In our long-running series, “How Im Making It,” we talk to people making a living in the fashion and beauty industries about how they broke in and found success.
She built one of the fastest-growing skin-care brands in Sephora’s history.
Tiffany Masterson, the founder of buzzy skin-care brand Drunk Elephant, never wanted to be an entrepreneur. “My mom was a stay-at-home mom and had four children, and I really just wanted to do the same thing,” she tells me over the phone from her hometown of Houston, Texas, where the company is now based. Yet she now runs one of the fastest-growing skin-care brands in the industry – one that has shoppers, investors and competitors taking notice.
Drunk Elephants impressive sales and rapid growth since its launch in 2013 have caught the attention of major beauty corporations – it was rumored that Estée Lauder Cosmetics Inc. had an interest in possibly acquiring the brand – and investors. In March of 2017, Drunk Elephant received funding from private equity firm VMG Partners and Man Repellers Leandra Medine, among other backers.
But more crucially, Drunk Elephant is finding resonance with consumers. Its messaging, which talks about “clean” products that omit certain ingredients Masterson has deemed dubious, has struck a chord and set the brand apart on the crowded skin-care shelves. TLC Sukari Babyfacial (one of my personal favorites, which I wrote about in February of last year) was one of Sephoras best-selling products of 2017 – no easy feat for a relative fledgling stocked alongside household-name brands backed by industry giants.
With brightly colored packaging and a quirky name (Drunk Elephant refers to the intoxicating-like effect its hero ingredient, marula, has on elephants that consume it), the company has also found success on social media, with a highly engaged community of followers. And for Masterson, its only the beginning. New products, global expansion and yes, perhaps an acquisition by one of those aforementioned major corporations – just not anytime too soon – are all on the horizon. Read on for the highlights from our interview.
Tell me about your background and how you first got interested in skin care.
I have no background in the industry and I never envisioned myself being an entrepreneur. My mom was a stay-at-home mom and had four children, and I really just wanted to do the same thing. But around the age of 40, I started getting antsy. My children were going to school full-time, and I started looking for a way to make a little extra money.
I started selling a bar cleanser. My brother and his wife had a store, and somebody introduced them to this cleanser from Malaysia and offered them the exclusive distributorship for North America. They werent interested, but my brother-in-law in Colorado was. He purchased the distributorship for the bar and I started selling it in Houston. Im building awareness, and I started getting attention for the product. I got it in Harpers Bazaar. I got attention from direct-to-consumer product company Guthy-Renker. I started learning more, and this process ignited a passion in me for understanding ingredients, how our skin responds and which roles ingredients play in formulations. Why do some have fragrance, why do some have essential oils? What about chemical sunscreens versus physical?
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How did you eventually get to the point where you were starting your own company?
Eventually, two years in, I figured out that the bar Id been selling was a multi-level marketing scheme. Around the same time this happened, Beautypedia came out with a one-star review, trashing the bar, saying it was a fraud and that the ingredients didnt support the claims at all. The guys that sold it to us had told us that it was their formulation and that it was patented and secret – and we believed them. But I saw the thing with Beautypedia and that really stung me. I realized if the company producing the bar lied about one thing, theyre going to be lying about other things as well. So we probably are looking at a bar that doesnt really have the ingredients theyre telling us it does. So I went back to my investor and I said, We need to shut this thing down. I want to do my own.
I had a consultant from Guthy-Renker saying, I think you kind of know your stuff, why dont you do your own line? You know so much about ingredients! My investor was excited to get his money back out of this thing and put it into a new line.
How did you first go about developing the new product range?
I started by making a list of the six things I think we need to have healthy skin. I wanted to do a cleanser for sure and my investor wanted me to do a bar. Through my research and talking to dermatologists I really believed the key things you need are a chemical exfoliant, a vitamin C product, a physical sunscreen, an antioxidant-rich moisturizer – in this case I wanted to do an oil – and then I did two bars. That totaled six products. I sat down, never having been in the industry before, and I started researching the heck out of ingredients and I, on paper, developed my own products. They were different than they are now for sure.
I came up with these criteria: It has to be nontoxic or low-hazard and it has to be bioavailable, meaning able to get into your skin. I cant even say that I knew that term at the time, but I wanted it to be able to get into your skin. I wanted it to be non-irritating.
As a result, there are some common ingredients Drunk Elephant avoids. How did you decide to exclude things like essential oils?
As Im going along doing my research, Im wondering about essential oils and what theyre there for. I would use them on my skin and my skin would freak out. Chemical screens made me break out. Thats how I went about figuring out the suspicious six – the ingredients that I dont want, that Ive seen people complain about. Fragrance, dyes, drying alcohol – why are they there?
I determined that the six ingredients I wanted to avoid, which I realized were largely there in competitors products for marketing. Silicones make a product feel better; dyes make a product look better; essential oils and fragrance make a product smell better; SLS is a cleansing agent that penetrates your skin and irritates and strips it.
So you really came at it from a consumer perspective?
A thousand percent a consumer head, heart, desire, not looking at other brands at all. It didnt even occur to me to look at other brands or try to compete or copy or emulate. I had it all in my head and it was coming from my gut. As a consumer, what do I wish was out there? Thats what I did.
How did you go about actually getting the products into production and perfecting the formulas to a place where they worked?
I called some people in Los Angeles who I knew could give me some names in the industry, and I eventually landed with my chemist and I said, Can you make these things for me? and I sent over the ingredient decks Id been working on. His assistant called me right away like, These are already ingredient decks, are you a chemist? I said, No, Im not, Im a stay at home mom in Houston, Texas. I just want to make these products. She was like Wow, I showed them to the chemist and we think theyre really interesting and different and actually really good.
