CEO Susan Kim on how Kopari was at the forefront of the clean beauty trend

0:06Hello, everyone, and welcome to the Modern Retail Podcast. I'm your host, Cale Guthrie-Weissman. This week, I'm really excited. We have Susan Kim. She is the CEO of Kopari Beauty, which is a beauty brand that's been around for many years now. Correct me if I'm wrong, but I'm pretty sure 2015 is when it founded, I believe. Wow, that's nearly a decade. So congrats on getting close to that decade-long span. It's expanded over the last many years. It started very traditional DTC sense, But like they have a bunch of retail partners, including Ulta. I want to go into just what it's like to grow the brand.

0:43Susan joined as CEO, I believe, in 2020. And so with four years under her belt, I'd love to hear just how the brand has evolved, how it's changed. Some stats I was just told is that I believe in 2023, revenue grew 40%, which is quite impressive. 45. I got to get extra credit for that five extra points. That was all you. So I want to know how you do that because it's been a tough year for a lot of brands. But Susan, how are you doing? I'm great. Thank you so much for having me. I'm really excited to share with you this journey. It's been pretty incredible. You're absolutely right. 2020 was when I joined.

1:16I decided to up and leave my former position at Huda Beauty as SVP of digital and all things, you know, marketing for the U.S. to join Kopari. I was not looking by any means. And this was in August of 2020. So I thought, you know, what a great idea to just up and move my family and take on a new role as CEO in the middle of a pandemic. So it's been quite a journey since then, for sure. Yeah, I mean, that is quite a time to start a new role, though. Also, I believe I talked with many people. That is also a time when people sort of did a reset and were like, what am I actually doing? Maybe I'll take on a new journey.

1:56So maybe that played into it. I don't know. Yeah, it was definitely great to like move down to San Diego and La Jolla where we're headquartered. And yeah, it's been quite a journey since then, because right after 2020, I don't know if you remember this, but the great global supply chain crisis. Oh, I remember it very well. I wrote dozens of stories about that. But let's let's back up a little bit because you mentioned where you're coming from, but you've worked with a bunch of big brands over the years. So do you just want to give us a little bit of history about who you are professionally? And like, it sounds like beauty has been your big mainstay, but where were you and what were you doing?

2:33Yeah. So, you know, I started my career at Mattel back in the day. Wow. Yeah. And I worked on dolls and I worked on the marketing of Monster High and Disney Princess and Girls Entertainment, everything that was under the umbrella of Girls Entertainment. So really understanding marketing and consumer-based brands for women and girls. And really this idea of like, how do we make girls' dreams come true? And that's always stayed with me, right? And what a classic place to just learn CPG, brand positioning, brand building, and all of that. And then I attended business school at Harvard Business School and had a great experience there.

3:10And coming out of Harvard, you know, this was 2010. So it was definitely the recession, the housing recession. And, you know, I could have gone back to girls' entertainment or entertainment in general, Children's Entertainment, or I had an offer from L 'Oreal Paris. And I just thought to myself, you know, I want to try a new category. I've always been curious about beauty. So I moved to New York City, worked on Fifth Avenue at L 'Oreal Paris. And that is definitely the Academy of Beauty Marketing 101. And I worked on the L 'Oreal Paris brand, the Mass brand, and had a great experience there. And then, you know, I decided to try cross-country to San Francisco to a smaller brand back then, Benefit Cosmetics.

3:52It is now a behemoth of a brand. There I got to work with Jean-Andre Rougeau, who is such an amazing mentor to me. He's currently the CEO of Sephora. I got to work alongside amazing talent and amazing colleagues. And we helped grow the brand to an over a billion dollar brand from back in the day. And I was there for about eight years, got to do the first influencer trip, really, you know, dove into digitally native, socially native content, really dove into international markets. I managed over 55 markets while I was there and did global marketing. I did strategic planning and then also got to own the US P &L and Omnichannel there.

4:31So an array of different experience. But I really love the digitally native, socially native epicenter of where the brand was headed. I mean, this is the day when, you know, YouTube was rising, when Instagram was just starting, when Facebook was just starting and, you know, brands were starting to tiptoe into the waters of social. I then left to build the hood of beauty business in the U.S. And because it was very much of a startup, there wasn't a ton of resourcing. So I oversaw all of digital, including the replatforming of the e-commerce channel, as well as Asia. Okay. Asia. We decided to go into Asia and I built that business as well.

