Grove Collaborative CEO & Co-Founder Stuart Landesberg joins Yahoo Finance Live to discuss the company's future and what the sustainable consumer product coming aims to achieve by going public via SPAC.
Video Transcript
- Well, sustainable CPG company Grove is going public with a little help from Richard Branson's Virgin SPAC. Here to discuss the move and what it means for its growth trajectory is Stuart Landesberg, Grove Collaborative CEO and co-founder. Sir, congratulations. The company will be going public and listing on the New York Stock Exchange in Q1 or Q2 of next year. Why did you decide to go public via SPAC, and this particular SPAC? What sort of added value does it bring to the company, and how do you invest that capital?
STUART LANDESBERG: Thanks so much for having me. And it is a really exciting day to be able to talk about Grove, our mission, and the next step. Grove has always been a company that seeks to create change by transforming the consumer products industry, products like hand soap, dish soap, laundry detergent, bath tissue that are in almost every home in the world, and that have a mixed track record for their impact on human health and a terrible track record for their impact on environmental health, to be a force for good in human and environmental health.
And so as we sought to go public, we thought about what is the way that we could do it that would most accelerate our mission and our vision to transform the category. And so we looked for a partner that had a track record in setting hard, almost unachievable goals and making them a reality by bringing them to the mainstream. And we're so fortunate to have Sir Richard Branson and the Virgin Group as our partners because they have a belief and an understanding that setting an ambitious goal that can change the world and then achieving it can bring value for all stakeholders, shareholders, and the environment. So we're really excited about the partnership, excited to go public, and excited for the next phase of growth.
- Stu, talk to us a little bit about that next phase of growth because your space has quickly become a crowded one. And I'm wondering how you're looking to differentiate yourself going forward, especially with the backing of the deep pockets like Virgin SPAC.
STUART LANDESBERG: The consumer products industry is massive. In the US alone, home and personal care is about $180 billion. Globally, it's about a trillion dollars. And if you look at that market, almost 100% of it is wrapped in single-use plastic. That means almost 100% of that industry needs to change. Grove is the market leader today in zero waste and zero plastic, specifically through our Grove co-branded home care. And while the business has grown over 50% from 2018 to '21-- 50% a year, I should say, from 2018 to 2021, to almost $400 million, we are still a tiny fraction of the size of the industry.
And so our goal over time is to continue to drive change in the massive, massive markets in which we play, and where we know that consumers increasingly are aware of the importance of all of our actions on the climate, on the environmental crises or plastic waste. And increasingly, consumers are demanding the products that we bring to market, which work as well as whatever you've been using, or better, and have a positive impact on your own health and on the environment.
- And so, on that note, I want to ask you, what are you seeing as far as brand loyalty? How many customers are return customers? And then how are you increasing consumer accessibility? I know you partnered with Target recently to make sure you have an in-store presence, as well.
STUART LANDESBERG: So these are two of the most important things. Number one, building products that people want to use again and again, and number two, widening the availability of our product assortment. On the first point, we've always believed that, in order to drive the best business and the best experience for consumers, the products don't just have to overdeliver from an environmental standpoint, from a design standpoint, great fragrances, beautiful packaging, but also have to really work. And because we've always overinvested in efficacy, building natural products that work as well, in most cases, as their conventional counterparts, we see market-leading repeat rate. For example, in Target, across the entire cleaning category, Grove has the number one repeat rate of any brand, conventional or natural, which speaks extraordinarily well to the strength of the connection that we have with consumers and to the quality of the product.
And the next step, as you said well, is how do we take this brand, which grew up online into a market leader, and expand the availability. And so while our partnership with Target has been extraordinarily successful in the first year, it is absolutely our intention to grow the assortment there and to grow the number of retail outlets where Grove products are available over time, and to do so deliberately so that we can bring the highest quality product to the highest number of folks as possible over time, because ultimately, that's what will make our mission successful.
- So Stu, I know a lot of retail companies are having the same challenges right now, trouble filling orders, inventories are tight, supply chains are disrupted. How have you been able to navigate all that? How are things for you there?
STUART LANDESBERG: So very well aware of the supply chain issues across the board. For us, when we look out at our core proposition to consumer, it is incredibly important that we not only deliver the highest quality product, but that we do so at an approachable price point. I'm so proud that our business has been successful both direct to consumer and in brick and mortar, that we're successful in big cities and in rural small towns across this country.
And so it's extraordinarily important that we keep pricing the same. And we've worked really hard with partners across the whole supply chain. And when you bring as many innovative formats to market as we have, you need to have extraordinarily tight relationships across the supply chain. So we've worked hard with all of our partners to make sure that we not just keep good availability, but that we're able to keep prices constant for consumers in our products. And we've been successful in doing that in 2021, and hope to be able to keep prices constant in 2022 and beyond, as well, because of the great partnerships that we're lucky to have across the supply chain with mission-aligned partners who wants to see our brand continue to take share and continue to transform the industry.
- All right, Stuart Landesberg, Grove Collaborative CEO and co-founder, thank you so much for taking the time to explain your model to us.