Honest Co. is reformulating its soaps after ingredients controversy - TechCrunch

The consumer products startup founded by Jessica Alba, The Honest Co., on Friday told The Wall Street Journal that it plans to reformulate its dish soap, laundry detergent and other cleaners after an earlier controversy over their ingredients.

The Honest Co. markets its products as gentler, healthier and more environmentally sustainable than those of mainstream brands in the U.S.

However, reporters with The Wall Street Journal and a third-party testing laboratory earlier found that some products made by The Honest Co. contained ingredients that the company previously said it excluded, namely, sodium lauryl sulfate (SLS).

While SLS is used in plenty of soaps and cleaners already, and is generally seen as safe, The Honest Co. claimed it wasn’t the healthiest option for consumers and was harsh.

The Honest Co. claimed, counter to the WSJ’s findings, that its own lab tests never detected SLS in its products. The five-year-old startup also said then that it used sodium coco sulfate not SLS. But SCS happens to be made with SLS commonly, so The Honest Co. remained under scrutiny and is even facing lawsuits over its labeling.

Recently, a deal in the works that could have seen Unilever acquire The Honest Co. for a price in the ballpark of $1 billion derailed at the last minute over pricing considerations, sources tell TechCrunch.

Instead Unilever agreed to acquire The Honest Co. predecessors, Seventh Generation Inc., for an estimated $600 million to $700 million in cash. (Seventh Generation and Unilever have not disclosed the financial terms of their deal.)

Sources involved in M&A dealmaking in the consumer goods industry are also telling TechCrunch it would be highly unlikely if Unilever were to acquire Honest Co. at this point.

But other titans in the field, such as Procter & Gamble, Clorox Co. and Johnson & Johnson, could potentially come courting. They are all rumored to have sniffed around the Santa Monica, Calif. startup already.

Honest Co. has raised $222 million in venture funding to date, and generates about $300 million in revenue annually. It sells its products direct to consumers online, as well as via its own pop-up shops and major retailers like Target, Costco and Whole Foods.

Honest Co. executives could  not be reached in time for comment.

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