5:16Wow. And then after that, you just went over to Kapari. Yeah, I always knew about Kapari. You know, I kept tabs on it. I remember when, you know, I was overseeing the U.S. marketing team and the team, they're much younger and much cooler than I am. And so they would say, Susan, have you seen this new brand? It's super clean. It's based in San Diego. And I remember thinking, I have to keep tabs on this brand. And I watched it grow over the years. And I just thought it had such a unique positioning right when clean beauty was on the rise. And, you know, when they approached me with this opportunity, I, you know, looked at the opportunity.

5:51I thought about, can I add value in this situation? Can I take this brand to the next level and really fulfill its full potential? And I felt that I could do that because it had such a strong base of a brand DNA, a richness to the brand DNA, the lifestyle, the activeness, the clean profile. It truly was a pioneer back in 2015 as one of the first clean brands out there. Our hero product, the coconut milk, non-GMO, 100 % refined coconut oil, you know, sourced from small family farms in the Philippines, handpicked at its peak ripeness, triple filtered, you know, super organic. So I just felt that with its pioneering heritage, combined with the richness of the lifestyle DNA, that there was something there for us to continue to build on.

6:43Got it. Yeah, I wanted you gave a little bit of like you set the table very well, but I wanted to go deeper. Just I feel like if anyone is vaguely aware of the beauty industry, they know Kopari. You're, you know, in the premium, like, you know, space, you're one of the leaders, especially for like, you know, your hero product, your sunscreen, all of that. But just what is, can you walk me through an abridged history of the company up until now? How did product expansion go? And what were the key expansion decisions that have been made over the last few years? Exactly. So Copari was founded in 2015, one of the first clean beauty brands on the market, definitely prestige.

7:25And we were D2C first. So we launched our own site, And we really built up the D2C sales back in 2015 and 16 around an assortment that was very much centered on clean, organic coconut oil and all the different ways that coconut oil could be utilized in a beauty regimen. So this included things like body oil and body balms and face moisturizer. And then by happenstance, we have four founders. And by happenstance, one of the founders believed in the use of coconut oil for deodorant, natural deodorant. So aluminum-free deodorant. And coconut oil is this great natural ingredient that is a very clean product that has a ton of lactic acid.

8:17So it's antibacterial. And so it's a natural deodorant that is effective. And so we were one of the first natural deodorants on the market in the boom of natural deodorants back in 2018 and 2019. and a lot of people know us for the deodorant. However, you can't build a prestige beauty brand from a personal care deodorant. The same stuff that you want to put on your face is not going to be the same stuff that you want to put in your armpits, right? And so when I came on board in 2020 and there was some volatility during the COVID years, obviously with brick and mortar shut down and basically all of beauty's brick and mortar shut down, there was an opportunity to really articulate who we are, who we're for and where we sell as a result of who we are.

9:05So this definition really set the base for articulating we are prestige beauty brand that uses not only coconut oil, but nature's finest ingredients with active ingredients to create the most luxurious and efficacious formulas out there. And then really thinking about the prestige distribution channel with partners like Nordstrom, Alta, to explode out that positioning as a prestige beauty brand. Got it. I wanted to ask, you sort of hinted at this just now, but when you joined, what was your mandate? I always like to ask the executives. So what was it that you set out to do? Was it this huge rebrand?

9:48And then I also want to add one more thing, which is your background is mostly in marketing. And so how were you excited about doing something that was outside of the marketing scope? Just because I imagine, you know, marketing is a grind. I'm sure being a CEO is a grind too, but it's like marketing is its very, very own specific grind. My mandate was to grow the company, obviously, because there was so much potential, especially because there was some ambiguity during COVID as there was for many, many brands out there. It was to grow the company, to be more efficient with our investment. And that's a hard thing to do.

10:24How do you propel growth in the 40 % and plus without huge investments, right? Back into customer acquisition, back into major brand campaigns. It was not a rebrand whatsoever. But that re-articulation was super important, right? And we articulate that every single day with our internal teams, our external teams, our external vendors and partners. because that reminder of like being centered on who we are serves us because very often in the beauty industry, you see things like, oh, you know, brand A just launched this. We should think about fermented mushrooms. It's like, well, actually that's not within the scope of our DNA.

