A bit over a decade ago, Russell Gong and Achal Patel were at a team dinner at Deloitte, where they each worked. At this dinner, attendees were asked the query, “What is your life’s purpose?”
Gong said he hopes to build something around social innovation and climate change. Patel said his goal was definitely something in the healthcare space. That was quite an icebreaker, but fast forward to today and the combination of their two answers accurately reflects the mission Health Office.
The company, which was founded in 2018, goals to reduce the billions of single-use plastic bottles wasted in pharmaceutical products each 12 months. The company sells over-the-counter and prescription medications in reusable glass bottles with refills packaged in compostable bags. They also work with existing healthcare firms to help develop sustainable solutions.
Last 12 months, Cabinet launched in greater than 500 Target stores nationwide, debuted its DTC prescription service Cabinet Health Rx, which offers the same low-waste system for pharmaceuticals, and partnered with pharmaceutical company McKesson to provide sustainable packaging to their private brand Foster & Thrive. All this meant that Gong and Patel were among the finalists of our list of Entrepreneurs of the Year 2024 – revolutionary leaders.
The problem of waste in the healthcare industry is obviously a huge problem. How to approach this problem without falling into the trap of its scale?
Gong: One answer to how we approach this challenge is really to try to understand product market channel fit, but also to use our mission as a backdrop to prioritize the direction of the company, not only revenue. For entrepreneurs at the starting of their journey, one of the things we might really advocate for is market fit. When you begin explaining where the real social problem is, the company will follow.
Patel: It is also helpful to acknowledge and realize that there are exceptional people working around us in all other features of climate change. We can solve some of those problems as a collective. It doesn’t have to be a concept where one entrepreneur saves the world. This is a really effective way to stay optimistic.
Late last 12 months, Cabinet launched 14 SKUs in over 500 goal locations. What did you learn from this launch?
Gong: The experience of working with retailers and distribution is all the time a lot of fun for us because it starts with how much impact we will make as a partnership. We think about it in easy kilos of plastic – how many kilos of plastic have we reduced? Thanks to Target, we have reduced over 50,000 kilos of plastic in just one summer, which is a huge amount for just a few months of operation. This was our first step towards achieving our mission and market fit.
There have been some critical moments since then [learnings for] sell and influence, which were really essential to understanding how to market and distribute. What’s essential is how does this translate into other parts of our business? What we actually learned is that guests are purchasing a refillable system [in store]they then continually buy online and return to the store. This is not the case with other retailers.
I would like to talk a little bit about the Sustainable Swap Tour, your campaign with Target that included 10 local activations. What was the purpose of this trip?
Gong: Our sustainable substitute trip with Target was a clear example of our realization that simply having latest packaging for an existing category is not enough. We need to educate, advocate and engage local communities in sustainable development activities, otherwise it will simply be too top-down. The goal of the tour was to reach the £50,000 plastic goal, but we also really wanted to make sure there was local engagement that may provide meaningful activations and support beyond just selling products and moving units.
Some people in the US are quite desensitized to waste or just don’t fully understand how much plastic goes into recycling. How do you approach different levels of understanding and commitment from potential customers?
Gong: When it comes to the situation our consumers find themselves in, they know we have a lot of labor to do [to address plastic waste]we have several perspectives. Number one is recognizing that the issue of plastic waste is mission number one. The nuance to this message, nevertheless, is that we don’t need to point fingers at the healthcare industry, doctors, or even existing players. We have a very clear view that the healthcare industry is trying to do the right thing, but in reality it is more stuck in its size and inertia and needs government and other partners to innovate inside it. While we recognize this as a problem, we would like to provide a productive solution to large pharmaceutical firms, healthcare distributors, and existing brands and retailers.
The second perspective, for bizarre people, starts with a very extensive educational map. Some people are still learning about the plastic problem. Some people are very apprehensive about this for their children and others. Our position is to start with people, wherever they are. That’s why we have different products that enable them to do this depending on where they are. Our compostable, refillable system is intended for patients and customers who are more sensitive to the concept of plastic waste and are trying to find a very sophisticated model to reduce it. We are working with our partners on an aluminum offering that will just be a simpler route to individuals who want to get involved in the system. And last but not least, we also offer content and curation services to help people think about it.
What are the biggest challenges you have faced
Gong: The biggest challenge we face is the speed of solving the mission, the speed of the inherent material reduction, but also the speed of how many more partners can we engage, can we connect, can we encourage, can we learn? The biggest challenge we see is how can we be sure that we reach more categories, more distribution channels, more partners and faster?
Patel: One of the things that has been a hurdle to overcome along the way – and I think this is something that a lot of entrepreneurs struggle with, especially when they’re working on sustainability – is having to pay more for a sustainable option. Whether you are a large company or an end consumer, at some point this becomes a barrier to adoption. One of the things that we have all the time been very methodical about as we grow our business is ensuring that we have the right products and the right channels for the right customers based on how effectively we will price our products based on the volumes that we deliver and at what stage innovation we are finding. But I think we get energy from that, truthfully, knowing that over time we will make sustainable products as expensive or cheaper than plastic alternatives. For me, this is something that drives me every day: How do I make this completely obvious so that it doesn’t have to be a alternative that the consumer has to make in the retail store?