How e-commerce retailer Grove Collaborative will go 'plastic-free' by 2025
Author: Deonna Anderson
How e-commerce retailer Grove Collaborative will go 'plastic-free' by 2025
Thu, 04/29/2021 - 01:30
Plastic-free by 2025. That’s the goal for e-commerce retailer Grove Collaborative, which sells household and personal care goods. Its offerings include its own product lines as well as products from other companies such as Burt's Bees, Mrs. Meyer's and Dr. Bronner's.
"It is our intention to hold everyone to the zero-plastic commitment," Stuart Landesberg, Grove founder and CEO, told GreenBiz during a recent conversation. "If we only change our own behavior, that would be a smaller impact than if we start to get people at all of our partner brands thinking differently."
Since it was founded nearly a decade ago, Grove has raised a total of $436 million in capital, according to data acquired by WasteDive. Most recently, in December, the retailer closed a $125 million funding round, which according to the company brought its valuation to $1.32 billion. In 2020, Grove made over $250 million in total revenue and the company said it has over 2 million lifetime customers.
While Grove's focus for most of its life has been strictly in the direct-to-consumer online space, it launched a partnership April 18 with Target in which a selection of Grove cleaning products — such as its cleaning concentrates with reusable glass dispensers and spray bottles — are available in stores nationwide and online.
Landesberg told Modern Retail that the idea behind the partnership was to make it easier for customers to refill products, by giving them the option to replenish in-store or on Grove’s website.
When I spoke with Landesberg earlier this month, we discussed other recent company news including its move to become a public benefit corporation in March and its plan to become plastic-free. It’s a little over a year into the latter commitment. Since March 2020, Grove has been partnering with with Plastic Bank and rePurpose Global to collect and recycle ocean-bound plastic. And it has a Plastic Working Group, made up of 63 third-party brands such as Method and Seventh Generation, with the aim to develop solutions to plastic waste.
A transcript of our conversation follows. It has been edited for length and clarity.
Deonna Anderson: Let’s start with talking about Grove recently becoming a public benefit corporation. Can you explain what that means exactly for the company? Grove is also a B Corp. How does that all work together?
Stuart Landesberg: I am a conscientious capitalism hype man. I just believe so much that corporations, for better or worse, are the fundamental organizing force of our time in history outside of the nuclear family. And there is a fundamental problem in society because corporations are incentivized to put shareholder interests above the interests of environment, the interests of community, the interests of employees, the interests of all of those stakeholder groups. So both the B Corp certification and the public benefit corporation structure are ways to combat what is one of the biggest issues in the world. We are all organized in these ways where many of the brilliant people in society are chasing a dollar as opposed to trying to make the world better, which is not the thing we should be doing.
So there are two different things. The first is to become a certified B Corp, which basically means we have to submit information about our practices in a number of areas: supply chain; diversity; transparency; sustainability; community impact; philanthropy. We have been a certified B Corp since basically the beginning. And that’s really a recognition of what I would say [are] good practices around both the impact that the company has on the world around it and the way we treat our employees and our community.
We want to do what we think is right for all our shareholders and stakeholders in the long term and not maximize for profit today.
And then there are the legal structures. The legal structure of the company historically has been a C Corp. But we transitioned from a C corp to a [public benefit corporation]. What a PBC does, which is really exciting, is it allows us to legally prioritize the interests of other key stakeholders — environment, community, employees — as highly as our shareholders. And so we can make decisions that may impact profit negatively in the short term if they are good for one of these other groups. It is not a perfect solution to the problem of capitalism pushing negative externalities of business models onto communities and the environment, et cetera. But it does take a really important first step by giving companies like Grove the ability and flexibility to say, "We want to do what we think is right for all our shareholders and stakeholders in the long term and not maximize for profit today."
I think it is a great corporate structure that I think will end up getting a lot more use over time by progressive companies. And I would love to see more companies — big and small — become PBCs because I think it is a necessity for corporations who take seriously keeping up with the demands of the climate crisis and what I think is a workforce that is going to just require employees who pay more attention to the real impacts of our businesses.
Anderson: Speaking of the impacts of your businesses, Grove is an e-commerce company, so packaging and plastic is very much a thing to grapple with. Grove is plastic neutral. What does it mean for your company to be plastic neutral, and how did the company get there?
Landesberg: We know that being zero plastic is better than being plastic-neutral, right. That is just true. But one of the biggest problems of single-use plastic is that nobody pays — the companies that profit by using single-use plastic do not have to pay anything for the cleanup of this really massive problem that we create. So in being plastic neutral we wanted to do two things. No. 1, we wanted to take the first step to make sure that Grove, our existence leaves the world a little bit better, not a little bit worse, right? Anytime that we sell a piece of plastic, we are collecting and we are funding the collection and recycling of the same amount of plastic somewhere in the environment, right. So the world gets no new plastic ever because of Grove, which is a thing that we can do today and, candidly, anybody can do this today. It takes a little bit of work but work that is very doable and worthwhile.
