When Carla Vernón joined baby and personal care brand The Honest Company as CEO last year, she knew many challenges lay ahead.
While a CPG veteran, it was her first time as chief exec of any company, let alone one that had just gone public two years prior (and garnered more attention than most given its co-founder is Jessica Alba). The company had also faced a turbulent 2022 with dipping sales. That meant Vernón had to build up her own skill set while also hitting reset on the brand’s retail strategy to boost consumer penetration, she told Retail Brew.
“I had a lot of reason to believe the brand could scale, and just hadn’t scaled yet,” she said.
Vernón spent more than 20 years at General Mills, holding many roles including head of its natural and organic division, overseeing the Annie’s brand. She then headed to Amazon, serving as VP of consumables categories, overseeing health and personal care, grocery, baby, and beauty.
Since taking over at Honest, Vernon has executed a transformation initiative that led to 10% YoY revenue growth in 2023, and consistent YoY growth each quarter this year, up 10% to $93 million in Q2 and 15% to $99 million in Q3, pushing the company to raise its full-year outlook to high-single-digit growth last month. Vernón shared the keys to her mission to—in the company’s words—“transform and strengthen” the business since she took the reins to set Honest up for a 2025 focused on acceleration.
In good company: When she joined Honest, Vernón got the feeling that “cars were moving in too many directions—and that is no way to quickly improve a business model,” she said.
Vernón said the “strengthen” element of the company’s strategy has centered around assembling a diverse executive team of CPG and retail experts from General Mills, Mattel, and Clorox. Since her tenure, she’s added execs to the team like Kate Barton, formerly executive director of marketing for Estée Lauder’s Aveda brand, as its first-ever chief growth officer.
Vernón knew the power of a tagline, and created an acronym called FEEFA (focused, "executionally" excellent, fast, and aligned) to use as a daily check for the work they were doing.
“Are we all on the same page? Are we operating with clarity? Are we going as fast as we can, or are we spinning and allowing ourselves to get stuck on things?” Vernón said. “We have the right discussions on what’s working and what’s not on such a high frequency that it allows us to address problems really close to when they arise."
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Retails of the trade: Much of the company’s transformation has centered around renovating its retail strategy. The brand began in DTC before launching in retailers like Target in 2014, and Walmart in 2022, but it’s setting its sights on retailers across mass, beauty, dollar, and club stores, she said, and going deeper in its current retail partnerships.
“The biggest brands that are in people’s lives every day are really available wherever a person wants to shop,” she said.
Honest has a strategy Vernón calls “stores, doors, aisles, shelves,” that focuses on all facets of retail distribution. Success in retail is not only getting into a new store like Walmart, but also growing the number of Walmart locations its products are sold in, categories across baby, personal care, household, and wellness it’s available in, and products beyond just its hero items that are stocked on shelf, she explained.
“While the whole brand as a collective has an 85% [all commodity volume] as a total brand, it can often make it sound like we’ve run out of retail runway, but if you look at any of our given items, some of our top items—like our leading moisturizer, our hydrogel moisturizer—is in less than 40% of all stores around the country,” she noted.
As its most widely distributed products, its diapers and wipes accounted for 63% of total revenue as of last year. “The correlation between points of availability and revenue are the most directly correlated driver of how your brand scales,” Vernon noted, referencing the 2010 book How Brands Grow: What Marketers Don’t Know by Byron Sharp, so distribution growth within Honest’s skin and personal care and household and wellness offerings is an opportunity to boost product mix and revenue.
Innovation, particularly “innovation on the core,” plays a role, too, Vernón noted. Seemingly small updates to products—like creating a flushable version of baby wipes last year that brought the brand into a new aisle of the store—can help to attract new eyes to the brand.
“There’s a lovely marriage of how you take the core and learn how to really continue to deliver hits,” she said.