Ep. 21: David VanHimbergen, CEO of Reel Paper
In Episode 21, James and Sean "Keep it Reel" with David VanHimbergen, CEO of Reel Paper, covering topics such as:
-Transitioning from CPG behemoth Procter & Gamble to leading a challenger brand in the consumer goods space
-The innovation process within leading brands Crest and Tide
-Navigating retailer expansion, including selection, to # of stores, geos, products, and shelf placement and presence
-Differences in consumer purchasing behavior between DTC and brick-and-mortar
-Bucking the trend of sustainable brands, winning on product performance and pricing
-Moving a category from commodity to care
This episode is a treasure trove for brands competing in the sustainable space and for listeners considering a career leap out of big CPG.
Welcome to Brand Busters with your hosts, James Schwyn and Sean Lee. Together, we bust open the latest in CPG, retail media, and life, or whatever the we want. And for today's episode, we got something special cooked up for you. Extra spicy. Take it away, Sean.
Awesome. Welcome back, everybody, to the latest episode of Brandbusters. And we have an amazing guest here today. We have David Van Himbergen, who's the CEO of Real Paper, which is a tree free, plastic free paper brand for every home. Currently, Real sells online and has distribution in Target, Fred Meyer, Rally's, and Fresh Thyme, and several several other retailers across the country.
I've known David for a while. David worked at Procter and Gamble in Brand Management, and he is an operating partner at Green Park Brands. We're incredibly pumped to have David on the show today, and I think, hopefully, everybody will learn a lot. I know I'm looking forward to learning a lot from David. So, David, really glad to have you, but the first question I would have is similar to me, you got your start at big CPG at Procter and Gamble.
What drew you to the the CPG or consumer goods startup world and the pain and punishment that comes with it? Yeah. No. I think, first, great to be here. Appreciate you having me.
Yeah. What drew me to CPG? I, so I went to undergrad at the University of Illinois as many people do, cycle through several majors, start off as a mechanical engineer before ending up in the College of Business and management information systems. So I had this technical degree, but really had much more interest on the business side of things. And, you know, I, on campus recruiting event, met some guys that that were from Procter and Gamble, really liked what they had to say.
It was kind of, you know, do I go in consulting? Do I go in the CPG? And just, you know, learning more about the consumer product space and, you know, how it's known for developing business leaders, the challenge of how do you build a brand, and what could sometimes be a commodity category, and create some relevance. But, you know, it's something that your addressable market is nearly every household in the US. And so for me, it felt like just that great place.
I didn't know what I wanted to do for a career. So I was like, well, let me go into the CPG world, hopefully, learn from some of the best, and then that would be a great foundation for a future career that hopefully evolves into something worthwhile. That's awesome. Yeah. And then and then, obviously, as I can attest to, being a a big company like Procter doing, consumer goods marketing and then leaving and doing the smaller or startup world thing.
What what kinda sparked your interest to to to jump out of the big CPG world and and jump into the smaller startup game of consumer goods? Yeah. I think it's, you know, the curiosity and how your career evolved. So when I first started at P&G, you know, like I said, I had more of an IT degree. So I started in the IT function and was supporting corporate finance, but knew that, like, hey.
If I if I'm here known as one of the best brand builders, you know, in the industry, that's what I wanna go learn. And so I was very intentional about trying to get over and, you know, what are the new skills and experience I wanna develop to continue to get further in my career? And, you know, eventually, throughout all those different iterations and opportunities, you know, I just found myself in an opportunity where I was working on a new venture for the company. And really, you know, at this point, you know, I was 16, 18 years with the company. So, you know, you're pretty experienced, and you get the opportunity to kinda apply everything you learn, but you get to do so within the, you know, without some of the constraints.
And you're far more focused on the external opportunity rather than oh, you know, I, yeah, I love my experience in in big CPG, so I don't wanna diminish it at all. But, like, towards the end, you know, you're doing a lot of internal selling to get things done, which is great practice and experience. But, you know, sometimes, I think there's this hunger and desire, like, alright. If the rains were off and I could just go wild, what could it look like? And Yep.
You know, on my last experience with the company, I had the opportunity to do so, and that just led to a hunger to wanna go out and do that, you know, elsewhere and think about, like, how do I apply my experiences in a new situation, build something from the ground up that could really leave, you know, a legacy and transform categories for the better. I think that's pretty common, especially if there's anybody listening that that works at big CPG because your experience was similar. You you got to go to a new venture and really launch something lean and scrappily within a big company. I did the same with the Xevo brand. And after that, like, the thought of going back, you know, to a large brand or or selling spending most of my time managing up and down internally and not actually executing, I was like, I gotta go do something small after this.
