Aesop: The $3.7 billion empire bottling mimetic desire

Jessy Wu

April 5, 2023

Source: Aesop

Aesop, a purveyor of premium botanical skincare and home care products, was founded in Melbourne in 1987. This week Aesop was acquired by L’Oréal, the world’s largest cosmetics conglomerate, for a jaw-dropping $3.7 billion.

L’Oréal already owns personal care brands such as Garnier and Kiehl’s. It probably didn’t acquire Aesop for its soap-making know-how! Instead, the $3.7 billion valuation tracks Aesop’s brand — which has become synonymous with aspiration, taste, and quality.

Aesop doesn’t just bottle bergamot rind and rosemary leaf — it distills mimetic desire into an apothecary bottle.

Mimetic desires are shaped by mimicry of those whose status or lifestyle we covet, rather than those that stem from an individual preference or need. We absorb these influences through the circles we move in and the media we consume.

We don’t buy $35 bottles of handwash because of the subtle fragrance it leaves on our hands, but because Aesop is a metonym for the kind of life we want to have — or at least, want our houseguests to think we have. Meticulously curated, environmentally mindful, and culturally progressive.

We want to be someone who reads Haruki Murakami, lovingly tends to their own sourdough starter, and gets up bright and early on Saturday mornings to buy fresh produce from the local markets. Of course, this person has patience, willpower, and discipline we don’t (yet) possess. But maybe this Aesop air freshener will get us halfway there?

Jessu Wu of AfterWork Ventures. Source: Supplied

Aesop’s multi-billion dollar acquisition by a global cosmetics juggernaut is not only a reminder that consumer goods companies can deliver venture-scale outcomes, but also that enduring brands — ones that command pricing power because of their place in our cultural imagination — take time, effort, and constant innovation to build.

Aesop could have coasted on the laurels of being on every aspirant home decorator’s mood board. But they have continued to push the envelope on immersive retail experiences and sought to stand for something larger than themselves.

During Mardi Gras, they transformed flagship stores in Sydney and Melbourne into Queer Libraries — stocking shelves with 45 titles by LGBTQIA+ authors for their visitors to cherish, share and discuss. Visitors were invited to collect a complimentary volume of their choice, no purchase required.

At a time when previously vaunted direct-to-consumer (D2C) companies such as Warby Parker, Allbirds, and HelloFresh are trading at 90% down from their pandemic peak, Aesop is a lesson in what is required to build an enduring business.

D2C companies used to get by with conversion-focused performance marketing — such as Instagram and search engine ads. It is clear they must approach a 3-speed marketing approach, each with different objectives and timelines:

Brand marketing: Building a business that people feel emotionally connected to, one that stands for something beyond the product it sells.

Product marketing: Telling your product story in a way that highlights your differentiation or quality, and builds trust. This is designed to build awareness and drive medium to long-term consideration.

Performance marketing: Conversion-driven marketing where the goal is to get customers to make a purchase, now.

As venture capital investors, we’re on always the lookout for consumer goods companies on a trajectory to build something as culturally resonant and enduring as Aesop. We are proud of the investments we’ve already made: including Lyka, Tirtyl, Vitruvian, and Outlaw.