11:01We have to be true to who we are to ensure that that lane is adhered to and consistent and frequent with our consumer base, right? And so for me, that re-articulation or, you know, rebranding was very important just to do from the, you know, offset because it is our every day that we walk. It's still today. And in terms of my background, you know, I was in marketing. I do love marketing. I mean, I just think the art of storytelling, the art of content creation, the art of really manifesting the brand and reaching new audiences is so fun. And I really enjoyed that a lot. But But my career, as I grew more senior in my career, became more P &L oversight.

11:43So at Benefit, I took over the U.S. omni-channel business, which is all of the dot-coms, right? How do we show up to our consumer base that is in this omni-channel world between Sephora.com and Sephora brick-and-mortar, all the dot-com and all the brick-and-mortar and so on. And then as I went on to Huda Beauty, I owned the P &L for Asia. I owned the P &L for all of the e-tellers. So really being able to understand how does a business model work in order to be sustainable for the long term future? And how do one thing drive another? Right. Whether it be the social content that drives conversion or whether it be overall brand awareness, wherever you are in the funnel, that might drive traffic and interest in Google search.

12:22Right. Got it. Got it. And so can you can you talk a little bit about, you know, especially since you are in so many stores and you you did this sort of rebranding or repositioning of the storytelling? When you are a prestige brand, how do you think about sort of the wholesale expansion? You guys are in a lot of stores, but I know price point definitely fits into it. Someone will see a product and say, that's so-and-so. That must be a prestige brand. But also, does that fit into, will you sell in any store? Are you very specific about where you expand into? No, we're definitely specific in where we expand into.

12:59The thing about selective beauty is that you don't make a product for the masses. It is very specific to a consumer and a target audience. And then selective distribution means that you are very specific to a consumer and a target audience who is looking to find that product in the price points and the departments and the content that goes along with it. Right. And so, you know, we think about our product innovation, our product assortment in that intersection of, you know, is it efficacious? Does it do what it says it's going to do? And does it fulfill its promise? We absolutely do our clinical tests.

13:36We do all of our, you know, trials and testing and panel testing to ensure that the product does what it does, says it's going to do, combined with luxury. Is it going to surprise and delight you? Are you going to ooh and ah all every time that you put it on? Are you just going to want to be reminded of vacation as soon as you put on that scent, scented and, you know, body butter or, you know, the sunscreen, which has no other comparable to it, you know, because it is so golden, so luxurious, amazing texture that dries down beautifully. And oh, by the way, it smells like paradise. I wanted to ask.

14:11So, you know, Kopari was one of the early companies in the clean beauty space. And I feel like clean beauty has become this sort of catch-all term that a lot of companies say. You guys are very specific, or at least when you started, it was the coconut oil. You talked about the sourcing. But I feel like both the definition and the way that shoppers think about it has changed. So can you just talk about, have you changed the way you talk about being a clean beauty company over the years, given the expectations out of shoppers? Or how do you keep up with the competition where I feel like every company says that they're clean now?

14:45Yeah, I mean, it's definitely table stakes now. You know, if you're a beauty brand, you definitely have a position on being clean or not. And what goes into your ingredients, right? And your formulation philosophy. The way I think about clean is that back in 2015, it was a differentiator, right? It was one of those things where if you were clean, you were differentiated for the rest of the competition. 10 years later, it's not the same differentiator because everybody is clean. So this constant movement of understanding what the differentiator is for your brand is an exercise that we go through constantly.

15:20So for us, our DNA is, yeah, we happen to be clean, but we are so much more than that. Our pillars of our DNA is that we are reminding you of paradise and whisking you on a permanent vacation. We are luxurious and efficacious formulas that give you that spa-like feeling. And we are a face, body, and skin, and sun care brand. So this ability to traverse different categories is very unique to us, right? So there are a lot of brands out there who's either all face or all body or all sun care or all personal care, right? The ability for us to be able to provide you with a really efficacious and beautiful SPF also give you an amazing moisture whip ceramide cream that hydrates you for 72 hours and also give you a body oil and body butter that is luxurious as well as very efficacious in terms of moisturization and also have the number one bestselling prestige deodorant on the market.

