The Honest Co. shook up the consumer packaged goods industry when it first began selling diapers in 2011. Since then the company, founded by actress Jessica Alba, secured several rounds of venture capital financing. It now has a valuation of well over $1 billion and boasts over 100 products, including cosmetics, sunscreen and shampoos.
But in recent months, more consumers alleged some products do not work as well or are not as natural as the company claims. The result is a long string of class-action lawsuits. This week, the suits were consolidated into one multidistrict litigation (MDL) now under the jurisdiction of the U.S. District Court for the Central District of California.
A bevy of accusations have dogged the company, with questions arising over the ingredients included in its laundry detergent, dish soap and surface cleaners. Honest has long claimed that its products are completely free of sodium lauryl sulfate (SLS), an emulsifier found in many liquid household and personal care products. SLS allows products such as body wash and household cleaners to maintain their color and consistency and create that frothy lather consumers expect. The oft-heard criticism is that SLS can be a pesky skin irritant, which is backed up by research published by the National Institutes of Health. The American Academy of Dermatology, however, has sown doubt on whether sulfate-free shampoos and other body care products are actually any better than conventional products.
Instead of SLS, Honest says it uses an alternative ingredient, sodium coco sulfate (SCS). But some consumers, and investigations by publications including the Wall Street Journal, raised questions about whether the company is living up to its street cred as a leading purveyor of natural products. Plaintiffs alleged that several of Honest’s products with SCS as an ingredient still contained as much as a 14-percent concentration of SLS.
And Honest has not helped its cause with its responses to this and other allegations, as it often took a shrill tone while playing the role of a victim. In a blog post earlier this year, the company responded to the WSJ article by saying, “The Journal clearly had the goal of harming the reputation and good will that we are so proud to have built here at Honest.”
The company also didn't take kindly to criticisms of other products, such as its sunscreens, which caused an uproar on social media as consumers insisted they were either not as natural as claimed or didn't even prevent sunburns. Instead of addressing that problem, the company posted Instagram photos of the founders’ children and answered those allegations with a defensive and strident tone.
The litigation creates a huge headache for the company as it is rumored to be inching toward going public. An influx of cash would allow the company to invest in more products and a more robust distribution system, as more of its goods have landed on the shelves of retailers such as Target and Costco. But before that happens, Honest needs to take a hard look at its products and supply chain. Finally, instead of firing back at criticism with smarmy public-relations rhetoric, the company needs to learn from its difficult year, become more transparent and rebuild trust with consumers, who hardly lack choices in what is a highly competitive industry.
Image credit: The Honest Company/Facebook