It’s been more than a decade since Jessica Alba started the Honest Company, launching a new diaper and wipes brand based on clean and natural ingredients. Since then, the brand has paved the way for dozens of independent hygiene brands who have taken advantage of increased contract manufacturing availability as well as easier and less expensive marketing opportunities created by social media and other non-traditional channels to blaze a trail into a market once populated by massive multi-nationals.

As newer brands like Rascal + Friends and Terra announce increased distribution in brick and mortar settings, Honest has reported some struggles in recent quarters. In its fourth quarter and full year earnings call, the company reported sales growth of just 2% despite 12% total consumption growth. Meanwhile, net losses continue to increase.

The company’s response to these challenges? Go high. In a move to drive growth and retain its position as a top tier brand, Honest will move away from certain low margin products, like some household items, and gradually raise prices in more successful product lines like baby diapers and wipes. According to the company’s CEO Carla Vernon, these efforts, which also include an exit from Europe and Asia, will allow Honest to match its pricing with its branded premium products and create a better return on shareholder value.

So far, these efforts appear to be working. First quarter sales grew 23%, driven largely by its diaper and wipes sales, which constitute about 64% of total sales. Executives expect this growth to continue throughout 2023 as pricing increases continue to roll out and the company expands into more retail channels, both digital and traditional.

Honest entered the market as a premium, upscale brand in 2012 and soon attracted customers willing to pay a higher price for products with clean ingredient claims, sophisticated prints and premium designs. Now, with so many other competing products offering similar benefits

On the market, can Honest replicate this success? Honestly, we’ll have to wait and see.


Karen McIntyre
Editor
[email protected]