On this episode, we talk about sustainability and packaging in eCommerce. It’s a great episode you do not want to miss.

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Welcome to the 2X eCommerce podcast. The 2X eCommerce podcast is dedicated to digital commerce insights for retail and eCommerce teams. Each week, on this podcast, we interview a commerce founder, a founder of a digital-native consumer brand, or a representative of a best-in-class commerce SaaS product.

We give them a tight remedy to give you ideas that you can test right away on your brand so you can improve commerce growth metrics such as conversion, average order value, repeat customers, your audience size, and ultimately your gross merchant value or sales. We are here to help you sell more sustainably.

On this episode, it’s an interview I had with Anaita Sarkar, the CEO and Co-founder of Hero Packaging. They’re based out in Australia but they sell to the Australian market and the world. They pretty much are an eCommerce B2B brand that sells sustainable compostable packaging to other online retailers. The website is approachable. It looks very D2C and B2C or Business-to-Consumer and Direct-to-Consumer, which I asked Anaita about and she gave us the intention behind, all of that.

She gives us her backstory and what she did before. She was an eCommerce entrepreneur prior. She saw a problem that needed to be solved and put together a solution. She has spoken to the smartest people she knew or in her network around sustainability. That was eye-opening. They have over 40,000 customers and these are businesses. They’re pretty much running from Sydney, Australia.

It’s a great convo because we speak beyond what their business does and her story. She also covers a lot about sustainability practices specific to eCommerce businesses and what you need to be doing. Also, how you can make an impact positively by consuming less but still delivering the same value you are to your market. All in all. It was a good convo.

While you’re here, I want to tell you about Commerce Accel. You don’t want to miss it. It’s taking place between the 22nd and 23rd of September 2022. It is the third Thursday and Friday in September 2022. You must go to Commerce Accel. It’s a virtual event that will help you prepare for Q4. It’s simple. We’re expecting over 60 speakers. We’re having three stages. We’re cognizant of your time. It’s only going to be for three hours over two days in three stages. We have ten content streams.

These guys are coming out from the trenches and showing you battle-tested strategies in operations, finance, marketing, media buying creative, and post-purchase experience, the whole shebang. Every single operational aspect of your business, we have you covered on Commerce Accel. Simple. Get your tickets. There are free passes to watch it live on the day. If you want to get the recording, there’s a premium and it’s only £199. These days, it’s about $199. There are multi-buy options. It’s an opportunity you do not want to miss. Head over to CommerceAccel.com. I shall let you enjoy the interview I had with Anaita Sarka, the CEO and Co-founder of Hero Packaging. Enjoy.

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Hi, Anaita. Welcome to the 2X eCommerce podcast.

Thank you for having me. I’m excited to be here.

I’ve been looking forward to this episode, particularly because you’re speaking to the topic of sustainability not just as a thought leader but you’ve seen a problem and you’re putting your money on the table to solve it. It’s been phenomenal thus far.

Thank you so much. It’s such an exciting industry to be in.

You’re based in Sydney, Australia. Hero Packaging, your company, serves both the Australian market and the global market, particularly the US or North America. Is that right?

That’s right.

Do you want to speak a bit about Hero, please? When you started, what you do, and then we’ll dig a bit deeper into you.

Hero Packaging was started in 2018. It was started because I needed a solution to my previous eCommerce business, which was shipping 60 to 80 orders a day in plastic packaging. It was one particular day when I walked into my office, we were waiting for the postman to arrive, and everything was wrapped in plastic. It was that moment when I went home and I wanted to come up with some solution for that business because it was making me feel sick that all that packaging was going straight into the bin and eventually into landfill or the ocean. I felt like I could do something better.

When I started to do my research online, the only options for me were boxes and paper packaging, which were not waterproof. The boxes were too expensive to ship. I wanted something that felt like plastic and acted like plastic but then could maybe break down into nothingness. There wasn’t a solution here so I went about creating that. I wanted to find someone who could make a compostable bag. I had to find manufacturers who could get the starch resin. I need to find manufacturers who could make the mailers.

Eventually, I found manufacturers who can make me a product that I could use in that business. I started using that product in my business and I loved it. It was great because it was withstanding the whole shipping process. I could pop it into my home compost bin and it would break down within a few months. I loved it so much that I decided to ask other business owners whether they would be interested in it. I had a landing page on my website with a Google ad that went there for a week. Within about seven days, we had over 1,000 signups. I thought, “This is a cool business to start.” That’s where Hero Packaging was started.

