Cleanery co founders Ellie Brade and Mark Sorensen on expanding their green cleaning and personal grooming products into Coles and Woolworths across the Tasman, and a new push into the US.
If an FMCG startup can be marked by its distribution then Cleanery is, well, cleaning up.
This time last year, husband-and-wife co-founders Mark Sorensen and Ellie Brade had just raised $2.3 million in seed funding. Their cleaning product was in six stores.
Now, they are in 2000 supermarkets across Australasia,including Coles and Woolworths stores across the ditch.
Next up is a push into the US, with a presence on Amazon confirmed, and talks with players in the “naturals” market that includes the likes of Wholefoods and Sprouts. Sorensen and Brade recently hired a North American sales director.
Cleanery’s main selling point is that it sells its cleaning products as a powder, in a sachet. To use it, you tip it into a spray bottle (which they’ll sell you too, if you don’t BYO) then add water.
Its founders say this model makes it much more efficient - and a lot better for the planet - for them to make and ship large volumes from Avondale, with just an eight-person team. The model uses 99 per cent less plastic than conventional rivals, Cleanery claims. It could fit its first order for Woolworths Australia - enough sachets to mix 400,000 bottles of cleaner - into just two shipping containers.
Cleanery also pushes that its cleaners contain only plant and mineral extracts. Most punters won’t miss the smell of chlorine and ammonia - but those kinds of chemicals are ruthlessly efficient at removing grime. Does Cleanery face a popular prejudice that “green” products are too nice for the job?
“That’s why we did two years of hard-sciencing before we launched,” Sorensen says. Gels, concentrates and tablets were rejected before they came up with their shipping product.
Cleanery co-founders Ellie Brade, who has a mar-comms and journalism background, and Mark Sorensen - a former Callaghan Innovation investment manager, who earlier worked for NZTE. Photo / Dean Purcell
They also wanted to be cost-competitive for the mass market (a sachet usually sells for $3) rather than charge a big green premium.
Cleanery’s seed money came from some big-name backers, many of whom had skills to chip in, too.
Investors included Peter Cullinane, Nicola O’Rourke (Comvita’s CDO) and Michael Stiassny (all via Founders Advisory), Shane Bradley, and Lance Wiggs, Rohan MacMahon and Dr Jez Weston via the Climate Venture Capital Fund.
Another backer was Chris Wong, owner of FMCG distribution business Pavé, who was able to help Cleanery navigate the trench warfare of getting into supermarkets, where every inch of shelf display space is hard won. Today, Cleanery is across Australia in 897 Woolworths supermarkets, with its new handwash range about to hit the shelves in 801 Coles next week. At home, it’s in 200 New World, Farro Fresh, Pak’nsave and independent stores.
Sorensen said he wants Cleanery to disrupt its market in the same way that former ad man (and NZME chairman) Cullinane’s Lewis Road Creamery shook up dairy. Lewis Road also made it into Woolworths in Australia, as well as the likes of Whole Foods in the US, before its 2020 sale to Southern Pastures.
It’s not all sunlight. Cleanery was going to stage a big-bang Series A round this year, and it still aims to bring in new investors from the US. But with the venture capital currently laid low by what Sorensen calls “crazy” interest rates, the decision was made to put that off. There was a top-up from existing backers to tide things over.
What will it take to make it in the US?
“It would be advisable for Cleanery to go for online and natural channels at an early stage,” the Climate Venture Capital Fund’s MacMahon said.
To make the product it wanted - and at a price for volume sales - Cleanery had to buy a factory in West Auckland, then create its own manufacturing systems. It can make up to 200,000 sachets per week (enough to fill around 250,000 bottles) at its Avondale plant. "We supply Australia and New Zealand from that and we'll certainly supply the initial US market out of that factory as well," Sorensen says. Photo / Dean Purcell
“They will need to be patient and exploit their advantages around product features, attractiveness to green consumers, pricing, inherent green/low emissions proposition. Through the online and natural channels [like Sprouts] I would expect them to be testing product and market-fit. They’ll need to be nimble with pack formats and brand messaging - and learn what is resonating with niche consumer groups.”
Longer term, he saw a template for going mainstream.
“Cleanery has been successful in bringing a new concept to supermarkets in New Zealand and Australia. They need to present this experience as part of the proposition for the similar - but much larger - channels in the US,” he said.
“Cleanery overcomes the compromise between product efficacy [actually being able to clean stuff], eco-credentials, and cost.”
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is technology editor and a senior business writer.
