Why we invested in Good Club.
The investment world is slowly coming around to the idea that good business and good values can go hand-in-hand. Good Club, the newest addition to the Vala portfolio, is a great example of a company making this look obvious.
Good Club is an online, sustainable grocery retailer, making it easy for consumers to shop for products they can feel good about without breaking the bank. They focus on sustainably sourced, ambient food, such as pastas and non-dairy milks, as well as household goods, including self-care and cleaning products. These are the kinds of things families buy in bulk once a month and that have long shelf-lives. Through an annual membership model, and by avoiding the logistical challenges of supplying ‘fresh’ groceries (i.e. fruit, veg, and dairy), Good Club keeps costs low and passes the savings on to their customers.
On top of its sustainable product range, and its zero emission deliveries, Good Club has just launched a Zero Waste service, cutting single use packaging out of the equation altogether. Zero Waste products are shipped in reusable containers which customers unpack into their own containers (i.e. jars) at home. When finished, they simply leave them outside for next-day collection.
Beyond the service immediately resonating with us (as conscious consumers ourselves!), the investment decision came down to team, timing and mission.
The two co-founders, Ben and Danny, bring a great blend of entrepreneurialism, product vision and a contagious sense of purpose. Ben was a co-founder at FarmDrop and has a track record in sustainability leadership. Danny is an experienced product manager with strong technical skills and an unwavering focus on the customer experience. They’ve assembled a team of top talent around them, all aligned with the mission of making sustainable living affordable for everyone.
Good Club, which only launched its membership service in 2019, saw remarkable growth in 2020, increasing revenues by over 10x from their 2019 levels, and we’re confident there’s plenty of growth left. They sit at the centre of trends we expect to accelerate in the coming years.
First, consumers increasingly want their purchases to reflect their values. 83% of UK consumers consider environmental sustainability to be important when shopping for household products, but cite cost, availability and information as barriers to buying ethical products. Good Club addresses all of these concerns, making it easy to find and buy affordable products that don’t cost the earth.
Second, online grocery shopping has become increasingly common, with Covid-19 accelerating a trend that was already well underway. As part of this shift, consumers are finding it easier to ‘unbundle’ their shopping experience, creating opportunities for new businesses with niche offerings. For example, families may look to buy household staples in bulk once a month with Good Club, and top up on fresh produce and smaller orders at their local shops or farmers market a couple of times a week.
Good Club wants to help bring sustainable living to the masses, and we’re fully onboard with that vision. Not only do we think this is great for the planet, but we believe mission-driven businesses that match profit with purpose have some key advantages when it comes to attracting and retaining customers, talent and partners alike. We can also see it provides further motivation for the team to keep innovating and improving their service, including expanding their Zero Waste product line and working towards providing customers greater transparency on the sustainability footprint of their products. Good values = good business, more and more so everyday.
We’re excited to welcome Good Club to the Vala family and look forward to supporting them through this next chapter. You can find out more about the company and its mission here, and try your first month of sustainable living with no membership fee.
And be sure to watch this space for further updates on mission-driven teams building great businesses — we’re going to be backing quite a few.
This article was written by Max Middleton, Investment Manager.