So it was kind of a no brainer to to launch after that. Yeah. It it transforms, like, who you are and how you think about things. So my last assignment with the company, I was up here in Chicago working on my own running the satellite business with other employees that we had hired that weren't legacy P and G employees, and we were 4 people off trying to route this new business model. And all the way to the point where I'm going into apartment buildings and drilling lockers into the apartment building, like, that was my role.
And, like Yeah. Every minute had to be productive and, like, what do you do kind of advance things forward? And I would still come back, you know, for a short period of time. My wife and family were still in Cincinnati. I was traveling back and forth every week.
And then, eventually, we moved up here, and I would travel back occasionally. But you'd you'd walk by some of those larger conference rooms where there are 40 people in there, and it would make me feel uncomfortable to my gut like, oh my gosh. There are so many people in that room. That's so much overhead. Are they all adding enough value that you can justify that?
So it's just like a mindset shift after that point, which, like you say, you get to a point where it's like, okay. I've I kinda have this sensation of what's possible, and you feel like you're transformed, then it becomes difficult to go back to that old world. Yep. Yeah. I I think, with all the different AI features and, whether you use Zoom or Microsoft Teams where it says 5 minutes left to your meeting, I'm surprised we haven't incorporated, like, an expense or budget here.
This meeting will cost you x. And companies might reevaluate and, who needs to be attending or whether that meeting needs to transpire whatsoever. Yeah. Yeah. But kind of on that topic on this theme of, like, big CPG versus, like, emerging challenger brand.
I mean, you worked on some really notable ones like Tide and Kras. What's the innovation process like? So not just working on the legacy, products. What's it like to stand something up completely new within an incumbent brand like that versus, you know, what you're doing with real today? Yeah.
I mean, all innovation I feel is really satisfying even back to my early days when you're just launching a line extension on, like, Crest toothpaste because Yep. The ability to see something that you worked on for 6 to 12 months finally end up in marketing, and you're like, oh my gosh. It's there. Like, just this past weekend, my son had a tube of Crest Arctic Fresh toothpaste, 3 d white out there. And I was like, you know, who launched that Arctic Fresh flavor?
That was me. You know? And so it's it's just really fulfilling. But I think the difference when you're in, kind of a larger company, which I kinda mentioned earlier, is, like, you're selling in those situations, but your audience is often different. Like, when you're working through big CPG, you know, obviously, there are a lot of stakeholders involved.
It's a huge company with a lot on the line. They need to make sure that they're managing their risk. And so you spend a lot of time trying to bring people along to what your idea is and selling them that this is an opportunity or a risk worth taking, and convincing them this is the right approach versus I feel like, you know, in this in the start up world emerging, you know, there are less immediate stakeholders that, can be impacted. And it's all about just validating it externally with the market. So, you know, in some cases, you know, it's not always just the the customer consumer marketplace.
You know, we we have to influence investors and sell them and tell them, hey. We've got a compelling idea here that we believe is worth you putting money into because someday we think that can be a great return on your investment. But it it very much seems more externally focused, and, you know, the context is sometimes different too. So, like, the the TideSpin experience. Like, I was starting up a totally different business model.
So there were certainly folks that had, that could be impacted that that I had to sell against. But it was new enough that it it wasn't gonna cannibalize, like, Tide laundry detergent. Yeah. So I didn't have to worry about that. In this world, you know, we're kind of a challenger emerging brand trying to exploit the space, but it's it's an evolution of existing products.
I'm not trying to create a new behavior. I'm not developing a new category. This is just what we believe to be a better alternative to the conventional legacy products that are out there that, you know, 100 of millions of households are using every day. Yeah. I think that makes a ton of sense.
What from just from, like, the challenges of if it before, you probably had a big team, huge consumer research budgets, you know, you may have worked on a product product for 18 months, 12 months before it hits market when you're at big CPG. Now you're probably launching things much quicker. You're at least testing them much quicker to see if you can validate them with consumers externally. What was the biggest mindset shift or challenge kind of going from, you know, working on Crest to working on, like, TideSpin, which was innovation within a big company, with less guardrails to now, you know, full emerging where you can probably react and and and test things much quicker. Yeah.
How hard was that transition to to to get comfortable with it? Yeah. I guess it, for me, it it wasn't that difficult. Now so that could be a function of just my career path and progression where, you know, like I said, in my big CPG final role or final couple roles there, I was kind of already in that space, so my mindset had started to shift of how do you operate with scarcity? How do you think about, you know, we wanna act and operate more entrepreneurially, so how do we mimic that?
