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When ethical toilet paper company Who Gives a Crap first floated the idea of launching its very own coffee brand, “Brew Gives a Crap”, it wasn’t seriously considering the idea, it was purely as an April Fools’ Day joke on social media. But there was an unexpected response. 

“Half of our customers thought it was a funny April Fools’ joke, and the other half was saying, ‘Oh my god, this is amazing, I can’t wait to try it.’ So we thought maybe there’s actually something in this,” Who Gives a Crap co-founder and CEO Simon Griffiths told Inside Retail. 

A few years down the track, the brand has followed through with the launch of a coffee product this week. Who’s laughing now? The aptly titled Blend No. 2 was introduced after much research into the effects of coffee on the human body. 

“After a lot of research, we realised coffee was a product that made some people need to go to the bathroom more. We’re always looking for ways to grow a business and to help stimulate demand,” Griffiths said with a smile. 

The B Corp donates 50 per cent of its profits to water and sanitation charities around the world and to date has donated over $10 million. But in order to reach the billions of people who still lack basic sanitation services, the company says they’re “going to need to sell a lot more toilet paper”. 

“The main thing is that we’re always trying to think about how to accelerate that impact mission. We’re really excited to put this out into the world,” Griffiths said. 

In line with Who Gives a Crap’s core values of operating ethically and sustainably, the organic coffee blend is Fairtrade certified, has carbon neutral shipping and comes in a 500g compostable bag, accompanied by a roll of premium bamboo toilet paper, of course.

“We haven’t seen a bag like this in the market before. Coffee bags typically have a plastic liner in them which cannot break down; this one is fully compostable. It’s a very cool piece of innovation that we’re hoping will become more and more popular with coffee brands in the future,” Griffiths said.

The coffee has been sourced from four different regions and is available as whole bean or ground. Griffiths said it is important for the business that the coffee is Fairtrade certified. 

“Our business exists to make people’s lives better. We take both social compliance and environmental compliance very seriously,” he said. 

The team of coffee drinkers in the business also took the taste very seriously. 

“Many of us are based in Melbourne, so we do take coffee very seriously. This has been through some incredibly rigorous taste testing to make sure we’re putting something out into the world that we’re really proud of and we know our customers will enjoy as well.”

High demand for limited edition products

While the product is intended as a limited edition, for online purchase only, Griffiths hasn’t ruled out the possibility of making it a permanent feature in the product portfolio.

“We expect it will probably sell out. If it’s something that our customers love, we’ll consider turning it into an ongoing product range,” he said. 

Limited editions are an important part of Who Gives a Crap’s product strategy. It collaborates with artists and illustrations on limited edition wrappers which it releases throughout the year and are hugely popular with its loyal consumer base. 

“They’re really amazing moments for us, particularly for customers who’ve been with us for a while to experience something different. They love our product and some customers buy every single limited edition wrapper that we produce which is amazing,” he said. 

“We thought this was an interesting twist to try it with a different product and see how that’s received by our customers.”

The brand has had a bit of a cult following since it launched in 2010. 

“There weren’t many brands that were tightly aligned to the ethics and values of our customers [at the time], and so I think what we were doing really spoke to a lot of people in a powerful way,” Griffiths said. 

“The fact that we follow through on our promises, and when you get in touch, there’s a real human at the other end of your email; by doing all of those things we’ve created a community around our product which is pretty amazing.”

Online marketplace MyDeal has seen its gross sales hit record levels for the first quarter of FY22, reaching $69.5 million – 49 per cent up compared to the prior quarter, and 22.6 per cent up on the same period last year.

Additionally, the business saw active customers grow 38.9 per cent to approximately 929,000, while returning customers made up nearly 60 per cent of all sales.

“I’m very pleased to announce another record quarter despite cycling a period of unprecedented growth,” MyDeal CEO Sean Senvirtne said.

“Through relentless focus on our key strategic initiatives, doing it ‘right, not rushed’, and executing our plan we have been able to grow faster than the industry average. Operating in a growing and underpenetrated online household goods market within Australia, MyDeal continues to acquire more market share and will continue to thrive in the years to come.”

According to Senvirtne, the launch of MyDeal’s dedicated mobile app has been a proven success, with more than 10 per cent of the business’ sales now coming through the channel.