There’s a lot to unpack there. That’s phenomenal in terms of you pitching yourself on the line wanting to change something that was not good. Off the back of that, launching it with your pre-launch and seeing that interest. I want to go back to who you are. Some people might have seen that and said, “We need to be sustainable. Do not do anything about it.” Our future often is reflected from our past. I want to go back to you maybe as a child in your teen life or adulthood if there were any significant points in time that you think woke up your awareness on sustainability.

My sustainability journey started so late in life. I was born in India and I came to Australia when I was 3. Here, it was all about survival. It wasn’t about like, “Let’s do sustainability.” Sustainability sometimes comes with a bit of privilege. That’s the problem that you want to focus on. The problem that we were focusing on is food, water, and shelter at that point. When I was growing up, it was about survival and making sure we had enough money coming in. I did all the right things by my parents but sustainability was not one of them. It was not something that we were focused on as a family.

When I started Hero Packaging, it was that beginning step. I saw plastic packaging sitting in my office. I saw my kids playing with the packaging. I watched the David Attenborough documentaries. I’d seen all of those things. I knew when I was looking at that plastic that it was wrong. I knew that there was something wrong. It was at that moment that I decided something needed to change.

When I did start the business and I started to educate myself, started to read every single environmental blog out there, and listened to every single podcast about it, I knew what I needed to do. That’s when I started to realize, “I need to be sustainable.” It was at the time of my life when my parents brought me here. I’ve got the pedestal and now I can focus on things like sustainability.

All I did was learn about it. This is such a huge learning curve for me. It’s more than a documentary but it was talking to other people who are much better educated than I am in this space. I have made a huge difference in my home life but also in a business that is predominantly sustainable. Also, now we practice sustainability in everything that we do, too.

I was on a podcast called the eCommerce MasterPlan by Chlo Thomas. She was like, “Nice lights in the background.” I was like, “Yeah.” She’s running a net zero business now. I found that commendable, to be honest. You spoke about your business that you had an eCommerce business, a small business. Do you want to speak a little bit about that business? I’m curious to know what you did prior. What’s been your career journey to Hero?

When I got out of school, I did my cadetship with KPMG. I was studying accounting. I was doing a degree in accounting. I was doing everything that my parents wanted. Indian parents are all about accounting or law. I did that first and I hated it. I was miserable working at KPMG. I didn’t like it at all. I didn’t understand the big picture. I didn’t want to do accounting, I didn’t want to work for anyone else. At that time, starting a business and being an entrepreneur wasn’t a thing when I was growing up. You have to work for somebody else.

I decided, “Maybe accounting is not my thing.” I tried my hand at media. I studied marketing. I did my Master’s in marketing. I worked in a telecommunications firm doing marketing. I realized that it wasn’t the category of what I was doing. It wasn’t accounting or marketing or even the industry I was in. It was the fact that I didn’t want to work for someone else. I wanted to make my own rules. I wanted to control the income I was bringing in. I wanted to be creative but also use my accounting skills to be able to manage my money.

At one point, when I was pregnant with my second kid, I decided that I would give it a go. I was going to be on maternity leave anyway. I thought, “I’m going to start a business. I’m going to see how I go.” What I did was I took a trending product and I placed it online in places that my competitors weren’t. I placed it on eBay and Amazon. I created a basic website and it started to sell fast. I did that for three years before the idea for Hero came about.

Did you sell globally or did you sell just in Australia for the eCommerce business?

It was a global business. The majority of sales were in Australia but we shipped all over the world.

Hence your discovery on the amount of wastage with packaging. Do you want to break down the technology? I love your website, by the way, it’s modern. You have clear navigation and then you have those stories. When you tap on the story icons or circles, they take you to product demos in a very mobile native format. It’s nice and modern. It feels D2C. You’re not selling packages to regular people. How did you come about taking this approach to being casual in doing business?

Because our customers are small to medium business owners, we don’t look at them as businesses, we look at them as business owners. They are human beings. They are consumers. We need them to fall in love with the brand. We know that no matter what happens, customers do not perceive a difference between our products and other products. What we need to do is be the brand that is the go-to brand in the sustainable packaging space. In order to do that, we need to stand out. We need to be clever, bright, bold, fun, and cooler than the rest of them.

For me, my whole thing is that if I want to be a go-to brand, I can’t be a boring B2B brand. What do I know about eCommerce? I know that people want stuff right now. They want instant gratification. They want to feel like they’re on social media all the time. They want to constantly scroll. They want to see user-generated content. I thought, “I can bring that into my website.” The people that we’re targeting are business owners. They are consumers. They are consuming media all the time. We can make it feel like they’re on another fashion brand but there buying for their business.