16:14that is incredibly unique because you don't see that kind of traversing of different categories in the beauty industry typically. And that speaks to the trust that we have as being one of those pioneers of the clean beauty movement and being very strict on what we formulate for the past nine, 10 years. When you first launched the deodorant, were the people using it the same as who were using the body butter and body oil? Or were they complete? Like, how do you bridge that when you have, you know, products that are similar, but as you said, in different lanes. Yeah. I mean, those customers back in 2018 and 2019 who came in for the deodorant, they're still our customers.

16:52They're still buying the Body Butter, the Body Oil, the SunShield Body Glow SPF 50. So they are graduating to different categories, which is a very unique, you know, thing for the beauty industry. We're going to take a quick break and we'll be right back. How important now is D2C? You're in a lot of places, but you also still do have your website. How do you keep that in mind and how does it play into your overall sales mix? Yeah, it's very important to us. It's a significant channel for us. It still is commercially incredibly contributive to us. We have very strict measurements when it comes to D2C and how we about the health of D2C.

17:34So whether it be our CACs, our LTV, you know, cost of acquisition for a new customer, our, you know, long-term value of a customer and how we think about our return on ad sales and ROAS, like those are measures, measurements that we keep track of on a daily basis. It's not hourly, quite frankly, right now we're in the height of sun season. So I'm loving these numbers that I'm seeing. It is incredibly, you know, amazing to see customers, our products resonate with customers. Our new innovations resonate with customers because our innovations, especially within Sun, I believe are ones that people have not seen before.

18:12Sunshio, people have never seen that format before. They've seen, you know, SPF oil before, but they've never seen that. And then this particular product, which is our SPF spray, they've never seen this before. You know, this intersection of like, it looks amazing, but also smells amazing and it's super efficacious, that's exactly what we want to deliver for our customers. And it's resonating. So you mentioned CAC and LTV. In this current weird environment that we're in, how are you keeping CAC down? It's a whole funnel. So we do a mix of the media plan when it comes to paid and earned. We do brand media, we do performance media, and we do earned sort of tactics, I would say, the earned media piece of it on social.

19:00And it's the harmony of all of those elements that come together that makes for a very efficient cap for us. Because it's not just about like, here's a product on social, go get it, right? And now, you know, click to buy. It's more about, are your friends talking about it? Are the reviews great? Are the influencers talking about it? Is it something that you're going to want to try out in store? So the marriage of all of that, and, And, you know, the reconciling of all of that happens to then result in really efficient cash for us. And how do you choose, like, what create, you know, who you work with?

19:36Is it, you know, I, you know, when you're in your category, you got to work with influencers. Obviously, you have, you know, you want to get placements in certain publications. But how do you choose now who you want to work with so that it works and speaks to the right customer in the right way? Yeah, I mean, it definitely depends. You know, we talk about performance media in terms of does this particular content creator, you know, do respond to a brief in a way that is really efficacious and she knows the hook, she knows what to say, what is her background. And we make sure that we have certain pillars like a, you know, lifestyle influencer or a beauty influencer or a skin influencer that we have certain categories kind of built out, right, for that performance piece.

20:17for more lifestyle and more earned. I think it has to do with, you know, this it girl factor that we look for where not only do they, you know, have the audience and the engagement, but they also have to love the product naturally because you could tell, right? This authenticity measure is still very important to us. Like, have they talked about us before organically? Have they used our products before? What do they think of the products? Do we have a relationship with them? And so on that really turns this, relationship into more of a science, I would say. And then the brand media piece of it is how do we think about the content that we put out as a brand from a positioning standpoint?

20:59I always tell my team, you know, social media content, all of that is a mix between the candy and the veggies, right? Yeah, you could have the ones that are going to get the engagement, the CPM, the effective CPM rates and all of that, right? And that's the candy for the audience. And that's what they're going to respond to. But we also have to force a certain amount of brand imagery and brand messaging out there. And that's the veggies that we have to mix into the overall media mix. I have to ask just because it's so topical, but you know, we're in a weird time specifically these last few weeks because of an impending TikTok ban.

