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The Secret To How This Company Is Getting Americans To Spend Millions On Fair Trade Luxury Bedding

November 09, 2015

(the below article originally appeared on forbes.com on Nov 7, 2015 by Kate Harrison)

Green products often have the stigma of being too expensive, and many companies in the green space work hard to let consumers know that their products are competitively priced. However, some eco-friendly companies embrace a luxury market position, producing top-quality products with added environmental, health or humanitarian benefits. One such company is Boll & Branch, the world’s foremost “fair and transparent” luxury linen company. Boll & Branch was the first bedding brand to earn certification by Fair Trade USA. Their fabulously soft high-end textiles are the epitome of eco-chic and ethical comfort, and consumers can’t get enough.

The founding husband-and-wife team, Scott & Missy Tannen, do not have a traditional background in textiles. Scott was a digital marketing pioneer. He spent several years building online marketing groups and award-winning programs for companies like Altoids, Oreos and Planters at Nabisco and later at Wrigley. He went on to found Funtank, a leading publisher and developer of casual online mobile and social games. After a successful exit with a sale to Publishers Clearing House, he founded red5 Capital, an early-stage investment fund with a strong portfolio of consumer brands. His wife Missy was a third grade teacher in Bridgewater, NJ, before becoming a stay-at-home mom for ten years, raising the couple’s three daughters. We discussed how they brought luxury eco-bedding mainstream in this interview:

Kate Harrison: Tell me a bit about how you two got into the textile business to begin with.

Missy Tannen: In the past, when we needed new sheets, we went to the store and bought the most comfortable-looking and luxurious-seeming sheets we could afford. We didn’t give it much more thought than that. Maybe we looked at the thread count, but we definitely didn’t wonder how many times the sheets had been marked up. We didn’t know whether we were paying for a marketing campaign, or what the factory was like where the sheets were made. The sheets came in a plastic sleeve with a photo of a classy bedroom on it. What could possibly be wrong with that? 
Plenty, it turns out. We followed the thread from our conventional sheets, so to speak, into the depths of a problematic industry. Dangerous factories, bonded laborers, worrisome chemicals and cotton farmers in India who have an average life expectancy of about 35. We decided it was time to offer a better solution. That day, we started Boll & Branch with a simple mission: to make better sheets by making a better company.

Harrison: How is Boll & Branch different from the competition?

 

Scott Tannen: Boll & Branch is really category disruption 2.0. In the past, many so-called disruptors have simply found producers of goods that are supplying major retailers. By contracting directly with these producers or importers, and reducing overhead by selling online, they were able to offer consumers the same quality of product they could buy retail, at a lower price. In the off-line world, we call this “private labeling” or “white labeling” as it has happened at grocery stores for generations.

We are completely different. While we offer the same commercial disruption from a pricing standpoint that others do, that is where the similarities end. We realized that if we could take a similarly disruptive approach to the actual sourcing of products, that we could make a transformative difference in the world — without needing to pass those costs on to the consumer.

So, we started with the cottonseed. We work with farmers and help them to convert to organic farming. As entrepreneurs, finding out the harmful effects in the developing world of working with non-organic cotton, there was no other choice. And, we cut out the middlemen on the supply-side, which means our farmers receive money directly from us via a number of cooperatives. We work with Fair Trade to pay a fair price for cotton, but we work with local cooperatives to make sure that money goes directly to the farmers. In India, farmers that sell to Boll & Branch can earn 200-300% more than others. So, while our costs are only about 30% higher than regular commodity pricing due to the Fair Trade price standards, the farmers earn 2x-3x their former income. That’s a huge win!

Missy Tannen: Then, we work directly with everyone from the cotton gins to the dye house to the weavers. Our sheets are a proprietary weave. They are significantly better than anything you can buy in a store, and not the same at all.

Unlike most companies in our market, we directly oversee our factories and talk to them multiple times a day. We have 300+ factory workers in Kolkata and know many of them by name. We ensure that they are paid a fair wage (200% higher than the average factory worker in Kolkata) and treated well. Plus, we give them special benefits like healthcare for their entire families, including their parents, and we pay for their children to go to private school.

