Burt's Bees and Güd to drive growth for Clorox

On Feb. 3, 2012, The Clorox Company reported sales results for its second quarter of fiscal 2012, with sales growth up 4 percent year-over-year and earnings up 11  percent to $105 million. Its Lifestyle division—which includes natural personal care brand Burt’s Bees, as well as water filters and dressings & sauces—saw sales growth of 6 percent and volume growth of 2 percent. In a statement, the company attributed positive volume growth to innovation in water filters and natural personal care—Burt’s Bees is constantly rolling out new products—and attributed solid sales growth to a benefit from price increases.

Continued growth for the Burt’s Bees brand comes on the heels of a 2011 goodwill impairment charge on the business. In January of last year, Clorox wrote down the value of Burt’s Bees by $250 million, as a post-recession reality failed to match up with pre-recession expectations. Clorox purchased Burt’s Bees for $925 million in 2007, a watershed acquisition for the promising natural personal care market.

Despite the write-down, Burt’s Bees continues to perform well. And evidence of a price increase suggests that the brand is beginning to embrace its identity as more of a premium mainstream brand than a core natural brand and will lead with a nature-as-luxury flair more in the future.

Its new line of Tinted Lip Balm, for example, shies from the yellow beeswax color so often associated with the brand’s packaging and instead uses a simple, dark casing that evokes luxury more than earthiness.

Positioning the brand as a luxury for mature, wealthier consumers offers a good complement to Clorox’s new natural personal care brand Güd, which is targeted to a younger crowd. Introduced in January, Güd is a line of 24 SKUs for women in their twenties, and it sells at a cheaper premium than Burt’s.