So I was already starting that. I think once you're finally on the outside, it it's just like you said, like, you've gotta learn to operate with a lot of constrained resources. So, you know, you don't have the luxury of, you know, writing a big brief, doing a huge consumer research project, going off and evaluating different concepts. And some of that is maybe arguably waste that you're getting out of the system. So, you know, when we launch new products now, you know, especially with real paper, you know, we're we are a toilet paper, as you may know, is just a very capital intensive business where, you know, if you control the infrastructure of what produces these products because, you know, it can cost a half a $1,000,000,000 or more for a tissue making machine.
Yeah. You can kinda control the category. So you so it's really tough to break into and that you've gotta find the right partners that will give you access to that manufacturing capacity and just even get in the game. And then if you're talking about innovation improvements, you know, they're justifying that investment and the huge capital resource around productivity and keeping things running 247 and limiting changeovers. So if you're introducing a new process into that, that's dilutive to them.
So you've gotta you know, again, you're selling. You try to convince them, like, yeah. Hey. Here's what we're trying to do and build here. Here's the traction that we have so far.
Ultimately, this is going to be a big opportunity, and you've just gotta can you convince them of that future value that justifies them taking a risk and a gamble on you. Got it. And as you kind of think about, whether it's currently with your experience with, like, real like, how do you think about plotting out kind of those pilots? So if you're thinking about, like, retail expansion. Right?
You might have some previous buyer relationships that might help you get in the door. But how do you think about, like, retailer selection and even, like, store selection to make sure, like, we can design this to succeed. I actually want it to be as many brick and mortar stores as possible. They're not gonna give you full access right away. So what are some, tips, tricks for other founders that might be listening in terms of how can we really draw this up, for them to take a bet on us and make sure that's a home run for all parties involved.
Yeah. I think it's it's a great point. I think you've gotta be very intentional about choosing your retail partners. And I think the, you know, the track you can fall into is, hey. We wanna get in many doors as possible because we wanna grow quickly.
But you can find yourself in a position where you're scaling something that's broken and not gonna work, and it's become it's gonna become much more difficult to unravel that and get out of it if you find yourself in that situation. So I'd say, you know, every step should be an assessment of, like, what's your confidence level to succeed. And so, you know, we first launched in retail with Target. Target's a great partner. When I was with P&G, I spent 2 years up there in Minneapolis working on our Target business.
So I learned how they operate, what they value, you know, what their shopper is looking for, or as they call guests. And so I think, you know, I knew that it would be a great fit there if we got in the door. And, you know, you go through the pitching process, you're convincing them, and then you're deciding on those initial test stores. And we started in 200 stores, which was, you know, a good sample size to validate the proposition with, but something that if it didn't work, we could we had the time to kind of correct and go from there. And and so we've kind of built from that.
You know, we expanded to 900, and then this year we're, you know, full chain and 1800 stores with our toilet paper. And so that was a proof point that, okay, in Target, we've demonstrated how this can work. So then as I look at what other channels and so so if you assume all mass is like that Yeah. You know, which is not the case. There's nuances across each of those retail partners.
But, you know and Target's great at executing new innovation. And so, you know, I definitely give them praise for that. But, you know, developing into conventional grocery, what what does that look like? Okay. Well, they you may have a similar shopper because it's just a higher frequency.
People may be buying their weekly grocery needs in a grocery store and supplementing with monthly trips to Target. So you may be hitting the same shopper, but it's a different mindset. They're going through the store, probably passing through the paper aisle more quickly. You know, their shelf space that's dedicated to it is less. It may be tougher or less efficient to get your products on shelf, so there's more cost and so your shelf price is higher.
So you've gotta learn, like, all of the nuances around merchandising. How big is our shelf presence? How important is that? If we don't have a strong presence at shelf, how can we drive discovery and get people into the aisle to let them know that now this retailer is carrying a sustainable paper brand? When they get there, is the pricing right relative to the competitive set, or, you know, can you drive closure?
So it's it's all those different iterations and, like, you know, those unknown components of the transaction, you're you're trying to prove out. And, you know, so, like, Fred Meyer, we're in 75 stores in the northwest, and it's it's different, and we're learning those things now. But I think as we figure out what works there, then we have more confidence like, okay. We replicate this across conventional grocery. Here's the kind of shelf presence we need to have to stand out or, you know, you could expect your velocity to be x versus y.