21:32Like, what are your thoughts on that? Or would it like, if it's, we're not, it's not going to be gone tomorrow, but like, what do you think is going to happen? And how, what could it potentially impact a business like yours? Yeah, I mean, And TikTok is definitely important to us because it is where our consumers spend a lot of their day. I know I myself have learned a lot from TikTok content, you know, but I think there are alternatives out there currently. And, you know, there is the potential that TikTok may be bought by a U.S. company. But I think YouTube Shorts is really interesting. I think Reels continues to be a huge opportunity for us as we unlock that.

22:09Obviously, the content piece of it will have to change based on the platform. We know that certain things may not resonate on Reels as much as it resonated on TikTok. So we'll have to adapt to that. But, you know, for us, the culture of experimentation and this constant wheel of learning is already embedded into our, you know, company. So I'm not too worried about it. We don't use a lot of agencies. We don't use an agency for our influencers. We don't use an agency for our paid media. We do it all in-house. And this muscle for experimenting and learning and experimenting and learning is something that we're used to because it has been such a chaotic couple of years with the supply chain crisis, with iOS 14 and 15, that I have no doubt that we'll be able to experiment and learn.

22:57Have you guys always never used an agency? We used to. And then... You came in? And then I came in. No, I'm a big believer that if you are building relationships, you have to own the relationships. That makes a lot of sense. I feel like there's an oscillation over the years with brands where you'll read articles on Modern Retail or wherever. Brands are doing away with agencies. And then two years later, brands are working with agencies again. What are your thoughts on that sort of, I guess you could call it sinusoidal, where it goes up and down and up and down? Do you think that would happen with you guys?

23:36Or is this in your DNA you want to always in-house it? It's in our DNA. I don't think that we'll ever use the agency for influencers at least or for social or for performance ads. Because I am a true believer, and I've done this through all of my career, that we have to own that relationship. I actually was texting with a couple of influencers this morning because I can, you know, because I'm close to them. Not because they're influencers, but because they're truly my friends. that I've had for the last couple of years. And that closeness means that they're going to think about us when they are presented an opportunity to go on the Today Show, for example.

24:13And also just like that reactive, agile, flexible startup mentality is truly the definition of our culture. So that's important to be able to react very quickly, to be able to pivot if we need to, to do another slice and dice of a piece and try a different hook depending on what the customer is reacting to. But that quick agile piece is very important to us. I wanted to ask, you sort of hinted at this. And I was reading, I was doing some research before, and I think it was a somewhat recent, maybe a year ago, BOF piece that you were quoted in about price hikes. And you said something interesting, which was you said that you had a Slack group with customers where you were, I think you were specifically talking about whether or not to raise the prices or how to do it.

25:02But is that something you've always had, a Slack group of your most ardent customers? This is recent, you know, but it's incredibly important to us. Because what we're able to do is get instantaneous feedback. And obviously, they're going to be supportive because they are our most active customers, I would say. They're our VIPs. But they get early, you know, reads on product. They get early, you know, launches so that we could get instant feedback. Sometimes I ask them questions about like, what do you care more about in terms of a product benefit? And that's instantaneous feedback. That's consumer centric, which is super important to us from a cultural standpoint within Kopari.

25:42But it allows us to have a community, right? That's really what it's about because they get access to us in the product development side. They get access to the content side, what they like better. And to be able to tap into them is such a gift. And how many people are in the Slack? Around 100. Some are more active than others. Interesting. Yeah. I feel like I've heard of this before. There's also that app, and I'm a blank on what it is, but there's another app where the entire point is to do communities. And so I'm always interested in this sort of one-to-one relationship brands have. And so that's a really fascinating way.

26:18I wanted to go into this past year just because, as I mentioned earlier erroneously, but you corrected me, 45 % year-over-year growth. So what do you attribute it to? Was it a specific channel that really popped? Was there a new product that really went well? What was the focus the last year that really helped for that growth? Yeah, I think, you know, for us, when I came on board in 2020, it was really important to re-articulate the assortment, the product assortment for Kabari, and to make sure that we had the right assortment for people to graduate into, whether it be body, sun, or skin. And making sure that our new launches have that lens of efficaciousness as well as luxury.