Building A Consumer Brand With Irena Todd, Co-Founder of Fresh Monster
WRITTEN BY MICHAEL SILVERMAN // BUSINESS & INNOVATION EDITOR
PHOTOGRAPHED BY ESTHER LEE LEACH
Michael Silverman: Irena, congratulations on all the success with Fresh Monster. It seems like such an incredible solution for children of a certain age and parents who want a great solution for their personal care routine. Where did the business idea for Fresh Monster come from and how did you go about designing the brand and products?
Irena Todd: Thank you, Michael! My co-founder, Jean Sim, and I met at Unilever, where we built our careers managing some of the world’s largest personal care brands, including TREsemme, AXE, Degree, and Suave. Despite this deep experience, once we became moms, we spent countless hours searching for personal care products that were suitable for kids. The more we searched, the clearer it became that there was a gap in the marketplace — the mainstream brands contained questionable ingredients, and the safer options were designed for babies at excessively high prices. It almost seemed unbelievable that once your baby grew into kidhood (read: more movement, more messes, more hair), nobody was designing personal care products for them. Why was our only safe option a baby shampoo? And why did it have to cost you an arm and a leg?
Given our background and entrepreneurial spirit, Jean and I felt that we were best suited to tackle this problem, not only for the sake of our kids but for all families. We set out to create a product that was specifically designed for the post-baby years through the pre-teen years. We developed vegan formulas that are toxin-free (no sulfates, parabens, phthalates, dyes, synthetic fragrances, BPA, gluten or soy), hypoallergenic, and made with kid-approved fragrances. We designed the bottle to be the home to quirky monsters that delight and inspire kids to embrace their uniqueness and individuality. Finally, we worked very hard to ensure the product price point is within reach for most families. And that’s how we landed on Fresh Monster - affordable, natural hair and body care designed and formulated just for kids.
MS: What has the entrepreneurial experience in Colorado been like for you? How do you feel about the business climate for consumer businesses specifically and startups in general in our state?
IT: I went to college in the Bay Area, and lived in Chicago and New York. Those metro areas have reputations for being dream start-up locations. Yet, when I moved to Denver, I realized that there is no better place to start a business than in Colorado — in particular, for natural consumer brands. The community of companies that are working on solving similar problems is vast - many brands are trying to clean up product categories that contain questionable ingredients or sketchy supply chains. Most have ambitious missions to improve consumers’ lives. Almost all get the unspoken rule that we help each other out – it’s how we beat the “big guys” and how we create sustainable change. When one of my startup friends calls, I pick up and try to help. They do the same for me.
I would like to give a special shout-out to the female founder / CEO community in particular. Colorado female founders understand that helping each other succeed is the best way to overcome the challenges we all face. Nothing makes me happier than seeing a female founder excel and there are many examples to point to including Maegan Scarlett (Overtone), Elizabeth Szymanski (MyVillage), Megan Bent (Harbinger Ventures), and of course Esther Lee Leach (Cherry Creek Fashion Magazine) who are all crushing it in their respective industries.
MS: E-Commerce has been a huge part of your growth journey but I know your experience at Unilever before starting Fresh Monster was very focused on the marketing of products in bricks-and-mortar retail. What have your learnings been as you master this quickly evolving part of the business and how would you recommend aspiring consumer entrepreneurs think about the retail vs e-commerce dichotomy?
IT: We all dream of “landing” Target or Whole Foods. The appeal and promise is obvious – sales will start pouring in, the awareness and growth will be exponential, we will have “made it”! This tends to be true for large brands. When I launched Axe Hair several years ago, we were able to get to 8-digits in revenue in only 3 years. This was possible because we had all-but-guaranteed full national distribution across all channels, a massive marketing budget, product economies of scale, and a world-class supply chain. Launching a small brand in retail is an entirely different proposition and almost never goes exactly as planned. Rather, it is often a perilous and unprofitable journey. It starts with slotting fees (many brands pay hefty fees to put their products on retailer shelves), price pressures (most retailers want brands to promote deeply and often), and high expectations (the rookie brand has to sell as well as the established brands, if not better). It ends with unexpected fees and an inability to learn what your shoppers think of your product or to make improvements or changes (once the product is on retailer shelves, it most likely can’t be modified for a full year).
