Everyone likes a clean slate, especially the co-founders of a cleaning products company.
That’s what the co-founders of Branch Basics, Allison Evans, Kelly Love and Marilee Nelson gave themselves, though they knew it was a risk. They shuttered their startup in December 2015 — right after achieving $2 million in annual revenue for the first time — and kept it closed for a year and a half.
The trio of co-founders launched Branch Basics, a plant-based cleaning products company, in 2012. Nelson, previously a full-time environmental consultant, knew and liked a supplier who made a concentrate that you’d add water to at home, creating your own cleaning spray. The group reached out and struck a deal to license it under the Branch Basics name.
As the startup gained traction, customers raised concerns about its vague ingredients label, which only said the concentrate was “plant and mineral-based.” U.S. federal law doesn’t require cleaning companies to disclose the ingredients in their products, and the supplier chose to keep the formula’s ingredients proprietary — even from the people selling it, says Nelson, 73.
The co-founders say they believed the cleaning concentrate was safe, but grew unhappy with the lack of transparency from the formula’s owner, and they didn’t want to sell a product their customers couldn’t completely trust. Instead of developing a new formula in the background, they halted all sales in December 2015.
Evans and Love earned money by babysitting, they say. Nelson returned to her environmental consulting work. They reached out to chemists at co-manufacturing facilities who could help them create a proprietary formula that they’d own, they say.
“I was just thinking, ‘Gosh, we have no chemistry background. We have no business trying to figure this out [on our own],’” says Evans, 39.
Branch Basics started taking pre-orders for its own proprietary formula in August 2016, and fully returned to the market in June 2017. Six years later, in 2023, the company brought in nearly $34 million in gross sales, according to documents reviewed by CNBC Make It.
The 30-employee company’s 2024 financials aren’t finalized yet, but Branch Basics is profitable, says Evans.
‘We have something here’
Love and Evans met in college, at the University of Texas at Austin. In 2008, the summer after they graduated, Nelson — Evans’ aunt — invited them to stay at her home in Texas’ Hill Country region.
Evans struggled with back cramps and polycystic ovary syndrome in college, and living in Nelson’s chemical-free home helped improve her health, she says. Her experience inspired the trio to start an online retail store called Three Branches Healthy Living, dedicated to selling chemical-free home and body products.
After a few years of running their online store, they decided to launch a house brand. They sold Branch Basics’ cleaning concentrate online and in a few mom-and-pop stores, siphoning it from large barrels into individual bottles by hand, Evans says.
When the Dallas Morning News featured the company in a June 2013 article, they realized, “Whoa, we have something here,” Evans says. They decided, “Let’s go all in.”
In 2014, the co-founders raised $1 million in funding to rebrand and purchase more inventory, Love says. But customers were already complaining about the ingredients label, and potential investors said they’d rather invest in a company that owned its own product, says Love, 39.
“We tried to convince the formula’s owner to reveal the exact ingredients,” Nelson says, adding: “Our mission was to teach people how to create a healthy home and read labels. This felt counter to that.”
‘The biggest risk we’re ever going to take’
When Branch Basics shut down, it let go of its eight employees at the time. Both Evans and Love had children the following year, adding to their financial pressure and stress about ever relaunching the company.
“I’m the first to admit I was the doubter. I was like, ‘We cannot do this,’” Evans says, adding: “When Kelly and I each just had our babies, I’m living with my in-laws. We [had] no money.”
“It was so stressful,” says Nelson. “Oh my, it was so stressful.”
After connecting with multiple chemists, they tested hundreds of different concentrate formulas — sometimes on themselves, to ensure they didn’t irritate their skin — before finding one they liked, says Love.
Taking pre-orders — thousands, Nelson says — gave the trio enough capital to place a purchase order and restart their business with “minimal money up-front,” says Love. They brought on a new CEO and CFO, who bought into the business: The five co-owners each own a little under 20% of the company, with the remainder belonging to friends-and-family investors, Nelson says.
They invested in social media marketing, inking partnerships with social media influencers and building an Instagram presence that’s now surpassed 500,000 followers, Nelson says. Owning their formula allowed for higher profit margins, she adds.
In 2022, the company expanded its product lines to include other cleaning supplies like laundry detergent and dishwasher tablets, which played “a big role in our growth,” says Nelson.
Branch Basics remains a small player in a worldwide household cleaning products market worth nearly $40 billion in 2024, according to a Research and Markets estimate. Consumer goods giant Unilever, which owns the eco-friendly brand Seventh Generation, brought in more than $14 billion from its global portfolio of home cleaning products last year.
The Branch Basics co-founders aren’t content with their relatively small slice of market share, they say. The company began its first brick-and-mortar retail partnership, with Target, on April 27 — a deal that creates a new set of challenges, from competition on shelves to a recent foot traffic drop-off in Target stores, as Modern Retail reported on April 29.
“It’s the biggest risk we’re ever going to take as a company,” Branch Basics CEO Tim Murphy told Modern Retail, adding: “If we become known as a great direct-to-consumer brand but can’t translate it to retail, then our company’s only worth so much.”