And, due to a strong start to the year, MyDeal is expecting a strong year ahead.

“We’ll continue to improve our mobile app to deliver increased conversion and engagement, and as we design and build our loyalty program and focus on being truly customer obsessed, we are confident we are in a strong position to grow all key metrics,” Senvirtne said.

Outdoor brand Macpac’s long-time leader Alex Brandon has signalled his exit from the business, with Priceline general manager of retail operations Cathy Seaholme to take his place in October.

Brandon has been chief executive at Macpac since 2012, and continued in the role through Super Retail Group’s acquisition of the camping and travel brand.

“It has been a privilege to lead our passionate team of dedicated [people] who have contributed to the success of Macpac and grown awareness of a truly authentic and sustainable brand,” Brandon said. “I am particularly proud of our track record of leading innovation without in any way diminishing our proud heritage deep-rooted in adventure.”

As part of the transition, Seaholme will relocate to New Zealand and will be based in Christchurch.

Super Retail Group chief executive Anthony Heraghty welcomed Seaholme to the position and thanked Brandon for the effort he put into the business.

“In wishing Alex all the best for the future, we acknowledge his critical role in successfully integrating Macpac with Super Retail Group and thank him for his leadership and his commitment to maintaining the heritage, quality and integrity of the Macpac brand,” Heraghty said.

Former Myer CEO Richard Umbers takes on role in healthcare

Former Myer CEO Richard Umbers will start his new role as global CEO at Ryman Healthcare in October. 

A press release from the organisation states that Ryman is New Zealand’s largest retirement village operator and launched the model of integrated living and care in Australasia.

“We are delighted to have secured Richard’s services and we believe he will be a great fit at Ryman,” Ryman Healthcare Chair Dr David Kerr said in a statement.

“This is a special company with a strong culture and a team committed to the care and welfare of our residents. We believe Richard has the right mix of commercial and executive skills and qualities to continue to foster that culture and build on it to prepare Ryman for the enormous growth we see in the years ahead.’’

Umbers is based in Melbourne and is looking to relocate to New Zealand in the near future.

He was most recently division director of buying at Kaufland and was previously managing director of Progressive Enterprises in New Zealand, which now trades as Countdown supermarkets. He has also held senior roles at Woolworths, Australia Post and Aldi. 

L’Occitane welcomes new global CEO

French beauty business The L’Occitane Group has announced the appointment of Andre J. Hoffmann as its new CEO, taking over from Reinold Geiger, who led the business for more than 25 years.

Hoffmann will also continue his previous role as the vice-chairman of the board and executive director, while Geiger continues to be board chairman and executive director.

L’Occitane said in a statement: “Under the new organisational structure, Hoffmann will drive the Group’s strategic planning to leverage the strengths of its core business in order to scale innovations and create large-scale new businesses, while continuing to build each brand’s unique identity.”

Hoffmann has worked at L’Occitane for more than 25 years and has held various senior leadership roles. Between 1995 and 2017, he was in charge of the brand’s Asia-Pacific business. He was appointed executive director in 2001 and vice-chairman in 2016.

Eco-friendly toilet paper startup Who Gives a Crap has secured $41.5 million in its first ever round of funding, as chief executive Simon Griffiths strives to build a business making — and giving away — billions of dollars.

It’s a significant first raise for a startup that’s been bootstrapped for nine years, but it also proves increasing interest in impact startups, even from traditional investors, and paves the way for more to come. 

Launched back in 2012 by Griffiths and co-founders Jehan Ratnatunga and Danny Alexander, Who Gives a Crap first got off the ground after a successful crowdfunding campaign on Indiegogo — a campaign that saw Griffiths himself perched on a toilet for 50 hours, until the business hit its minimum target.

The startup has been bootstrapped ever since, only taking on some debt financing to manage working capital, Griffiths says. That debt has been repaid for some time, he adds.

In nine years, it has made more than $20 million in profits, and donated half of that to non-profit partners working on clean water and sanitation projects.

In the 2020 financial year, Who Gives a Crap donated a record $5.85 million, a boost of 750% on the previous year.