And the more that you can get on the same page with your buyers so that expectations are clear and, you know, you're showing a shared desire to make this a success because that's the number one thing that they want. Your goals are aligned. You can usually kind of figure out, like, okay. We've got some assumptions in place, but we don't know. We're gonna be learning on this.
We'll continue to monitor results closely, and we'll adjust the plan from there. No. I think that's I think you said a lot of really great things there. And a couple of things I wanted to double click on is when you first got into Target and you did your 200 store tests, how did you align or think about those 200 stores with the buyer? Did they pick them?
Did you guys select them together? I know a lot of retailers will kind of break their stores into, like, tier 1, 2, 3, 4 based on different, you know, locations or ZIP codes. Did you go on the 1, like, 200 that you thought would be the best for real, or did you pick kind of a variety of stores to see how it would play out and then Yeah. Try to extrapolate that out? Yeah.
So, yeah, I think that's the the great thing about launching in b two c first is we knew which pockets of the country we had strong sales with. Yep. So we could share that data with them and help them kind of identify what we believe to be the right stores. But at the end of the day, you know, they're working back with their category managers and selecting those. So it ended up aligning very much so with where we were strong, you know, a bias for the coast, larger metro markets, some of their higher performing stores.
And that certainly served us well. It was like, you know, we're we're launching initially and we're expecting, you know, certain velocities and, you know, things are off to a pretty solid start, but it just keeps climbing month over month. And then, like, 3 or 4 months in, we're doing 2 to 3 times what the buyer expected in velocity. And That's great. They're like, hey.
This is great. And, you know, part of that is just the the importance of store selection, and getting in those right right stores, making sure that you've got the right support plan to drive people in there, to know that the assortment has changed and evolved. And, you know, again, what's the what's the product look like on shelf? Is it easy to find? If it's not, how do you overcome that and get people all the way down to the end of the aisle to see that there's another choice in the set form?
Yeah. No. And I think the other question I had on what you had said, which which is great and and kinda dovetails on this is it seems like units per store per week tends to be the measurement that a lot of buyers care about. Obviously, they want velocity off the shelf. When you're thinking about those early tests or going into a new retailer like Fred Meyer where you have 75 stores, how do you think about your demand plan, like, knowing that you've you've got 75 stores and probably 75 ZIP codes that you need to drive drive velocity for.
Do you get pretty targeted around certain marketing or digital efforts to try drive people in, make them aware that it's there, or do you partner more with retail media or, you know, in store promotions? How do you think about that, or is it all of the above? Yeah. It's it's all of the above, and then the mix may shift and change. Probably all of the above would somewhat indicate that we've got a lot of budget that we're putting behind these things, which, you know, again, we have to be selective.
You know, we don't have a mass media plan where we've got we're driving brand awareness everywhere. And so, you know, the more targeted and I think closer to the point of purchase where we've seen that be more effective. And so it's a combination of some retail marketing or retail media, some shopper marketing tools, and and really, again, it's kind of an iterative test and learn. I I you know, I think that's a little bit of a challenge in these start up businesses too is where, you know, you've really constrained if you don't have the capital to put in the big marketing, which is, you know, your most discretionary lever to pull back on when capital gets tight or cost surge a bit. Mhmm.
You know, you you lose some of that brand awareness driving component. You're like, okay. Now we have to get by without that and be scrappy. So how do we find those more targeted opportunities to make sure that this is working? And so yeah.
I mean, there's there's no silver bullet per se. I think it's a mix in trying to just figure out what works and what doesn't. Got it. And with, a a lot of brands, especially big CPG tend to be retail first, maybe e tail second. I find the trend is with more challenger brands.
It's the inverse leading with kind of ecommerce, marketplaces, d two c. I think Sean and I, we are an Amazon agency prior to this. We actually saw a few trends where these challenger brands were actually trying to leverage their, kind of ecommerce sales data to help penetrate new stores and markets. So, hey, for our reason, we have high penetration in this geo, and we think we could kick off a a task or a pilot with a certain set of retailers. Any any unique findings for you in terms of, like, whether it be, differences in assortment in terms of what's being purchased in store versus online or, just unique findings from, hey.
What are people talking about online via customer reviews that, hey. We thought our value prop was this, but they're really consumers are really clinging to this about real. Yeah. I I think, certainly, you know, we'll we'll take that data to say, hey. We've got a really strong consumer base in Northern California around the Bay Area, and that was part of, You know, when we talked to Raley's, we're like, hey.
We think we can be really successful here. Here's some of the data that we have. You know, I'd say the differences that we've noticed is I think pricing sensitivity is a little more important in retail. We've kinda learned that through different iterations and experiments. So I think you've gotta be pretty mindful of that.
