How Honest is the Honest Company? Gabrielle Husen White Paper Comm 204 University of Wisconsin Whitewater, WI

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1 1 How Honest is the Honest Company? Gabrielle Husen White Paper Comm 204 University of Wisconsin Whitewater, WI

2 2 Table of Contents: Introduction/Summary: How Honest is the Honest Company...3 Background on The Honest Company...3 Mis-leading Ingredient Branding...4 False Labeling 5 Solution..6 Persuasion..7 Conclusion 9 References 10

3 3 How Honest is the Honest Company? Natural beauty, health and wellness do not come as easy as one might think for a multi-million dollar company. The Honest (Beauty) Company has falsely labeled merchandise as organic according to The Organic Consumer Association (Vasel, 2016). The OCA has also claimed that some of the ingredients have not been assessed as safe for human foods much less for infant formulas. While the Honest Company is being questioned on how honest they really are, thousands of consumers are left with no choice but to ditch the brand. Jessica Alba and Christopher Gavigan co-founded The Honest Company in 2011 with the intent to create an effective line of household products, utilizing questionably safe and eco-friendly ingredients (The Honest Company, 2017). The Honest Company wanted their products to be noticed as confident and affordable, with sustainability and savvy style. The company prides themselves in five key elements, which are as follows: honest, social goodness, support, peace of mind and delightful design. Honest Company had the goal to relieve its consumers of a few tasks by delivering family essentials to their doorstep, redefining family brand. Between beauty and household items the Honest Company offers their honestly free guarantee, You can rest easy knowing the Honest Company s products are made without potentially health-compromising chemicals or compound. (Honest, 2016) As the company intends to deliver honesty and piece of mind, consumers have found the ingredients to be harsher than advertised. The problem with using terms such as all-natural, organic, or eco-friendly is that there is no actual consensus on what those terms truly mean (Russo, 2015). In a 2015 report conducted by Nielsen, it was

4 4 found that 53% of consumers surveyed said that all-natural descriptions were moderately or very important to them (Nielsen, 2015). These consumers often do not read the label, or double check ingredients to ensure the product itself is safe for their families and themselves. Natural and organic beauty and household items account for 24% of annual sales-2.7% growth for overall beauty category (Nielsen, 2015). With the rapid growth of organic and natural products in the industry, Honest was set to grow rapidly as an indication of the booming demand of plan-based high performance naturals. A March 2015 report conducted by Kline & Company estimated the natural products industry is at $33 billion dollars worldwide. Table 1. Product Accordance % Considered a High Priority or Moderate Priority Cruelty free brands 57% Products contains sunscreen (SPF) 56% Natural 53% No animal bi-product 52% Anti-aging ingredients 44% Plumping and firming 44% Sensitive Skintypes 43% Dark spot treatment 43% Brightening 43% Salicylic Acid 42% Non-Comedogenic (doesn't clog pores) 41% Fragrance Free 40% Sulfate Free 40% Organic ingredients: 38% Cocoa, Shea Butter, aloe Paraben Free 37% Organic 37% Dewy 36% ngredient: retinol 34%

5 5 ngredient: caffeine 25% Source: Nielsen beauty online survey The table above is used to represent a survey of that conducted in 2015 by Nielsen to adequately display consumers in the marketplace (specifically beauty.) Sulfate free, paraben free, and organic account for nearly 40% of those surveyed. Based on the online survey, the overall importance of these claims made by companies effect sales and can ensure the consumer the products purchased contain ingredients both safe, and effective (Nielsen, 2015). Consumers were claiming that Honest s products contain unnatural and synthetic ingredients (McLean, 2015). In addition, it was also said by consumers that the sunscreen was ineffective after some publics posted photos on social media of sunburns from Honest s sunscreen (McLean, 2015). Problems faced I ve narrowed my argument to ingredient branding, as ingredient branding pulls demand from end users through distribution channels directly back to original equipment manufacturers. Based upon Nielsen s 2015 survey, it is apparent that consumers find labels claiming ingredients to be organic or all-natural of that of high priority or moderate priority in the decision making process of buying goods. The first lawsuit arose in September 2015 allegedly claiming that the Honest Company falsely labeled its products as natural, and furthermore consumers were questioning what ingredients were truly being utilized in the product line. Both co-founders briefly commented to CNN Money regarding these claims saying the company had no intention to wrong their customers (McLean, 2015). Consumers however, took to social media posting pictures wearing Honest s SPF 30 showcasing sunburns on the body and face. The company came back saying the sunscreen was indeed effective, and that they claim to be transparent

