It's a Matter Of...Circular
It’s Cool to Care with Stephanie StahlAugust 17, 2021 BeautyMatter
August 17, 2021
We're in a new era of sustainability driven by consumers, governments, and corporations, impelled by the visible effects of pollution on our environment, the impact on the climate, and our food supply. The collective consciousness on sustainability is rising perhaps faster than many expected. The beauty industry's contribution to the current state of our environment is well-documented. And quite frankly, embarrassing. We all participated in some way to the current state of affairs. And now it's our job as an industry to fix it, and really change the system that created the problem.
Stephanie Stahl, CEO and co-founder of Ace of Air joins Kelly to discuss how her and her team deconstructed the beauty paradigm, and are offering consumers the chance to rent product packaging in the name of conserving the planet.
[beginning of recorded audio]
Stephanie Stahl [00:00:28]: Hi, I’m Stephanie Stahl, I’m CEO and Co-Founder of Ace of Air, and to me, it’s a matter of circular.
Kelly Kovack [00:00:41]: It’s cool to care. I’m Kelly Kovack, Founder of Beauty Matter. The changing nature of cool is impacting what shoppers buy, who they follow, and how companies behave. We’re in a new era of sustainability, driven by consumers, governments, and corporations, impelled by the visible effects of pollution on our environment, the impact on the climate, and our food supply. The collective consciousness on sustainability is rising perhaps faster than many expected. The beauty industry’s contribution to the current state of our environment is well-documented, and quite frankly, embarrassing. We all participated in some way to the current state of affairs, and now it’s our job as industry to fix, not market around it, but really change the system that created to problem. Sustainable solutions are not linear, and they’re certainly not easy, but Stephanie Stahl, CEO and Co-Founder of Ace of Air is up for the task. She and her team have deconstructed the beauty paradigm, offering consumers the chance to rent product packaging in the name of conserving the planet.
So Stephanie, thank you for joining us this afternoon. I’m so excited about this, because I got a sneak preview this summer when you did a webinar, but now it’s sort of out in the world. So thank you for coming back and sharing with us, sort of post-launch.
Stephanie Stahl [00:02:08]: It’s so great to be with you again, Kelly. Really excited.
Kelly Kovack [00:02:12]: You know, so Stephanie, to get started, you’ve had such an interesting career that spans numerous leadership roles at big CPG brands, across multiple categories, you’re a brand advisor, a board member, you started your career in finance, and you’ve had some entrepreneurial stops along the way. Can you share a little bit about your background? And obviously, with your background, you could have done anything, but here you are not only reinventing a new product, but how people contemplate purchasing products. So what was the impetus for launching this venture? Yeah, and then we’re going to dive into Ace of Air.
Stephanie Stahl [00:02:51]: So I have spent my whole career in the consumer world, perhaps with the exception of my time on Wall Street, right out of a college, and have a real passion for understanding consumer behavior, understanding what links up well with consumers today and tomorrow, and have done that in three very emotional spaces: beauty, wellness, and fashion. And being a marketer in those categories has been a really amazing experience because it’s a mix of some of the really hard science, right, data mining and drawing on my econometrics background, and you know, what is the dollars per square inch selling at your big retailer, combined with this really special magic and creativity and the emotionality of the way that consumers behave and interact with brands and products in those categories. And a couple of years ago, I had the good fortune of being introduced to my co-founder, Petra Nemcova, by my third co-founder, David Knowlton, and they’ve known each other through Petra’s philanthropic work, which she’s been very involved in for the last 15, 20 years, and we began to talk about what might be possible. And as we looked at the industries of beauty and wellness, what might be additive? And we put a pretty high bar on what we wanted to talk about, because honestly, there are a lot of beauty and wellness brands, and there are a lot of amazing beauty and wellness brand, but does the world need another beauty and wellness brand? Not so much. And we wanted to create something that would be mission-driven, and that’s what led to Ace of Air.
Kelly Kovack [00:04:47]: You know, somewhere in your LinkedIn bio, you made reference to the fact that you support conscious capitalism, and I think capitalism is great. I think it needs a rethink. I think we’re in the process of doing that. But it means different things to different people, and everyone has sort of a different approach to it. What does it mean to you and how is it important? And how did it inform the launch of Ace of Air?