And, you know so going back to the DTC and retail, like, you can kinda use that use the online sales to identify where there might be opportunities, but the way you, I think, capture those opportunities might be a little different. You know, it's and and, again, like, I think it it comes back to like, we're we're still very much in an emerging white space in this category. Like, it is in the very early stages. And you've seen, across other personal care categories where there's been a larger focus in development and sustainability, but that just hasn't happened in paper yet because there hasn't been the right assortment or products to deliver on that need for consumers, which we're hopeful that we are there. But with that comes, like, a huge task of just educating consumers.
Like, you tell a consumer, hey. We're we're tree free products. And they're like, oh, like, regular toilet paper is made of trees? Like, what? I I didn't think about that.
Like, some people even think, like, oh, I thought it was made of cotton or something else. Like, I just didn't know. They don't think about that. They don't think about what impact that could have on the environment and just, like, you know, where in some instances, there may not be the most efficient logging practices. You're clear cutting forests and you're damaging ecosystems and and it becomes tougher to regenerate there.
And those forest that play such a vital role in offsetting all the man made carbon we're creating. You know? So you you start to get into that story and it it's intuitive and they follow it and it makes sense. But there's everyone's just such a creature of habit. Like, okay.
I buy toilet paper. This is the one I always buy. I'm not gonna think a lot about this because, again, historically, there hasn't been a lot of choices. There's, like, a range of softness and strengths and price points, but they're all legacy brands that have been around for 30 to 70 years. Yeah.
And probably because they have to spend whatever you said, like 100 of 1,000,000 of dollars to to to buy the equipment, roll the lines to make it work. So a huge barrier of entry. Yeah. So the incentives are never really in place for them to innovate significantly because they're like, I have to pay off this asset over 30 years. And for me to do that and justify it, I'm I'm running it as much as I can with as little changeover and downtime as possible.
With sustainability, I think this is a really interesting category like value prop because I think the average consumer wants to do well for the planet, wants to kind of, you know, do their fair share. I think my hypothesis is there might be kind of 2 apprehensions. 1, like, do they wanna pay a premium to do that? Mhmm. But then 2, like, is the efficacy of the product there.
And you guys kinda hit that score on, which I think is a little bit unique. And something I like is, hey. I wanna be good for the plan, but I also wanna make sure this works just as well, if not better, if I'm gonna pay a premium on top of that as well. So how do you kind of battle that bias that the average consumer might have, against, like, sustainable type products and show, like, hey. Yes.
This is a not only is it better for the planet, but this will be a better experience for you as well. Yeah. And that's that's really the sweet spot that we focus in on of, hey. We're offering premium products that are sustainable without the significant trade off. And historically, where you've had, you know, maybe lower quality products, some of the, you know, private label recycled fiber.
The recycled fiber gets processed a lot. It's you know, and it's so manipulated that it becomes tougher to make high quality tissue out of. And so bringing a different plant source in bamboo, which is a grass, allows you to use a virgin fiber that regenerates from the same root structure. You don't have to dig it out of the ground, disrupt the land, and create a high quality tissue product. Yeah.
So that is, like, number 1 that we have to convince people out of is it's, you know, it's not gonna feel like sandpaper. It's gonna be a high quality. And we use a 3 ply product, so we really deliver that balance of softness and strength consumers expect. And that's been critical. So much to the point of, like, our our original box and Target had a cutout window in it.
And what we would find so you like a little cutout window so you could see because you're you're walking down a paper aisle that's usually white rolls wrapped in plastic, and it's just a wall of that. And then all of a sudden, you come across this, you know, brown stone colored box, and you're like, okay. This is different. Cool. And so we needed to show them, like, alright.
There are rolls within there. This is a toilet paper product. But because we didn't wanna use any plastic, there was no plastic shield in that window. But then consumers would be curious and they'd reach their fingers and then they'd start ripping apart the the wrapping paper around our rolls to feel the tissue. That's so funny.
And we're like, okay. Great. And that that's kind of a show and tell at shelf. But, unfortunately, they'd leave that product back and buy something else, and so we'd be left there with a product that didn't look great. So we, you know, we eventually learned that too to kinda close off the window and try to show the product on the front of the package to deliver the signal of what's this category, how does it fit within all this.
But it's certainly, you know, a big consideration for you're asking someone to lead from something that is a very intimate, comfort focused experience. I don't wanna give up and sacrifice a lot of that. Oh, yeah. I don't want my, you know, the the test of the first wife. Right?
