DTC Vitamin Powerhouse Ritual’s Next Moves: Retail, Advocacy, Sustainability Measures And More Ingredient Traceability

If you need a rebuttal to the “direct-to-consumer brands are dead” narrative, consider Ritual. Started by founder and CEO Katerina Schneider in 2016 with a women’s multivitamin, the supplement brand has surpassed $100 million in revenues via subscription. Although it has a see-through design esteemed for its Instagram appeal, Ritual’s ability to drive substantial DTC sales doesn’t rest on its looks or trend savviness. In fact, it eschews trendy ingredients such as adaptogens (more below on why) and relies on extensively vetted ones. And it’s placed ingredient transparency and product testing at the center of its business model to establish consumer trust in a supplement segment not known to be overly concerned about what people swallow.

Now, as Ritual, which has received $53 million in funding from the likes of Forerunner Ventures, Founders Fund and Norwest Ventures, steps into omnichannel distribution with its own store and wider retail availability forthcoming, it’s doubling down on transparency efforts and beginning to advocate for policy changes to improve the supplement segment as a whole. The brand recently appointed Lindsay Dahl as chief impact officer. She formerly fought to tighten regulation of the beauty industry as SVP of mission at Beautycounter and is charged with a similar responsibility at Ritual.

Schneider says, “I would like to see standards upheld across every product that people are putting in their bodies, whether it’s ours or something else. It’s bigger than the brand. It’s actually impacting people’s health in a bigger way, and I think that’s a really exciting thing to lead.”

Beauty Independent talked to her and Dahl about information Ritual shares with the public, including supplier names competitors can easily access, the brand’s governmental agenda, its Amazon-first approach to diversifying distribution, and why people should stay away from protein powder sourced overseas.

How did being an immigrant shape your career trajectory?

Schneider: It had a really big impact. I’m actually a refugee from Ukraine, which means something different now, unfortunately. I grew up in Brooklyn, and my dad became an entrepreneur. It was all about the hustle. I was always around that entrepreneurial journey my whole life, showing that you can come from nothing and have a really big impact on the world.

I ended up working for Troy Carter, who was Lady Gaga’s manager, running a fund in LA, and we invested in over 70 companies, everything from Uber and Dropbox to Warby Parker and Spotify. I saw that hustle again with Troy, and everything he accomplished in his life.

I was surrounded by founders, and I always knew that I wanted to start something, but I never knew what that would be. I didn’t ever have that idea where it just kept me up at night, but, when I got pregnant and was running this fund, I couldn’t stop thinking about prenatal vitamins as weird as that sounds, and more broadly, just how broken the industry of vitamins, minerals and supplements was.

This is over seven years ago before I started the company, and nobody I knew in my network of other millennial moms had a brand that they knew and trusted. I asked them, “What prenatal are you taking?” It was, “Yellow bottle, brown cap, let me go home and tell you.”

I thought that was interesting. When I dug deeper, there were really no brands that were leading when it comes to traceability, ingredient sourcing and science. That was really motivating for me. The vision became a lot bigger than prenatals. It was really, how do we change the industry? How do we impact people’s health in the biggest way and become the most trusted brand for everyday health?

How did you think your perspective as an investor impacted Ritual?

Schneider: Well, we’ve kind of done things differently, maybe because of the experience that I’ve had in investing, by actually building IP in this space. I don’t think that’s something that most people think about. So, we have a patent on our technology. We’re submitting for several other patents.

We’re a technology company. We have over 20 engineers. We have really thought about the customer experience, not just the product. You can have precise control. You can snooze or rush your order. You can bundle things. The experience is really lovely. Out of a company hackathon, we built an Apple watch app. I think that investment in not just the physical product, but the experience was highly influenced by being an investor in tech.

Glossier received criticism for going too hard into technology and ignoring the product. What do you make of that?

Schneider: We haven’t gone as ambitious as creating a community platform, which I think is inspiring, frankly. Maybe there’s some backlash there, but I think it’s inspiring to do things that haven’t been done before. For us, we’ve just stayed laser-focused on the experience around our products. That’s led to industry-leading retention.

For example, you can enter the date you’re due on the prenatal side, and we have data on when people are expecting. We can help them transition to postnatal and really just create a more thoughtful experience with our product and brand.

Ritual CEO and founder Katerina Schneider

What’s useful for consumers and what isn’t when it comes to traceability?

Dahl: We’re thinking about traceability at Ritual is really in two different ways: the concept of traceable sourcing and traceable science. Both of those two paths are important. Today’s consumer, especially our customer, cares deeply about understanding and is skeptical of, what kind of science is actually behind this prenatal vitamin? How much access and visibility does this business have into their supply chain?

When you look at the rest of the category—this isn’t to speak disparaging of the rest of the category—having traceable science and sourcing is not common practice, but it was part of what compelled Kat to start this business, and certainly we found a large market of people that are asking these same questions as well.

To your question, everyone wants a different level of information, but as the market continues to grow, people are asking harder questions. Building transparency across the business, we want to be able to share with people something as simple and powerful as the final place of manufacturing and the name of the supplier used for those ingredients that they’re putting into their body every day.

