This article previously appeared on Just-Food.
While Amazon Prime Day may have dominated the headlines last week, the launch of private-label CPG start-up Brandless also garnered considerable industry attention.
Pitching itself as the ‘Procter & Gamble for millennials’, the direct-to-consumer (DTC) grocery site sells everyday essentials like coffee, peanut butter, toothpaste and hand soap. All products are organic, unbranded and sell for a single price-point of $3.
According to co-founder Tina Sharkey, the Brandless vision is about ‘reinventing modern consumption by making better stuff at fairer prices available to everyone.’
My initial reaction is that this looks like an early version of an interesting idea. Single price points are intriguing and cheap is chic, but Brandless will face stiff competition from Amazon and Jet, which have significantly better demand data and are both aggressively innovating on the online CPG value equation (Amazon with a growing portfolio of own labels and Jet by giving shoppers more options to trade convenience for savings.)
With all its VC funding (it’s raised $50 million in funding to date) and a business focused on low-margin essentials, Brandless has the mandate to grow. But its membership and shipping fees are self-imposed obstacles to growth. (Brandless offers a subscription service called “B.More” priced at $36 a year, which lowers the free shipping threshold from $72 to $48. For all other orders, a flat shipping rate of $9 is charged).
A few other early observations:
While this first iteration leaves room for improvement, growing demand for organically-sourced products, convenience, transparency, simplicity, and value serve as a backdrop that represents ample opportunity for a new entrant like Brandless.
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