Caraway CEO Jordan Nathan: Create a distribution advantage

RHO MARKET FIT

Jordan Nathan launched cookware brand Caraway in 2019 with a simple goal: Replace teflon pans. After his own experience overheating a non-stick pan in the kitchen and becoming sick from the fumes, Nathan set out to design a healthier line of kitchen products. In the year since, Caraway has raised $5.3 million in venture capital, expanded into kitchen linens, and launched partnerships with retailers like Crate & Barrel, West Elm, and Food52.

“All of our products are non-toxic and eco-friendly,” Nathan says. “We don’t use any single-use plastic in our packaging. In tandem with our non-toxic mission, our products are high design. We love color, and we treat our products more as art and home decor than items that you cook with.”

That design-centric focus is a key tenet of Nathan’s strategy to stand out in an increasingly crowded field of e-commerce competitors. Here, Nathan shares his playbook for product design, succeeding on Amazon, and building a distribution strategy. His answers have been lightly edited and condensed.

Caraway for Crate & Barrel

Caraway recently partnered with Crate & Barrel on an exclusive collection. What is Caraway’s strategy for distribution — both retail and direct-to-consumer?

“Direct-to-consumer is a great launch platform. But if you actually look at the reasons why brands like Harry’s, Casper and Glossier were successful, it’s that they created a distribution advantage. For them, that advantage was direct-to-consumer because no one had really done it before — it was new. But

for Caraway, our goal is to get Teflon off of shelves with our core cookware set. Really, the only way to do that is to physically go replace what’s on shelves today.

Our approach is highly omni-channel across our website and retailers. We’re not at a point where our own brick and mortar makes sense, but at some point I think it certainly could. Within our site, we’re running Facebook ads, we’re on Google search, and we’re doing all the typical digital tactics. But where digital alone falls short is reaching people when they’re buying at big life moments: Shopping for a new home or registering for a wedding.

These are key moments that a lot of the big retailers tap into because they have a range of products and registries. And a lot of our retail partners reach different demographics than what we see on our site. We use these opportunities to reach new demographics that otherwise we would not have tapped into.”

How do you think about differentiating the products you design for retail partners?

We are a very design-driven brand. Color is a big piece of what we do. The retailers that are great to partner with have aesthetics that are complementary to what we have on our site, but also allow us to differentiate our assortment. For example, many customers go to Crate & Barrel for items with gold hardware, so that was a great partnership to launch a line with gold handles.

As we expand, we don’t want to be a brand that has 20 different shades of blue across 10 different retailers, which many of the large legacy brands do. Instead, we want to have select retailers to launch new assortments that create excitement for customers to go to Crate & Barrel to get something that is different than what is on our website.”

How does Caraway consider product design as a whole?

“The average product development process for most brands is doing a lot of surveys and talking directly to customers. At Caraway, we actually don’t do that as much. We spend a lot more time looking at data across market sizes, online reviews, and using a number of tools to back out into models to find feature sets that people are talking about online. That gives us a good direction of what matters to consumers.

Additionally, what features the consumer wants isn’t always the best choice. I think sometimes it’s good to head in a direction that has never been done before because customers have never seen it before, or solve issues they are having in their kitchen through the product.

For example, when designing our cookware set, we realized storage was a big issue. People didn’t like stacking because it would scratch the pans, or they would lose lids in their cabinets. That was a real pain point for customers, and the idea of them having to go out and buy a separate storage system didn’t make any sense to us.”

You used to manage brands at Mohawk, an e-comm holding company. What are you watching as Amazon Marketplace brands are consolidated?

“I think what Mohawk and Thrasio are doing is an incredible strategy. If you look at the largest CPG companies in the world — Unilever, PNG, Whirlpool, and so on — they’re all cut from the same cloth. They start with one or two brands, and then they start acquiring as they grow. Then they take those new brands and they put them into their platform of retailers. I think in the DTC world, you’ll start seeing more roll-ups and holding companies.

And, I don’t think being a DTC brand versus a marketplace brand is mutually exclusive. I think you can live on both. Amazon in particular is its own beast that is based on search engine optimization. I think we’ll start seeing more direct to consumer brands sell on Amazon, but to really succeed in the Amazon marketplace you have to game the algorithm, and a lot of that is dictated by pricing. So if you’re a brand that is okay with changing your pricing — having it be $12 yesterday and $15 today — it’s a great marketplace to start in. For a lot of the digitally native brands, we’ll start seeing them sell on Amazon once their price points and brands are established.”

What’s your best piece of advice for other CEOs?

“We’ve grown Caraway through partnerships and relationships. A lot of that has just been taking the time to sit down and meet people within different categories and industries. I would highly suggest using 10- 20 percent of your time to network outside of your category because it’s going to be invaluable to the growth of your business.”