There's a lot of lot the stakes are high there. So That's right. I I I think you wanna know, going into that, they're not gonna be in a precarious situation. So Yeah. I've got a People have been burned before.
You know, you're you're on a road trip. You have to go into that gas station bathroom, and you're like, oh. Yeah. So yeah. So that that's critical.
And we try to work through it. But, you know, the other thing is, you know, you can drive yourself nuts trying to think through all these and, like, how do we overcome it? But, you know, for me, I step back and I'm like, look, we we've got tens of thousands of subscriptions online of people that signed up to buy this product. They never felt it. Like, they took a leap of faith.
So the more that, you know, you establish your your brand expectation out there for consumers and that they're seeing it, then, you know, hopefully, you'll overcome it and you're just I I think the more that you convey, like, hey. We're a premium product. This is what we focus in on. Certainly, trying to get your your copy on your packaging right to address any of those barriers, it's it's critical. So yeah.
So product performance is the other piece. The other one that I think you've said, which is critically important is just the pricing of there's a big gap in the say versus do around sustainability. Everyone says that they wanna be sustainable, but there are limits to where they'll leap off and and that's where I think our our understanding around pricing has been so vital of, you know, we can't command a significant premium at this point in time when there's already a significant spread in the category from, like, a Charmin versus a Scott tissue. So we've gotta figure out where we fit in there. We're certainly gonna be on the high end, but as a challenger brand, you know, trying to break through the category where someone's maybe taking a leap of faith of, like, I don't know if I wanna like this product.
Like, we can't go to the point where we're 50% higher than the conventional premium brand that set the standard of the category. Yeah. And that's what when when we launched Xevo at P&G, like, that was always the thing is people, 1st and foremost, want the product to work. Right? They it has to work.
Like, otherwise, they're not gonna pay a premium for any other benefit besides it performs just as well as the the brand that they use today, if not better. And then, yeah, you can only go so far. Like, people wanna do better for the environment, do better for themselves, but there, you know, there is a limit to to pricing. So I think both those things for anybody looking at founding a brand, it tends to be around those areas of can you do something a little bit more environmentally friendly or better for you, that performs just as well as the existing brands. But I think some some people listening may go sideways where they're like, I can charge, you know, a 50%, a 100% premium to the the most expensive brand there.
And, you know, oftentimes, consumers will push back on that. So you really have to find the right sweet spot of, you know, environmentally friendly product performance and price. Yeah. And that's kind of the downside to, I think, what prohibits a lot of innovation is where you've got categories that are reliant on scale. You know, to launch something that's new and different is you're probably not gonna have a cost advantage.
And so, you know, out of the gate, for you to have a reasonable margin, you may have to charge some premium. And you've just gotta understand, can I communicate that value in a compelling enough way that the consumer sees it and they're willing to invest behind that? Because, also, over time, as, you know, more legacy companies evolve to adopting that technology, then the cost will ultimately come down. It can be parity, but it's just the, you know, the downside of being a first mover is a little bit you don't you don't have that cost advantage. You've you've gotta figure out, okay, if it's more expensive, how much are they gonna have to charge for that?
Can I command that premium? Can I communicate in a compelling way where it's not a barrier? Or can I target a unique audience that that will resonate forward to build enough critical mass that I can eventually move into the mainstream and and make the proposition work? What are, kind of dovetailing from price? I assume with with Amazon and with your website, it's a heavy, bulky product and shipping is probably a big a big cost that that factors into your pricing.
What are some of the challenges of of just selling a bulkier product versus a beauty care product that, you know, it costs 4 or $5 to ship? And how have you guys thought about overcoming them with your business model or ways that you bundle or go to market or think about frequency? Yeah. I mean, it's tough because it's not only bulky, but it's cheap. So it's not like I've got a $70 bottle bottle of cologne that I can sell and put in the $5 mailer.
Like, it's 10 to $15 sometimes to ship these bulky goods across the country. So, you know, so you're you're then the value proposition on call it DTC or Amazon is just the convenience aspect of I don't have to remember to buy it. You know, if I live in a, you know, dense metro area where I don't have a car, the last thing that I wanna have to do if I go to the grocery store or anywhere is, like, haul back bulky paper goods. And so the convenience of having it delivered on a regular cadence, setting that frequency and not having to worry about it is really what the value is for them there. And so you know, and that is, I think, you know, getting people on a subscription plan where they have full control over what's the frequency of how when they need to replenish it based on the size of their household, how much storage capacity they have, has given consumers the flexibility to say, okay.
