Unilever's Dr. Squatch Acquisition Faces Three Critical Challenges

Forbes

01-07-2025

Gen Z men are the driving force behind the rapid growth in male grooming products.
Unilever announced the acquisition of men's grooming brand Dr. Squatch for an undisclosed sum, specifically citing the brand's "viral, social-first marketing strategies, partnerships with influencers and celebrities, and culturally relevant collaborations" as key deal drivers. Known for cheeky marketing and provocative campaigns featuring Sydney Sweeney as a "Body Wash Genie" Dr. Squatch has built a loyal following among Gen Z men whose facial skincare usage surged from 42% to 68% between 2022 and '24 according to research by Mintel.
Yet Unilever has been here before, without reaping the rewards. The corporate giant acquired Dollar Shave Club (DSC) in 2016 for what seems almost identical reasons—viral marketing that challenged industry giants. Seven years later, Unilever confessed the expected returns hadn't materialized and sold the company to private equity. DSC's former CEO Larry Bodner was blunt about the failure: Unilever "neutered the vibe and fun of what the brand stood for. It just didn't fit in a vanilla corporate entity."
With Dr. Squatch facing increasing competition from disruptive brands like Manscaped and Harry's, Unilever can't afford another costly misstep. Success depends on Unilever learning three critical lessons from the DSC acquisition to preserve what made Dr. Squatch worth acquiring.
The Corporate Acquisition Curse
The soul of a startup starts with a higher brand purpose.
A review of corporate acquisitions of entrepreneurial brands reveals a consistent pattern: start-up brands that thrive on agility, risk-taking, and innovative culture typically struggle when absorbed into corporate structures that prioritize process, hierarchy, and risk management.
Drawing on Ranjay Gulati's insightful research on the soul of a start-up, three crucial cultural pillars define successful startups:
When acquirers maintain these pillars, they more often succeed. When corporate processes eclipse the culture, ventures almost inevitably falter. Yet preserving start-ups' cultural pillars can be challenging for corporate entities.
Corporations who succeed in preserving the acquired brand's higher purpose do so by making that part of the deal. Google's $1.65 billion YouTube acquisition worked because Google explicitly promised YouTube would "operate independently to preserve its successful brand and passionate community." Similarly, P&G acquired Native body care to fill a specific portfolio gap in natural/clean deodorants. The deal helped "P&G to reach consumers who are looking to avoid certain ingredients". Rather than changing Native's mission, P&G leveraged it to reach health-conscious consumers.
Ben and Jerry's was acquired by Unilever in April 2000 for $326 million after more than 20 years as ... More an independent enterprise.
Yet, supporting an entrepreneurial brand's higher purpose can come with challenges, especially when the founder's purpose takes a new direction. Unilever has experienced this reality firsthand with its Ben & Jerry's ice cream co-founders. The founder's increasing social activism has not consistently aligned with Unilever's values, illustrating the complexity corporations can face.
Entrepreneurial brands often succeed by creating intimate customer relationships that corporations desperately desire, but which their formal structures and scale can hinder. Nordstrom's $350 million acquisition of Trunk Club in 2014 illustrates this challenge. Trunk Club revolutionized personal styling for affluent men through high-touch, personalized service—customers developed relationships with individual stylists who understood their preferences.
After the acquisition, Nordstrom pushed to expand the service yet to contain costs, instituted a $25 at-home try-on fee and shortened the return window, negatively impacting what male customers had come to expect. The result: Nordstrom took a $197 million write-down and eventually shut down the service entirely.
Snapple built its success on anti-establishment marketing and selling through small, independent ... More distributors.
Quaker Oats' experience with its Snapple acquisition in 1994 demonstrates how challenging it can be to preserve autonomy within corporate decision-making. When Quaker acquired the quirky beverage brand for $1.7 billion, Snapple had built its success on unconventional marketing and distribution through small, independent distributors that matched its authentic, anti-establishment brand identity.
However, Quaker applied its traditional corporate playbook, pushing Snapple into supermarkets where it faced direct competition from giants like Coca-Cola and lost the very quirkiness that made it valuable. Three years later, Quaker sold Snapple for just $300 million.
Three Lessons Unilever Can Learn from the Dollar Shave Club Experiment
The global men's personal care market is projected to grow at 11% annually through 2032
Unilever's reasons for acquiring Dr. Squatch mirrors the rationale for acquiring Dollar Shave Club: cheeky, irreverent marketing that disrupts traditional grooming advertising and connects with male audiences. The DSC experiment offers three essential lessons Unilever would be wise to apply to maintain Dr Squatch's cultural pillars and appeal.
DSC rebelled against large corporations by offering affordable razors and challenging the high price of established brands, namely Gillette. DSC's popularity ignited with an expletive-laden video that challenged industry conventions. Integrating DSC into a broader corporate purpose not surprisingly diluted the brand's appeal.
Dr. Squatch's brand purpose follows a similar ethos and goes beyond selling soap. The brand's limited-edition soap using Ms. Sweeney's bathwater reflects a purpose that rejects mainstream personal care products for a more authentic approach to masculinity.
For Dr. Squatch to succeed will require the brand stay true to its purpose and ability to create campaigns that generate organic social media buzz—the kind of awareness that motivated Unilever's purchase in the first place.
When DSC expanded beyond its core $1 razor proposition into expensive cologne, hair cream, and sunscreen, it abandoned the budget-conscious customers who had embraced the brand's anti-establishment message about overpriced grooming products. Considering Dr Squatch's popularity, Gen Z men have shown they respond to messaging around grooming as self-expression rather than simply basic hygiene.
Gen Z men respond to marketing messaging around grooming as self-expression not simply as basic ... More hygiene.
Gen Z men represent the future of the men's grooming market according to researcher Mintel. Unilever would do well to keep the interests and preferences of this demographic front and center as they invest in Dr Squatch and avoid the temptation to push the brand too quickly into mass-market price points where it could lose the authenticity that has resonated so strongly with Gen Z men.
Unilever attempted to preserve creative independence by allowing DSC to launch MEL Magazine —a men's lifestyle publication with complete editorial independence and no revenue model, bankrolled entirely by Unilever. While this effort preserved autonomy, it exemplified too much creative freedom without accountability.
The challenge for Unilever with Dr. Squatch is finding the optimal balance between creative autonomy and business accountability. Success means establishing clear KPIs around brand engagement, customer acquisition costs, and revenue growth while giving the Dr. Squatch team the freedom to pursue unconventional marketing strategies that drive those metrics.
Dollar Shave Club's Lessons Provide a Roadmap for Dr. Squatch's Success
The global men's personal care market generated $58 billion in 2022 and is projected to grow at 11% annually through 2032. The Dr. Squatch opportunity requires not only capturing the coveted GenZ men and their surging interest in skincare but continuing to connect with young men who view grooming as self-expression and respond to authentic, irreverent messaging.
Unilever now has a roadmap for success with Dr Squatch based on its struggles with Dollar Shave Club: maintain brand purpose while delivering returns, protect customer connections while enabling growth, preserve creative autonomy without sacrificing accountability.
The question isn't whether Dr. Squatch has the potential to succeed under Unilever's ownership—it's whether Unilever has learned from its past efforts to let the brand flourish.