Speaking to SmartCompany, Griffith puts the massive uptick partly down to the bizarre panic-buying of toilet paper we saw early on in the COVID-19 pandemic (and occasionally throughout), as loo roll became “the hot commodity”.

In the 2021 financial year, profits dipped again, with Who Gives a Crap donating $2.5 million. It marked an stabilisation, he says, but there were also ongoing disruptions to supply chains — caused by the COVID-19 pandemic — that have made things tricky over the past 12 months.

Now it looks like the worst of the rollercoaster is over.

“We’re kind of back on a trajectory that’s a little bit more predictable and easier to forecast.”

This funding will be used to continue what Who Gives a Crap is already doing, but ramping up the pace.

“We’re really proud of what we’ve done,” Griffiths says.

“But where we really need to get to is billions of dollars of donations, if we’re going to help the 2 billion people who don’t have access to adequate sanitation.”

To get there, the focus will be on launching new products, expanding further in some of its newer markets, and hiring the people needed to make it happen.

The funding also gives Who Gives a Crap the balance sheet required to embark on some of the bigger projects in the pipeline, such as improving its environmental credentials, and getting to net-zero emissions.

For Griffiths, success comes down to the amount of impact created, he says. That means giving everyone in the world access to clean water and sanitation.

“To seriously put a dent in in that problem … means building a company making tens-of-billions of dollars in revenue.”

A star-studded investor list

The round was led by Brussels-based Verlinvest, whose executive director Raphael Thiolon is set to join the board of the startup.

London-based The Craftery and Jam Jar Investments also contributed.

Beyond that, the investor list reads as a who’s who of the Australian startup scene, including Mike Cannon-Brookes’ Grok Ventures, AirTree Ventures and impact fund Giant Leap.

Who Gives A Crap also secured contributions from high-profile individual investors including the likes of Adore Beauty founders Kate Morris and James Height; Culture Amp’s Didier Elzinga and Doug English; Canva co-founder Cameron Adams; former Unilever chief executive Paul Polman; and a handful of sports stars, who invested through Athletic Ventures.

While some of the investors — Giant Leap, in particular — have a clear MO of investing in impact startups, it’s certainly not a criteria point for all of them.

The first few years of Who Gives a Crap were about proving the theory and the business model, Griffiths says. Then, it was about growth and scaling, ramping up the donations into the millions.

Now the founders have proven not only to themselves and to consumers that the model works, they’ve managed to convince the capital markets, too.

“The idea of giving away half your profits was certainly not very cool, from a capitalist perspective, a decade ago,” Griffiths says.

“I think we’re been able to help shift the mindset on that,” he adds.

“This is hopefully a better, new way of thinking about capitalism that will influence what comes after us as well.”

A shift in capitalism?

On the face of it, gifting away half of your profits sounds like a hard sell to any investor who is, ultimately, looking for a return.

Yet we are seeing more and more investors focusing on businesses that tackle the big challenges facing the world.

Griffiths was also careful in choosing who he brought along on the journey.

There were three key criteria for investors. First, there had to be mission alignment, he explains.

Second, Griffiths was looking for “patient capital”, he says. This was always going to be a long-term investment.

“We’ve got a 30-year thesis that we’re executing against,” he says.

Finally, he was looking for deep expertise across operations, culture, consumer mindset and growth.

All of this — and the mission alignment point in particular —meant there were some investment discussions that quickly fizzled out.

But Who Gives A Crap is already a well-known brand with plenty of fans in the startup sector, and the fact it was able to attract such a significant amount of money from such a renowned group of investors speaks volumes, Griffiths says.

This wasn’t just a raise for impact-focused investors. It was a smart investment for anyone. That marks a changing of the tide, which will only create more avenues for growth for more impact-focused businesses, he adds.

“Probably the most exciting thing is just seeing this shift towards profit-for-purpose businesses becoming something that is really taken seriously by the private capital markets,” he says.

“That makes me super excited about, not just now in this moment that the world is in, but what the world is going to look like ten years from now as well.”

It appears Griffiths isn’t alone in feeling this way.

In a statement, Mike Cannon-Brookes called Who Gives a Crap “an impressive Aussie underdog story”.

“I hope other entrepreneurs are inspired by their story of building a profitable, fast-growing business that is also environmentally sustainable,” he added.

