The $3 Toothpaste Club? Startup to Test the Power of Brands – Sharon Terlep July 11, 2017 6:00 a.m. ET


As retailers struggle, startup Brandless hopes generic products and simple pricing will give it an edge

Brandless taste-tests products in its product-development space in Minneapolis.

Brandless taste-tests products in its product-development space in Minneapolis.Photo: Ackerman + Gruber for The Wall Street Journal

By

Sharon Terlep

A new online retailer is betting it can get American shoppers to break up with big brands from Colgate to Heinz.

Called Brandless, the San Francisco-based startup on Tuesday plans to start selling generic, health- and environmentally conscious consumer staples, such as fluoride-free toothpaste and organic agave nectar. Everything will be priced at $3.

The business model: Cut out supermarkets and traditional marketing, funneling that money instead toward making products that can compete with pricier, name-brand counterparts.

In doing so, Brandless aims to capitalize on a packaged-goods sector in upheaval, one that faces increasing competition among both high-end and discount brands as well as consumers who are doing more shopping online and demanding less-processed foods.

“It’s an inefficient process,” Brandless co-founder Ido Leffler said of the traditional system of packaged-goods companies selling their products through brick-and-mortar retailers. “We are re-appropriating those dollars back to the consumers.”

Stephanie Stamm

The 115 products that will be initially available are generally more expensive than their big-brand rivals. Brandless hand soap, for instance, costs 31 cents per ounce, more than Dial, which goes for about 27 cents an ounce on Target Corp.’s website for a similarly sized bottle.

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