2019-05-10 04:00:44 Growing & Complex Businesses English Read how two soccer parents invented the first laundry detergent pods and were able to grow their natural products ecommerce company with a... https://quickbooks.intuit.com/r/us_qrc/uploads/2019/05/QB_LA_18-10-05_GRAB-GREEN_0116_PORTRAIT-FULL-FRAME-NO-VIGNETTE-e1557772268603.jpg https://quickbooks.intuit.com/r/growing-complex-businesses/how-grab-greens-five-person-team-generates-a-35-compounded-growth-rate/ How Grab Green’s five-person team generates a 35% compounded growth rate

How Grab Green’s five-person team generates a 35% compounded growth rate

7 min read

  • Grab Green raised $2.5 million in funding from Stoneway Capital in 2016 and has an average compound annual growth rate of 35%.
  • They were the first to invent laundry detergent pods—before Tide—and the first in their niche to list their ingredients—before Seventh Generation.
  • They operate with a team of five people working full-time, leveraging QuickBooks Enterprise and other software to scale.

When you run an ecommerce business, customers rarely visit your office. So when an older gentleman started picking up their products in person at their office in Camarillo, CA to sing their praises, it was a powerful reminder of how their natural household product company is making a stark difference in their customers’ lives.

The founders of Grab Green, Patricia and Michael, learned the man was buying the products for his granddaughters who were suffering from Severe Combined Immunodeficiency (SCID), which made their immune systems virtually nonexistent. Grab Green’s products were the only ones they could have in their home that didn’t send the children into shock.

“It’s pretty dramatic. Our 3-in-1 fragrance-free laundry detergent pods are used by a number of children’s hospitals to wash the linen,” Michael explains. The children’s oncology department needs safe, natural products so that patients aren’t exposed to toxic chemicals contained in common household products. Grab Green’s products give them a safer alternative.

In the U.S., liquid laundry detergent pods cause more than 10,000 cases of poisoning each year for children five-years-old and younger. The highly concentrated dose of chemicals contained in the liquid makes it particularly dangerous. While developing their first product, Grab Green settled on a powder detergent which had environmental and health benefits, but also ended up saving costs for their business.

“2,000 loads of laundry would normally be three or four truckloads with liquid detergents, but its only one truck with us. We’re really saving petroleum costs and environmental waste,” says Patricia. “Everything just came together naturally for us, no pun intended.”

From the dark side to the green side

Patricia describes the transition from traditional to natural products as bringing people over “from the dark side to the green side.” The highlight of running her company is when she hears from customers who got rid of their rashes, breathing problems, and other health ailments after switching to Grab Green.

“We were the first to invent the laundry detergent pod, way before Tide, believe it or not. We created the first ever bleach alternative pod and wet dryer sheets. We created a lot of firsts. We only had a handful of products, and today we have about 150 different SKUs,” she says.

Patricia came up with the idea for an eco-friendly laundry detergent after realizing that she was washing her children’s sweat-stained clothes after soccer practice with products containing toxic ingredients, exposing them to dangerous chemicals on a constant basis.

She struck up a conversation about these concerns with Michael on the soccer field as the two cheered on their kids. That’s when they decided to work together to solve this problem for other families as well.

Patricia’s past experience in product development for a nutraceutical company, plus Michael’s entrepreneurial background in software startups, turned out to be the perfect match for launching an eco-friendly company with a global reach. In 2016, they raised $2.5 million in funding to expand its operations worldwide.

As of 2017, the natural product industry has surpassed $200 billion in size, and a Kline & Company study revealed that consumers are now willing to pay higher prices for natural personal care products.

While the newer organic, eco-friendly, companies in the market saw tripled growth rates, traditional companies like Johnson & Johnson experienced a 20% decline in sales for their baby collection, forcing them to change their product lines to make them healthier and more eco-friendly.

“What we learned is [millennial moms] were looking for fewer, simpler ingredients, more naturally derived ingredients in their products,” said Trisha Bonner, associate director of research & development at J&J Consumer.

For Grab Green, which launched its natural brand in 2009, providing solutions to consumers looking for eco-friendly alternatives is nothing new. Just recently, they launched their new baby collection with 14 products after spending over a year in research and development. Patricia says that it’s important for them to keep in mind that “as consumers change, we’re changing, too.”