Australian farmers are on track to deliver $70 billion of value for the first time, with bumper harvests and higher prices for most commodities outweighing challenges posed by mice plagues and labour shortages.

Favourable weather conditions will help lift the agriculture sector’s gross value of production (GVP) to $73 billion this financial year, according to forecasts by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES).

Australian growers are also benefiting from a drought in Europe and North America which has pushed up international grain prices. Strong global prices for grains, cotton and sugar are tipped to lift the value of Australia’s crop production by 7 per cent to a record $39.5 billion.

North Queensland cane grower Stephen Calcagno is enjoying a sweet season. Sugar prices are so good that he and fellow growers are locking in forward contracts.

“Growers are actively securing those prices to guarantee the next two or three years for their crops,” Mr Calcagno said.

• Australian startup Who Gives A Crap announced it had taken on its first round of capital with a group of sustainability-driven investors following nine years in business.
• The company said the investment would help it accelerate its profit-for-purpose business model that sees 50% of all profits donated to charity.
• It plans to use the capital to enter new countries, expand its products and scale its sustainability initiatives.

Australian B Corp Who Gives A Crap has raised AU $41.5 million in a funding round backed by Atlassian co-founder and co-CEO Mike Cannon-Brookes. 

It said the decision to accept investment, after nine years of operating, would help scale the business and accelerate its mission to help two billion people around the world access clean toilets and safe water.

Since launching in 2012, the direct-to-consumer toilet paper company’s profit-for-purpose model has seen it donate 50% of all profits to this cause. 

It has now reached over AU $10 million in donations to impact partners around the world that work with local communities to build sustainable sanitation solutions. 

The investment was led by Verlinvest, a family-owned investment group focused on driving growth for purpose-led brands, including Oatly and Tony’s Chocolonely, along with Cannon-Brookes’ private investment firm, Grok Ventures. 

Other lead investors include Craftory, Jamjar, Airtree, Giant Leap and Athletic Ventures. 

The company said it plans to use the capital to enter new countries, expand its products and scale its sustainability initiatives.

Who Gives A Crap, which has been self-funded since its founding in 2012, said its decision to operate as a high-growth startup without funding was driven by a desire to prove its model of donating 50% of profits to charity could work. 

Now, it said the investment would enable it to take steps to expand its global footprint, while also continuing to ensure donations will enable the company to increase its impact.

Simon Griffiths, the company’s chief executive and co-founder, said in an open letter it planned to continue to focus on balancing its mission with growth. 

Its founding purpose – to ensure everyone has access to clean water and a toilet – would continue to drive its business strategy, Griffiths said. 

“We donate 50% of our profits to incredible non-profit partners to make it happen,” he said. 

“But to reach our goal, we need to accelerate our growth and take our impact to the next level.”

Ben Black of Verlinvest said the startup’s profitable sustainable business model was a template he hoped to see replicated. 

“We invest behind global brands and entrepreneurs driving long-term shifts in consumer behaviour, and believe that enterprise should be a force for good, playing a role in shaping society,” Black said. 

“Simon and his team have developed a profitable, consumer-centric business model enabling growth at scale, intrinsic to which is driving a mission to give everyone access to clean water and sanitation – whilst leading the shift away from deforesting virgin paper products.”

Cannon-Brookes said his investment firm was committed to supporting socially responsible organisations.

“Who Gives A Crap is an impressive Aussie underdog story,” Cannon-Brookes said. 

“Simon and his team have taken something so simple – toilet paper – and turned it into an impactful business, both socially and environmentally,” he said. 

The Atlassian co-founder said his fund would continue to back the growth of sustainable companies.

“I hope other entrepreneurs are inspired by their story of building a profitable, fast-growing business that is also environmentally sustainable,” he said. 

• The Australian Competition & Commission is investigating if there has been a breach of competition laws regarding shipping containers in Australia.
• At the same time, the watchdog is looking into the broader shipping industry, which has seen container prices spike.
• COVID-19 disruptions and massive consumer demand for retail goods have strained the global shipping industry.

Australia’s consumer watchdog has confirmed two parallel investigations into local port operations and the broader shipping industry, as local importers strain under high container prices and ongoing port congestion.