Stephanie Stahl [00:05:12]: So, for me, conscious capitalism, very much like you just said, Kelly, capitalism does need a rethink. And if you think about the powers that create change in the world – create positive change in the world, that can come from lots of places, right? Individuals, communities, societies, government, business. And at different points in time, all of those can have impact. I view business as a really important, powerful driver of positive change. And if you think back to business and what I’ve encountered a lot in this venture, bringing Ace of Air to life, is so much of business continues to be driven by a scorecard that came out of the industrial revolution. And it’s a scorecard of efficiency and very narrowly defined lanes of business, and a responsibility for that lane, though narrow, and then a bit of a well, everything else is kind of outside our purview, and that doesn’t serve the planet very well. And even living through this pandemic as we all have and are, the industrial revolution was largely based on philosophies of war and going to war, and if you think about – I’ve worked in some big companies, but been in the world like you, those fundamental underpinnings are very out of date and have huge opportunity to evolve dramatically and maybe one of the silver linings of these last 14 months is that kind of a change, now that some of the things that were considered norms and must-haves, like being in the office 24/7, we miss certain things about all of those interactions, and some of them are really important, but I don’t think it was ever warranted to have to be in the office all of the time.
Kelly Kovack [00:07:08]: Listen, the pandemic was an accelerant for so many things, and you know, I think there was sort of this move to brands that were purpose-driven. A lot of them were just checking boxes, but some of them truly were purpose-driven. And I think the pandemic has shown us what for-profit, capitalistic brands or businesses can accomplish to solve problems that government is just too tangled up in itself to move fast enough. And the vaccine is the perfect example of that. And so I think consumers were already wanting it, but I think now seeing what’s possible when we put all of that energy behind these massive brands, how much can be accomplished in a short period of time when we use these businesses for good.
Stephanie Stahl [00:08:01]: Agreed. The power of the consumer, right, in making those changes, and the power of disruptive innovation, that does tend to come from outside of the large, established organizations.
Kelly Kovack [00:08:15]: Yeah, so I’m interested to see sort of on the other side of this, companies really driving the innovation and not relying on government to solve all of these problems.
Stephanie Stahl [00:08:24]: And that’s one of the reasons we became a B-corps.
Kelly Kovack [00:08:27]: And I wanted to talk about that a little bit, because I think there’s also this moment of time where there’s lots of noise and there’s lots of washing: greenwashing, clean washing, purpose washing.
Stephanie Stahl [00:08:40]: Absolutely.
Kelly Kovack [00:08:41]: Yeah, totally. And I think everyone, I have to believe, is well-intentioned. Sometimes they’re not working with the right information. You know, we’re all running for-profit businesses here, but I think there are some brands that are really kind of walking the walk, and there are others that are taking a lot of shortcuts. I think things like B-corps certification, where there’s an actual process, and you’re not just sending in a check, checking a couple of boxes, and getting an emblem, are really going to be the differentiators moving forward to kind of separate the wheat from the chafe in terms of kind of purpose and really sort of adding a level of accountability and transparency to some of these claims. So can you talk a little bit about why it was important for you to launch as a certified B-corps? And also what the process was like, because it’s quite involved.
Stephanie Stahl [00:09:36]: It is very involved, and from the beginning, as I was, many years ago, getting involved in conscious capitalism, beginning to learn about B-corps, one of my favorite B-corps is Patagonia, and I felt like that is the gold standard in terms of what you know, which is the rigor and the evaluation that goes into being certified, and I think as a result, it has meaning to the consumer in what is an increasingly noisy land of certifications and off-sets and, you know, there’s a lot of activity going on. So in looking at the companies that B-corps, in understanding what’s required, we put that on our very first aspiration list. And another thing that’s wonderful about the B-corps certification is it provides a roadmap for businesses like us, which were just beginning, and not only around eco and sustainability, but also about employment practices, and it is a comprehensive – and I learned a tremendous amount going through the process, and a benefit to us being delayed in our launch by the pandemic and all of the related supply chain is I decided, you know what, what am I going to use kind of this stretched out time frame to do? And applying to become a certified B-corps was one of the things that we did last summer, and it was very rigorous, very involved. I strongly leaned on one of my children to be my intern to help with the documentation and all of the things that needed to be put together, and it was like waiting for an exam result when I was waiting for the final evaluation and whether we were going to make it or not, and was just absolutely delighted, and it’s an ongoing, evergreen certification. You’ll be re-audited, they look for continued improvements, we’re looking for continued improvements. So, for us, knowing that we were doing the work and also wanting to confirm that we were thinking about all of the things that we needed to be thinking about, it made a lot of sense.
Kelly Kovack [00:11:48]: Yeah, the thing I love about it is that it’s not this one-and-done certification. When you’re talking about sustainability in general and kind of all of the adjacencies, it’s really about an evolution, like it’s never going to be done. So I love the fact that it’s not one-and-done, you have to go through the certification, I think it’s every three years, right?
Stephanie Stahl [00:12:12]: It is, yes.