We went through, ingredient by ingredient, and we swapped out a couple that canceled each other out or that did the same thing, but the resulting ingredient decks were very similar to the ones I first wrote down for every product. At some point my chemist was like, You know you didnt have to do it that way. I would have just done the formulation for you, thats how brands do it. But I learned a ton doing it that way; I will always do it that way.
What is your process when youre formulating new products now?
To this day, I still do my formulations that way because I think it makes them more interesting. Im into health and wellness. I look at ingredients like food, like ingredients I make a smoothie with, so Im coming at it from a different angle and I think that keeps the formulations from being run-of-the-mill.
What were your initial goals when you were first building the business?
My goals were kind of pie-in-the-sky: I was like, Im going to do this product line and Im going to sell it. Once I started interviewing people in the industry for jobs, like my manufacturer or my packaging company, I started hearing stories like, Oh well they also do the packaging for so-and-so, who just sold his company for $200 million to LOréal. And so you start getting the idea of the path. I told my brother-in-law, Lets just do this line, get it into Sephora and then lets sell it to one of the big cosmetic companies.
So that was initially a goal, right from the launch of Drunk Elephant?
Absolutely. But as Ive gotten further down the path of doing this, I dont feel the need to sell it soon. Im sure I will one day. I love it, its so rewarding, its exciting, I have an incredible team and culture. Im still in Houston, Im staying in Houston, I love it in Houston because it keeps me out of the industry and I dont ever want to be entrenched in that. I want to just still develop and have all of my ideas come from my gut instead of from other brands. I never want to stop questioning things. The essential oil being good for you, I questioned it, I believe its not. We keep questioning things that weve been told for years and proving perhaps that theyre not right after all.
Even if you did sell, you would want to just stay on board and maintain your role in the company?
For sure. I think you have to. I dont think you can just sell something that youve worked this hard on. My heart is in it; I feel protective of it. I dont want to just sell it and have somebody come in and change things.
How and when did you partner with Sephora?
I launched it originally just on my website, a kind of soft launch with interim packaging, at the end of 2013. I started sending stuff out to editors. I had my eye on Sephora, but I wasnt really ready to send the line to them because I didnt feel like it was really ready. I took that year selling it on my website and getting feedback. I tweaked a few things, and I was getting press, so Sephora actually reached out to me. They asked me which category it should be in and I told them it was a new category: nontoxic, clean.
Then I went to Cosmoprof in Las Vegas. Sephora was there and they come by – the retailers hide their badges so you dont know who youre dealing with – but sure enough, it was them. I sent them home with product. I heard from them about a week later. Theyd had time to talk about it, read about the philosophy, use it, and they launched me five months later, in January of 2015.
How did working with Sephora as a retailer change the business?
We sold out of several of the products really, really fast. The original forecast for the year we did right away, and that was exciting and challenging. I had to learn how to get things more organized. Sephora has been an unbelievable partner, and Ive been a good partner to them from the beginning, but I didnt have an interest in exploding. I didnt want to put the product everywhere.
Some of the best advice I ever got was when I was talking to a distributor in my first year and he was talking about getting Drunk Elephant products into Barneys or Bergdorfs or Neimans and he said, I could try to get you into these places, but where do you shop for your skin care? I said, I shop at Sephora. And he said, Thats where its going to sell. That proved to be exactly right.
Drunk Elephant hasnt done any traditional marketing or paid influencer partnerships. Can you tell me about that choice?
I dont know any different. Im a firm believer that once money changes hands, the authenticity is gone. This isnt judging other brands, its just my own personal preference as a consumer. I blow past advertisements. When they pop up on my screen I delete them, and when they get in my face I dont like that. So when I see Sponsored on Instagram or Facebook, its a turn-off for me. Immediately it says to me these people have to pay to get attention. I dont mean to sound ugly against the companies who do it. I know traditionally marketing, advertising, paying – thats just the way its been. But for me personally its just not my style and I dont feel comfortable doing it, now that Ive not done it for so long.
How has Drunk Elephant used social media to its advantage, even without doing paid partnerships or activations? It seems like you use it a lot for customer feedback.
Is there a better place for me, as a founder, to get my feedback, to learn new things, to be questioned, to be challenged, to be called out, to own my mistakes, to fix them, to not be defensive? Im on there just for Drunk Elephant – its not to bash other brands or compete. Its to connect with my consumer. I feel like if theyre spending money on my product, then they deserve to have access to me.
I make it a point once or twice a week to pick up the phone and call someone whos emailed in to Drunk Elephant. Thats the most genuine way to grow your business because they lob questions at you. You get the real-time feedback. And I can go change a package, I can go change a formulation. I can do that. As a consumer, thats what I want in a brand, so thats what Im going to give.
You secured another round of funding from minority investors in March of 2017 – how has that changed the business and affected its growth?
It wasnt necessarily a money-need thing, it was more of a strategy-need thing for us. It allowed us to hire an elite team of industry veterans who really can help share their experiences and guide us, so thats been major. I think people are everything, and we have a really solid, great team. Its a very colorful team that I think we all share the same values. Im so excited for the next phase. At some point you have to know what you dont know.
Whats coming next for the brand?
Global expansion and exciting new products. I dont look at trends and I dont wait, so Ive already developed my products through the end of 2019. I have three launches per year scheduled; I even have one product for 2020. So thats seven more products in the can that I love, that Ive named, that I use.