Photograph by Caitlin Abrams
Racheal Vegas
Rachael Vegas leads the Minneapolis-based product development team for Brandless.
The challenge: disrupt the consumer packaged goods industry by creating a new product line that spans all the typical store aisles of nonperishables, from cotton balls to tomato sauce. Avoid the typical branding gimmicks. Use high-quality ingredients and sophisticated flavors. Go direct to consumer. And, oh yeah: Every single item must be $3.
Most merchants would balk. It’s tough enough to break through the clutter in one category—coffee, lotion, gluten-free desserts—let alone a selection broad enough to rival Trader Joe’s. But Rachael Vegas, a merchandising and retail pro with 13 years of experience at Target, jumped at the daunting opportunity to build a new brand called Brandless. It’s been described as a new generic, but that’s not the real story. “Generic means copying an existing product and selling it for less—value first. We’re quality first. We want to provide more people with access to quality,” Vegas says. “We’re a brand, but we’re reimagining what it means to be a brand. ”
Every Brandless product is named for its key ingredients or properties. Blueberry Flax Granola. Organic Wheat Crackers. Toothpaste is simply labeled Peppermint Toothpaste. Those single-serve applesauce squeezies that are now lunch box essentials? Organic Applesauce Pouches. The front of every Brandless package lists key attributes in place of catchy slogans or mascots. Organic. Non-GMO. Gluten-free. At checkout, Brandless shares “BrandTax savings” with customers. This is what Brandless counts as hidden markups on national brands. “We’ve been trained to believe these costs increase quality, but they rarely do,” says the company manifesto at brandless.com. “We estimate the average person pays at least 40 percent more for products of comparable quality as ours. And sometimes up to 370 percent more for beauty products like face cream. We’re here to eliminate BrandTax once and for all.”
1 of 4
Gel Hand Soap
The eucalyptus and lavender scent is mild and fresh.
2 of 4
Mouthwash
Made with essential oils, but lacking the minty zing.
3 of 4
Quinoa Puffs
I devoured the bag. Jalapeño Cheddar has a real kick!
4 of 4
Shells & Cheddar
No artificial flavors; kids liked the taste.
Can it be done profitably? And perhaps even more crucially: Will it taste good and work well enough to lure shoppers away from their preferred brands and convenient resources like Amazon Prime?
“Absolutely,” Vegas says. “Consumers should be picketing in the streets for what they pay versus what they get.”
Brandless is particularly targeting millennials. Especially the urban professionals who don’t need industrial-sized jars of peanut butter and who desire their balsamic vinegar to be organic and their toilet bowl cleaner to be phthalate-free —on a $3 budget. Of course, those are the same folks most likely to justify a $9 shipping fee as worth the time saved by not going to the store.
Another hook representative of commerce in the age of TOMs and Warby Parker: Brandless partners with Feeding America to donate a meal for every order.
“Millennials don’t want to buy products their parents buy,” Vegas says. “They are open to new brands, which explains why so many of the top brands are in decline.”
Vegas is a grocery geek. Even on vacation she can’t resist stopping off at the local grocery store, just to look around. She observes an end cap display showcasing myriad maple products. She checks prices on pretzels. She notes the shelf placement of gluten-free cereal. It’s an interest that’s been brewing since she bagged groceries in high school. “Everyone eats. Everyone grocery shops. It’s an intuitive industry with immediate gratification. I love seeing how the customer reacts.”
She grew up around the industry in Maine. Her grandfather ran a liquor store. Her dad managed real estate for grocery stores. After college, she managed a supermarket in North Carolina. Following business school, she became a store buyer. Target brought Vegas to Minneapolis. She worked her way up the corporate ranks—helping to launch the Method cleaning brand, leading sourcing for women’s apparel and accessories, overseeing house brands such as Archer Farms—before landing what she thought was her dream job: running Target’s center store grocery, which includes all the nonperishables.
But building a new brand from scratch is a rare opportunity. So when serial entrepreneurs Tina Sharkey and Ido Leffler, creator of several consumer brands including Cheeky, YesTo, and Yoobi, approached Vegas with the idea for Brandless, she gave them just one condition: She didn’t want to leave Minneapolis. That’s why Brandless, which is headquartered in San Francisco, based its product development office in Minneapolis.
“My Brandless co-founder, Ido Leffler, and I had a vision to democratize access to goodness, and we couldn’t think of a better person, more full of goodness, than Rachael to channel that vision into creating amazing, high-quality products,” says Sharkey, a former venture partner who helped raise $50 million in funding for Brandless before it launched online in July.
To be exact, Brandless launched on Amazon Prime Day, with 107 products. They’ve nearly doubled that assortment, with much more on the way.
For a year before launch, Vegas worked on Brandless under a code name from her kitchen in St. Louis Park. With her virtual shelf empty, she had to start from scratch, producing basics like ketchup and olive oil. She quickly worked her way to snacks—an $87 billion industry, which, she says, is one of the fastest growing segments of the grocery business as people replace meals with popcorn or chips. It’s up to Vegas to figure out what type of snacks people want, which flavors to offer, and how to produce them efficiently enough to fit the $3 price point, but without sacrificing quality. Her method is very data-driven, but she’s also got to be creative about flavor profiles and packaging, and able to spot the next big trend before it peaks. She works with food scientists and experts in product formulation. She samples multiple sources for all of the basics, from black beans to raisins (both organic, of course).
This fall, Vegas is betting big on maple. Over the summer, she and her Minneapolis-based staff, which has already grown to 11 (including several other Target expats), signed off on Maple Creme Cookies that launched in September. They tasted dozens of cookie shells and frosted fillings before arriving at what they believe is the perfect formulation—sweet but not cloyingly so; substantial but not too heavy.
“I think it’s helpful that we’re in the real world, not the Silicon Valley bubble,” Vegas says between bites. “It’s important to recognize that people do still get into cars and drive to the grocery store.”
But if she can replenish their mustard and mayo in between those trips, and then maybe get us to click on Organic Crushed Pepper & Truffle Oil Popcorn (it’s addictive), mission accomplished.