Kelly Kovack [00:12:14]: So everyone’s always looking for that elusive big idea, and big ideas are great, but they are often elusive because they don’t mean very much if they fall apart in the execution. And as I mentioned, you gave BeautyMatter, our audience, kind of a sneak peek on how to tackle refillable packaging from a design perspective on a webinar this summer. So I know the lengths you’ve gone through to kind of cross the t’s and dot the I’s, so to speak, because Ace of Air is a very big idea. Can you walk us through the development process of what it took to launch Ace of Air? And I suppose before we get to that, because we haven’t even talked about what Ace of Air is yet, why don’t we backtrack and introduce the world to Ace of Air?
Stephanie Stahl [00:13:00]: Beautiful, thank you for that opportunity. Ace of Air is a circular beauty and wellness brand that launched on January 28th of 2021 with eight skincare and supplement products that have been formulated synergistically to deliver the best possible desired skin and benefits. And we did that with a commitment to being vegan, with a commitment to cruelty-free, and a commitment to circular, which around our packaging means being zero waste. And that’s what led to the webinar last summer specifically around our packaging. But I will say we have an amazing group of expert advisors who have been central and deep in the formulation. We have an amazing husband and wife, natural pharmacology team. She’s a third generation herbalist and a naturopath, and they have been integral in formulating really efficacious, high bioavailability supplements, and we’ve worked with a fantastic dermatologist and long-time beauty formulator for our skincare products, and doing those, the skincare, we have developed Consistent – we also look for the gold standard in clean, which as you well know can be a range of definitions. And so we formulated Consistent with the Environmental Working Group guidelines and are in the process of going through verification with them on our skincare formulas, and that takes a lot of iterations, right? Because we know, look, the beauty consumer wants products that look and feel and deliver at a certain standard, and one of our commitments, Kelly, at the beginning of this venture is we wanted positive impact at scale, and that meant we needed not to just be talking to individuals that had already decided to be super sustainable, right, either because of making their own formulas or being willing to compromise on some things. We wanted to be able to deliver a positive solution to the main part of the beauty and supplement market, and that’s what we went off to build, three some odd years ago.
Kelly Kovack [00:15:19]: Yes, you’re grounded in selling a product, but you’re also attempting to re-engineer a method of sustainable shipping and packaging, and push consumers to rethink purchasing a product, any product, like what that actually means. Can we talk about why you decided to choose sort of skincare and supplements, and how that supports sort of the mission to change consumers’ thinking? And also what you mean by making consumers rethink the concept of purchasing a product? Because I think for me, that’s kind of the foundation of what you’re trying to tackle.
Stephanie Stahl [00:15:57]: So we started with skincare and supplements because, look, skincare is a really important regimen for women and men, and taking care of your skin, the largest organ in your body, has an immediate positive impact on how you feel about yourself and how you show up in the world. And for me, personally, skincare is a higher priority than cosmetics, because when you start with great skin, you can sort of skip a lot of other things, and everyone is personal on that point, but skincare is a really important sector, and we were very inspired by how quickly “clean,” however you want to define it, has gone from niche to mainstream, and I think one of the main drivers of that ten years ago was Gregg Renfrew and Beauty Counter. There were others as well, but really impressed by not only how the dialogue has changed, how the industry has changed, but also how she and Beauty Counter have also advocated and educated, and sort of delivered that in an entire messaging package to the consumer. And we looked at that and said, you know what? We want to continue to drive that forward. And, increasingly, the concept that your skin is only going to look as good as your gut, and speaking for me personally, if I’ve eaten garbage for a week, it doesn’t really matter what I’m putting on my skin, it’s an uphill battle, and you know, I think we learned in 2019 one of the highest Google items was gut health and its link to, obviously, overall well-being, but also to skin health. And I would say Petra was a real driver of – she’s been committed to that integrated beauty, beauty inside and out, for a long time, and she’s a vegan, she’s very focused on what comes in, lives a life of thoughtful consumption, and it felt like we were not going to deliver what we wanted to to our customers with just skincare or just supplements. So, that’s where those two came together.
Kelly Kovack [00:18:18]: So in terms of the concept, you’re very much going beyond just a refillable concept. This is all about the entire experience. I think it also, for me, consumers are more invested in the brand – they have to be, by virtue of the concept. Can you share a little bit about – so you’ve landed sort of the products, the concept, functional beauty. Now how do you deliver that in sort of the circular way that you envisioned?
