Jessica Alba’s Honest Co. to Drop Use of Disputed Ingredient

Consumer-products seller to reformulate laundry detergent, other cleaners

Honest Co., the consumer-products business co-founded by actress Jessica Alba, is reformulating its laundry detergent and other cleaning products, removing an ingredient that has created controversy for the company, according to people familiar with the matter.

The five-year-old Santa Monica, Calif., company sells household, baby and personal-care products that it markets as made without chemicals that it says are harsh or potentially harmful to health. Many of the compounds that Honest says it avoids are found in mainstream brands, which say they are safe to use.

In March, The Wall Street Journal reported that two independent lab tests found samples of Honest laundry detergent contained significant amounts of sodium lauryl sulfate, a cleaning agent that is on a list of chemicals that Honest has pledged to avoid. The detergent bottles for years have claimed the product is “free of” SLS.

Honest disputed the labs’ findings and said the company’s own testing didn’t find SLS. Instead, it said it used sodium coco sulfate, which Honest said was a different compound derived from coconut oil and less of a skin irritant than SLS. Chemists interviewed by the Journal said sodium coco sulfate is a mixture of cleaning agents that includes a large amount of SLS.

Honest executives said in March the company had no plans to reformulate the detergent.

The company is now preparing to roll out a new laundry detergent in 2017 that doesn’t contain sodium coco sulfate, according to people familiar with the plans.

In response to an inquiry from The Wall Street Journal, Honest said it is making changes to multiple products, including dish soap, detergent and other cleaners, “utilizing an advanced sugar-based surfactant technology to further improve the efficacy of our products.”

The company said its research team “consistently works to innovate across our entire product line while adhering to The Honest Company’s uncompromising safety standards.”

Replacing the laundry detergent with a new formulation that doesn’t contain sodium coco sulfate would remove ambiguity over the SLS issue, which caused Honest to face backlash from some customers.

One small customer, Sprout San Francisco, a children’s boutique that sells natural and organic products, earlier this year stopped selling Honest detergent and the company’s dish soap and multi-surface cleaner because they contained sodium coco sulfate.

“We decided the product wasn’t what it was described to be,” Sprout owner Suzanne Price said in an interview. Sprout continues to carry other Honest merchandise like disposable diapers and skin-care products.

The moves are coming at an important juncture for Honest. The company has in recent months had discussions with several large companies about a potential sale, say people familiar with the matter, though it is unclear if there will be a deal or if Honest will decide to pursue an initial public offering instead.

The company has had talks with consumer-products giants including Unilever PLC, Procter & Gamble Co.Clorox Co. and Johnson & Johnson, according to one person familiar with the matter. The four companies declined to comment.

Honest currently generates roughly $300 million in annual sales, and was valued at $1.7 billion during a private funding round in August 2015.

Unilever recently discussed the possibility of acquiring Honest at slightly over $1 billion, according to people familiar with the talks, but earlier this month the European consumer-goods giant said it was buying Seventh Generation Inc., one of Honest’s primary rivals.

Honest isn’t the only natural-products company that is rethinking its use of sodium coco sulfate. Hain Celestial Group Inc., which owns several brands of shampoos and skin cleansers that contain the ingredient, earlier this year told the Journal it was reformulating dozens of products and dropping claims that they don’t contain SLS.

Honest, meanwhile, is fighting civil lawsuits brought by consumers in California and New York who claim they were misled by the labeling on the company’s laundry detergent and household products. The company has denied the claims.

During an appearance on NBC’s Today Show in August, Ms. Alba, who is Honest’s chief creative officer, said the suits were “baseless and have no merit” and her celebrity status has made her a prominent target.

“Our customers are savvy enough to do research and understand the integrity of our products,” she said. “We stand by our ingredients, the effectiveness of the products, and we are pretty optimistic that we are going to win every case.”

This isn’t the first time Honest is launching new versions of its products after facing scrutiny from consumers and the media. In the summer of 2015, some people who said they were Honest sunscreen users posted photos of their sunburns on social media and questioned the efficacy of the product.

Honest executives including Ms. Alba defended the sunscreen at the time, saying the product had gone through extensive testing and met government-mandated standards. This year, the company released a reformulated sunscreen product that contains higher amounts of zinc oxide, the active ingredient that blocks ultraviolet rays.

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