I I'm not gonna have too much product because my closet in New York City is really small, and I don't wanna store a case of teepee there when I don't even have place to put my luggage when I'm not traveling. But at the same time, you can flex that based on if you're a larger family in the suburbs and you're ordering it, you can get it every 4 weeks. And and that you know, having consumers in a subscription just gets the economics, the whole proposition to be much stronger in terms of what lifetime value we're able to achieve. And also that I think going back to the comments earlier around the performance of the product that we've said is, like, if that product doesn't perform, they're not gonna repeat. So you've gotta have that great experience to drive the repeat to justify the extra cost to be able to fulfill within that model.
Talking about, like, repeat purchases and kind of driving, I guess, consumer loyalty, I think one of the shifts we're seeing now and kind of the era of influencers and affiliate marketing and Gen z, How do you think about especially with your category, like, getting your consumers to become brand evangelists. I think there's a big competitor, Dude Wipes and Sean Riley, obviously built this big following. You have a lot of people just, like, weighing in with kind of the tongue in cheek, like, humor, but it's getting them a lot of exposure through that, just kinda through that niche. How are you kind of capitalizing getting your you've got a great subscriber base, a lot of people that are already buying in regularly. How are you tapping into that to make them take that extra step to to recommend and, I guess, be a brand ambassador for you guys?
Yeah. It's you know, for us, the emotion that I think we're trying to evoke with our consumer is that they're proud of the paper that they buy. And so some of the unique aspects about our our experience is that, you know, certainly, our our brand and tone of voice is very choiceful. But, you know, it's what we talk about a lot is trying to move the category from commodity to care, that they care enough about what materials are used, not only within the product itself, but as it's packaged. And so when you can communicate those values back with your consumer base and do so in a way where it becomes a bit more interactive I mean, we'll hear all the time of, you know, someone will say, oh, I had a guest over the other weekend, and they went to my bathroom and they saw, you know, my rolls of real wrapped in the back of the toilet.
And they're like, oh, what's that fancy toilet paper? So that, you know, because the rolls are individually wrapped, that's unique within this category. And it provides a visual of that can spark some curiosity. Like, what is this? Why is that different?
And on the roll, we tell a little about about our story, how it's made of bamboo, and, you know, saving trees is important. But that becomes kind of a jumping off point for to drive a conversation. Like, what is this? Why are you using this product? Where did you find it?
Why is that different? And so you're trying to get your consumer base to educate others within their network and spread the message of what we're trying to do. And within our design, we want an aesthetic that feels very clean and modern that very different from what's in the category today of bright colors with cartoon characters or just swirly old fonts. You know, something that looks really modern that allows for this next generation of consumers that are like, look. I wanna make a difference.
I wanna do something different from what the prior generations or my parents' generation have because I know that all of my small choices add up to create a meaningful impact. And, yeah, buying toilet paper that's plastic free and made from a grass like bamboo, may not seem like a lot, but it's a small change that's relatively easy that adds up very quickly and can have a significant impact on the broader marketplace. That's great. Yeah. So, like, once you once you kinda find some of your or, I guess, get your brand users that can evangelize and and share it with their friends or kind of people that are close to them in their tribe, how do you think about acquiring customers today?
I know I we ask this to a lot of different founders, but what tactics or channels are working well for real today, and what emerging channels are you most excited about or testing right now? Yeah. We, you know, we have to be very focused in terms of where our spend is now for where we are. So we we do rely heavily on Meta or Google. Yeah.
You know, that's the That was everyone we talked to. TikTok. Right. Yeah. So, you know, I think there are there are things out there, though, that are very intriguing.
I saw a new service that just got some funding from Sequoia and other, I think, big investors that was around customer acquisition at retail that I felt was really compelling. So I reached out to that group just to understand what it is and what a pilot could look like. Because I think it's that, how do you take the the performance based aspects of digital acquisition and evolve that into retail? I think that's the what everyone's hoping and looking for. Got it.
So get attribution there. I mean, it's it's never gonna be perfect. Right? But you just wanna have at least a better idea of what's the return on my investments that are going in there. You know?
And we're still far away, like I said, from really stepping into mass channels. But, you you know, the more that I think connected TV can help drive, you know, more targeted ad delivery, That seems really compelling. So, eventually, you know, as we continue to scale and grow and our budgets can grow with us, that, you know, that's something that we can step into. But I think it's it's largely just for me, I think it's smaller activation opportunities that, are inherently a bit more experiential that can have a big impact and can kind of radiate and grow from there. And so sometimes that's just what we're looking at.
