Dive Brief:
- The Honest Company has hired Amazon veteran Pete Gerstberger as its new chief digital and strategy officer, effective Oct. 4.
- Gerstberger previously served as head of Amazon's Key service, which allows for contactless deliveries inside customers' homes. Prior to that, he was vice president and general manager at Ring, a security and smart doorbell service that Amazon acquired in 2018.
- At Honest Co., Gerstberger will be tasked with overseeing the brand's omnichannel strategy and driving its digital business with the help of analytics.
Dive Insight:
Launched in 2012 by actress Jessica Alba, The Honest Company has capitalized on growing consumer interest around so-called clean and natural products that shun chemical inputs. The company, which filed an initial public offering this year, has a trademarked "NO list" that includes 2,500 chemicals such as parabens, sulfates and phthalates that the company will not use in its products.
From that premise, the brand has launched into numerous categories, everything from diapers (which, together with wipes accounts for 63% of the company's revenue) to dish soap. The brand estimates that the total domestic "clean and natural" markets for its three primary categories — diapers and wipes, skin and personal care, and household and wellness — were worth a combined $17 billion in retail sales in 2019.
The company's clean-product ethos is part of its sales pitch. It can also be a legal risk. In its initial public offering prospectus, Honest Co. noted class action suits against it from consumers alleging a sunscreen didn't work and wasn't "natural" — which led to an investigation by Food and Drug Administration — and other lawsuits claiming it misled consumers about ingredients in various cleaners.
While the company's revenue has been growing fast, it has posted a loss every year since its inception, though the company narrowed its operating loss considerably in 2020. For the first half of 2021, Honest Co. is back to operating at a steep loss, according to its latest financials.
Gerstberger will be overseeing the company's digital business, which represented some $166.7 million in revenue in 2020 and accounted for roughly 55% of all revenue, with retail sales making up the rest. Honest Co. touted his background at Amazon Key, where Gerstberger helped scale the service to 50 million Prime customers, as well as working to develop and launch Ring's home security system (Ring Alarm).
Along with his responsibilities on the digital side of Honest Co.'s business, the company said Gerstberger will be "a key voice in moving the corporate strategy forward, narrowing in on future company growth initiatives, licensing, partnerships and category development."