Speaking to ABC’s “The Business” Monday night, Australian Competition & Consumer Commission (ACCC) chair Rod Sims said it is looking into the operations of local port operators, also known as stevedores.

The investigation comes after freight companies alleged that Australian port operators have dramatically increased the fees charged for loading an unloading cargo from container ships over the year, eating away at trucking company profits.

The ACCC last year found stevedore revenues and profit margins grew over 2019-2020, despite the coronavirus crisis causing container shipping volumes to shrink dramatically.

This was largely due to increases in “landside” charges, the ACCC said, which some port operators maintain are necessary to ensure efficient operations.

“We have a narrowly focused investigation as to whether there is a breach of competition laws in relation to containers in Australia,” Sims said.

“‘Is there a breach, is there not a breach?’ We’ll get to the bottom of that,” he added.

Onshore issues backdropped by extreme shipping costs

The issue of stevedore fees has only become more prominent in recent months, with global shipping prices not only recovering, but far surpassing standard levels.

Sky-high consumer demand for imported retail goods has collided with COVID-19 disruptions at some of the world’s busiest ports, putting a premium on shipping costs.

As of 9 September, the Drewry composite World Container Index, a go-to collation of popular shipping route pricing, put the cost of a standard 40 foot container at US$10,083.84 (AU$13,698.54) per 40ft container — up 309 per cent from the same week in 2020.

Averaged over the year so far, the Index sits at US$6,695 (AU$9,097.52) per 40ft container, compared to the five-year average of US$2,327 (AU$3,162.39).

The China Containerized Freight index, which tallies popular global routes including Shanghai-Melbourne, shows similar growth over the year.

Speaking to the ABC, Sims said the ACCC is looking into the “much, much bigger issue” of shipping price hikes for its November monitoring report.

It is likely that research will look into how rising shipping costs are being passed on to Australian consumers, who may be asked to make up for it at the checkout.

“We will look at, ‘To what extent is this a structural problem?’ due to the fact that you have got concentration in shipping which has occurred a lot, or, ‘To what extent is it a short-term issue due to the spikes in demand as people consume more goods and less services?’ as COVID-19 interrupts the supply chain,” Sims said.

Given the heightened demand, delays, and port congestion, domestic retailers and couriers have already started to warn Australian shoppers to plan ahead for the Christmas rush.

Exports continued to outpace imports in July, boosting the trade surplus to a back-to-back record of $12.1 billion, with the value of goods shipped to China hitting a new peak despite Beijing’s trade sanctions.

The result comes after the national accounts for the June quarter showed a quarterly record trade surplus of $29 billion and a 7 per cent improvement in the terms of trade, which has now risen 24 per cent over the year.

Despite being in the middle of a global pandemic, strong commodity prices gave national incomes a solid boost, which flowed through to mining profits – up 18.4 per cent for the quarter and 10 per cent for the year.

This trickled through to company taxes, which lifted by $8.6 billion, or 37.2 per cent, over the three months to June 30, helping lift taxation revenue above pre-pandemic levels (also to a record level of GDP).

At $19 billion, exports of ore and minerals (primarily iron ore) continued to grow unabated in July. However, recent falls in the iron ore price mean export values have probably peaked for a while.

The head of Australia’s largest fruit and vegetable grower and the peak body representing winemakers have urged state and territory governments to stick to the national plan for reopening borders amid growing concerns labour shortages could threaten bumper harvests.

Currently, under the national plan, lockdowns and border-related travel restrictions are expected to only be enforced in extreme situations once COVID-19 vaccinations hit 80 per cent. However, states such as Tasmania, Western Australia and Queensland have flagged they may hold off opening their borders until higher vaccination rates are achieved.

This is a cause for concern for Sean Hallahan, chief executive of ASX-listed fruit and vegetable grower Costa Group, which relies on moving workers around the country to pick produce at its multiple farm locations. He told The Age and The Sydney Morning Herald that, while the company was currently managing, a lack of clarity made planning for the season difficult.

“We are managing through it, but it would be better if there were clearer guidelines to be quite honest,” he said. “We’d like to move our workers down from northern New South Wales into Tasmania, but it’s hard to get a clear line of sight moment on exactly how that can occur.”

