A Deal That Seeks to Keep the Buzz

If it's true that opposites attract, Clorox and Burt's Bees ought to be a match made in heaven.

Clorox: a leading manufacturer of chlorine bleach. Burt's Bees: the maker of 99% natural personal care products.

Last year, Colgate-Palmolive paid around $100 million for niche natural brand Tom's of Maine; with the $925 million acquisition of Burt's Bees, Clorox is following suit.

Clorox, to be sure, makes a lot of things besides bleach, including Fresh Step and Scoop Away kitty litter, Glad storage products, Kingsford Charcoal, Hidden Valley Ranch salad dressing, and Liquid-Plumr. The variety of household products doesn't have much in common besides - well - a certain level of toxicity. "Organic" and "environmentally conscious," their image is not.

But Clorox looks at the natural personal care market and sees a $6.4 billion industry with high margins, strong growth, and ample fragmentation. It looks at Burt's Bees and sees a leading brand with an established international presence.

"The acquisition of Burt's Bees is strongly aligned with Clorox's centennial strategy to pursue growth in areas aligned with consumer 'megatrends' in health and wellness, sustainability, convenience and a more multicultural marketplace," Clorox said in a statement.

Clorox already owns the Brita brand of water filters and has launched a line of natural Cleaning Products called GreenWorks. The company is hoping that with Burt's Bees, Clorox will gain credibility and momentum in the highly lucrative green/sustainable product category.

What Burt's gets from Clorox in return is deep pockets for research and development, along with Clorox's hefty distribution capabilities.

Burt's Bees will retain its president, John Replogle, and will stay based in North Carolina. But it remains to be seen whether Burt's Bees, under its new corporate umbrella, will be able to maintain its signature level of "all-natural" appeal with its core consumers.

The challenge for any niche brand that becomes a small part of a big company is maintaining its credibility when faced with corporate pressures for new product development and for improving returns.

Liz Gunnison