Some people will care about that and some will not, but what we found is that people are very responsive to it because it shows that we’re doing the homework behind our products, and we’re confident enough to share that with our end consumer.

There’s also an additional layer to that, which is not only about giving consumers transparency to help build trust because trust is very important to us as a brand, but it also is showcasing in some ways to our competitors who our ingredient suppliers are. We think that’s a good thing because the business has spent a lot of time trying to find best-in-class suppliers, and if we help their businesses grow simultaneously, we also think it can increase the access to high quality vitamins across the market.

Are the names of the suppliers available on Ritual’s website?

Schneider: Yeah, and people are sometimes shocked that we would list every active ingredient supplier on our website because that means another company can go and recreate our formulation, and we are OK with that because that means that people are using better ingredients in their products.

That has been there since day one, and it’s something we’re really proud of. Traceability is not just the ingredients. It’s also the science. We share the process for formulations. It’s a four-step process. It starts with identifying nutrient gaps. What is it that people are actually lacking in their diets?

Then, it’s about finding the ideal form. Our genetics have such a big impact on how we utilize nutrients. A third of us have a genetic variation where we can’t properly utilize folic acid, so we use a methylated folate from Italy that bypasses genetic variations.

The fourth step is just looking at the big picture. How are all these ingredients interacting? It’s just a really different and more thoughtful approach to formulation versus just creating nutrient overload, which is very common in the industry.

That’s why seeing the ingredient suppliers makes sense for our consumer. It’s less of, just take our word for it. That’s something we would never do. We want to show people.

To your knowledge, has somebody else tried to use your suppliers?

Schneider: Yeah, I’m friends with the founder, and it’s not a competitive product. In a closed space, they were like, “Thanks for the omega-3 tip. We’re using your omega-3 supplier Algarithm. They seem like a great supplier.” So, I’ve heard it, but it’s not something I’m tracking actively.

What do you think should really persuade a consumer’s purchasing decision in terms of the information they might have about a brand?

Schneider: One thing that we didn’t really talk about is third-party testing. I can’t [emphasize enough] just how important it is to have third-party testing on products in this category. Third-party testing is not a requirement. A lot of companies don’t choose to invest in that because of cost. It is very important because your manufacturers might say, “Hey, this is in the product,” and they might be fantastic, but you need to be checking that work.

We invested in USP for our flagship product, and less than 1% of supplement companies have that. It’s the highest bar for product transparency. It’s a very long, very expensive process. They’re actually going in and testing your lots, auditing your facilities, and verifying what’s on the label is actually there—and not just for one lot, but many lots.

When we say non-GMO, we are actually verifying our multivitamins with Non-GMO Project verification. It’s fairly easy to put a non-GMO claim without that third-party verification.

On the protein side, it’s even more important in some ways because of banned substances, heavy metals. There’s a lot of volume there that can impact your health. We’re actually the first plant-based protein to be Informed Sport Certified, which checks for hundreds of banned substances.

Our consumers are buying because they know we have high-quality ingredients. I think that’s the No. 1 reason. That’s clearly connected to the traceability. I’m excited to expand upon that and educate consumers in other areas. We’re even building a traceability portal, where people can track their lots, see our testing. That’s coming soon. It’s taking it to the next level.

What’s the next step in traceability?

Schneider: The impact on the environment is the next thing. It was really important for us to get B Corp. People create companies in this space because they care about people’s health, but, as an industry, we actually drop the ball on something that impacts our health in the biggest way and that’s the environment. That’s something we are really excited to drive going forward.

We have really bold sustainability goals already. Our vitamin bottles are 100% post-consumer recycled materials. Our mailers are 100% post-consumer recycled as well. Again, it’s not like we’re like, “Take our word for it.” Our team is in the middle of showing the impact that our packaging, products and manufacturing are having on carbon. We’re taking a scientific approach to measuring.

Ritual has surpassed $100 million in revenues via subscription. The brand, which has raised $53 million in funding, sells a bottle of multivitamins every 16 seconds on average.

Beautycounter pushes for legislation. Do you want to fight for legislation? How can the industry be better regulated?

Schneider: We definitely want the industry to be better regulated. It’s a myth that the industry’s not regulated. A lot of people think that it’s not. One of our early scientists said, “It’s like having a street with stop signs, but no police around.” There is pretty tight regulation, and it could be better on the enforcement side. Advocacy is a big part of our future.

Dahl: We’re going to be asking for transparency around marketing claims to make sure that companies are using their best judgement when they’re marketing products and using terms like “clinically studied.” We’re also going to be pushing to make sure that there’s more funding and staffing for the FDA to do site audits, assess manufacturing facilities and make sure that basic manufacturing practices are up to speed.

Our advocacy work here at Ritual is going to be understanding where our industry is today while knowing that we have the opportunity to do better. We’re going to be working to help support Congress to do the right thing to make sure there’s a level playing field across the industry for both the quality of the product and also the quality of how companies show up to consumers through marketing.

