Brief

Honest Co. taps CPG veteran Vlahos as CEO

Dive Brief:

  • The Honest Co. announced Thursday it has hired Nick Vlahos as chief executive officer, replacing Brian Lee, who co-founded the eco-chic e-commerce startup with model/actor Jessica Alba. Lee will stay on as an advisor and remain on the board.

  • Vlahos has significant consumer product goods chops, most recently serving as executive vice president and chief operating officer at The Clorox Company, where he was responsible for some $3 billion in sales across its household and lifestyle segment as well as leading its global sales, marketing, R&D, IT and product supply efforts.

  • Vlahos also helped drive growth in major Clorox portfolio brands like Burt's Bees and Green Works, developing expertise in the natural and organic products segment in which the Honest Co. competes.

Dive Insight:

The Honest Co. has forged an impressive niche in natural (or at least natural-seeming) consumer products like detergent and diapers, raising more than $200 million from outside investors since it was founded in 2011, according to FactSet data. While rumors of a sale to consumer goods giant Unilever never materialized (Unilever instead went on to acquire chem-free household product company Seventh Generation), Honest reached more than $300 million in sales in 2016, five years after its launch.

Vlahos is taking the helm at a time when natural products are especially of interest to consumers, a trend which is behind moves like Unilever’s Seventh Generation acquisition and retailer Target’s new strategy boosting chemical transparency throughout its supply chain. Target recently pledged to list each ingredient in all owned and national brand products — including generics in the fragrance, beauty, baby care, personal care and household cleaning categories — by 2020, and to help meet its goals, the retailer expects to invest up to $5 million in green chemistry innovation by 2022. 

That is “a big deal,” Mike Schade, director of activist coalition Safer Chemicals, Healthy Families' “Mind the Store” campaign, told Retail Dive in an email earlier this year, adding that he believes Target's initiatives could influence other retailers and brands to follow suit.

But Honest Co. has at times struggled to maintain its position. The brand promises “safe and effective products for family and home,” but faced complaints from consumers that its sunscreen allowed severe sunburns and from advocates that its laundry detergent contains a chemical that the company said it doesn’t contain (and that co-founder Alba has told people is a toxin to avoid). 

Purity is difficult to achieve because some of the chemicals in consumer goods enhance the performance that consumers also continue to expect. consumer pressure is mostly focused on chemicals in their food, and shoppers may be more tolerant of, say, brown spots on fruit they know is organic, or textures in nutrition bars they deem well formulated and free of additives. But so far, there’s less patience when it comes to consumer products, according to Steve Barr, PwC Consumer Markets leader.

“The interesting thing we still have to address —and I think this is the difference between consumer products and food — is that consumers still expect the products to achieve their desired results,” Barr told Retail Dive earlier this year. “I think that’s the dilemma: The ultimate winner here is going to be the retailers and the CPG companies that can achieve products that are both highly effective, and also good for the planet and good for you.”

That’s where Vlahos’s experience could come in handy as the brand moves to become less of an e-commerce retailer with more omnichannel operations. Target, CVS, Babies “R” Us and other retailers now carry the company’s laundry detergent, diapers and other products.

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Filed Under: Corporate News
Top image credit: Flickr - Abi Porter