Kudos sustainable diapers to launch in Target stores

Honorary diaper founder Amrita Saigal and her daughter

Courtesy: Honor

Throughout modern history, parents have had only one real choice when it came to disposable diapers: plastic.

Disposable products are often made from fossil fuels like petroleum and can take hundreds of years to break down, making them the third largest consumer product in U.S. landfills, according to the EPA.

Plus, they aren’t as breathable as other materials, which may make incidents like diaper rash more common.

Nonetheless, plastic diapers from large brands, e.g. ProcterOwned Pampers and Kimberly ClarkCuriosity continues to dominate the market. Kudos founder and CEO Amrita Saigal is looking to change that.

The MIT graduate, mechanical engineer and “Shark Tank” cast member developed a sustainable diaper that uses some plastic but is lined with 100 percent cotton and incorporates sugar cane and Trees and other degradable materials.

Later this month, it will be the first diaper of its kind to hit retail stores and will be available in approximately 375 stores. Target Locations Nationwide.

““I’m excited to partner with Target and make history as the first 100% cotton-lined disposable diapers to hit retail shelves,” Saigal told CNBC. “This is a really big deal for us, especially. It’s because Target doesn’t own many brands.

honor diapers

Courtesy: HatchMark Studios

In the three years since its launch, Kudos has raised more than $6 million in funding. Last month, the company closed $3 million in funding from investors including Precursor Ventures, Xfund and Oversubscribed Ventures.

In the past 12 months, the company has sold more than 20 million diapers and sales have grown more than 100%.

Disruption through innovation

Sehgal said she has long been fascinated by consumer packaged goods and has spent her career looking for ways to redesign everyday products like tampons and diapers in an effort to disrupt an industry long dominated by corporate superpowers.

Her goal? Reduce the world’s dependence on fossil fuels by building new supply chains and developing sustainable products that are as effective as, if not better than, our competitors.

“I’m not going to launch a product that’s as good or better than Pampers,” Segal said.

“Are there environmentally friendly alternatives? Yes, but they don’t perform well, and when it comes to diapers, we can’t have something that doesn’t perform well. You get one diaper, one leak, and your parents are already sleep deprived. They need something that works. , they are unwilling to sacrifice performance for the sake of environmental protection.

After three years of research and development, Saigal has developed a diaper that absorbs far more fluid than Pampers Pure Protection, Huggies Special Delivery and honest Diapers, independently tested according to the International Diaper Test.

Pampers did not respond to a request for comment. Honesty declined to comment.

A spokesperson for Kimberly-Clark, the parent company of Huggies, told CNBC that the company could not comment because it had not seen the study conducted by Diaper Testing International.

Saigal has also developed a proprietary “DoubleDry” technology that gives the diaper two layers instead of one, allowing it to wick away moisture.

“If you just remove the plastic and replace it with cotton, your diaper is going to be a complete failure because what happens is your baby will pee and all the urine will pool together and then your baby’s bottom will be soaked,” Said Sehgal. “How to quickly pick up urine and feces and then pull it through the diaper layer and spread it evenly so your baby’s bottom feels dry. That’s where our innovation comes in.”

Kudos is much smaller than its larger rivals, but Saigal said its scale puts it in a unique position to build new cotton supply chains and help suppliers grow with the company.

“For a company like Procter & Gamble to do that, it would cost hundreds of millions of dollars to reconfigure their equipment…It’s very difficult with their existing supply chain to actually make that happen with natural materials.” from Massachusetts said Saigal, who worked as a design and manufacturing engineer at Procter & Gamble after graduating from the Polytechnic Institute.

Sehgal said even sourcing natural materials to replace plastics will be a challenge for big companies due to their larger scale. Suppliers like cotton farmers tend to lock in buyers and partners before growing the materials they need, she said, and those supply chains haven’t really scaled up yet because there hasn’t been huge demand for cotton from diaper manufacturers.

As more small brands collaborate with natural material suppliers to develop new supply chains, Saigal hopes that larger brands will adopt natural materials more widely instead of plastics, which may reduce the price of these materials and, in turn, make plastics More expensive.

“When will natural materials be truly adopted on a large scale? The reality is that natural materials are becoming cheaper than plastics,” she said.

diaper economics

Honor faces a landscape of daunting scale.

Established brands that started by selling products directly to consumers and then moved into retail may face difficulties due to high inventory costs and the onerous payment terms that come with them.

Hello Bello, a hypoallergenic, sustainable diaper brand founded by celebrity couple Kristen Bell and Dax Shepard, filed for bankruptcy in October as the company began After selling a product at retailers such as retailers, it becomes difficult to develop its supply chain. Walmart.

Over the past few years, many other consumer products companies and direct-to-consumer brands have faced a similar fate after entering a financing environment that prioritized growth over profitability.

“In the heyday of DTC, it was like, ‘Don’t worry about unit economics now, right?’ It was like, just revenue growth, revenue growth, revenue growth, and then once you hit $100 million in revenue, $200 million, so let’s figure out how to make money,” said her founder Saigal. The company was founded in 2021 and received funding in 2023 from “Shark Tank” host Mark Cuban and guest shark Gwyneth Paltrow.

“I think this model no longer works,” she continued. “It’s like growing at a slower pace but letting the unit economics work from day one. I think brands that are going to be successful now have to be very, very tight on locking in their volume and unit economics from the beginning.”

Saigal’s No. 1 priority for the business in the coming year is to become profitable, and to achieve that she will keep her team lean and strategize about the capital used to pay for inventory ahead of her move into Target. She also has to tread carefully when it comes to pricing. Her product costs more to make than her competitors, but if the price is too high, she risks alienating potential buyers.

Currently, parents can purchase Kudos for 41 cents to 70 cents per diaper, depending on size. By comparison, a box of Pampers Pure Protection diapers costs between 34 cents and 75 cents, according to listings on Target.com.

“Our prices are a little more expensive just because our raw materials are more expensive, but I try to keep it as low as possible,” Sehgal said. “I really care about the product being high-quality but also easy to use. That’s what I want to do so we can make it available to as many people as possible and cleaner materials are not out of reach.”