6 6 rather than misleading through their various online channels of marketing (McLean, 2015). Attorney Nicholas Carlin said he would ask a judge to certify the suit as a class action, which ensures customers with similar claims participation. The lawsuit was filed in a federal court within California the week of September 10 th, 2015 (McLean, 2015). Honest Company CEO Brain Lee sat down with CNN Money to discuss the case. Within the interview it was noted that the companies website lacks ingredients content within the websites product list as nearly 40 ingredients were excluded (McLean, 2015). It is unclear if the brand has intentions to change their current ingredients, or adhere the ingredients to the way they are branded. Just as the Honest Company was venturing out to a beauty line in early 2016, suspicion from the OCA arose regarding false labeling within Honest s infant formula. The company claimed to contain only a form of blended non-gmo (referred to as genetically engineered) and other high-quality ingredients sourced only from organic, and safe farms (Vasel, 2016). The company then told CNN Money April 6 th, 2016 that it s formula was in fact cleared by the FDA, and meets all safety and nutritional standards; as they remain in strict accordance with that of the National Organic Program (Vasel, 2016). As Honest continues to expand their product line, the OCA planned to seek a jury trial. After being sued for allegedly falsely labeling products as natural in September 2015, Honest Company continues to have trouble regaining customer loyalty. A Wall Street Journal investigation claimed the Honest Company s laundry detergent contained an ingredient promised to never to be found within the product line (NG, 2016). The Honestly Free Guarantee remains unclear to how honest it can truly be.

7 7 Although many would assume the government could prohibit the use of harmful ingredients in beauty and household items, they do not. It is also unclear how to adequately determine if a product claiming to be natural actual is natural. The U.S. Food and Drug Administration (FDA) does require that products are properly labeled and ingredients exact according to the generally recognized as safe (GRAS) under sections 201 (s) and 409 of the Federal Food, Drug and Cosmetic Act (U.S. Food and Drug Administration, 2016). However, the FDA does not define or regulate terms such as organic or all-natural unless it relates to agricultural ingredient marketing. In attempt to fill the void, states such as California and Washington have implemented legislation to require disclosure of various chemical ingredients. However, these laws do not create a nationwide standard, therefore it is hard to implement across all levels. Solution The solution is to refrain from using claims such as all-natural guaranteed or made with only organic ingredients because these terms are often deceptive to consumers. The Campaign for Safe Cosmetics (CSC) director Janet Nudelman says refraining from this terminology can reduce exposure to harsh chemicals linked to cancerous diseases (Campaign for Safe Cosmetics, 2016). The CSC also has found chemicals found in household and beauty products linked to reproductive harm, as well as birth defects. Natural compounds can be created synthetically says Mark Blumenthal, founder and executive director of the American Botanical Council (Moran, 2015). Concerns regarding natural compounds within these products include the potential for chemical contamination within the supply chain, and or processes that may be found within the final product.

8 8 For one trade group, the National Products Association (NPA) has taken several actions towards self-regulation. NPA established a certification program requiring products labeled natural to only contain natural ingredients, or at least almost only natural ingredients. Daniel Fabricant, executive director of the NPA, says that no company has achieved this certification or has been challenged within a court of law (Moran, 2015). Only 11 ingredients used within the U.S. cosmetic industry are banned and/or restricted for use, while more than 1,300 chemicals have been prohibited or restricted across Europe, according to CSC data. For Honest Company, conducting a company wide ingredient check would allow the company to re-evaluate all ingredients contained within the product line. This could potentially also save them from future lawsuits, thus creating a re-evaluation of what they are truly using and how that relates to their honestly free guarantee. It would also be in the company s best interest to check the facilities used to bottle and create the products, ensuring that chemicals or harsh ingredients would not be contained in the final item. In attempt to move to better-regulated household and beauty ingredients, Senators Dianne Feinstein (D-CA) and Susan Collins (R-ME) created the Personal Care Products Safety Act in April While federal regulations have not been updated in over 75 years, the PCPA seeks to improve and strengthen the FDA s authority to regulate ingredients in everyday products. Doing so would also grant the FDA authority to recall products that deem harmful, or are extremely cancerous. This power currently is not intact for the FDA, and could prevent implications such as one s the Honest Company is facing. Persuasion

9 9 As consumers grow more and more frustrated with Honest and their ability to clearly state the significance of all natural ingredients throughout the line, this market will be closely monitored in relation to complying with health regulations. The clear objective is to fill the void between false labeling within the product line, and mis-leading ingredient branding. Honest Company prides themselves in integrity and truthfulness, thus the company must re-evaluate their mission as well as if they would like to be considered completely organic. The important item is to regain the customer s trust back in an effective and authoritative way. In the case of Honest and their sunscreen claiming to be ineffective, the Honest Company handled their crisis communication through a variation of social media posts (including blog posts) that were featured on the companies website. In regards to several other lawsuits filed against Honest Company over the course of , they assured their publics that each would be dropped and handled properly. The Honest Company utilized their various forms of social media to address current and potential consumers, and clear the air regarding harmful ingredients. By reaching out directly to their consumers via social media the company allowed their publics to feel somewhat reassured that their questions would be answered, and the items would be proven in alignment with the honestly free guarantee. The public relations team for Honest Company claimed that their reputation was being harmed through the various articles published throughout in regards to wrongful ingredients within their product line. While many name brand detergents use SLS to create suds, we have always chosen to use SCS at Honest. SCS is less irritating and safer to use in products from skin care to cleaners. Safe and effective, just like we like it because we