Our belief is that our suppliers are a part of the Boll & Branch team. They make a product that is flat out the best in the world — and we treat them exactly as they should be treated. Because we are able to cut out the overhead of stores, middlemen and contractors, consumers are getting a much better product with a much better backstory, at a fraction of the price of sourcing this quality elsewhere. Everyone wins.

Harrison: People think of cotton as a natural fabric. What is wrong with conventional cotton production?

Missy Tannen: It’s a simple fact that cotton accounts for about 5% of the world’s crops, but utilizes 25-30% of the world’s chemicals and pesticides. Most cotton is grown in the developing world where smallhold farmers do not have the sophisticated equipment that their counterparts in the US do. So, these toxic chemicals are being applied by hand, which is extremely dangerous. Plus, many of these farmers do not have the education necessary to understand the adverse effects. If you spend any time talking to farmers or investigating these conditions in places like India, China, or Pakistan, you know that this is a massively under-reported issue.

Traditional cotton farming is, for the most part, quite dangerous and the conditions are deplorable, yet none of the big brands are doing anything about it. They are fine with the status quo, which is killing people and poisoning their villages and their children. This is not drama — this is reality.

The big brands know that organic cotton costs more and they’re accustomed to profit margins that are remarkably high, so they are reluctant to change their production and acquisition methods. However, we have tens of thousands of customers who are demonstrating every day that they do care about beautiful ethically-sourced products. They vote with their wallets.

We do not market to people that live purely organic lifestyles; we market to people who want a better product and care about how it is made and what its production means to the people who make it.

Harrison: Who is your target market and how do you reach them?

Scott Tannen: We like to say that our target is people who sleep on beds. And that’s true. We’ve sold products in all 50 states and all over the world. Our product is not inexpensive, but when you consider that it is made with extreme quality and will last for years, the price is very fair.

As such, it is not only wealthy people that purchase our products. Sure, people like President Bush (both of them) and President Clinton sleep on Boll & Branch as well as tons of celebrities. However, we also have people tell us that they don’t usually buy luxury products, but decided that they believe in how we make things. They won’t spend $75 on a set of sheets from a big box store that was most likely made in sub-standard conditions.

While we do have many millennials that shop with us, one of the most incredible things has been the number of older consumers who’ve not previously purchased online, that are discovering our brand and putting their trust in us. When you think about the typical e-commerce startups, we are reaching a very different consumer.

Harrison: What challenges is Boll & Branch facing and what lessons have you learned that others might benefit from?

Missy Tannen: We are two people that didn’t know textiles, but we were motivated to learn and take a chance on doing things differently in an established industry. Sometimes we are actually shocked that we’ve been able to learn as much as we have and that this crazy idea of sustainable luxury textiles is really working. In our first year, we sold just over $1.5M in sheets, which blew us away, and proved all the naysayers wrong. This year, our business seems to double every single month. We’ll do somewhere between $10-15M in sales in 2015, which is really our first full year in business.

Scott Tannen: You can’t fake passion, and our customers believe what we believe. They advocate for us and we really feel that they’re part of the story we are all writing. We’re not just a sheets or bedding startup, we are a movement for bringing the Golden Rule to business.

But, if we didn’t have an absolutely credible product it wouldn’t matter; people may love your mission, but they want to buy great products. That’s the key to it all. This is a sustainable product, but don’t let that fool you — it is also true luxury in its finest form. I’d put our sheets up against any others, at any price point. They’re that good.

Summary: Boll & Branch is a vertically-integrated online retailer of bedding and home textiles that both commercially and socially disrupts the category. As the first bedding brand to become certified by Fair Trade USA, Boll & Branch proves that quality and well-treated workers can coexist. Selling online only has allowed the company to cut out the middlemen. While definitely a luxury product, consumers know quality when they see it and experience it. These products, paired with their commitment to their social mission, means Boll & Branch has tremendous growth potential.

This article originally appeared on forbes.com on November 7, 2015 by Kate Harrison, Forbes Contributor – @kate_l_harrison and find her marketing consulting business online at katelharrison.com. For her green wedding professional certification class, visit greenweddingprofessionals.com.