Launching a new company through e-commerce allows for a quicker path to getting to know your consumer and how your product fits into their lives. It allows for more flexibility in fine-tuning the product/market fit. Once we started selling Fresh Monster online, we were able to test our pricing in real-time, connect with consumers directly, as well as test new innovations. Additionally, without the gatekeeper, the margins are significantly better, allowing new brands to build up cash flow and independence in charting their growth. I’m not saying it’s easy or cheap, but it is easier and cheaper than brick-and-mortar retail. Ultimately, it allows entrepreneurs to build a strong consumer following and positive cash flow first – both indispensable if or when the brand decides to tackle retail expansion.
MS: Lots of growth-oriented early-stage businesses, especially in consumer and tech, are very reliant on outside fundraising to achieve their goals. What has the fundraising journey been like for you and what advice for other entrepreneurs would you have when considering whether to prioritize profits or growth?
IT: We started our Fresh Monster journey by attending the Telluride Venture Accelerator, explicitly planning to fundraise. It’s what all the startup books tell you to do, what the press celebrates, and how your company is valued in the eyes of many. The program offered a demo day, a Shark Tank-like experience, pitching to dozens of investors at once, in hopes of getting several interested in our business. We were lucky enough to get a lot of interest and exceed our fundraising goals. On the flip side, getting funding that early on, set us on a path that required rapid revenue growth. With time, we figured out that getting to profitability, not fundraising was the best way to ensure our brand was growing sustainably and would give us the most flexibility to make bets on new ideas. Not everyone can bootstrap to profitability, but everyone can set profitability as a goal to reach as early as possible. Simply put, profitability gives you the ability to determine your own destiny which is why most of us become entrepreneurs to begin with.
MS: It seems as though many consumer product businesses may have seen some benefit in the rapid change of consumer behavior but have suffered substantial supply chain and distribution disruption. What positive and negative effects has Covid-19 had on your business?
IT: Like most consumable brands, we saw a bump in demand as people moved to shopping online in unprecedented numbers. We are the #1 kids personal care brand on Amazon, so we benefited from the surge of new online shoppers. At the same time, we scrambled to keep up with the demand and produce enough products. Some of our suppliers went out of business, others were struggling to meet deadlines. Some dealt with Covid outbreaks on factory floors, others were side-tracked producing hand sanitizers. Ultimately, we worked with our suppliers to come up with creative solutions to outages and hustled to come up with plans B, C and D for various supply chain hurdles. As crazy as last year was, it strangely fits the arc of the startup journey. At this point, we’re used to the roller coaster.
MS: Selling consumer products involves so much work behind the scenes to source, produce, market, and distribute products that are ultimately interacted with by the consumer either on shelf or online, and then in their home. With your extensive experience being a product marketer at Unilever, an entrepreneur in the space, and a conscious consumer yourself - what do you think the biggest “unknowns” or “misconceptions” are in the personal care category that you wish more people knew about or took the time to educate themselves on?
IT: I have two — one that entrepreneurs should think about and the other that could benefit consumers.
For entrepreneurs, launching a brand in the personal care space should be about building a story and emotional pull around consumer insight. It is beyond designing a label and making a product. If you think about it, some of the most iconic personal care brands are successful primarily because they establish an enduring emotional connection with their consumers. When I worked on TREsemme, consumers didn’t just see us as a styling brand, but a brand that made them feel more stylish and fashionable. Our Axe shoppers didn’t see us as a shampoo brand, but as an ally in dating. Successful personal care companies build brands that carve out an authentic and lasting place in their consumers’ lives.
On the product development front, the big watch out for natural personal care brands is fragrance. It is important because it creates an experiential consumer connection and builds lasting brand loyalty. However, “fragrance” and “perfume” are words that can hide hundreds of undisclosed ingredients, including phthalates or other toxins. The FDA does not require ingredient disclosure for any fragrance. Conversely, working with natural, botanical fragrances is difficult. It’s harder to create the robustness, longevity, and stability of the fragrance mixed into the formula. While it’s challenging, it is not impossible. If able to crack it, it is the best way to be transparent with consumers and offer safe products.