Clorox Buys Burt's Bees

Sunday, April 13, 2008 by: David Gutierrez, staff writer
Tags: Clorox, natural products, health news

(NaturalNews) The Clorox Company has announced plans to purchase Burt's Bees, a personal care products company known for using only natural ingredients such as beeswax and flowers. The company is known for products including lip balm, hand cream, soap, moisturizers and shampoo.

"We see lots of growth potential in Burt's Bees,'' said Beth Springer, Clorox's head of strategy. The company plans to expand distribution of Burt's Bees products from its current base in health food stores to mass retailers such as Target.

Clorox has agreed to pay $925 million for the company. Currently, 40 percent of Burt's Bees revenue comes from sales of lip-care products, 30 percent comes from baby and outdoor products, and 30 percent comes from personal cleaning products. The personal cleaning line is the fastest-growing.

The purchase marks part of Clorox's wider strategy to acquire a number of health and convenience product lines in the nest three years. Clorox is also the owner of Brita water filters.

"The Clorox name doesn't tend to make one think of nature- friendly products,'' said Ali Dibadj, an analyst with Sanford C. Bernstein & Co. "This acquisition can help.''

Clorox is not the only major company to acquire natural or environmentally companies and product lines in recent years. Colgate-Palmolive Co., the largest toothpaste maker in the world, purchased Tom's of Maine in 2006. Like Burt's Bees, Tom's of Maine makes its products (toothpastes, soaps and shaving cream) only from natural ingredients, such as olive oil. The company was acquired for $100 million. In 2000, Unilever NV bought Ben and Jerry's Homemade Inc., well-known for its natural ice creams.