As Colgate-Palmolive Co. seeks to cut out retailers as sales move to eCommerce, the consumer packaged goods (CPG) company is reportedly seeking the help of a startup to sell products via a subscription service. According to sources familiar with the situation, Colgate is nearing a potential deal to purchase a minority stake in the contact lens subscription service Hubble, The Wall Street Journal reported.
With such an arrangement, Hubble would create subscriptions for Colgate products. While an oral care subscription geared around products like teeth whitening may begin this year, other product lines, such as pet food, could be in the works. The financial terms of such a deal were not disclosed in the report, but Colgate and Hubble would reportedly share revenue from the services.
The move comes as competition from subscription services for razors, such as Harry’s and Dollar Shave Club, have led Gillette to cut prices and refocus on new products. At a meeting in May, Colgate CEO Ian Cook said the company was working to “not let a direct-to-consumer model slap us the way it slapped Gillette.”
In 2016, Unilever purchased Dollar Shave Club as part of its overall strategy to expand its consumer goods and personal care line of business. Dollar Shave Club gives customers the option of getting a new razor in the mail once a month for as little as $1. Since launching in 2011, the firm has expanded to other items. Unilever is the Anglo-Dutch firm behind Axe, Dove and Pond’s — and it is one of the world’s largest players in a sector that directly competes with P&G and Colgate-Palmolive.
Michael Dubin, founder and CEO of Dollar Shave Club, was to stay on, and DSC was to continue to operate autonomously, though Dubin now answers to a “trio of Unilever execs.” In a Recode interview, Dubin noted the allegedly billion-dollar deal came out of discussions surrounding Unilever possibly investing, since the business was not looking for a buyer at the time.