Stephanie Stahl [00:18:50]: So there were two really low moments on this venture outside of the many supply chain hiccup moments, and one was when I kind of went back to a project around recycling. And when I was a very young consultant at The Boston Consulting Group, a project I was involved in had a recycling component – and this was in early ‘90s. And in that research, what I found, having spent time in many of the recycling centers across the northeast, is not only were very few materials actually being recycled, but there wasn’t any money in it. And the waste business is actually a pretty big money business, and what you find in any for-profit business, right, where there’s money that tends to drive volume and action and units. And in recycling, in large part because beyond, let’s say stainless steel, glass, and corrugate, which are three of the more recycled items, but even corrugate is less than 50%, particularly around plastic, because there are so many types of plastic, the amount of effort that goes into hauling and sorting and bailing, and then comparing that bailed used resin to virgin available on the market, particularly when the price of oil is so low as it is right now, you do all that work, you spend all that energy and resource, and that bail goes to landfill because there’s no after-market for it. That is the fundamental challenge around plastic, right? Which is otherwise a miracle material, right? It’s light, it’s moldable. Since it came to the scene in what, 1968? It has found its way into everything for those reasons. Unfortunately, its afterlife is tough, and only 7-9% is being recycled in this country. So fast-forward, you look at skincare and you look at supplements, and the majority of the product packaging is single-use plastic, billions of units a year globally. You then add on the skincare side all of the things we have come to expect and want to deliver a premium experience. So you have the disc on top of the moisturizer that makes sure your moisturizer doesn’t get onto the lid. Well, that disc is never getting recycled, it’s way too small.
Kelly Kovack [00:21:13]: Don’t forget the little spatula.
Stephanie Stahl [00:21:15]: The little spatula. The lid. And then, you know, probably cellophane, right, because at retail, you need a barrier, so that somebody doesn’t trial it, and then you’ve got the secondary, and if you buy it at retail, then you have the bag and the stuffing and if it’s coming direct to consumer, you have the box and the stuffing. In supplements, you’ll also probably notice that 30 supplements in a jar is actually a pretty small jar, and any marketer who has been in a conversation with a retailer about a new product, you very quickly get to the conversation around well, how is that going to stand out on shelf? And that means larger, right, so more packaging, and now stuffing in the bottle because otherwise the capsules shake around too much. And everything moves toward more packaging, and we did the lifecycle analysis because we wanted to make sure we had the scientific underpinnings to make sure that we were focused on the highest possible impact opportunity, and we looked at ten direct to consumer skincare and supplement products, all kinds of brands and products you would know and recognize, and we included refillables and we included things that are packaged in mushroom biodegradables. We wanted to have a current representative set of current alternatives, and there were a few variations, but in the main, the product is about 25% of the impact, so the item you actually want to use or consume. The shipping is about 5%, and that sometimes is surprising to people because you can see the trucks, right? There’s this visceral sense that it must be the shipping, that must be the problem. And obviously five is five, but it’s about 70% packaging, which isn’t a big surprise when you think about how small the product is and, as my youngest son used to say when he was very little, how ginormous the packaging is. So you sort of look at that, and you say, well, okay, we could say, no more skincare and supplements, right? I mean, somewhere at the most fundamental is a call to action about consumerism, and that has to be part of this conversation.
With that, however, people want their skincare and supplements. I want skincare and supplements. And you look at the packaging and you say, alright, so how can you change this? And you go a little bit Back to the Future, right? In the ‘60s, all of our milk, all of our soda, all of our beer in glass bottles that weren’t recycled, they were collected, sanitized and refilled through a bottler network that was regionalized and localized, and that was how that was done. And it was actually – I love drinking out of a glass bottle, it’s kind of a treat, right? It’s a more premium experience than out of a plastic bottle. All of those networks are gone; they’ve been placed by the wonderful convenience of plastic. And we looked at that, we looked at the runway. We were really inspired by how consumers have embraced a roundtrip relationship with a brand via UPS, because they get something out of it that’s very high-value to them, whether it’s being able to rent something that perhaps you can’t afford, or you like the environmental impact of having something amazing for an event that you don’t need to own, right? You can just borrow it. And we thought, in consumer products, and every sector is going to have to solve this for themselves, why in an instance where the packaging matters, right, beauty is a special category: the packaging matters. You want it to look great on your counter or on your vanity. Why do you have to own it? What it we as a brand took extended producer responsibility and from the very beginning designed valuable packaging rather than disposable packaging? And that was a fundamental fork in the road, right, because designing something that is disposable is entirely different than undertaking how do you design something that works as a system and can be used 100-plus times. And we think that the understanding of the consumer around the damage the package is doing, and if you take as truth that we’re consuming more than the planet can provide and we are wasting more than the planet can withstand, then you begin to think differently about what’s a must-have versus, hm, what might the future look like if it were different? We talked last summer about, well, is the consumer ready? And that’s a great question. The research we did said the consumer is running way ahead of the existing brands, and I think Tesla is a great example of, what, ten years ago? Changing the game on electric cars, right? Up until then, electric cars weren’t cool. They certainly weren’t a two-seater sport coupe that people got on the waitlist for that wasn’t very convenient, right? The battery life was very limited and it took forever to charge, but people were lining up, not just eco people and car people. But it was a way to capture the imagination that was a game-changer, and fast-forward, it’s changing the whole industry.