Mr Hallahan said he was watching the positions of Queensland, Tasmania and Western Australia “with concern”, saying it was creating a lot of uncertainty within the industry over when crops will be able to be picked.

“Meanwhile, the fruit on the trees keeps ripening, and we’ve got timelines to meet that we can’t do anything about,” he said.

In an open letter published last week, members of the Business Council of Australia urged states and territories to “stay the course” in line with the national plan.

Perth-based Wesfarmers chief executive Rob Scott, who signed the open letter, told ABC Radio on Monday morning the national plan was “really sensible” and a key way to encourage vaccinations, warning that the reliance on borders in Western Australia could be causing complacency among residents.

“We do have great faith in the national plan and the Doherty Institute. It is a very cautious, considered basis to progressively reopen,” he said.

In some industries, there are concerns continued border closures could have widespread impacts. Tony Battaglene, chief executive of the Australian Grape and Wine industry body, said Western Australian winemakers were very concerned about having enough labour to pick grapes for this year’s vintage.

“If we get a burst of hot weather and all the grapes ripen at once, in those regions where it’s mostly hand-picked...that’s going to cause some problems,” he said.

“So we just need the borders to open up and we need everyone to get vaccinated and get moving.”

Similarly, Paul Zahra, chief executive of the Australian Retailers Association, said the states that opened up in line with the plan would “reap the rewards” of an open economy.

“We can’t keep borders closed forever, it’s unsustainable,” he said. “It’s important that we have all states open and that we’re all in this together.”

ASX-listed natural products player BWX Group has snapped up a majority stake of Financial Review Young Rich Lister Zoë Foster Blake’s Go-To Skincare for $89 million.

BWX counts skincare and makeup brands Sukin, Andalou Naturals and Mineral Fusion as part of its stable, and recently bought ethical platform player Flora & Fauna.

The deal to acquire a 50.1 per cent stake in Go-To Skincare represents an enterprise value to EBITDA multiple of 14.9 times 2021 earnings.

Ms Foster Blake - who will continue as chief creative officer and a director - founded the skin care company in 2014. Last financial year Go-To generated $36.8 million of revenue and $11.6 million in EBITDA.

Go-To has four of the top 10 best-selling products at cosmetics retail giant Mecca with products such as Face Hero and Skin Party. Other lines include Bro-To for boys and men and plant-based skin care for kids, Gro-To.

Ms Foster Blake’s near 40 per cent stake in Go-To will drop to about 23 per cent, estimated to be valued at about $40 million, post deal and based on the group’s valuation of $177 million.

Other Go-To co-founders will also remain, and the company will be a standalone brand, leveraging its new parent’s expertise and capability.

The purchase will be funded via $85 million fully underwritten institutional placement and a $15 million share purchase plan. New shares will be offered at $4.85 each - an 8.7 per cent discount to the share price just ahead of the announcement.

Chief executive David Fenlon called Go-To is an authentic brand with an exceptionally loyal customer following, omni-channel offering with an exciting growth outlook giving BWX access to the “masstige” premium market in Australia and US.

“Through this partnership, BWX intends to support Go-To’s growth potential by leveraging our capability, resources and international distribution network,” he said.

Ms Foster Blake - who has authored 12 books and is a former beauty director of Harper’s BAZAAR and Cosmo - said it was all about international expansion and finding a like-minded partner.

“We believe that Go-To to has a place overseas, and we’ve been in the US now for three years, but there’s so many opportunities, I can’t wait to get over there and start getting things going,” she told investors on a call.

Analysts asked about saying ahead of competition in a huge skincare market with new players popping up all the time, to which Ms Foster Blake said: “I think the fact that we have credibility, integrity and quality products because, of course, marketing and a good story will get your first product sale, but not work for repeat purchases, and I think our sales indicate that we are well beyond that.”

BWX at the same time released its full-year 2021 results when revenue increased to $194.1 million, up 3 per cent, from $187.7 million a year ago – this was lower than its guidance.

Underlying earnings before interest, taxes, depreciation and amortisation gained 11.5 per cent $34.5 million, beating guidance, while statutory net profit increased 60.9 per cent to $23.7 million.