It sounds so simple. An online membership club where folks can order the everyday foods and household goods they use most often — with each item guaranteed to be healthy, sustainable and affordable.
But there’s only one product sold in each category. One shampoo. One peanut butter. One tea. For a $59 annual membership fee, Public Goods members also get free shipping on orders of $45 and up. Think of it as an online cross between Costco and Trader Joe’s.
Public Goods founder and CEO Morgan Hirsh spoke with NRF about the brand, its commitment to sustainability and why retailers should pay attention.
CEO of Public Goods
What is Public Goods?
It’s a brand. In addition to that, we’re a brand with health and sustainable products across categories in a way that’s simplified and beautiful. We have one product in each category and people trust that we’ve done the research to make sure it’s a good product.
What kind of research do you do?
We’ve built strong relationships with top manufacturers in many categories. We also have brought in everything from chemists to food scientists. But there is no one answer about what we research because we’re in so many categories. For coffee, for example, we want to know that it’s fair trade. For food, is it certified organic? For toilet paper, is it tree-free? We always want to offer a healthy, more sustainable version of the product.
Where did you get the idea for Public Goods?
I’ve always had a sensibility for minimal and simple. I was living in Montreal working in manufacturing. I started to notice all of these direct-to-consumer companies popping up, like shaving companies.
I thought about what could make direct-to-consumer more useful. And then I realized, what if I could sell lots of products that people would always feel good about using? If we can deliver it at a fair price, that’s where people will go. If we can deliver it simpler and easier than anyone else and eliminate the guess work, we become the obvious choice.
How did Public Goods get started?
We did a lot of research on what works on Kickstarter. We did a video in summer 2017 of me talking to the camera explaining the idea. The idea resonated and we raised $700,000 in 38 days.
One particular Public Goods on-line promotion also had a very viral moment — please explain.
Facebook blocked all our ads — in fact, everyone’s ads — for hand sanitizer, because so many advertisers were price-gouging when the pandemic began. But we kept selling ours for $2 per bottle. Since we couldn’t say the words “hand sanitizer” or “face mask” in our ads, we substituted a “beep” sound. We made a joke that [those] words were profane, according to Facebook. It would be impossible to calculate the publicity value of that ad, but it sure got attention. Even Walmart reached out to us after that ad.
How many products do you have?
We started with 10 products (all bathroom essentials like shampoo, conditioner, toothpaste and toilet paper). The idea was to cover one room of the house. Right now, we have 260 products in personal care, household supplies food, and vitamins. We also have some hard goods, like bath towels.
How many products will you ultimately have?
We’ll continue to ask our customers what they want next. There’s no limit to peoples’ appetite for products. We launch about 150 products per year. But there is no finite number of SKUs. If customers stop asking for new products, we’ll know it’s come to an endpoint, but I don’t see that happening for a long time.
What’s your next product?
Pet food. We rolled out 10 products in the pet category in September, including dog food, dog kibble, cat kibble, cat treats and pet waste bags.
Why is sustainability so important to you?
It’s just existential. When you think about it, sustainability has to be important to everybody. We are talking about life or death choices. The only alternative to healthy is unhealthy. When consumers make unhealthy choices, they get sick. If you are starting a company from scratch, as we are, there’s no excuse not to develop products with these values in mind.
Why should retailers care about Public Goods?
We just partnered with CVS and rolled out into a couple thousand locations. It’s personal care items.
What’s the difference between paying for a membership to Public Goods or getting your products at CVS without a membership?
It’s more expensive at CVS — and limited.
Are you talking with other retailers?
Yes, we are open to other retail partnerships. We’re in talks with a big Canadian retailer. We’re also working with a lot of great boutique hotels in hotel room amenities.
Are you speaking with Target?
We have a sales team talking with them. Partnering with a retailer is a big deal. You only want to partner when you’re setting up a program for success.
What’s your best-selling item?
Our refill shampoo pouches are big sellers. So are our ramen five-pack, our toilet paper and our face masks.
Is Public Goods profitable yet?
We made money last quarter.
How many paying members does Public Goods have?
I won’t give you an exact number, but it’s definitely way more than 10,000.
How big can you get?
We aim to double or triple our business each year. It’s not like there’s an endpoint.
Can Public Goods ever be a billion-dollar company?
I believe, based on our assortment and strategy, I think we can hit that number and beyond from a revenue standpoint.
What’s a really bad-for-you product that you secretly like?
I confess to sometimes eating candy with my girlfriend.