It reminds me of MOO, the online print and design company. They’re headquartered in London. You’d go to their website and it’s just fun. They sell business cards and office prints. It’s interesting. It’s much more approachable. Do you want to explain the technology? You deeply researched it. When you came across this solution, you were convinced this was the way forward. What exactly happens when they’re compostable? Does that mean I can put it in my compost bin? It’s biodegradable but how does the tech work?

You need two things to work here. You need resins, which are the real materials inside of the mailer. You need someone to be able to manufacture these resins because they don’t work like plastic. The technology behind it is that the film is blown with these resins and then printed and then sealed together with heat. We needed a manufacturer who was a plastics manufacturer, who has done years and decades’ worth of plastic mailer production.

We needed resins that were made from corn or potato starch or any starch or cassava to test those resins with the plastic manufacturing if that makes sense. You needed to have those resins in the mailer. That’s how we were trying to figure it out because the resin manufacturer wasn’t making the mailer. The plastics mailer person wasn’t making the resins. We needed to combine those two together.

Honestly, it was a difficult task because they’re tough to use. We needed to find someone who is willing to work with us to make something. It ended up being that the first iteration, the first sample we got, while we loved it, we tested it in our home compost bin and it didn’t break down as fast as we wanted it to.

What did you use for the first one?

We had a manufacturer of the resins and we didn’t think that the resins were doing their job. Because it’s made of natural resins and then also a synthetic resin, which binds it all together, we needed to make sure that it was the right percentage of each so that it could break down in our home compost bin. We tested it for ourselves because while you can get certifications and all of that stuff, if you don’t test it yourself and you don’t know what you’re using, it could end up being a little bit like greenwashing, which is something that a lot of people do. We’re very aware that as time goes on, people are going to be testing that stuff. We want to make sure that we’re selling the right stuff. In terms of the technology, it’s a two-part process, the resins and then the making of the mailer.

There are two kinds of resins, natural ones and then synthetic ones.

The synthetic one also needs to be certified. We needed to find that, too.

How have you marketed first and then what’s been uptake?

The uptake has been phenomenal. That first Google ad with that landing page, in seven days, was about 1,200 signups. That’s what we got. What we had offered were free samples. We sent out free samples to 1,200 customers. From that point, already, the user-generated content started happening because we were the first to market here. The word of mouth and the virality of this unboxing experience where people were opening up a package and then popping it straight into their compost bin was incredible.

The first marketing we did other than getting those signups was completely organic and it was social. People were tagging us and doing unboxings and talking about how cool this product was. After that, to market it, we did everything that we’re supposed to do with eCommerce. I learned a lot of things in my previous eCommerce business. We immediately set up our SEO. We were focused on it from the beginning knowing that people are going to start typing in compostable packaging, home compostable packaging, and sustainable packaging. We wanted to be number one for all of those things.

You created a demand.

Correct. If we didn’t want to suddenly send out all these packages but when people started googling it, they couldn’t find us. That was completely beside the point. I wanted to make sure we were present everywhere that our consumers were. I started with Facebook ads, Google ads, and SEO and made sure that our organic content was consistent.

The 1,200 people who responded to the Google ads, were they normal customers? Did they turn out to be small business owners?

They were business owners. I only targeted people who are interested in business packaging and eCommerce packaging on Google ads for my keywords. We had a qualified audience and a lot of them are still with us today. In that time, we’ve changed manufacturers. We’ve changed the thickness of the mailers. We’ve changed so many things. Because of the community and because of people who are so focused on sustainability, we’ve retained a lot of customers. We’ve tipped over 40,000 customers.

Congratulations on that. It’s phenomenal, both what you’re doing and the business’s success. You’re a sustainability guru and an eCommerce guru, in my opinion, given your background. Beyond packaging, for eCommerce operators reading this, what are critical areas in their entire operations can they start to think about research and then eventually tackle?

There are lots of small things that they can do. As businesses, we want to tackle the big things. I always say that there are five things that they must do. One is to look at their electricity. It’s the simple stuff, which is turning off your laptops every night, making sure all lights are off in the office, and making sure you’re going into solar as much as possible.

The second thing, other than packaging, is I always ask for packaging to be looked at. Whether that’s our packaging, whether that’s moving to recycled, whether that is the packaging that comes from your manufacturer to you, usually that is wrapped in all plastic. How can you change that? Can you ask them to use hex wrap or paper packaging instead?

The third thing I would say, and this is an important one, is looking at the carbon footprint per product that you sell. One, it’s going to educate you on how much carbon you’re producing and how much you need to offset. Also, you can use that as a marketing tool because you can say to your customers on each product page, “This is the carbon and we can offset it by doing X, Y, and Zed. You can use an app on Shopify called EcoCart and offset.” Finding out the carbon footprint per product is important.

