This 23-Year-Old Founder And CEO Is Set On Eliminating Plastic From The CPG Industry
To Nohbo founder and CEO Benjamin Stern, the CPG industry’s moonshot is the elimination of plastic—and aiming for a moonshot in his blood. His grandfather was an engineer on the first Apollo mission, which paved the way for humans to land on the moon with Apollo 11. “He was always talking about it until he passed away from Parkinson’s, and it definitely had a major influence on me,” says 23-year-old Stern. “I’ve always been fascinated with science and engineering.”
Unlike his grandfather, Stern’s fascination is focused on earth, where Nohbo develops and manufactures biodegradable water-soluble personal care drops and sheets designed to dissolve without a trace. It runs a 12,000-square-foot facility in Melbourne, Fla., with the capacity to produce around 200 million drops and 120 million sheets annually. Nohbo estimates that, for every million drops used, 15,590 pounds of water, 22,050 pounds of plastic and 220 pounds of preservatives are saved.
Nohbo is currently working with six CPG companies and its in-house brand, Sunrise Session, will soon enter Anthropologie. Its progress is happening as CPG conglomerates and the retailers that stock them are reimagining the stuff that crowds consumers’ bathrooms as they implement sustainability efforts. “I truly hope we are the ones to lead the charge, but no matter what, in the next five years, we will see drastic changes—and your grocery store aisles will definitely look entirely different within the next 10 years,” says Stern.
Beauty Independent chatted with him to learn about Nohbo’s history and future, its series A fundraise, his greenwashing pet peeves and advice for the world’s largest CPG players.
Did you expect to get into the beauty industry?
No, I did not. I am from Seattle, Washington originally. I grew up in this culture that propagated the message to reduce, reuse and recycle over and over again. That never really sat well with me. I always thought the most impactful products that existed disappeared when you finished them like food. I was in this biology class in high school, and they put on a fascinating documentary about the plastic industry. I was horrified by the plastic waste consuming marine life.
I remember going home, seeing my mother using Tide detergent pods and having a eureka moment about, what if we could encapsulate beauty products in water-soluble films, therefore eradicating the need for single-use plastics? The day I turned 14 and a half, I applied for a work permit, and I was working odd jobs. I was a sub maker at Jersey Mike’s. I was pushing carts at Wegmans. I was selling coffee beans around the neighborhood before that. I love the ability to bring something to consumers. It always made me happy.
One day, I was watching “Shark Tank” at my father’s house in Maine, and after the episode, they were like, “Apply to ‘Shark Tank’ here.” I had no product. I had a provisional patent I created myself and a cool idea. I sent “Shark Tank” a two-sentence email, and I got cast on the show. They called me and said, “Do you have product?” I said, “Absolutely,” and I raced to get everything together for the show. We had three offers on “Shark Tank.” Mark Cuban ended up investing and kickstarting the idea into becoming a company.
What happened after “Shark Tank”?
“Shark Tank” was an incredible experience. It aired in February 2016, and it was filmed in September 2015. It got me started. A lot of large companies reached out to me to try to utilize this as a packaging technology platform, and that inspired me to pursue patents. We have three patents issued today and six others filed.
After “Shark Tank,” I went on to raise a $3.5 million seed round led by the fund Material Impact. I opened up a manufacturing facility. Early on, we were making all sorts of cosmetics to keep the lights on, but, after closing the funding, we focused on water-soluble pods. There were a lot of ups and downs along the way, but today we have a team of 14 people in Melbourne.
Consumers are willing to pay more for sustainable packaged goods, but they truly don’t have options. At Nohbo, I want to work with all the CPGs to convert their products into pod form factors so consumers have options. We seek to create one-for-one products in our three core products, first and foremost our drops. They create packaging with a solution that melts in the palm of your hand. There’s no water, plastic or preservative left behind.
The second product is slips. They are single-use sheets of film. They dissolve in under two seconds in water. The third product we are releasing later this year is called hydrofill. Basically, it’s a 1-oz. pod you add to six ounces of water, shake it up, and it forms seven ounces of viscous shampoo or conditioner.
What are your thoughts on consumers’ willingness to pay more for sustainable packaging goods?
Our current products are sold at a premium. Our hydrofill is a cheaper product. It’s more mass market. The goal is to eliminate the green tax, which has consumers paying more for sustainable products. I want to create cost parity in the marketplace.
There is a masstige market for consumers willing to pay more, especially for haircare products. There’s a reason why Kevin Murphy or Aveda products are so successful—because there’s a market for them. And sustainable packaging does tend to be more expensive, but every single CPG company has a goal to eradicate or reduce their single-use packaging impact. Hopefully, the consumer will bear as little as possible of the cost increase.
One thing to mention on this topic is that Procter & Gamble launched Tide Pods in 2012, and by 2015, they comprised 15% of the U.S. market for laundry detergents. They are two to three times more expensive than liquid products, but they’ve had incredible growth. It’s a multibillion-dollar product line. It goes to show that this format is incredibly sticky.
You brought up ups and downs at Nohbo. What were you referring to?
There have been times where we have barely been able to make payroll, where we had our manufacturing plant effectively close while we downsized and I looked to find financing. I would say the biggest downside is that this company is my identity. Nohbo and I are one. Any rejection from a customer definitely takes a toll, and any acceptance is really exciting to probably an unhealthy level.
The payroll difficulties were rough. I had to be candid about how we were working our way out of them. I did what I could to pay essential employees. I took out Amex loans and personal loans to fund as much as I could. I was driving for Uber Eats at night. This was back in 2019 before we closed the institutional round. I did everything I could to make sure everyone was made whole once we closed the financing round.
It helped me plan better. I prepare now for these things way in advance and communicate with our investors before times of needs.
