Q1 Sales Fall at Grove Collaborative

Grove Collaborative, Inc., a certified B Corp and leading sustainable consumer products company, reported net revenue in Q1 was $90.5 million, an 11% decrease year-over-year. The net loss margin is 52.4% compared to 37.1% in the first quarter of 2021. 

 

“The secular tailwinds powering the move away from plastic are long term and growing across the industry, and Grove is leading the charge,” said Stuart Landesberg, Grove CEO. “Our brand awareness continues to grow, and our innovative assortment of sustainable products combined with strategic initiatives to drive both diversification in revenue and growth in profitability lay a strong foundation for success as we prepare to become a public company. We are confident that as the environment normalizes, we will be positioned for long term profitable growth. We look forward to partnering with VGII on our mission to transform the use of consumer products into a force for human and environmental good, creating value for all stakeholders.”

 

Grove Brand products represented 51.7% of net revenue in the first quarter of 2022, an increase of 60 basis points from 51.1% in the first quarter of 2021. During the quarter, the company launched Peach Kids, the first-ever 100% plastic-free personal care line exclusively for kids, following the successful initial launch of Peach Not Plastic in 2020 and marking entry into the kids’ category.

In the first quarter, 58% of Grove Brands net revenue came from zero-plastic, re-usable product models and zero plastic waste alternative products, meeting the company’s Beyond Plastic standard, up from 43% in the first quarter of 2021.

 

Grove believes measuring plastic intensity (pounds of plastic per $100 in revenue) enables the company to decouple its plastic footprint from its revenue growth and pin its success to plastic reduction. Across the Grove.co site, plastic intensity was 1.16 pounds of plastic per $100 in revenue in the first quarter of 2022 as compared to 1.37 in the first quarter of 2021. Across all Grove-owned brands, plastic intensity was 0.94 pounds of plastic per $100 in revenue in the first quarter of 2022 as compared to 1.15 in the first quarter of 2021.

 

During the first quarter, the company announced the appointment of Chairman of the Board, John Replogle, former CEO of Burt's Bees and Seventh Generation, two of the industry-defining brands in the natural products space. In the first quarter, Grove announced a company-wide reorganization which included a reduction in workforce of approximately 17% of corporate employees to reduce operating expenses and strengthen key areas across the business. In connection with the reorganization, the company recorded charges totaling $1.6 million in the first quarter.

The company strengthened its balance sheet with a new $50 million redemption backstop agreement with VGII, designed to provide additional liquidity to pursue growth. This agreement underpins Virgin Group Acquisition Corp II’s commitment to the strategic business combination with Grove and to its mission. 

 

On April 11, Sergio Cervantes joined Grove as chief financial officer, enhancing the senior leadership team. Cervantes came to Grove with significant financial executive experience in global consumer products, including 18 years with Unilever and four years at Gillette. 

 

On May 31, Grove published its annual Plastic Scorecard and Sustainability Report which can be found at grove.co/sustainabilityreport2021 and grove.co/plasticscorecard, respectively. 

 

The company reached its goal to plant 1 million trees across the US in partnership with the Arbor Day Foundation, months ahead of its year end goal. Through its environmental impact shop, a unique offering launched in August 2021 that lets customers amplify the impact of every order, Grove customers have funded the planting of over 50,000 additional trees to support California wildfire restoration along with over 25,000 acres of rainforest conservation and 300,000 pounds of plastic collected in India.