Brandless: Disrupting Everything in Consumer Packaged Goods

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  • July 11, 2017

“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 distribution. 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!”