Kudos baby diapers creator Amrita Saigal with her daughter
Courtesy: Kudos
Throughout modern-day background, moms and dads have just had one actual choice when it concerns non reusable baby diapers: plastic.
The single-use items are commonly made with nonrenewable fuel sources like oil and can take centuries to damage down, making them the third-largest customer product in united state land fills, according to the Environmental management Agency.Â
Plus, they’re not as breathable as various other products, which can make occurrences like baby diaper breakouts extra common.Â
Still, plastic baby diapers from huge brand names like Procter & & Gamble-owned Pampers and Kimberly-Clark-owned Huggies remain to control the marketplace. Amrita Saigal, creator and chief executive officer of Congratulations, is aiming to transform that.Â
The Massachusetts Institute of Innovation grad, mechanical designer and “Shark Container” alum created a lasting baby diaper that makes use of some plastic, however is 100% lined with cotton and integrates various other degradable products like sugarcane and trees, she informs CNBC.Â
Later this month, it’ll be the very first baby diaper of its kind to land in stores when it releases in about 375 Target places nationwide.Â
” I am so thrilled to companion with Target to make background as the very first 100% cotton-lined non reusable baby diaper to strike retail racks,” Saigal claimed in a meeting with CNBC. “It’s simply an actually huge offer for us, particularly since Target does not bring several brand names.”
Kudos Diapers
Courtesy: Â HatchMark Studio
In the 3 years considering that its launch, Congratulations has actually elevated greater than $6 million in financing. It shut a $3 million round last month with financial investments from Forerunner Ventures, Xfund and Oversubscribed Ventures.Â
In the last one year, it’s marketed greater than 20 million baby diapers and expanded sales by greater than 100%.
Disturbance via innovationÂ
Saigal states she’s long been attracted by customer packaged products and has invested her occupation finding out means to upgrade daily items, like sanitary napkins and baby diapers, in her quote to interfere with a sector long controlled by company superpowers.
Her objective? Lower the world’s dependence on nonrenewable fuel sources by constructing out brand-new supply chains and creating lasting items that are equally as reliable â $” otherwise far better â $” than competitors.Â
” I’m not introducing an item that is not at the same level or far better than Pampers,” claimed Saigal.Â
” Exist environment-friendly options? Yes, however they do not execute and when it concerns a baby diaper, we can not have something that does not execute. You have one blowout, one leakage, your moms and dads are currently sleep-deprived. They require points that function. They’re not happy to endanger efficiency for environment-friendly.” Â
After 3 years of r & d, Saigal created a baby diaper that can soak up much more fluid than rivals like Pampers Pure Defense, Huggies Hand-to-hand Delivery and Honest diapers, according to independent testing conducted by Diaper Testing International.Â
Pampers didn’t return a request for comment. Honest declined comment.
A spokesperson for Kimberly-Clark, which owns Huggies, told CNBC it could not comment because it had not seen the study conducted by Diaper Testing International.
Saigal also developed a proprietary “DoubleDry” technology that brings two layers to the diaper instead of one, which allows it to wick away moisture.Â
“If you were just to take out the plastic and replace it with cotton, your diaper would fail miserably, because what would happen is your baby would pee and all the urine would just pool, and then your baby’s butt would be wet,” said Saigal. “How do you quickly wick away that urine and poop and then pull it through the layers of the diaper and then evenly disperse it so your baby’s bottom feels dry. So that’s really what our innovation is.”Â
Kudos is far smaller than its mightier competitors, but Saigal said its size has made the business uniquely positioned to build out new cotton supply chains and help suppliers grow alongside the company.
“For a company like P&G to do this, you’re talking ⦠hundreds of millions of dollars in order to reconfigure their equipment to be able to do it ⦠it’s really hard with their existing supply chains to be able to allow natural materials to actually work in their current process,” said Saigal, who worked for P&G as a design and manufacturing engineer after graduating from MIT.
Even sourcing natural materials for use instead of plastics would be challenging for larger companies because of their scale, Saigal said. Suppliers like cotton farmers tend to have buyers and partners locked in before they grow the requested materials, and since there isn’t yet mass demand for cotton from diaper makers, those supply chains don’t really exist yet at scale, she said.
As more and more smaller brands work with natural material suppliers to develop new supply chains, Saigal hopes that big brands will adopt natural materials over plastic more widely, which could reduce the price of those materials and in turn, make plastics more expensive.Â
“When do you really get mass adoption of natural materials? The reality is, when natural materials become cheaper than plastic,” she said.Â
Diaper economicsÂ
Kudos faces a daunting landscape of scale.
Buzzy brands that start out by selling directly to consumers and then make their way into retail can face difficulties because of the high cost of inventory and onerous payment terms that come with it.Â
Hello Bello, a hypoallergenic, sustainable diaper brand founded by celebrity couple Kristen Bell and Dax Shepard, filed for bankruptcy in October as it struggled to develop its supply chain after it began selling in retailers like Walmart.Â
Over the last few years, a number of other consumer product companies and direct-to-consumer brands have faced similar fates after coming up in a funding environment that prioritized growth over profitability.
“In the heyday of DTC, it was like, ‘Don’t worry about the unit economics now, right?’ Like, just top-line growth, top-line growth, top-line growth, and then once you’re at $100 million, $200 million in revenue, then let’s figure out how to make this profitable,” said Saigal, who founded her company in 2021 and secured funding from “Shark Tank” host Mark Cuban and guest Shark Gwyneth Paltrow in 2023.Â
“I don’t think that model works anymore,” she continued. “It’s like grow slower, but have the unit economics work from day one. I think the brands that are going to be successful now have to have a very, very tight lock on their numbers and their unit economics from the beginning.”Â
In the year ahead, Saigal’s No. 1 priority for her business is to reach profitability and to get there, she’s keeping her team lean and being strategic with the capital she’s using to pay for inventory ahead of her launch into Target. She’s also had to toe a fine line when it comes to pricing. Her products are more expensive to make than her competitors’, but if the price is too high, she risks alienating potential buyers.Â
Currently, parents can buy Kudos for between 41 cents and 70 cents per diaper, depending on the size. That compares with a box of Pampers Pure Protection, which runs between 34 cents and 75 cents per diaper, according to a listing on Target.com.Â
“We are a little bit more expensive just because our raw materials are more expensive, but I’ve tried to keep it as minimal as possible,” said Saigal. “I care so much about being premium, but accessible. That is like exactly what I want to do, so that we are accessible to as many people, and cleaner materials are not out of reach.”
Disclosure: CNBC owns the exclusive off-network cable rights to “Shark Tank,” which features Mark Cuban as a panelist.
