At 12 years old, Pai Skincare is one of the veterans of the organic and natural skincare market. The brand’s transparent approach, commitment to sustainability and well-established efficacy have all combined to bolster its growth, as have the tailwinds of a thriving industry that’s predicted to reach $54bn by 2027.
Inspired by her own experience of living with hyper-reactive, unpredictable skin, founder Sarah Brown chose to take matters into her own hands, by creating an effective form of skincare she could trust.
The result — Pai, skincare made with truly organic ingredients, no inflated marketing claims and a brand that understands products, has enabled her business to stand out in the complex and competitive world of skincare, and captured the imagination of leading beauty retailers such as John Lewis and Sephora.
Today its products are stocked in 116 retailers across 21 countries worldwide, with the company on course to generate $10 million in revenue for 2019.
Slow and strategic in her approach, Brown has proven that it’s possible to mainstream a niche wellness brand, without compromising on credibility.
Here she tells Welltodo why slow growth and self-funding build strong foundations, how credibility cultivates consumer loyalty and how personalisation is already playing a huge role in Pai’s future strategy.
On launching lean and working in-house…….
I started Pai from my draughty garage which I converted into a make-shift lab. Once I had six formulations that I was happy with I worked with a student designer on logo and packaging, and then built a website for £500. I drew on my PR experience to get the word out and invested the small amounts of cash I had on good photography.
Working with the ingredients and the formulation trials forged an absolute love for product creation which we’ve never let go of — we still proudly formulate and manufacture every one of our products. Sadly, in the case of other skincare brands, almost always both steps are contracted out.
Keeping manufacturing in-house has been against all advice, and people continue to tell me it’s crazy. It drains cash out of the business and creates endless operational challenges. But it means we can maintain exceptional quality and have a unique connection to the products we are selling, so I’ve never regretted it.
On baking purpose into the brand’s DNA…….
My vision for Pai hasn’t changed since those early days. It has always been to help people feel good about their skin. It’s built into our brand DNA and we’ve never deviated from it.
The word Pai means “goodness” in Maori (my Mum’s from New Zealand). It’s a daily reminder to be a good business in every aspect that entails, from how we pay our staff (we are London Living Wage certified) to how we source our ingredients and packaging.
We’re far from perfect but have always tried to take the difficult (good) decisions even when they’re completely commercially impractical.
On the evolution of the organic beauty market…….
I have always believed in the remedial power of organic ingredients, and so that coupled with a growing trend around wellbeing, means it’s not a big surprise to me that the natural beauty space has exploded.
We’ve benefited from that growth both indirectly and directly. More traditional retailers are wanting to stock decent, high performing organic products, so more listings across the globe are helping to drive brand visibility and revenues.
The customer shift towards natural has also had a positive industry effect. Most notably we’ve seen big scientific advances in formulation, which has helped to slowly erode the “you can’t get performance with natural” myth.
On self-funding and slow growth…….
I started out entirely self-funded with £15k of personal savings. It didn’t last long, and I had to go back to work part-time to pay the bills! The business was bootstrapped for the first few years which was a good discipline in some respects as it meant I had to be profitable from day one and grow slowly, organically.
The wider economic backdrop was an important factor. I launched at the start of 2008 when the UK and global economy was tanking. It took me two years to persuade the bank to loan me £25k to launch some new products via an EFG (Enterprise Finance Guarantee) scheme, which meant it was underwritten by the government.
We then raised equity from a few angels and after that completed our first Series A investment of £1.3m with a private investor in 2017. Throughout we’ve had a supportive bank in HSBC, which has provided a number of debt facilities to us. As a result, we’ve not had to keep giving away equity just to scale our operations.
On championing credibility in an era of ‘green-washing’…….
I’m not worried about competition and really support the growth of the natural/organic category, as we all end up benefiting — there is room for everyone. However, with growth can come a lot of ‘green-washing’ and natural imposters.
With no regulation in place to protect the terms “natural” and “organic” more and more brands have jumped on the bandwagon without the credentials that stack up to scrutiny.
Terminology – like ‘clean’ and ‘non-toxic’ – which started in the US, have now infiltrated the industry globally and has the potential to damage the reputation of what we’ve worked so hard to build up. They are nonsensical terms to me, as what defines a brand consistently as ‘clean’? The ingredients omitted by some are included by others and vice versa. The word clean can also imply all synthetic products are in some way dirty, and worse… dangerous.
The scaremongering can be misleading. Ultimately buying natural should be a choice and not something customers are hoodwinked into on the basis of fake credentials or safety claims. This is where certification standards come into their own because they have been developed, refined and updated over many years. They are kitemarks of authenticity.
Since the get-go, we have been certificated by the Soil Association and COSMOS (the former is merging with the latter). The standard demands 70% of non-water ingredients in a product must be grown, harvested and extracted organically. It provides a helpful set of rules for brands and a badge of reassurance for customers.
On bolstering innovation…….
Innovation is important in any business. You can never stand still.
It’s quite easy to cultivate when you own the product creation process! We have three (brilliant) cosmetic chemists on staff who are looking at ingredients and trying new formulations out all the time. We also have an in-house packaging manager who is helping us to improve our packaging sustainability standards.
But on the flip side of a commitment to innovation, we will also never be trend-led. The new products we create must be something our customer has a genuine need for. We never churn out products for the sake of it. The maximum we’ve ever managed to launch in one year is two!
We take a very considered approach to NPD and are the antithesis to what I call “fast beauty” which is fuelling a throw-away culture.
On rooting sustainability and ethics into business practices…….
We have pretty robust ethical standards in the business which don’t drive strategy but certainly underpin it. We would never pursue something that didn’t align with our values.
Some of our sustainable practices happen at quite a micro-level day to day, from how we package our products (we use sugar cane plastic and glass) to how we ship them out the door protected with biodegradable compostable chips. These little things quickly add up to something sizeable from an environmental perspective and become more than the sum of their parts.
In terms of philanthropy, we have historically chosen two charity partners in Mind and GirlvsCancer –– both we felt a personal connection to. We have just donated £10,000 of our Black Friday sales to the latter and the four brilliant charities in the GirlvsCancer stable.
On smart growth strategies…….
We have kept international distribution tight and tried to focus on a few core markets and do them well rather than spread finite resources too thin.
We have avoided distributors as they can sometimes take a lot of margin for moving boxes. We have a brilliant sales team who are on the move pretty continuously getting into markets where we don’t have permanent boots on the ground.
The strategy has worked well so far, and we have some brilliant anchor retailers, big and small, from Content and Oh My Cream to John Lewis and Sephora.
Our direct to customer business continues to grow alongside wholesale and is a key focus for next year.
On building out the business via personalisation…….
Future plans are big with lots in play for 2020. It’s going to be a crucial year for us.
We plan to continue building our skin consultation service and internationalise it next year.
We offer free 30-minute skin coaching sessions by phone or video, which can be life-changing for people. They are designed to help people understand their individual skin better and feel more in control of it, which is an amazing service that not enough people know about.
The wellness movement is being driven by a whole generation so it’s here to stay, and we feel proud to have been at the forefront of that movement in the early days.