Tracee Ellis Ross on the Future of Black Beauty and Diversity in Business

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  • Actor and entrepreneur Tracee Ellis Ross launched beauty line Pattern in 2019 that caters to the needs of Black women, an often underrepresented market in the cosmetics industry.
  • Black consumers possess roughly $1.2 trillion in spending power, making them an important market for brands looking for growth.
  • Ellis Ross told CNBC's Inclusion in Action forum that promoting diversity is more than just putting diverse executives "on mastheads."

For decades, companies creating haircare products for Black women — or buying into the market opportunity as Unilever did in its acquisition of Sundial Brands — have been stories told through numbers that justify catering to a minority consumer segment routinely pushed aside by the expansive, multi-billion-dollar beauty industry. 

The numbers are evident: according to Nielsen, Black consumers spent $473 million on haircare and $465 million on skincare products in 2018.

But for actor and entrepreneur Tracee Ellis Ross, who launched her own beauty line catering to the needs of Black women in 2019, the numbers miss the mark. "I don't think that number even cracks the surface. Unfortunately, our industry and the world still uses numbers as a way to qualify and quantify our worth, and we are so much more expansive than that," Ellis Ross told CNBC's Inclusion in Action forum Thursday.

Ellis Ross, a star on the hit show "Black-ish" who has long spoken out against the lack of diversity in Hollywood, teamed up with Ulta Beauty in 2019 to launch Pattern, a beauty line that caters to the needs of Black women. In recent years, the cosmetics giant, which also tapped Ellis Ross to serve as a diversity and inclusion adviser, announced plans to double Black-owned brands on store shelves by the end of 2021 and devote $25 million toward reaching underrepresented customers.

Ellis Ross said that starting a brand that celebrated Black women was her "life's work," as she recalled her experience searching for beauty products at stores growing up.

"Our little shelf space was at the back in a dark corner of the store and it was the same product from when I was a child to when I was an adult."

A new generation of Black entrepreneurs is changing the beauty landscape, with brands including The Lip Bar, CurlMix and Curls growing sales and raising capital to expand their businesses. For Ellis Ross, building Pattern was a 12-year process from the moment she made her first brand pitch and it evolved over 75 different products and many experiments.

"Long before I was on social media, I was walking through this journey with my hair. And I went from my own personal discovery to realizing that I was not alone. That there were so many people in this curly, coily and tight textured community that didn't have products that really met them where their hair was," she told CNBC.

The beauty industry is an example of the opportunities to break down a systemic misunderstanding of the barriers to economic opportunity. "I feel that those are conversations that I think are getting better and easier, but I don't think one needs to explain why you need to have products for your hair. I think it's a given," Ellis Ross said. "The validity of my needs does not need to be justified," she added.

Ellis Ross said the number of years it took to develop her brand speak to the long road ahead for the broader societal goals related to diversity. While there are signs of improvement in opening up more opportunities to minorities, companies need to communicate more, and "go beyond just D&I executives and mast heads."

"This isn't a retail issue, this isn't an industry issue," Ellis Ross said. "This is a societal issue that we are all working through and have been for quite some time. ... To really look at not checking boxes, but where the systemic oppression actually meets the road. ... I think the more that we feel siloed off and think that our experience is so unique, we can't help each other move through and find solutions."

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