Many articles have reported that vitamins have little to no benefits.

Schneider: I’m very, very passionate about this topic. I would just say that some of that stuff isn’t true. Not just our products, but a lot of ingredients in multivitamins have been studied for decades. When we choose ingredients, we choose ingredients that have their own completed clinical studies, so there’s kind of a guarantee that they’ll work in people’s bodies. We go above and beyond by actually running our own studies as well.

The Multivitamin 18+ is an example of that. Almost all of our ingredients have their own human clinical study in that product. It’s not like an experimental adaptogen. B3 has been studied in people’s bodies for decades.

What’s interesting is, how does this combination get delivered? We can now say that we saw a 30% increase in vitamin D levels over 12 weeks. It’s not enough to have a clinical study, you need to get the scientific community to buy in and validate. That’s why we go further, peer review and publish the study.

We just ran two in vitro studies on our gut health products. We want to see where the product is delivered, which actually has an impact on how it’s utilized. We have a delayed release capsule. It bypasses the stomach and gets released in the small intestine.

So, the delivery mechanism is actually really important as well. You’ll see a lot of companies in this space just put a bunch of ingredients together in a capsule and beautiful packaging, but we look at the technology of the encapsulation as well.

Is there an ingredient you want to know more about?

Schneider: Ingredients that are not in our products like adaptogens. People are saying they’re having great results from adaptogens, and the problem is that there’s very little clinical research going on in that space. There hasn’t been investment in that. Those are the things we stay away from. We’re putting ingredients in our products that have a legacy of clinical research behind them.

Would you take adaptogens?

Schneider: I used to. I used to take a lot of things. The more I got to know, the more things I’ve rejected. I’m frankly scared of any powdered product not from the U.S. because of heavy metals, contaminants, a lot of stuff. It was really expensive, but we partnered with PURIS and use regeneratively farmed peas in our protein that are grown in U.S. farms versus going overseas.

And this is why we list our suppliers because, the more testing you do, it’s like, wow, some of that other stuff has a lot of heavy metals in it. The more I’ve learned, the less experimentation I’ve started. Things are cool and shiny, but I don’t want to make myself sick.

Ritual recently opened a store on Abbot Kinney in Venice. Tell us about that. 

Schneider: It’s helped bring our vision of traceability to life in a physical space, which is really exciting because we’ve been 100% direct-to-consumer until now. What’s crazy is that we have a nine-figure-plus recurring business that we built entirely direct off of very few SKUs like multivitamin and prenatal. Now is really an interesting time for our brand to expand into new channels.

The store is our first foray into becoming an omnichannel brand, interacting with our customers in real time, getting to know them, helping build community. We’re always in that experimental testing mindset when it comes to marketing. So, for us, it’s figuring out what messages are working and dipping our toe into omnichannel. It’s a very different world.

Direct-to-consumer brand Ritual has been diversifying its distribution. It recently opened a store on Abbot Kinney Boulevard in the Los Angeles neighborhood Venice and launched on Amazon. It’s slated to enter a traditional retailer soon.

Does it work within the current model to go into traditional retail?

Schneider: It does. Now, we’re at a scale where our purchasing power is in a much stronger position. We can really scale the pricing where it works in retail. We can slightly increase the products on other channels compared to our site, and it’s still really competitive with what’s out there on the shelf while maintaining really strong margins.

Slightly increase the price?

Schneider: We’re on Amazon now, so you can see the price is slightly higher on Amazon, but for people that’s super convenient. Our site is subscription-only, so they’re able to buy something à la carte on Amazon. Amazon is definitely blowing out our projections. Even just having been there for about a month, we’re already on the top of prenatals or multivitamins.

I feel like we’re in a world where brands can live in so many channels because you’re meeting the consumer where they are. I think it’s harder to build that really strong scaled direct business, and we’ve done that. It’s a very interesting, different model to now go into more channels after we’ve built that trust and awareness.

Why did you go to Amazon first as you move into omnichannel?

Schneider: It’s more analogous to the direct side of things, what we know better. Also, it’s a cool testing ground for us. We’re going to be launching in a big retailer in the coming months, but this was the first step.

If we were to talk in a few years, what do you hope your business and the industry as a whole would’ve accomplished?

Schneider: Our vision is to be the most trusted brand for everyday health. I think we’re well on our way. As far as our business, I hope to have the No. 1 prenatal in the coming year or years. We’re already on track for that.

I hope that we can be leading the industry to be more thoughtful when it comes to transparency, traceable science and traceable sourcing. How do we make sure and get more products out there that are transparent about their ingredient supply chain? How do we get more products that are third-party tested out there in the world? How do we get more companies investing in clinical research that not just furthers the claims that products can make, but furthers women’s health?

Dahl: The idea is to also push the envelope and use the power of our business to make major changes in our world and be accountable for the impact we’re having. Like Kat was talking about before, the [connection] between climate and our health is something we care about. So, it’s not just about our formulas, but what can we do as a business to help be accountable and reduce the impacts we’re having on the world out there that also does impact our health.