How Grab Green runs a global business with only five people

Grab Green is now in its tenth year of business but the team remains small and lean. With one person in accounting, logistics, and operations, and two more in sales and marketing, they are a team of five full-time staff, supported by two-part time staff in accounting and marketing. They can stay competitive with such a small team because of their software solutions, which allow them to scale their business without substantially increasing resources.

From the very beginning, Patricia and Michael relied on QuickBooks Enterprise to take care of their accounting and operations needs. “We didn’t want to spend $200,000 on an Enterprise Resource Planning (ERP) solution and the complexity that comes with that. We had to make it so we had a control center and were able to manage all of those functions with a very small team,” says Michael.

“It’s the cost of the implementation and the level of staff that you need to run it… I’ve had other companies where I had to staff teams of five to eight people to run those types of systems.”

By adding bolt-ons to QuickBooks Enterprise, such as Electronic Data Interchange (EDI) software for sending purchase and sales orders electronically to their third-party logistics (3PL) warehouses, they were able to build a centralized platform that could scale up easily without needing extra hands. For more complicated inventory planning, they use QuickBooks Enterprise to calculate sales velocity, production timetables, and production schedules on each of their copackers or component level pieces. Later they adopted QuickBooks Enterprise’s manufacturing and inventory features as their business grew and their needs became more complex.

All in all, the team spends five hours a week managing QuickBooks Enterprise. They also leverage marketing tools like ConstantContact, Survey Monkey, and Klaviyo to reach and grow their large customer base. “By having all this technology, it really allows us to be slim and agile,” Patricia explains.

The most challenging parts of growing Grab Green are the unexpected, disruptive, issues. A few years ago, Grab Green’s deliveries were caught in the middle of a deep freeze in the East Coast, dropping temperatures to -20ºF. When the trucks arrived, the warehouse’s doors were locked. Its operations shut down due to the cold. The products sat out in the trailer, in the parking lot, and they ended up losing 10 trucks full of frozen products.

When you suddenly lose a large chunk of your inventory, Michael says, “You have to dig into your pocket just to survive because you could run more product, but that could be 60 to 90 days down the road. Meanwhile, your retailers are expecting those trucks to get to your warehouse so they can fill orders. So it’s a double whammy. You lose your inventory and then you lose the available cash on that. Then you have to wait 60 to 90 days for the next production run. And if retailers can’t get your product, they’re gonna get it from somebody else.”

The most recent time this happened, Grab Green was in the middle of opening up a new warehouse in Chicago when the polar vortex reached the Midwest. Learning from their previous experience, Michael and Patricia made sure their suppliers were available to move their products from the trucks into the warehouses.

There’s no silver bullet to these challenges. “You have to get your systems and your company up, such that you’re able to deal with the problem when it does arise. Not worry about it before, because that’s just a lot of wasted energy… I’ve got contingency plans in place in case these things occur.”

“You always need capital to keep running your business. That’s where QuickBooks definitely comes in handy for us. No matter where we are, we can tap into QuickBooks Enterprise and see what is going on financially, what sales orders are coming in, what invoicing and accounts receivable are like. We can manage all that from anywhere, although I will not admit to doing accounting on the beach,” Patricia adds.

Final Thoughts

Creating products that are safe and green through transparency and continuous testing is central to Grab Green’s mission. On the business side, they plan to continue QuickBooks Enterprise to scale up with a small team.

“If I were to start a new company tomorrow, I would implement QuickBooks Enterprise without a doubt,” says Michael. “Starting your own business is challenging enough. Don’t make it more complicated.”

Rate This Article

This article currently has 10 ratings with an average of 3.8 stars

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

Help Your Business Thrive

Get our newsletter

Thanks for signing up!

Check your inbox for a confirmation email.*

*Check your spam folder if you don’t see a confirmation email.

Related Articles

What is a green business? Plus, 10 ways your small business can add up big savings

It’s impossible to miss all of the recent talk about climate change…

Read more

Reducing your carbon footprint: Lessons from environmentally-friendly companies

You’ve heard the buzz about sustainability, but it hasn’t been something you’ve…

Read more

Sustainability, ‘small’ business, and love of the craft

On the north coast of Cornwall, England—a half-day ride southwest of London…

Read more