10 10 want nothing more than for you to feel good about using our products everyday the blog claimed after feeling attacked by the Wall Street Journal early March, 2016 (The Honest Company, 2016). While many consumers remain upset with the company, the PR handled the situation accordingly targeting their consumers, and reassuring that the Honest Company intends to use safe and effective ingredients. Although the attempt at reassuring their publics was appropriate, consumers were still upset to find dishonesty from the company. One consumer replied to the post claiming it was impossible to make SCS without the end result not containing SLS and that any chemist would be aware of this (The Honest Company, 2016). It was apparent that Honest Company was using the same ingredients found in Tide. SCS contains a mixture of various cleaning agents that often contain a significant amount of SLS. In addition, Honest Co. does not have their products created independently; rather utilize test parties not employed directly within Honest Co. The products are manufactured in China, thus the company cannot be 100% reassuring to their publics if they are not completely on board with what is being bottled for purchase. Honest Company, like most companies globally, purchase the ingredients that are found within the final product however, rely on other individuals for responsibility for what is truly being bottled prior to purchase. Thus, there is no 100% guarantee that the products are chemically tested, being appropriately bottled, and adhering to the honestly free guarantee. The WSJ article was reported in regards to the idea of chemicals found within Honests products, not to harm the reputation that Honest had at the time. As far as the reputation was concerned at the time of these accusations, Honest was already facing previous accusations within the same context. Although the crisis

11 11 communication was effective to their publics, most consumers were still hesitant to continue use with the product line. If Honest Co. was able to adequately handle the first accusation and make changes within the ingredient branding; the company itself would not be up for question. The Honest Co. should move forward from the accusations by providing safer and more effective naturals for its publics. Conclusion In order to gain a complete understanding for how natural and organic product companies comply with meeting the requirements brought forth by the FDA and OCA, is in direct accordance with how necessary it is to conduct a more clear, and concise perception of what these items truly mean. It was said that nearly 53% of the public finds it important to label these items as all-natural and that this number will continue to increase in this ever-changing market. For Honest Company, it is extremely important to match the family brand to the correct ingredients for safe use. This includes, but is not limited to, compiling with the honestly free guarantee, adhering ingredients to a more natural approach, and ensuring its publics trust within the company. The effects on the relationships of Honest Company s publics from several lawsuits regarding ingredients has shown discrepancies in correspondence with the company s message and overall slogan together we can make it better. As the marketing world continues to grow, and social media becomes a tool for companies in today s day and age, each mode of communication between publics becomes essential. Although Honest Company did adhere to its publics through blog posts and other social media platforms; the clientele was left with no choice but to lose complete trust for the company. If the company would have handled the first lawsuit by conducting an

12 12 ingredient test, they may have been able to gain the consumers trust, however unfortunately they are still today left with smaller publics. As the beauty line launched late 2016, the FDA and OCA will be careful to watch which ingredients are truly natural and which fall short.

13 13 References CFSAN (2017). Red List. Retrieved February, 2017, from Center for Food Safety and Applied Nutrition. (n.d.). Generally recognized as safe ( GRAS). Retrieved February, 2017, from Fund, B. C. (2016). Chemicals in Cosmetics. Retrieved February, 2017, from James Russo (2015, March 24). Package this: Beauty consumers favor 'Cruelty Free' and 'Natural' product claims. Retrieved February, 2017, from McLean, R. (2015, September 4). Jessica Alba's Honest Company sued for alleged false labeling. Retrieved February, 2017, from Ng, S. (2016, March 10). Laundry Detergent From Jessica Alba's Honest Co. Contains Ingredient It Pledged to Avoid. Retrieved February, 2017, from Terrell, B. E. (2016, April 6). OSC vs. The Honest Company. Retrieved from

14 14 Vasel, K. (2016, April 27). The Honest Company gets sued... again. Retrieved February, 2017, from

COSMETICS REFORM EXPLAINED

COSMETICS REFORM EXPLAINED 2 BACKGROUND/ INTRO 3 Background/Intro At the Johnson & Johnson & Johnson Family of Consumer Companies, we recognize that consumer confidence is more than a formula, which is