Grove Collaborative was founded in 2014 to help people find home products—soap, skin care, pet food, and more—that also protect our planet through more sustainable ingredients and packaging. Grove has since grown into a successful online subscription service with products from popular brands such as Seventh Generation, Method, Mrs. Meyer’s and Badger Balm, and annual revenues above $200 million. It also has grown to serve millions of loyal customers who became even bigger fans when demand for soap, hand sanitizer and other cleaning products skyrocketed during the COVID-19 pandemic.
Stuart Landesberg, cofounder and CEO of Grove, says the mission-driven company’s values and stakeholder-focused model served as a stabilizing force amid the changes driven by COVID-19. As orders jumped by 50% and Grove faced decisions that would affect its suppliers, workers, and customers, Landesberg says he found solace and strength in his belief that businesses can lead by example in driving positive change.
Recently I had the opportunity to talk with Landesberg as part of my research for my upcoming book. In the following excerpts from our conversation, he shares more about the effects of COVID-19 market shifts on Grove as well as his hopes for the company and other mission-driven businesses in the future. Grove is a good example of how staying true to mission and values can serve a company well in crisis times.
Christopher Marquis: How did Grove Collaborative adapt to market changes driven by COVID-19?
Stuart Landesberg: The principles we laid out in the beginning were: Stay true to our values, serve our community to the best that we possibly can, and create as much flexibility as we can to keep people safe.
The hardest choice was what to do in March when we had all of this volume, all of a sudden. Do you maximize profit? Do you maximize the number of new customers? Or do you show up for your existing customers? If you’re delivering on your promise to your community, it doesn’t maximize profit but is what we ultimately decided to do. We keep the product in stock for our existing customers.
And all of a sudden orders grew by 50%. You can ask for overtime, you can even mandate overtime. But is that the humane thing to do? Knowing that every hour worked equates to several extra orders, the ROI on those hours is really big in the short term. But those were people, too. Ultimately we ran a number of different programs where we let people run negative on their paid-time-off, didn’t do any mandatory overtime, and put in a number of other policies to give the folks in the fulfillment center some flexibility. We definitely didn’t maximize revenue or profit through that period, but we prioritized doing right by our team and by our community.
The long-term benefits of having shown up properly in that moment will outweigh the short-term lost revenue. You have to be able to play the long game, and we are lucky to be big enough and have the support of investors so we can think long term in that moment.
Marquis: How has the pandemic affected your relationship with companies in your supply chain?
Landesberg: One of my favorite parts of my job is the people I get to work with on the supplier side. The company is called Grove Collaborative deliberately, because we are reliant on the work that so many other people in the ecosystem have done. There are a bunch of awesome companies doing awesome stuff, and we’re really lucky to be in that ecosystem.
When things change, the integrity of all the participants in the supply chain is particularly important and it’s hard to do due diligence real time. And so that level of trust is super valuable. I can trust that whoever I’m doing business with is not price gouging. Through the ups and the downs, it’s important to have people across the table with whom you believe in. And we do for all of our suppliers. These people are here for the same reasons we are: to make better products.
Marquis: How much do you think customers care about Grove’s social mission and values?
Landesberg: People come to Grove for different reasons. Our mission statement is to help all families create a home that reflects the best of themselves. Our long-term vision is that consumer products will be a positive force for humans and the environment as well. It’s not “How do we get everyone to care about sustainability?” That’s not the vision; that’s not the goal.
A lot of people come to us because the products and prices are great, customer service is good, and it’s really convenient. And they wouldn’t necessarily self identify as super high on the sustainability spectrum. There are a lot of other folks who come to us super charged up about sustainability. The thing that these people have in common is that they’re all trying to be thoughtful about getting the best product for their home and their family.
I’m a big optimist and believe that people want to do the right thing. There’s a bunch of pretty obvious benefits that are sustainability and mission-related. But really they’re just things that are better for the world we all share.
Marquis: What process do you use to identify and partner with investors who are aligned with Grove’s mission and values?
Landesberg: We screen them in three ways. The first is to show up authentically and hope they don’t run away. I’ve never promised that I’m going to stop caring about the environment. The bigger we get, the better the company is going to get at this.
Number two is investors have a pretty good track record. It’s easy to call references for investors, just like you go to for any employee. Someone can tell you what their values are, but you can check how they showed up for other portfolio companies in challenging situations.
The third thing is I’m a believer in taking action. When we rolled out the plastic neutrality program, that was a really significant financial commitment. Do investors flinch? And if they do, OK, let’s start a conversation.
Marquis: Tell me more about the plastic neutral program—where did the idea to “move beyond plastic” emerge, and how did Grove make it a reality?
Landesberg: To achieve our overall long-term vision, you have to go right at the biggest problem. And the biggest problem in our industry is single-use plastic. The goal is for Grove to become plastic-free by 2025, but we have the resources today to become plastic neutral. The way that works is for every ounce of plastic we sell, we pay for the collection and recycling of an equivalent amount of plastic pollution somewhere.
We’re showing pretty clearly that it’s possible to run a business and counteract most of your negative externalities. Also, we can charge partners and suppliers for this, so now there’s a financial incentive for them to stop using plastic.