Kelly Kovack [00:26:44]: Thinkers. Innovators. Experts. Generating ideas for the business of beauty. BeautyMatter has built its reputation as a must-read resource for beauty industry insiders, delivering future-focused insights and actionable solutions. With the speed of innovation and increased competition in the category, access to the right analysis and intelligence is more critical than ever. Make an investment in yourself and unlock a competitive edge with a subscription to BeautyMatter. Head over to BeautyMatter.com to check out our content. And as a listener to our podcast, use the code UNLOCK25 for a 25% discount.
It’s interesting that you mention that all of those bottling networks are gone, because that is also sort of an interesting solution you’re solving for. Because tackling this refillable concept, design is one piece of the equation, and it’s an important piece of the equation, but success is really contingent on the ability to operationalize the concept, and there aren’t really many resources at hand to do that. So can you share your learnings on what needs to be considered from an operational and a supply chain perspective when you want to tackle a concept like what you’ve launched?
Stephanie Stahl [00:28:17]: So doing anything differently, right, it’s a given, it’s going to take longer, cost more, and be more challenging. That’s a generic answer to that important question. Specific to this, you know, your cost structure is going to look different, right? Because you’re making an investment in a capital asset that is owned and that you are sharing with your customers that actually will depreciate over time. It’s an investment in property, plant, and equipment, which is very different than when I was at Revlon and we would be negotiating to make sure that our compacts didn’t cost more than two-and-a-half cents. So there are economic and financial implications that, in some ways, are easier to address if you start that way. It’s not an easy transition, which is a reason people don’t move on this, even if well-intended. The other piece is around reuse, and obviously UPS and FedEx, they already run roundtrip operations; that truck goes back and forth. And so the opportunity in the backhaul is actually positive for business and positive for the environment because that truck is making that trip anyway. And I think we will get to electric vehicle fleets long before we solve the micro-plastic problem, and I think all of those companies are moving in that direction. The cleaning aspect of it is central, right, because this must be clean, it must be clean at a microbial level, these are supplements and skincare and I’m all for finding amazing partners who already do things, right, well and at scale, and that doesn’t exist. So we’ve worked with some amazing partners to create that functionality and it is central to our brand premise, along with our products and our customer experience. So in some ways, it makes sense that we would need to build that and operate that, and that’s what we’ve done.
Kelly Kovack [00:30:26]: How long has all of this taken you?
Stephanie Stahl [00:30:30]: It has taken, at this point, almost three and a quarter, three and a third years, and the last twelve months certainly got stretched out by the pandemic, and I don’t think we’re alone in that. But it has taken longer because we needed to do materials research and design and we worked with UPS to create a shipper that will survive the nine miles of conveyor belt that every shipper goes through in every trip that it takes, and that kind of collaboration and understanding of what’s possible and what’s aesthetic and what would be fun, people buy products, not sustainability, and they buy beauty and supplements to invest in themselves and feel good, so the whole brand experience needs to reinforce that experience. It’s been really fun, actually, to collaborate from creative to intensely functional to manufacture things and figure things out, which is what has been core in this, because there hasn’t been a roadmap.
Kelly Kovack [00:31:37]: Can we talk about materials just a little bit, because I think that’s one of the places where we’ve sort of gotten to this point where there’s a lot of finger pointing of brands, like you’re using that material, and finger-wagging, it’s not good. And at the end of the day, and all of the conversations I’ve had around what are the best material choices, it always ends with, “well, it depends.” Because it’s not just about the material, brands are of different scales, they have different needs, they have different manufacturing. There’s not a one-size-fits-all solution to this. Can you share a little bit more about your material choices and why they made sense for you?
Stephanie Stahl [00:32:19]: Yeah, and I think it depends is a really frustrating answer and also accurate. We started from a place of fundamentally, there’s the linear economy and there’s the circular economy, and the linear economy is estimated to be about 92% of the world economy. And the linear economy is defined very well by the Ellen MacArthur foundation, is an economy that is basically take natural resources, energy, people power, make things and then waste things, repeat. And even if you are wasting better, you’re still going through that cycle of reusing and wasting. The circular economy, in context, is about designing out waste, it’s about keeping materials in use, and retiring responsibly when no longer able to be in use. They’re fundamentally different. So when you’re talking about materials, you know, and I get really excited about new materials that are coming out, or mushroom-based plastics, the challenge on that, if it’s still single-use, you still have to grow the field, make it, and dispose of it, and as you’ve mentioned, things that say they’re compostable, well, maybe they’re just industrial compostable, which is very hard to find in this country at this time. So we said look, that’s got to improve because it’s a big part of the economy, but actually, the bigger win is to shift from linear to circular. And in shifting to circular, then you get into the conversation around, well, what things are light; durable; premium – we wanted this to be a premium experience, not a sort of dissolving paper bag experience; efficient, which for us meant an efficient use of space as well as a high percentage of recycled materials, and iconic, where this would be easily recognizable. And [we] went through that iterative process because a lot of things that are light aren’t durable, right, so you have an immediate conflict point, and we looked at everything from glass to stainless steel to aluminum to poly paper mixes to all the -bles, right, the biodegradables and the whole gamut. And if your bar is it needs to be able to be reused a hundred times, a lot of materials fall out pretty quickly.
