Running Through the Legs of Goliath

At about $32 million in annual sales, according to Information Resources Inc., Method is still a rounding error to P&G. But Method's impact has been remarkable. It's pushed its way onto shelves everywhere from Target and Wal-Mart to grocery and drug chains and high-design retailers such as the Conran Shop (while keeping its prices competitive with P&G's). Of the 15 categories in which IRI tracks Method's efforts, the company had triple-digit growth for the most recent year available (ending October 30) in six; it had double-digit growth in another six. Its competitors, meanwhile, have had mostly tepid growth or even declines in those categories (albeit on much larger sales). "Method was way ahead of the game in romancing some of these products and making them fit into the décor of a house," says Tom Vierhile, director of Datamonitor's Productscan Online, which tracks new consumer products. "Everyone's paying a lot more attention to them."

That higher profile has put a lot of pressure on Method's latest launch. "Method has to enter a category with a huge disruption," says Alastair Dorward, the company's CEO. "The story cannot be copied overnight or eroded by existing [companies]. It has to have disruptive packaging, ingredients, and fragrance."

Not only is this Method's biggest launch, it's also the most complicated; materials are sourced from China, Portugal, and Mexico as well as the U.S. The six new products--the room spray, a battery-operated air freshener, a plug-in air freshener, and a soy candle, plus refills for both of the air fresheners--need to be on the shelves in 1,433 Target stores on February 12. Says Dorward, "We need to really pull something great out of the hat."

Then again, no one expects the launch to come off without mistakes. In fact, at Method, trial and error is part of the plan.

The Method story starts in a postcollege crash pad at the corner of Pine and Franklin in San Francisco. Ryan and Lowry had grown up together in Grosse Pointe, Mich., and had kept in touch while Ryan worked in advertising and brand consulting and Lowry, who'd studied chemistry at Stanford and has twice placed third at the Olympic sailing trials, wrote environmental position papers for Washington's Carnegie Institution. They'd reconnected on a Detroit-San Francisco flight after Christmas 1997. It turned out that Ryan needed a place to live and one of Lowry's frat brothers had just moved out.

Between drives up to the mountains and tossing back beers on the orange velour couch in their living room, the two started a series of conversations about what was cool and uncool in the world. Those conversations morphed into a discussion of what products had been reinvented with a design perspective--computers, for example--and what products hadn't. Perhaps because both Ryan and Lowry had come from entrepreneurial families--the Ryans and the Lowrys both ran auto-supply-related businesses in Detroit--this quickly turned into a discussion of what categories might be ripe for an update. Eventually, they settled upon...cleaning fluids.

Lowry still recalls the date and time of Method's first sale: February 28, 2001, around 6 in the morning. With about $300,000 culled from friends and family and their own savings, he and Ryan had lined up low-volume outsourcers around San Francisco to make their first products: four cleaning sprays for kitchen, shower, bath, and glass, all scented and packaged in clear bottles. They'd filled a few bottles with their formula and were stalking grocery-store managers at dawn. The stalking paid off at a Mollie Stone's in the suburb of Burlingame. "The manager of the store just liked the way the packaging looked and liked their attitude," says David Bennett, the co-owner of Mollie Stone's. "And it was a product that the big companies, the chains that we compete against, didn't have. We felt it looked like an upscale product that would meet our consumer demands, and we went ahead with it." On the spot. Which meant the grocer had placed an order for a product that technically didn't exist.

Lowry jumped in his '91 Explorer, raced back up to San Francisco, grabbed Ryan and pails and formula and bottles and labels, and they started filling the bottles by hand and stuffing them into cardboard wine boxes. They were en route back to the Mollie Stone's by the afternoon. "On the way we bought one of those little invoice books with the carbon copy, like when you go to the takeout food place," says Lowry. "And I literally wrote out the terms: net 30 days, each item, and the price, and had the store manager sign it and give us a copy--and that was our initial revenue."

 PREV  1 | 2 | 3 | 4 | 5  NEXT