Brandless:  Disrupting Everything in Consumer Packaged Goods

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“Make it simple, but significant.”  – Don Draper, Mad Men, 2010

I am excited to announce our recent investment
in Brandless, a bold new consumer packaged goods (CPG) company that officially
launched today.  Brandless’ mission is
simple but significant: offer health-conscious products at a disruptively low
price point that can’t easily be replicated by established CPG conglomerates.  Over the past several decades, consumers have
grown to believe that high quality, responsibly-sourced products (such as
organic or chemical-free food) should cost more than lesser counterparts sold
under national brands.  Brandless aims to
challenge this way of thinking, and in doing so change the way we shop for
everyday items.  

The CPG industry is a $775 Billion market that
reaches every American household—from the kitchen counter, to the pantry and
beyond.  Decades ago this industry could introduce low-cost, high-margin
products to the world through television ad campaigns and national wholesale
.  In recent years the traditional brand advertising approach
has largely grown stale in today’s digital era, and has eroded consumer trust across
an industry that has lost touch with modern buying behavior.  Today’s
consumers are often digital natives with discerning taste—seeking both value
(distinguishable quality) and values (healthy, responsibly sourced) in
the products they consume. Despite rapidly increasing supply and demand for
healthier, more sustainable food products, the CPG industry has largely kept
prices 40-50% higher than lower-quality alternatives under household brands.
 This price distortion has sadly made “eating right” and “buying right”
unaffordable aspirations for many, alienating today’s value (and values) oriented
consumer.   

Brandless has a fresh take: a data-driven
approach to every SKU, working with the best suppliers around the globe to
introduce unique products that meet their incredibly high standards for
transparency, quality, and value.  Their
everyday essentials collection will include hundreds of hand-picked items that
reflect the most imperative product values (such as organic, non-GMO, free of
artificial colors and flavors) at an affordable price.  Everything at Brandless is $3, frequently
offering comparable quantities of better quality products than SKUs that
generally cost $5 to $10+ in ANY grocery store.
For those who struggle with the sticker shock of $9 organic pasta sauce
and $8 organic granola, Brandless offers incredible alternatives for just
$3.  The value speaks for itself: from
cost, to quality, to taste—the products are filling and fulfilling, at a price
point that is simple, and hard to resist.  (Don’t just trust me, read more about the
products here!)

Brandless can sell such high-quality products
at lower price points by removing the hidden “brand tax” from their cost
structure and sharing the savings directly with consumers.  Traditional
CPG incumbents incur a 40-50% increase in overall “cost” because of their
legacy supply chains, inefficient marketing channels, and high distributor
mark-ups — which is subsequently paid by consumers via higher prices for almost
everything we purchase on a regular basis.  New entrants are not plagued
by these same historic taxes, enabling Brandless to remove additional costs
from day one.  As a result, every product
offered has substantial savings when compared to traditional brands (as high as
70+% in some categories), depending on the size of the industry “brand tax”
that is stripped from its price.  If successful across many SKUs, this
disruptive approach will unbundle the “brand tax” from many aisles in grocery
stores today, and increase overall access to healthier, higher quality food and
household goods for everyone.  

We
invest in entrepreneurs who challenge conventional wisdom and want to change
the world, and that’s exactly what I found when I met Tina Sharkey, Ido Leffler
and the whole Brandless team!  Tina and Ido have dedicated their careers
to building consumer products and brands in family, health, and education, and
their professional successes have been both cause-centric and double bottom
line.  They believed that a new, transparent, authentic supplier could
change the way we view price and value in grocery stores, ultimately liberating
us all from paying the “brand tax”.  Today is the beginning of a
significant movement, and I hope you will all join us in “Going Brandless!”