And so what we found for the primaries is that stainless steel was the best option. Again, dependent on our specific circumstances. And stainless steel doesn’t come with recycled content because the alloy doesn’t behave the way that they want it to with that in it. So that was a disappointment, right, because wouldn’t it have been great to get 100% post-consumer recycled something as our primary? And we will continue to hunt for that. But stainless steel has been a great option. It is a very functional material and not a very beauty material. So we found an amazing partner to coat that in food-grade ceramic to make it look and feel very different. You then go to the idea of clunking down a stainless steel anything on your counter. It doesn’t tactically and audio, it’s not a great sound.
We also had to solve the whole adhesive label conundrum. And UPS shared with us that they have some customers, largely in medical, who do a lot of roundtrip shipping in durable shippers and get really frustrated with that iconic UPS label that you just keep sticking on and sticking on and sticking on, and they spend several hundred thousand dollars a year unsticking it. So in that life cycle, we had to rethink all of it. So on our primaries, our labels are made of natural rubber, FSC certified, fair trade, natural rubber that are debossed. So that can go through a high sanitary washing cycle over and over and over again and not rub off and not disappear. So we’ve used natural rubber for all of the soft pieces that you need for functional benefits in a jar so it doesn’t leak. So that’s the nature of our primaries.
The shipper is different. And we looked at, again, a whole range of things. And where we landed, Kelly, was we didn’t want any virgin petroleum-based plastic in our packaging. And you could say, boy, that’s a really fine definition, and it is. And in full transparency, we feel positive about it, and the reason we ended up with that is our shipper is made of 100% post-consumer recycled polypropylene, of which 30% is reclaimed ocean waste. And you could say, okay, well, how did you get there? It’s light, it’s durable, and we felt strongly about the opportunity to help clean up some of the existing problem. And going forward, if there were no plastic waste to draw from, we’d figure out something else, but right now, there’s an abundance. And it turned itself into a really nice, sleek, premium-feeling shipper.
And then for our purposes, we have a shipping label that is inside the shipper because that felt more sanitary. One of the things about having labels on the outside is that they tend to wear and that slot tends to not hold up so well. So we then needed a clear window to protect that label as it goes through the shipping process, and we looked at every possible post-consumer recycled plastic to be that label. And then thing about post-consumer recycled plastic is you can never get clear, clear, clear. They’re all slightly milky, slightly gray because they’ve absorbed stuff in that process. And UPS can’t scan it. So our label window is PLA. So it’s plant-based plastic. But hopefully this conversation gives you some sense of the work that has gone into trying to figure out, to your point, what’s the best material? It depends.
Kelly Kovack [00:38:57]: Yeah, and you know, it depends, hopefully it changes a year from now. Because I think there’s so much innovation happening in the material space. But it has to be commercialized. No one wants to be the first to test run some new material, because if there is a problem, it can put you out of business. So there’s tons of innovation, but a lot of it isn’t commercialized. But it will come.
Stephanie Stahl [00:39:21]: It will come. There’s some sort of things about oh, can’t you get a much higher recycled content? I read somewhere and you chase it down. And actually, you can’t, yet.
Kelly Kovack [00:39:30]: Yeah.
Stephanie Stahl [00:39:31]: So, to your point, hopefully, right? And hopefully the change is rapid and we can all benefit from it and continue to evolve.
Kelly Kovack [00:39:38]: You know, you’ve clearly done a lot of research and due diligence in the development process of this brand. And, as if it’s not hard enough to launch a brand, you launched during COVID, which had its own sort of set of circumstances. I know you had a lot of supply chain issues, the same way everyone else has. But beyond COVID and kind of the uncertainty that it brought, what were some of the biggest challenges that you didn’t expect?
Stephanie Stahl [00:40:07]: I probably didn’t fully grasp how engrained, how things are, are in every piece of the conversation. And a micro-example of that is the number of times we would go back and forth with amazing manufacturing partners who would come back and say, well, I know that’s what you want to do, but plastic would be perfect for that. And you’d go back and say, yes, I understand… Well, how about silicone? No, we don’t want to use silicone. We really want to use natural rubber. And so you are pushing against an ingrained system, not only of capital assets that are there and that’s what people want to use, but also just habits. And so everything took a couple of extra conversations and a couple of extra iterations. And then what you found is those that really got it, really got it. And now you had people who were driving even harder than you. And those are the magic moments. And it’s not with every partner and every person, and it’s often enough and you have to cast a wide enough net so you find those people who have both the capabilities and the openness and kind of come onto the team and start driving the team.
