Avocado Green is counting on it. The mattress brand launched in 2016, at a time when hundreds of direct-to-consumer bed-in-a-box startups like Casper, Purple and Leesa were flooding the internet with ads (and their bank accounts with cash). In 2018, mattresses were a $29 billion market, with at least 189 different startups competing to own the way we sleep, spending millions on social media ads and paying mattress bloggers for positive reviews. But Avocado had a distinct approach. While other brands focused on price or convenience, Avocado wanted to sell an all-organic mattress. To do this, he had to build an entire supply chain from scratch, from buying a factory in Los Angeles to co-owning sheep and cotton farms in India.
But this slow and laborious process seems to be paying off. Avocado Green’s mattress received the highest rating from Consumer Reports this year. And while some of its competitors have faltered and others have gone out of business altogether, Avocado is now booming: its workforce is hitting 800 (and growing); and this year it is opening 3 new stores, bringing its fleet to 12. Avocado’s success reveals that consumers are increasingly looking for sustainable, non-toxic products in all aspects of their lives beyond food and fashion.
The foam problem
When memory foam hit the market, it seemed revolutionary: the material was invented for NASA spacecraft seats in the 1960s; and in the 1990s, TempurPedic incorporated it into a comfortable, pressure-relieving mattress. Before that, they were largely made of metal coils and layers of cotton and wool. Soon other brands, from Sealy to Beautyrest, were rolling out their own foam mattresses. And over the past decade it’s become even more prevalent, thanks to Casper and Purple realizing that with memory foam they could compress a mattress, squeeze it into a box, and ship it direct. at the customer’s door. For the first time in history, consumers didn’t have to go to the store to choose their mattress and then have it delivered by moving truck.
Mark Abrials, who co-founded Avocado Green Brands with three friends, has watched the explosion of direct-to-consumer mattress brands. But it also occurred to him that no one really thought about how unsustainable and toxic foam mattresses are. For one, the foam is made of polyurethane, which is plastic. The material is mixed with chemicals that allow it to be whipped into a foam before being molded into a mattress. At the end of its life, it will end up in a landfill, where it will not biodegrade, but contribute to the plastic pollution crisis. Additionally, the Sleep Foundation says the toxic fumes from foam mattresses can cause breathing problems and nausea in some people, so they recommend airing them out for several days, a process known as outgassing.
“It was a very crowded market space, which was certainly daunting,” recalls Abrials, now CMO of Avocado. “But it was also clear that there weren’t many options for mattresses made from natural materials. So there was also an opportunity.
From Farm to Mattress
Of course, the lack of natural mattresses on the market also meant that there weren’t many factories that specialized in using the kinds of materials Abrials had in mind. The founders located Brentwood Home, a 35-year-old factory in Los Angeles that made its mattresses from latex, extracted from the rubber tree. So in 2016, Avocado placed its first order for mattresses, made from latex, cotton and wool, and launched a website to sell them. And just like other startups, Avocado shipped the mattresses directly to customers in a box. “Would people buy it? We didn’t really know,” recalls Abrials.
Turns out they did. Thanks to predecessors like Tuft & Needle and Casper, which had been selling since 2012 and 2014, respectively, consumers had grown accustomed to shopping for mattresses online, and Avocado’s stood out for its environmental friendliness. Avocado immediately ran out of inventory and placed more orders. But Abrials was not completely satisfied with the product. While Avocado’s materials were natural and would biodegrade at the end of their life, he thought it would be best if they came from organic farms. A lot of latex and cotton is made using harsh pesticides and other chemicals that pollute soil and groundwater with toxic chemicals. The founders decided that the best way to control the manufacturing process was to own the factory; So in 2018, Avocado acquired Brentwood for an undisclosed sum. And together, the two companies tried to figure out how to make an all-organic mattress. “Owning the factories allows us to keep a close eye on quality,” says Jessica Hann, senior vice president of brand marketing sustainability at Avocado Green Brands. “But it also allows us to be more transparent with our customers, including tracking our carbon footprint.”
Avocado hired sourcing experts, and as they searched for organic suppliers, they found small family farms in India that matched the company’s values. But rather than just sourcing materials from them, they decided to invest in owning them. Today, they are co-owners of a certified organic latex factory in Kerala, southern India. They also co-own a sheep farm in the Himalayas, certified by the Responsible Wool Standard, where they graze 200,000 sheep on approximately 100,000 acres of land. The sheep are shorn every year and all the wool is processed and then sent back to Avocado’s factory in Los Angeles.
Starting at $1,399, Avocado’s mattress was more expensive than many of its peers, whose mattresses retailed for as little as $399. But since the brand was able to expand its operations, it was able to release a cheaper mattress, with fewer components, which starts at $799. It’s also launched a luxury mattress that’s softer and includes more layers of material, starting at $2,799, allowing it to tap into the lower and upper segments of the market.
Say no to VCs
As the mattress wars escalated five years ago, startups made headlines for the massive injections of venture capital they received. Casper, in particular, stood out for raising $339.7 million across five rounds of funding, which led to a valuation of $1.1 billion in 2019. But Abrials says Avocado’s success has a lot to do with refusing to take venture capital funding. The company was fully funded by the four co-founders themselves, several of whom were entrepreneurs who sold their previous businesses to launch Avocado. “We liked the independence we had to make choices that were right for us, rather than trying to make things look good on an investor’s bottom line,” he says. “We had seen investors wanting to come in, then wanting to leave a company, after a set period of time.”
But despite all his funding, Casper was unable to build a profitable business. In 2020, it had a disappointing IPO after its financials revealed it was losing money on every mattress sold, largely because it was spending a third of its revenue, $114 million, to marketing. Analysts pointed out that Casper didn’t actually have a single product, so it acquired customers largely by spending money on social media marketing. And as the market grew increasingly crowded – with at least 178 different mattress brands online by 2018 – it became more and more expensive to buy ads. “I think VCs were applying the software model to accommodate legacy products,” says Abrials. “But creating a product, especially a unique product, is very difficult. Our materials come from complicated places; it takes a lot of people to make physical things; mattresses are difficult to ship. Sometimes I think we must be really crazy to do what we do.
This year, Casper announced it was taking the company public, at less than half its IPO price. It’s not the only struggling mattress brand. Purple’s CEO resigned last year after disappointing financial results. And some startups, like Tomorrow Sleep, a bed-in-a-box spin-off owned by Serta Simmons, shut down completely last year.
A zero waste factory
Although Avocado does not share revenue, it appears to be growing rapidly. It now has one million square feet of manufacturing space in Los Angeles, 800 employees and 12 physical stores, in locations including New York, Marin County, California and Georgetown, DC. we earn every year and reinvest it in the business,” says Abrials.
After six years in business, the founders of Avocado have big dreams for the future. Beyond mattresses, the brand now sells sheets, towels, bed frames, sleepwear and even skincare. In some cases, such as beauty products, the company partners with other suppliers. But it tries to make many of these new products, like furniture, in-house.
Abrials is now determined to try to create a zero waste factory, where no piece of wool or piece of wood is thrown away. Currently, the brand is salvaging all of those leftover materials and turning them into new pieces of furniture, like a $599 coffee table or a $109 vase. “We ask our workers to save every little piece of wood we cut and figure out what we can do with it,” he says.
But in the end, he thinks that’s how the brand will succeed. “It’s always a crowded market,” says Abrials. “Sustainability is how we can differentiate ourselves. So we have to keep pushing the bar.