What have you learned about being a manager?
I believe, in a startup, it’s essential to hire slowly and find people that take extreme ownership of their roles. I bring on people to this company because I trust implicitly that they are working in the best interest of the company and let them have complete freedom. There’s a good book called “No Rules Rule.” I think that dynamic is very, very important for a startup. I don’t have time for micromanagement. I believe in bringing on good people and giving them a huge leash, and when they are abusing that policy, correct for it quickly.
What is your market focus at Nohbo?
Our model focuses very heavily on two markets. One is CPG. We work with—and these are hypothetical—the Procter & Gambles, Unilevers, Estée Lauders of the world to convert their products to water-soluble pods on a private-label basis. The second market is hotels. The state of California is banning single-use plastic hotel amenities. We sell finished products to hotel groups under our own brand, Sunrise Session, and secondary brands. We are customizable and very open to both scenarios.
We have worked with distributors in the past, albeit unsuccessfully. It’s best to target boutique hotels for us and really get to the decision makers in the hotels ourselves. Hotels did a 180 with the pandemic. Even though all of them had environmental initiatives, they were disregarded, and everything was wrapped in plastic, but things are normalizing, and they are returning to corporate sustainability objectives. We are focused on business-related hotels because they have higher turnover, meaning products are placed in their rooms much more often.
How focused are you on your own brand?
We launched our brand, Sunrise Session, in August 2021. It takes up a very small amount of focus and revenue for our company. Primarily, we launched it as a testing ground to gain market feedback and see how consumers adapt to the pod form factor. Most importantly, a lot of hotels don’t want to put in work. They want an existing brand in an exciting format, and we bring that to them. Sunrise Session was our attempt to create something visual and visceral for hotels wanting to adopt a solution without much effort.
Is there greenwashing that really irks you?
Absolutely. I have always been very stubborn. We want to replace plastics outright. There’s a lot of packaging that’s using PCR, recycled plastics and marine plastics that aren’t even in the ocean, they are just marine-bound. It’s kind of crazy. There’s a tremendous amount of greenwashing, even in Kraft paper wrappers that have a lining of plastic, which means, unless you go to an industrial composter, they’re going to cause the same harmful effects as regular plastic. Packaging in general is extremely antiquated. There hasn’t been innovation in decades. We are one of the very few that offer that uncompromisingly.
If you had a magic wand to make the CPG industry more sustainable, what would you do with it?
I think a solution that doesn’t require any additional onus on the user for it to be adopted and sold. Refillables, while they’re a good idea, I think they’re too onerous on the consumer who has to go to stores and constantly refill their bottles. I don’t see that picking up in mass.
If you were working at a major CPG company, what would you do?
If I was running a CPG company, I would really heavily invest in innovation, R&D and product development because consumers aren’t going to accept PCR for a sustainable story. I don’t think that’s going to last long. I would acquire and create new solutions. The ones who truly offer something different and new to the market are going to dominant in the long run just as Procter & Gamble did with Tide Pods.
An example of what’s being done today is Proctor & Gamble creating EC30 and GEM lines, which are water-soluble films similar to our slips. Their core approach is building out new brands, but the problem is that 99% of their revenue comes from existing brands that are everywhere and ingrained in consumers’ lives. I don’t think they’re going to reach any of their goals by creating a million new brands. It’s about implementing solutions into their existing lines.
Can every personal care product be in a pod?
For the most part, nearly all products can fit into one of our solutions. Traditionally, pods couldn’t be anything but wash-off products, but our hydrofills can be leave-on products. I think that a lot of the daily-use products that are massive contributors to waste can be converted. If you go to a grocery store, a CVS or a Target, you see a sea of plastic, and those are large shampoo, conditioner and body wash bottles that are the biggest contributors of plastic waste. It’s not a tiny mascara.
What do you have to tell consumers about your formats?
Consumer education is really important, and the way we try to tackle that is through hotels specifically. Customers can bring shampoos and conditioners to hotels, but most people don’t bring body washes. By placing our products in hotels, they’re almost forced to use them. From there, they can convert to our brand or CPG brands we work with.
Education is something we have to do better, and it’s probably our biggest hurdle to overcome. People see a pod, and they don’t just instantly get that it’s personal care, and that the solution is going to melt away. There are a lot of learnings on how to convey this to the consumer who has no idea what in the world this product is.
Nohbo is in the process of raising a series A round with the goal of securing $15 million in funding. Why are you doing that now?
It’s less of a have-to and more of, how can we accelerate our growth? The experience of fundraising before was difficult. It was my first time fundraising. At first, I spent weeks just doing nothing but cold emails to random investors. I barely got any responses.
I was lucky enough to reach a fund that said we are happy to introduce you to another fund and that turned into a warm introduction to [venture capital firm] Safer Made. They helped catalyze our first round. It was a domino effect where an introduction turned into another, and before I knew it, we had an oversubscribed seed round. I was only planning to raise $1 million.
I think venture capital is very helpful, but it’s also very expensive. With the state of the market, it’s kind of crazy. Where at one point, valuations were outrageous and it was a good deal to get VC, that’s looking different now.
I have the support of our existing institutionals in our series A. They are participating pro rata. My strategy is no longer cold emailing. I have received a lot of intros to a bunch of funds. We are looking to add a CPG fund to our cap table and are focusing on climate tech as well. We have been very material science heavy. So, I want to get a little more well-rounded.
What’s the biggest challenge for you going forward?
Growing fast is important, but it’s very difficult to populate the organization with the right hires and skill sets. Lack of focus and lack of money kill startups, and any new avenue that we go down such as food that’s entirely new for us requires a lot of resources and time. We want to get one thing right first. We want to gain market adoption in personal care prior to getting into food. It’s about a methodical approach versus a distracting one.