Kelly Kovack [00:41:30]: There’s also an amazing knock-on effect of that. So once you’ve opened their mind to the possibilities of doing things differently, they’re also going to approach every interaction with another brand and share that knowledge. I’ve never really thought about that before, but it really is just this kind of amazing knock-on effect that is a byproduct.
Stephanie Stahl [00:41:50]: Yeah, the people we’re working with from our advisors to our development partners have been real drivers of this at this point. And one of the things we are also looking to do, because we’ve invested not only in the materials research and in the development, but also in a tech platform because when you are tracking not only finished goods, but you’re also tracking packaging as an asset, it is a different system that you need to do that. So all of our packaging is individually tracked and we’ve created a tech platform that does that seamlessly. And that’s an investment that many new brands don’t have in their budget, and so we’re already in conversations with new and existing brands on how do we leverage the investments that we’ve already made?
Kelly Kovack [00:42:40]: It is very interesting how a lot of brands that I’ve talked to who are reinventing how brands get brought to market and are solving sort of these supply chain issues are not only sort of sharing resources, because, you know, I think no one brand is going to solve our planet’s problem; it has to be a collective. And there’s, you know, this very fine line between competition and collaboration. And I find people who are truly committed to sustainability are some of the most generous with their hard-earned information that’s cost them money – I mean, time is money, and perhaps sort of differentiation in the market. But they’re often the first ones to share the knowledge.
Stephanie Stahl [00:43:27]: And I’m sure you remember, and I was really struck by it, and I love AllBirds and they’re another B-corps, love their shoes and their socks. And I remember the open letter they wrote to Amazon who was enthusiastically knocking them off, and it was exactly to your point. It was about okay, this is what you’re doing, I really hope that you get the full benefit of all of our knowledge and resource if this is the path that you’re going to take. Back to the Future is circular and collaborative because we have got some really big opportunities to solve and they’re not the status quo. So the more that we can support and leverage learnings and make progress, the better for all of us.
Kelly Kovack [00:44:15]: You mentioned earlier in the conversation that you think the consumers are not only ready, but they’re far ahead of brands. I mean, the concept of refills isn’t new. You spoke of kind of the milk man, it’s the way we used to get things. And I think that we’re starting to see, I think much more in Europe, a lot of the big, kind of personal care brands are test-running refill concepts at retail. We haven’t really sort of seen that here. But ultimately, the success of this is going to require a shift in consumer behavior at scale. And you clearly must believe they’re ready.
Stephanie Stahl [00:44:54]: Enough of them are ready.
Kelly Kovack [00:44:56]: Enough of them are ready. You know, what are your insights about sort of the consumer readiness for this shift to refills and circular product offerings? I mean, Gen Z is already there. They are smarter than all of us. They are going to solve so many problems. They have such sort of – I think it is a generation that is wise beyond its years. It’s the rest of us that need, I guess, the behavior shift.
Stephanie Stahl [00:45:20]: And, you know, back to Tesla, behavior – it’s hard to change one’s own behavior. It’s a real uphill climb to change anyone else’s behavior. If the incentive structure is right that you get things that you’re excited about in a way that makes you feel good, then that can move a lot of actions in a given direction. And I think the behavior change that goes with owning a Tesla is one of those examples on one end of the market. A behavior change of getting your dress for an event from Rent The Runway is another behavior change, right? You’ve got to time it and get it and send it back. So the behaviors are already changing, and I think retail and Loop is working really hard to figure out at mass scale, from grocery to a lot of other categories, how do you make this work at retail? We came at this from skincare and supplements and we thought hard about, from the product standpoint, did we want to do some of the things that are happening in haircare, right? So you have a bar instead of shipping water around. And we felt, at this point, back to at scale, the options of turning the form of moisturizer into something different, or serums, didn’t feel like the consumer was ready for that. And I’m not even sure what that looks like, but it’s an interesting question. And supplements, they sort of have to exist, right, and be packaged, and they are regulated by the FDA, so I don’t know how soon you could go down to the grocery store and fill something up in that form. So as it turns out, both of these categories have somewhat unique product characteristics, and so being a commercially refilled product felt like the right place, the right time, now. And I think through COVID, it’s been interesting, there’s been a lot of research done around refill, reuse models, and the demand for those that are commercial has increased. The sort of more do-it-yourself side of things, this has obviously not been the time or the place, but the commercial side of it, certain consumers are well-aware of how they want to show up for themselves and their planet footprint, and circular reuse, refill is sort of the path and a place they get pretty excited about going. And we did a lot of research and the number of people who wrote in to one of the bits of research that we did who said they were so excited to be doing this in partnership with a brand, and that’s the response we’re getting to date.
