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Why we invested in EcoSoul – The household brand for the future

Updated: Jul 26, 2022

About EcoSoul

EcoSoul is a consumer brand which provides alternative household solutions made from 100% certified 'green' material, meeting the growing demand by both consumer and planet. On a mission to make sustainability more inclusive and accepted, the company is well on its way to become the world’s first full stack eco-friendly company.

Utilising a beachhead strategy that attacks one of the most pressing areas in consumption - single-use plastics - EcoSoul has launched a line of plastic-free tableware, organic kitchenware, and compostable waste bags, starting with targeting the US market.

Its products are sold by some of the leading retail grocery chains in the USA and online across various e- commerce platforms. With over 100 SKUs in 1800+ stores, the company not only strives to be the number 1 choice for consumers, but also ensures that its products are pocket friendly. The latter being a critical component of its success, as most eco-friendly brands are deemed overpriced or for the ‘ultra-conscious’.

With over 35 contract manufacturers, 16+ Consolidation & Port Operations and 4 US Distribution centers, the company has built its moat around a robust supply chain model which ensures optimal sourcing of materials from suppliers. With products manufactured at 41% lesser costs and sold at a minimal premium of 10-20%, the company is rapidly scaling, at higher margins and lower price points versus its competitors.

Eco Soul has shaken up the market by getting price points of eco friendly products within 10-25% of plastic and tree-based products

Its performance speaks for itself: EcoSoul has 3x its sales every quarter for the past 3 quarters and is expected to grow another 2.5x each quarter in the coming year. Its retail presence is also growing exponentially, 10x to be specific, thanks to strong traction and demand. With a forecast 21x surge in customer base, achieved via scaling of D2C and retail partnerships, the company is on track to reach its target by 2026: To become the global household name at a $600M valuation.

Industry and growth drivers

The disposable tableware market has experienced significant change in the past decade, pushed from two directions. On the one hand, growing concerns over climate change have forced a steep reduction in single-plastic consumption and, on the other, convenience and food delivery trends have caused a surge in demand. As a result, demand for ‘green’ single-use products has risen tremendously, showing no signs of stopping. In fact, by 2030, FMI (2022) reports that the biodegradable disposable tableware market is expected to reach US$10.8bn growing at 6.4% CAGR between 2022-2030, while the wider disposable tableware market was valued just over US$32.1bn in 2021.

As shoppers are starting to pay increasing attention to how their consumption habits impact the environment, sustainably marketed products have grown over 7x faster than conventional marketed products, despite premium pricing (on avg. 39%). This drastic change in attitudes have created a big opportunity for innovation, change and impact. The customer segments who have not yet fully embraced sustainable shopping attribute their reluctance to four key factors:

However, as favorable legislation promoting clean packaging is being roll-out, we anticipate this segment to dominate much of the existing market in the near future, while increase in demand will push the industry to grow further. Nonetheless, for the time being, the market is very fragmented with no large players having significant market share. Within the disposable tableware, we see the top 5 companies holding no more than 16% of the market total.

Uniquely qualified founders

While we were compelled by the market opportunity outlined above, we also acknowledged that successful execution would require a highly focused team with specialised skill sets that span B2B and B2C paired with overall brand building strategy. What EcoSoul has set out to achieve is not a small feat, but after meeting with this purpose-built founding team, it has become evident that if anyone can tackle this opportunity, it would be them.

The EcoSoul Co-Founders, Arvind Ganesan and Rahul Singh, both have experience in scaling global home categories, operations and teams across verticals.

The co-founders initiated their professional relationship working in leadership positions at Wayfair, and both have over 15 years of deep experience across roles including product, operations, merchandising, marketing, supply chain and inventory management.

With such unique and comprehensive background, coupled with an impeccably detailed approach to business, Arvind and Rahul set out to tackle the opportunity from a consumer-first perspective. By effectively identifying key industry challenges early on, the team focused on addressing them holistically to ensure maximum functionality, usability and impact.

Lack of a brand: Most early-stage companies launching eco-friendly products are limited to one category and unable to service the needs of the customer looking for a suite of products for everyday use. This leads to challenges in creating a household brand.
Price: The premiums on these products are often very high (35%-100% premium). When it comes to the question of affordability, Eco Soul has been able to source the right market to find the most cost-advantaged source markets & suppliers. Their long-term supply contracts with the suppliers and the strong volume discounts gives them the availability to price roughly half of what their competitors sell at.
Quality: There’s a certain reluctance amongst consumers to opt for ‘clean’ alternatives as it’s seen as a quality compromise. While most challenger brands use sourcing houses or multi-layered distributors, EcoSoul has on-the-ground manufacturing operations close to our source materials in Asia. Giving them more control over our supply chain, allowing us to create high-quality products at a lower cost to the consumer.
Certifications: The market is filled with low quality products, marketed as ‘green’ but more often than not, using mere greenwashing tactics to attract customers. But to build trust amongst people that their products are better for you and the environment, EcoSoul has its products certified through industry-leading agencies — like USDA, TUV Austria, The Biodegradable Products Institute, and FSC.

What’s next for EcoSoul?

While operating primarily as a D2C (e-commerce) and B2B2C (Grocery Retail) brand, EcoSoul is focused on the next phase of omni-channel expansion by partnering with B2B players in food and hospitality industries, while building relationships with potential partners across the B2B ecosystem. Alongside its bio-based home essentials product line, the brand recently launched a new category of natural baby essentials.

While expanding the product line, we at FounderBank Capital (FBC) are working closely with the EcoSoul team on successful growth hacking and business development, including leveraging our partnership network to build up the brand through re-branding and brand strategy development. And if you are a green soul looking for products that are economical and eco-friendly, do visit EcoSoul Home and check out their product range!

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