I mean, even, you know, product on the shelf, quite honestly, like, is a big driver of awareness of just allowing someone to see you and getting their consideration set up. Like, hey. I'm a paper brand. Like, I've been out here. And after a couple times, they, you know, they might look over and say, okay.
Well, what is this? Because I've seen it at my friends in their bathroom. Now I see it on the shelf. I've heard about it here. I went to a concert at the Salt Shed in and I saw that they're using it.
So, like, you know, what it's it's, I think, enough exposure in these small, big, I guess, like, kind of opportunity areas that I think can just start to compound into building something of significance. But, yeah, I think for now, like, our marketing mix, like I said, is pretty traditional and just kind of some of the bigger things. And, you know, we're still experimenting with some other I mean, like Instacart, and it's, you know, in a very interesting acquisition channel for us, you know, because that user's gonna tend to fit and overlap with where our shopper demographic's gonna be. They're probably looking for new innovation, different items within the category, and they're using that as a service. And so here's an easy way to kind of jump in, meet a consumer that might have interest, and serve them up an ad and win a new shopper.
Great. And I I think as we're kind of wrapping, I would always like to hear, like, which brands are the founders or kind of CEOs that we're talking to? Who are they tuned into? Who are they monitoring? Who do they think are doing things well?
I think we all feel like we're plugged in, but I I've never left, you know, surprised I'm always surprised when I find out, wait, hold on. What who's doing this and that category? So who's someone, whether it be a founder or a certain brand that you're really impressed with? Yeah. I mean, it's probably an overused one, but LiquidDeaf, I think, is certainly, attention grabbing just at the how quickly they've been able to scale.
But, you know, what's certainly, I think they lead with creativity and kind of transforming what would be a a relatively dull category. But, again, I think if you if you think about the moments of usage that are extremely relevant. You know, you go to a concert and remember I was this was couple years ago. I went to a concert with my wife and we're outdoors, and she's like, I don't wanna have a drink or whatever. I was like, oh, you want a liquid dust?
She's like, what is that? I was like, oh, it's just water, but it's in this, like, tall boy can, so it looks like a drink. And she's like, yes. That's perfect. Because then people think I'm drinking up Yeah.
Boring, but, like, I'm using it. And it's just like you know, and it's $7 for a can of water. So you're like, woah. So, you know, but they've they've really, I think, transformed that experience to be like, you know, you got more people that are like, I don't wanna drink a lot. I'm a mid forties parent.
I wanna enjoy the concert, but I know I'm gonna be woken up tomorrow morning at 7 AM, and I've gotta run the kids to soccer. So I need to be on my best. And so, you know, but it gives you a canon and experience like you're there enjoying it and, you know, allows you to still partake in the, in the mood, I guess. Yeah. So there and I think there are some others in, like, you know, personal care that have done a good job.
I mean, even going back to, you know, Method and missus Myers, you know, Method which launched in Target as well of just being a bit disruptive, you know, just the visually different in terms of shape and design of standing out and saying, like, woah. This is different. And there were a lot of other things that came along with that around sustainability and whatnot and Yeah. You know, dialing using fragrance is really a a sensorial cue to drive appeal. You know, there's, there you know, and and I'd say just more than ever now, it seems like these categories are becoming more fragmented as there's it's easier to kind of jump in and get into these industries because I can find a way to sell online very easy and transact with consumers.
I can acquire them through these different digital media platforms. They're very easy to get in. So it it has, I don't know, another trade expression or democratized, like, products and and that you've just seen a lot more entries into these spaces, which is great for the consumer because then there's choice. And that's ultimately what we're after. It's like, hey.
As we talk to retailers, like, this is emerging. It's coming. The consumers want the choice. You just need to provide the right assortment. Or they may deflect, and they'll they'll go to those channels like Amazon that do have a much wider assortment, aren't limited by some physical linear shelf space, and can provide those long tail items that create channel switching behaviors that are difficult to claw back.
And I think that's what a lot of these physical traditional brick and mortar retailers are sensing right now. Yeah. No. That's great. It's always good to always good to hear what brands you're following, and I think all those are good lessons.
David, really appreciate the conversation today. I think, I I know I've learned a ton. I'm sure James has learned a ton, and and I think the listeners will. What we always like to do is for anybody that found this helpful, please share this episode with your friends, your colleagues, anybody else that you think could learn from it. And then we're all pretty, nice nice and open people, so follow us on, LinkedIn or send us a a request.
Follow us on any other social media like like Twitter or x. And, thanks again for listening. We appreciate everyone's time, and, David, thanks for coming on. You bet. Thank you.