Exclusive: Not ‘Selling Out’- Sundial CEO, Richelieu Dennis, on Landmark Acquisition and How Deal Will Benefit Black Women Entrepreneurs
On Monday, Unilever announced a landmark agreement to acquire Sundial Brands, (No. 10 on the 2017 BE Top 100 list with $300 million in revenues) the company behind top-selling naturalista favorite SheaMoisture, and the news took consumers, fans, and the black business world by storm as Sundial became yet another black-owned personal care company to diversify its ownership ranks and take advantage of the significant payday (an exact sum CEO Richelieu Dennis would not confirm in this exclusive interview).
For Dennis, the deal had more to do with expanding the company’s core mission of social entrepreneurship and community empowerment than taking a huge check to the bank.
In this Black Enterprise interview, he breaks down how the deal is vital for reinvestment—not “selling out”—and how thousands of women entrepreneurs of color will benefit from Sundial having a real seat at the table of one of the largest consumer goods corporations in the world. Below is the transcript of Dennis’ responses during the interview:
On making the decision to sell:
“We’re a business built on mission and impact. Our business model has always been about finding opportunities to invest back into our communities. We’ve built a model over the past 25 years—a business that we call ‘community commerce’—and that is about using the business to create opportunity for our consumers and suppliers within our community.
So the focus has always been on the economic empowerment of women of color through business opportunities and revenue generation and reinvesting into these businesses. The first thing that was important to me was that we would find a partner that could not just guarantee that they would preserve that model of 10% of our community commerce products’ revenue going back into our community. I needed somebody who could not just be able to preserve that but who could also scale that up at a pace that is faster than what we’ve been able to do thus far. Although what we’ve been able to do is pretty amazing, we are now able to do [more] through this deal. It’s completely mind-blowing.”
On “selling out” and protecting product quality
“So, I’ve heard this question: ‘What do you say when people say you’ve sold out?’ Selling out means you’ve sold and you left—you took something and you left. I am sacrificing my business so that I can invest in my community—that’s not selling out.
What has happened with companies in our community that have been acquired is different from what is happening here. The technical term is the same, but if you stop and analyze what we’ve done…We sold our business to Unilever, and we’re turning around and using that capital to invest in our community and buy stock in Unilever.
So now, what we’ve done is flipped it. We’re now shareholders in what is [one of] the largest [consumer goods companies] in the world today, and we have a seat at the table in how they make decisions, in the types of products that come to market for our community—a vested interest in making sure our products do not change. They have a vested interest [in that as well]. They’ve just made an acquisition of [a very large sum]. … It’s the first time we’re seeing real value against a brand serving women of color. They will not risk that investment by saying, ‘OK, now we got it and we’re going to change it.’ There’s no advantage in changing the product. … That is evidenced by the fact that we also are a standalone business. They’re not buying us and we’re now moving to Unilever headquarters and there’s a Unilever team taking over. No. Sundial remains a standalone business unit of Unilever.
When I say this notion of ‘selling out’ is a myth, it’s completely not understanding what we’ve done.”
On scaling impact
“If you think about it, in our supply chain in West Africa today, we impact somewhere around 14,000 to 15,000 people—women who are now living above the poverty line who are now able to send their children, their daughters, to school, get healthcare, access to clean running water—we’re now, because of this deal, able to build on a platform like Unilever [and] we’ll be able to scale that in the hundreds of thousands within the next two years.
So, if you think about that and the things we’re doing that will directly impact underserved communities both in Africa and in the U.S., it’s extraordinarily powerful and has not been done before by any other company. It’s also important to make sure that the companies we’re building out of our communities are for the purpose of serving our communities.
How we can scale impact? It took us 25 years to build the business, and within the next two years, we will more than double the business that we’ve built because we now have the infrastructure. We now can go to Brazil and do business, South Africa, Nigeria, Ghana, Tunisia, Morocco…all of these places Unilever has these tentacles.
We had a consideration early on about going public, which gives you access to capital, but it does not give you infrastructure, expertise, or capacity. Our people are in need all over the world. Even when we look into the U.S.—the most developed country in the world—look at the challenges we have in our communities because we don’t have access to opportunity.”
On the $100 million fund reinvesting in women entrepreneurs of color
“Earlier this year, we started a series called ‘Real Talk’ and we went to cities talking to hundreds of women on what their challenges are. Overwhelmingly, the women said that SheaMoisture is incredible for providing scholarships to Tufts School of Business—we graduated almost 30 people from the school’s executive ed program, we sponsored women of color entrepreneurs to get business training at one of the best schools in the world—the feedback we got is, ‘That’s great. We go and get the education and get these contacts, but the reality is even having all these things, if I don’t have money to invest in this business, my business dies… It doesn’t grow.’
Women of color have the highest rates of starting businesses and the lowest rates of receiving capital. How does that go together? How do we start solving these issues? I started thinking, well I’m going to take my own money and start a fund that’s going to invest in all these incredible women who are not getting these opportunities. So, when I began having the conversation with Unilever, we talked about the business and the opportunity and one of the things I said to them was, “Hey, I’m doing this fund, on my own, and if I’m going to partner with someone who’s willing to put their money in my community like I’m willing to put my money into my community. They said, ‘This is what we love about what you’re doing.’
What started off as a fund that I was doing individually, all of a sudden became $100 million that is invested in women of color in this country and in other underserved communities. That is game-changing because out of one business, Sundial/SheaMoisture, we will be able to fund thousands of businesses. That is where our mission has always been. That is what this partnership is all about.”
Next: Check out Part 2 where Dennis gives tips on how entrepreneurs of color can position themselves for expansion with lucrative partners.