Jacques is the author of “When China Rules the World,” and a columnist for the Guardian and New Statesman. He was a co-founder of the think tank Demos. Full bio

Charles Robertson: Africa’s next boom

The past decade has seen slow and steady economic growth across the continent of Africa. But economist Charles Robertson has a bold thesis: Africa’s about to boom. He talks through a few of the indicators — from rising education levels to expanded global investment (and not just from China) — that lead him to predict rapid growth for a billion people, sooner than you may think.

Emerging-markets economist
In “The Fastest Billion,” Charles Robertson re-examines the narrative of economic growth in African nations. Full bio