Why I Don’t Buy Shampoo or Beyond Meat

Up until the 1970's, shampooing was not a daily practice for Americans. Since then, we aggressively adopted it; Americans shampoo 4.59 times a week according to Proctor and Gamble.

The “No Poo Movement” rejects shampooing this frequently. The No Poo Movement argues that shampoo removes a natural oil from the hair. Your body then produces more of this oil to compensate for the removal, which leads to a “greasy” look. We then enter into a vicious cycle of more and more washing.

I’ve shampooed a few dozen times in the past 5 years (I still have friends too!). I have seen no negative impacts once passing a 2 week “acclimation” period. I have many friends who have joined the trend and have stuck with it.

If we’ve just started washing our hair in the last 50 years, what was the reason we started?

Shampoo is a portal into a dark side of capitalism. Shampoo was a new product line that companies exploited to increase growth. Companies like Proctor and Gamble artificially generated demand for shampoo and invented an entire market. Take it from a former ad executive himself:

"All you have to do is watch her running in slow motion on a beach with her hair flopping gracefully in the wind," says Steve Meltzer, a former ad executive. The idea was, "Wash your hair with this stuff, and you, too, can be like Farrah Fawcett," Meltzer says.

These types of products are everywhere. These products follow a simple model:

First, pour investments into research and development for marginal improvements of current products or the invention of new product lines.

Next, cultivate demand through brilliant marketing tricks that tap into our psychological weaknesses and beholden us to the next new thing. Convince the public that this good is essential, will improve your life, and that “everyone else is doing it.” This process allows companies to generate new areas of growth and please shareholders.

This process has been in the playbook of companies for centuries, but throughout the US, in the past 50 years, the pace and expertise has risen. The examples are everywhere: soda, bottled water, nutritional supplements, packaged foods, 5 blade razors, and enriched flour. Nassim Taleb goes so far to say,

“Dental hygiene: I wonder if brushing our teeth with toothpaste full of chemical substances is not mostly to generate profits for the toothpaste industry—the brush is natural, the toothpaste might just be to counter the abnormal products we consume, such as starches, sugars and high fructose corn syrup.”

These new products mostly come from low growth consumer staple companies (Proctor and Gamble, PepsiCo, Unilever, etc.). Their typical offerings are inherently noninnovative, low growth, and low margin. However, the shareholder model requires a steady, predictable increase in earning per share. As such, companies attempt to create new product lines, new models, new “innovations,” and new consumer behavioral habits. Every time I walk into a Walgreens, I’m amazed by the sheer number of products and the creativity used to sell such basic products.

We are on the path to a reckoning of this type of consumption. There is a clear yearning in the culture for real food and natural products. We can notice this in some marketing lines: “All natural!” or “No artificial flavoring.” This is a pendulum shift from canned food, processed meats, and packaged chips.

While we are beginning to see this shift, it won't be easy. The incentives are not aligned with the companies that are pressuring our consumption. We will never hear an executive on a Pepsi earnings call announce that they will phase out profitable foods because they have come to the realization that their products contribute to health risks.

This isn’t a secret. Pepsi’s 2018 10K Annual Report clearly lays out their vision for “innovation”:

“Demand for our products is also dependent in part on product quality, product and marketing innovation and production and distribution, including our ability to: maintain a robust pipeline of new products; improve the quality of existing products; extend our portfolio of products in growing markets and categories (through acquisitions, such as SodaStream, and innovation, such as increasing non-carbonated beverage offerings and other alternatives to, or reformulations of, carbonated beverage offerings); respond to cultural differences and regional consumer preferences (whether through developing or acquiring new products that are responsive to such preferences); monitor and adjust our use of ingredients and packaging materials (including to respond to applicable regulations); develop sweetener alternatives and innovation;”

Pepsi is clearly concerned about changing consumer preferences, and they will attempt to predict and influence our changing preferences to align with new growth opportunities. Pepsi will use its marketing expertise to push us to buy sugar full products like Tropicana and Gatorade (owned by Pepsi) by distracting us with the calcium benefits or Usain Bolt.

However, Pepsi has an inherent business problem with its research and development - the food and drinks have already been invented. Millions of years of evolution has created the natural foods and drinks (basically water, coffee, and tea) that we have to eat and drink.

Along the same lines, I am cautious of the hype of the Beyond Meat and Impossible Burger trend. This screams research and development of “new” and “innovative” food products that a company can sell to us. As Beyond Meat is now a public company, they will now be beholden to their shareholders. They are legally obligated to a fiduciary responsibility to their shareholders. This has been a glorious "get out of ethics free" card that companies have played since the founding of the corporation. When you are legally bound to your shareholders, you can justify nearly any action.

As Beyond Meat pours millions into marketing their product and changing our behaviors, remember that they are now on a growth mission regardless of the potential harm of their products.

As Beyond Meat notes in their S-1 Filing, “Our brand and reputation may be diminished due to real or perceived quality or health issues with our products, which could have an adverse effect on our business, reputation, operating results and financial condition.”

While Beyond Meat is pushing great initiatives on climate change and animal welfare, they are knowingly selling an unhealthy product. Beyond Meat is highly processed and full of sodium and saturated fat. At this point, we know that this is unhealthy and will contribute to continued health issues with Americans.

These consumer staple companies cannot grow by simply selling natural products. If you look at the business model of any grocery store, you know that there is no margin in selling natural, healthy food products. To compensate, consumer staple companies will rebrand, repurpose, and innovate to capture our attention. As a result, we, the consumer, will continue to spend more on products we do not need.