The fourth thing I would say is freight. Are you air shipping? Are you sea shipping? Air shipping is so much in terms of carbon. The fifth one I would say is to look at your staff and look at you. Are you allowing for work-from-home flexibility? That is great for the environment. Traveling into the city or some metro place, all staff every day are doing that. It’s not great for the environment. Make sure you have that flexibility and have that hybrid working approach as well.

Thank you for the tips. With regard to Hero, where in the markets are you in Australia? The normal packaging products essentially compete on price. You seem to own that sustainability niche. Where are you in the markets? Are you challengers or market leaders?

We are the market leader in the sustainable packaging space but not in all packaging. There are still businesses that only go by price and if they only go by price, they will never choose us because we are 30% more expensive than single-use plastic and we will always be more expensive. There is nothing we can do about that.

Producing things sustainably and having a transparent supply chain and using the right resins and doing things in the right way without fossil fuels is always going to be more expensive. In terms of being a market leader, if businesses are looking for sustainable packaging, we are number one. If they are looking for packaging in general and they’re only coming down to price, we are known but we don’t own that market space.

With inflation, given the fact that you’re in the frontline of selling sustainable products, how’s it affected the way we view the sustainability approach? Could you speak to that, please?

Do you mean in terms of the consumer’s point of view or from our point of view?

There’s inflation, which is impacting discretionary income and sellers. Besides luxury product sellers, more sellers are very price sensitive now because consumers are also getting squeezed in most economies. They often say that when you’re in survival mode, you don’t think too much about sustainability.

My question is with all of your experience with Hero, are you seeing any slowdown in demand? Is the retail giving you feedback on what the market is looking for? Not all but many eCommerce businesses are struggling due to the fact that consumers don’t have the same discretionary income they had years ago.

We, of course, feel it. If you are an eCommerce business, for the most part, everyone is feeling it. Everyone can feel the downturn or at least pre-pandemic ways. Everyone was forecasting this huge change in eCommerce and they didn’t predict that once out of it, inflation would be so high. Everyone is being cautious of their spending. Of course, we feel it because we feel the lag effect of it. If consumers are spending less, they buy less from our customers, which are businesses. Those businesses end up buying less packaging from us.

My thinking here is that is okay. That is a natural part of the business. It’s a natural part of life. Things go up and down. You have to stick it out. You have to keep innovating. A lot of the time, businesses go, “No one’s buying from us. We’re going to slow down a little bit.” They get scared and they cut costs. What we have decided to do is to be consistent with everything that we’re doing. We’re not slowing down.

In fact, while there is a slow period, we’re bringing in new products. We’re trying to enter new markets. We know that things will pick back up. These things don’t scare me because I’m in this for the long run. It’s not a short-term strategy. I genuinely want to make a difference when it comes to getting brands to be more sustainable. For me, these downturns don’t affect me. Even though it affects our revenue, it doesn’t affect me as a business owner.

It’s about staying in power. There’s another question around it. Are we over-consuming as a civilization across the world, particularly in Western countries? I speak to some Millennials and Gen Z and some of them have some interesting lifestyles. Upcycling has jumped. Some don’t shop in fast fashion stores despite it being kind to their wallets. It’s been it’s interesting.

I wonder what will be on the other side. I was wondering what the ripple effects are across the board, which is interesting. Those are the main questions I have. Before I let you go, because you’re such a phenomenal founder, I want you to participate in our lightning round. It’s a set of about six rapid-fire questions. You need to use a single sentence to answer them. I tend to ask special guests. Would you be happy to try it?

Of course, yes.

What advice would you give yourself five years ago?

Build a network rather than hiding behind my product. Go out there and talk to people and ask questions and ask for help because a lot of the time, people want to help.

I’ll take that, too. Are you a morning person?

Yes, I am a morning person.

What does your morning routine look like?

I wake up, get the kids ready for school, and go for a 2 to 3-kilometer walk with no phone.

What are two things can’t you live without?

My family and my phone.

What book are you reading?

How Brands Grow and how to build brand assets.

The final question is what has been your best mistake to date? A setback that’s given you the biggest feedback?

When we decided to use a new manufacturer and they took our deposit and then never produced our goods and they still owe us $30,000. Learning about business quickly and learning that not everyone does business in the same way.

That’s true. Anaita, it’s been a pleasure having you on the 2X eCommerce podcast. For people who want to find out more about Hero Packaging, it’s HeroPackaging.com.au. Anaita, do you hang out on any social media sites like LinkedIn or Twitter?

I’m on basically everything but you can find me on LinkedIn or Instagram, which is @Hero.Packaging.

Thank you for being on the 2X eCommerce podcast.

Of course. I had a great time. Thank you.

Cheers.