It was a short courtship.
CVS put Public Goods into 10 locations in January, testing out endcaps with the brand's sustainably-focused products, and just over half a year later, the partnership is expanding to include 2,000 CVS stores nationwide. CEO and founder of Public Goods, Morgan Hirsh, wasn't sure if the relationship would work when CVS first came to him, but agreed to a pilot because it seemed like a relatively safe way to test it out.
By the end of the first month, the brand's performance in CVS stores was "tremendous" and CVS had approached Public Goods about expanding it nationally. What made the difference for Hirsh, other than the strong performance, was the connection between what CVS stood for and what Public Goods stood for.
He noted that the mission statements of both companies center on providing accessible, healthy products to consumers, and he was particularly impressed by the health giant's track record, including the decision CVS made to stop selling cigarettes in 2014.
"Even though they were going to lose billions of dollars in revenue, it was just something that they felt, as somebody that's on their customer's journey toward good health and maintaining good health, that cigarettes just weren't the right kind of product line to be selling to consumers," Hirsh said. "I found that there's a lot of integrity in that decision."
As the years have passed, CVS has moved to position itself more solidly in the healthcare space, including through its HealthHub store concepts (the company has plans to open 1,500 by 2021). It's also worked to improve the beauty and skincare brands it stocks, partnering with other DTCs to test out new concepts and product offerings.
With Public Goods, the retailer gains a brand that's hitting on sustainability trends customers increasingly care about, as well as positioning itself in the health space. For now, the partnership is solely focused on Public Goods' grocery and personal care products, but that could expand further in the future.
Public Goods has a growing assortment of its own, which includes the above categories, as well as household, and vitamins and supplements. Within the next month, the brand's offerings will expand again, to include pet. While it may seem like a disparate set of categories, all of the company's product decisions are based on customer feedback, Hirsh said, and help realize the brand's mission of providing customers with a one-stop shop for sustainable and healthy products.
That focus on making the shopping experience easy for customers was one of the reasons Hirsh was wary about moving into CVS, or any brick-and-mortar retail partnerships, where its products would be sold alongside thousands of others — the exact problem Hirsh is trying to solve with Public Goods. So far, though, CVS has allayed those concerns, giving the brand its own endcap in the pilot and now a "skinny tower" in stores that stands apart from the aisles, and allows customers to shop all of the Public Goods products in one place in the store.
"A person could walk to one endcap, get the things they need for their bathroom, and leave without having to go through a labyrinth of aisles," Hirsh said, noting the brand's shampoo and conditioner were displayed alongside its toothpaste, toothbrushes and deodorant. "Because of our assortment and aesthetic, we managed to offer an oasis within their environment where we simplify the shopping experience for people where they can stand in one place, get what they need and know that it's a high quality product."
CVS is a large retail partner to start with, but the brand also has big ambitions. Public Goods has grown five times since February, "simply because we couldn't support more than five x growth," and is already in conversation with other retailers about potential brick-and-mortar deals.
"I think maintaining the integrity of the brand and the brand experience is paramount," Hirsh said. "We look at all decisions through that lens first, but certainly we want to make our products accessible to people and I think partnering with retailers is a great way to do that."