Kelly Kovack [00:48:10]: So, you know, obviously what you’ve launched is capital intense, and the investment community kind of has a formula business thesis that they work against for investment. And so much of what was required to bring this brand to life requires a rethinking of how money is spent. Do you think that investors are more open to looking to brands like yours that are kind of outside the norm? And obviously it requires patient capital because none of this happens quickly. But, you know, what’s your experience been there? Because there are a lot of creative people, but it doesn’t fit into that kind of beauty wellness investment kind of mold, if you will.
Stephanie Stahl [00:49:00]: So we have an amazing group of investors and they’ve been supportive, both as investors and as business experts. And I think, to your question, increasingly, you know, there are investment firms who focus only on B-corps. There are investment firms who are focused only on circular. And so look, in the main, is there a huge change yet? Probably not. But there’s enough of a change and there’s enough of a – and I hear a lot of commentary from people in the investment business about how millennials and Gen Z have very different investment expectations than their parents and the transfer of wealth from boomers and X’s to this younger generation is putting a lot of people in the financial community on notice. That it’s no longer this separation of, well, my investments are this, and then I do good things with other activities. They want it together. Back to the power of conscious capitalism, whatever term you want to put on it. And that takes time, but it is happening.
Kelly Kovack [00:50:11]: Yeah, I’ve even seen – I think it’s a UK-based firm, that it’s a group of investors that their fund is B-corps certified. So I guess you just have to find your people and find the right money, and it’s not going to be the traditional investors. So, Ace of Air just launched. It’s very early days. But what does success look like for you?
Stephanie Stahl [00:50:35]: Success for us is on two levels. One is to have a sustained, sustaining business, right? There’s that saying, no margin, no mission. And we fully embrace that. We are a public benefit corporation in addition to being a B-corps, which means our investors, our planet and the consituents associated with us delivering to our planet are all at the table, and that is a great defining construct. That means we need a business that is a success. We are going to build that one person at a time. This is a business that is a high-touch and therefore the customer experience is central, the product delivery is central, and that, in this noisy marketplace, will take some time to build, and that is what we’re building. And the other level that defines success for us is the larger mission of educating, advocating, bringing along, making fun a concept that is really important to where we’re going as people and planet. And so looking for other brands to amplify that message, looking for NGOs to amplify that message, we contribute 3% of our revenues to our partners, Ocean Conservancy and 5 Gyres and the Peconic Land Trust. And being an integrated source, as a business, to, look, you said it. We need lots of solutions. We need lots of people focused on different sides of what this problem opportunity is and we want to be a catalyst to accelerate that movement.
Kelly Kovack [00:52:23]: Well, I’m so excited for what you’re doing, and honestly, very grateful for the amount of work and the commitment. It’s brands like yours that are going to help not only inspire others, but help sort of make what you’re doing sort of the norm. So I’m super excited to watch your path. And really, thank you so much for your time and your generosity of information. And, I know this is – well, it’s the second already, so we’re already collaborators. So, you know, what we have is we have a platform to reach people, so that’s sort of how we’ve made a commitment to kind of make an impact by using that to highlight what other people are doing. So we are always here to tell your story as it evolves.
Stephanie Stahl [00:53:12]: Oh, I’m so grateful for that. I love your platform, I so enjoy speaking with you, and I’m just delighted and look forward to doing this again soon.
Kelly Kovack [00:53:22]: Yeah, absolutely. Thank you, Stephanie.
Stephanie Stahl [00:53:24]: Thank you.
Kelly Kovack [00:53:30]: For Stephanie, it’s a matter of circular. We’re at a tipping point and it’s time that companies make real, actionable commitments. The sustainable conversation has shifted. Existing agendas are no longer enough. Conversations have turned to circularity, the concept of eliminating waste and infinitely using resources. The focus on circularity is forcing every stakeholder in the beauty ecosystem to collaborate, innovate, and push the limits on better sourcing, greener chemistry, smarter packaging, and innovative retail models. Using her big beauty background, Stephanie is deconstructing how beauty brands are manufactured, packaged, shipped, and sold. In effect, she’s creating the playbook for how beauty brands will be built in the future. So in the end, it’s a matter of circular, and that’s what matters. I’m Kelly Kovack.
Stephanie Stahl [00:54:26]: Hi, I’m Stephanie, and to me what matters is circular. And what that means to me is using the valuable assets of our planet and our people in the most positive and long-term way possible.
Kelly Kovack [00:53:50]: It’s A Matter Of is a production of BeautyMatter LLC. You can find more content and insights on www.BeautyMatter.com and follow us on social media @BeautyMatterOfficial.
[END OF RECORDED AUDIO]
2 Article(s) Remaining