The second thing we wanted to do was create a system where our economic incentives for our partners, who are in some cases much larger than we are, are aligned to what’s best for non-financial stakeholders like the environment. So we charge ourselves when we make products that have plastic in them. And we charge all of the third-party brands on our platform anytime there is plastic in the product. If it comes in plastic, you will get charged an extra 5 cents or whatever it is because you are selling plastic, because you have to pay for the collection and recycling of an equal amount of plastic if you are selling at Grove.
And what that means is you now have a financial incentive to get out of plastic. And next time you are looking at your packaging, you will say, "Well, gosh, if I just chose a different material — maybe paper, maybe aluminum because it is infinitely recyclable — that is a better decision for the environment." And you are going to not have to pay the fee. So we have aligned the financial incentive with the true cost to society, not just at for Grove but one step down the supply chain to all of the brands we work with. And some of the folks we work with are owned by Unilever and SC Johnson and Clorox. And so those companies now for the first time have a real incentive in their supply chain to eliminate plastic and see a financial [benefit].
Anderson: Are there any other ways that you work with your suppliers to tackle the plastics issue?
Landesberg: We lead a plastic working group, which has over 60 participants from across the industry: some companies bigger than Grove, some companies smaller. And that plastics working group tries to tackle the most important challenges from a packaging perspective that are applicable across the industry. The second word in our company name is "collaborative" and that is not baloney. We genuinely believe that to solve the most important problems, it is going to require collaboration between a number of folks. We do not want [intellectual property] just for ourselves. We want to be a part of a group and ideally lead this group that can create solutions that everybody can leverage.
Grove Co. products represent more than 50 percent of the company's sales.
Anderson: I want to know more about Grove’s goal to be plastic-free by 2025. Does that goal include both Grove products and third-party products?
Landesberg: Oh, I am a total cowboy. I want to convince everybody to do the thing that is necessary to save the world. And I believe deeply that there is about almost $1 trillion of commerce on an annual basis packaged in single-use plastic globally — almost $1 trillion! It is incredible, right, like that is going to change. And I just like to think I have the best job in the world because I get to help pull people along in that change. And so we are lucky to have really great partners who are thinking about ways to innovate because we feel really good about the plastic-free innovation that the Grove brands bring, right. The Grove Co. brand is absolutely the largest plastic-eliminating brand probably in the world.
But not all the good ideas are going to come from us so we are — it is our intention to hold everyone to the zero-plastic commitment. But we do not know exactly how to get there, and we know that they don’t. So we are all going to hold hands and do our best, and we will see where we are in 2025. But if we only change our own behavior, that would be a smaller impact than if we start to get people at all of our partner brands thinking differently.
Anderson: It sounds like the pathway to 2025 includes iteration and figuring it out as you go. Is that right?
Landesberg: So the first thing I would say is there is real reason for optimism. And in the last year, I talked about us collecting 5 million pounds of plastic. But we’ve probably saved another 5 million pounds of plastic from folks just in the Grove brand choosing plastic-free alternatives, choosing reusable plastic bags versus single-use plastic bags, choosing the glass bottles with the aluminum refills instead of single-use plastic, choosing dryer balls instead of fabric softener. I could go on and list every single thing in our portfolio, but you get the point.
For a long time we have been able to ignore the impact that our purchase decisions have had on the environment. But that is just not true today, and it is going to really not be true in 5 years.
We have been able to pivot aggressively towards zero plastic. And the best two examples of that are two of our brands are completely zero plastic. [One of them is] Peach, which is a line of zero plastic products [for] your shower — shampoo, conditioner, face wash, body wash in all of the really high-performance formats. But you can do it in bar form so it is zero plastic and the efficacy really is there.
Anderson: We’ve talked a lot about the plastic initiative. Could explain how this initiative fits with Grove’s overall sustainability strategy?
Landesberg: The company’s vision is that consumer products will be a positive force for human and environmental health. And it has to be not just a neutral, but it has to be a force for them. And so we try to create business models that actually leave them better than we found them. And we think that over the long term, that is just going to be the status quo. For a long time, we have been able to ignore the impact that our purchase decisions have had on the environment. But that is just not true today, and it is going to really not be true in five years, and it is going to be even more not true in 20 years.
And so looking with a 20-year lens, when people and governments have to consider the impacts of all of our actions on the environment, we want to be positioned as the company that makes the best products, the most accessible products, the most beloved products that ... are not just neutral on the planet but actually leave it better. And so that is our overall positioning, and we think that is good for the business and good for the environment. And I believe that the interests of shareholders, the environment and consumers are all perfectly well-aligned.
This story was originally published by GreenBiz and can be accessed here.