The Honest Company

History

Alba was inspired by the 2008 birth of her first child Honor and her own history of childhood illnesses to create a company that provided an alternative to the prevalent baby products with ingredients such as petrochemicals and synthetic fragrances. She was compelled to become serious about this venture when one of her mother's product recommendations caused her child a welt outbreak. It took Alba three years to find her business partners—chief executive officer Brian Lee, chief operating officer Sean Kane, and chief product officer Christopher Gavigan. Despite advice that she should start small with a singular focus, Alba launched the company in 2011 with 17 products. While building her company, Alba has lobbied the United States Congress to make the testing of children's clothing and toys for chemical inputs more stringent.

2013 sales were $50 million. In November 2014, the company had 275 employees and was projected to do $150 million in sales. 80% of its sales were online via a monthly subscription service with the remainder being done in department stores and discount warehouses. The company eventually totalled $170 million in sales in 2014.

Honest raised $70 million from venture capitalists in the summer of 2014 in preparation for an imminent initial public offering. The financing put a value on the company of $1 billion. Prior to the 2014 round of financing led by Wellington Management Company, the company had raised $52 million in financing from ICONIQ Capital, General Catalyst Partners, Institutional Venture Partners and Lightspeed Venture Partners. As of August 2014, the company's products were available at retail outlets in the United States and Canada. The company had plans to expand to England and Australia, but the summer 2014 funding was primarily to prepare for a launch in China. A company press release said the funding was to aid product development and expansion.

Whole Foods and Costco were The Honest Company's initial retail distributors. The company began selling in Target Corporation on June 15, 2014. Other stores that carried the company's products by mid 2014 included Buy Buy Baby and Nordstrom. By the end of the third quarter of 2014, the company carried 90 products. Its leading selling product was diapers, at the time.

In July 2015, Jessica Alba announced that the Honest Co. would be moving their headquarters from 2700 Pennsylvania Avenue in Santa Monica to the top three floors of 12130 Millennium Drive in the Playa Vista neighborhood of Los Angeles in early 2016. The following month, it announced a new round of funding generated an additional $100 million of venture capital, implying a valuation of $1.7 billion. In late 2015, the company acquired Alt12 Apps, the makers of popular apps such as Baby Bump, Pink Pad and Kidfolio.

Honest is known for its eco-friendly products. The company has a strong charitable mission that is likened to Toms Shoes, Warby Parker, and Etsy. It donates products, revenues and labor. The company also touts its Honestly Free Guarantee that it does not use "health-compromising chemicals or compounds", including a specific list of products it promises to never allow in its products. As of August 2015, the company was thriving without having ever employed traditional media such as print ads, television or billboards.

In March 2017, The Honest Company announced that Clorox veteran Nick Vlahos would replace Brian Lee as Chief Executive Officer. Vlahos worked at other retail brands, including Burt's Bees, Brita and Green Works. Brian Lee remains on the board in an advisory role.

Honest Beauty

On September 9, 2015, the company opened the Honest Beauty brand as a separate entity with its own website and logo. Honest Beauty launched with an 83 element product line (17 skin-care products and a 66-piece makeup range). Its products are derived from botanicals free of parabens, phthalates, petrolatum, sulfates and chemical sunscreens. It will have a brick and mortar presence in a six-month pop-up retail shop in The Grove starting September 25. The September 9 launch took place at Trump SoHo amid the backdrop of lawsuits against its parent company.

Controversy

A controversy resulted from Honest's SPF 30 sunblock, which resulted in multiple customers complaining of skin burns until it was reformulated (with reduced zinc oxide levels) and repackaged in 2015.

In March 2016, it was reported that Honest's liquid laundry detergent product contains "a significant amount" of sodium lauryl sulfate or SLS, a synthetic surfactant that the company claimed it would "never consider for use in anything. Period." In immediate response to the WSJ article, Honest Co. stated that its product does not contain SLS, but does contain sodium coco sulfate which is characterised by The Honest Co. as the "gentler alternative" to SLS. However, sodium coco sulfate is a mixture of synthetic chemicals composed primarily of SLS. Honest's detergent is sourced from Earth Friendly Products (EFP) which did not test for SLS. EFP in turn purchased untested chemicals from Trichromatic West which also did not test for SLS. EFP had removed its claims of SLS-free product from its own website in late 2015.

In April 2016, Good Morning America reported that The Honest Company is being sued for "representing its Premium Infant Formula as 'organic' even though this product contains 11 synthetic substances prohibited under federal law in organic products."