Kudos diapers founder Amrita Saigal with her daughter
By: Kudos
Throughout modern history, plastic has been the only real choice parents have had when it comes to disposable diapers.
Disposable products are typically made from fossil fuels such as petroleum and take hundreds of years to decompose, making them the third-largest consumer product in U.S. landfills, according to the Environmental Protection Agency.
Additionally, it is not as breathable as other materials, which can make it more susceptible to problems like diaper rash.
Still, major brands of plastic diapers Procter & GambleWith Pampers Kimberly-ClarkHuggies, owned by Amazon.com Inc., still dominates the market. Kudos founder and CEO Amrita Saigal is looking to change that.
The MIT graduate and mechanical engineer and “Shark Tank” alum told CNBC that she developed a sustainable diaper that uses little plastic but incorporates a 100% cotton lining and other degradable materials like sugarcane and wood.
The diapers will be available at approximately 375 retailers later this month, marking the first time that they have been available in retail stores. the goal We have locations nationwide.
“We’re excited to partner with Target and make history by bringing 100% cotton-lined disposable diapers to their stores for the first time,” Saigal said in an interview with CNBC. “This is a really big deal for us, especially since Target doesn’t carry a lot of brands.”
Kudos Diapers
By: HatchMark Studio
Kudos has raised more than $6 million in funding in the three years since it was founded, and last month closed a $3 million funding round with investments from Precursor Ventures, Xfund and Oversubscribed Ventures.
In the past 12 months, the company has sold more than 20 million diapers, increasing sales by more than 100%.
Disruption through innovation
Saigal said she has long been fascinated by consumer packaged goods and has spent her career looking for ways to redesign everyday products like sanitary napkins and diapers to disrupt industries long dominated by large corporations.
Her goal is to reduce the world’s dependence on fossil fuels by building new supply chains and developing sustainable products that are as effective, or better, than their competitors.
“We’re not going to launch a product that’s equal to or better than Pampers,” Saigal said.
“Are there eco-friendly alternatives? There are, but they don’t work. When it comes to diapers, you can’t make something that doesn’t work. Once a pee leaks, once a pee leaks, a parent is already losing sleep. Parents want something that works, and they’re not willing to compromise on function for the sake of being eco-friendly.”
After three years of research and development, Sigal developed a diaper that can absorb far more moisture than competing products such as Pampers Pure Protection and Huggies Special Delivery. Honesty According to independent testing conducted by Diaper Testing International, the diapers are safe.
Pampers did not respond to a request for comment. In a statement, an Honest spokesperson said, “We conduct a wide variety of tests to ensure our products meet rigorous safety and performance standards. Our philosophy about diaper performance is that in-use tests that also evaluate comfort, fit and leak prevention are the most accurate indicator of a diaper’s effectiveness in keeping babies comfortable and dry.”
A spokesperson for Kimberly-Clark, which owns Huggies, told CNBC that it hadn’t seen the study conducted by Diaper Test International and couldn’t comment on it.
Sigal has also developed its own “Double Dry” technology, which uses two layers of diapers instead of one to wick away moisture.
“If you just took out the plastic and replaced it with cotton, the diaper would be completely useless, because when the baby pees, the urine pools and the baby’s bottom gets wet,” Saigal says. “How do we quickly soak up that urine and feces and distribute it evenly through the layers of the diaper so the baby’s bottom feels dry? That’s really our innovation.”
Kudos is much smaller than some of its bigger competitors, but its size puts it in a unique position to build new cotton supply chains and help suppliers grow alongside it, Saigal said.
“For a company like P&G to make this happen, it would cost hundreds of millions of dollars to reconfigure their facilities to make this possible. With the existing supply chain, it’s very difficult to make natural materials actually work in the current processes,” said Saigal, who went on to work for P&G as a design and manufacturing engineer after graduating from MIT.
Even sourcing natural materials to replace plastics is a challenge for larger companies, Saigal said. Suppliers such as cotton farmers tend to secure buyers or partners before they grow the required materials, and because there isn’t yet mass demand for cotton from diaper makers, those supply chains don’t exist at scale, he said.
As more smaller brands work with natural material suppliers to develop new supply chains, Saigal hopes that larger brands will adopt natural materials more widely over plastic, driving down the price of natural materials and, ultimately, raising the price of plastic.
“When will natural materials really take off? Realistically, it will be when they become cheaper than plastic,” she said.
Diaper economy
Kudos faces a challenge of monumental scale.
Buzzworthy brands that start out selling direct to consumers and then branch out into retail can face challenges due to high inventory costs and the onerous payment terms that come with it.
Hello Bello, the hypoallergenic and sustainable diaper brand founded by celebrity couple Kristen Bell and Dax Shepard, filed for bankruptcy in October. Walmart.
Over the past few years, many other consumer goods companies and direct-to-consumer brands that launched in a funding environment that prioritized growth over profitability have faced a similar fate.
“In the heyday of DTC, it was like, ‘We don’t need to worry about unit economics now, right?’ It was just about revenue growth, revenue growth, revenue growth, and then when we get to $100 million, $200 million in revenue, let’s figure out how to make money,” said Sigal, who founded his company in 2021 and secured funding in 2023 from “Shark Tank” host Mark Cuban and guest shark Gwyneth Paltrow.
“I don’t think that model works anymore,” she continued. “Grow slowly but make sure your unit economics work from day one. I think the brands that are going to be successful going forward are going to have to manage their numbers and their unit economics very tightly from the get-go.”
Over the next 12 months, Saigal’s top business priority is achieving profitability, which she’s doing by leaning her team and strategically using cash to pay for inventory ahead of her expansion into Target. She also has to walk a delicate balance when it comes to pricing: Her products are more expensive to produce than her competitors’, but pricing them too high could scare away potential buyers.
Currently, parents can purchase Kudos for 41 to 70 cents per sheet, depending on the size, while a box of Pampers Pure Protection costs between 34 and 75 cents per sheet, according to listings on Target.com.
“The prices are a little higher because the ingredients are expensive, but we try to keep them down as much as possible,” Saigal says. “I’m very mindful of being premium, but also affordable, and that’s really what I want to do, so that our products are available to as many people as possible and cleaner ingredients aren’t out of reach.”
Disclosure: CNBC owns exclusive off-network cable rights to “Shark Tank” featuring Mark Cuban as a panelist.
