Original article can be found on SupplyChainBrain.
The history of Athletic Greens
Many startups are born of an entrepreneur’s personal need. So goes the story of Athletic Greens, seller of a popular nutritional supplement health drink.
Chris Ashenden, a New Zealander who appropriately refers to himself as “The Kiwi,” faced a personal health challenge in the form of an inability to properly absorb nutrients. Rather than subsist on dozens of vitamin tablets a day, he undertook with doctors and nutritionists to formulate a green powder, containing some 75 vitamins, minerals and whole-foods-sourced ingredients, which is sold today under the Athletic Greens brand.
With a focus on business-to-consumer subscriptions in the U.S., Europe and China, and product sourced in New Zealand, Athletic Greens got underway nearly 11 years ago. Sales growth was steady in the early days, but picked up pace a few years back “when we started to focus on our brand and how we could give customers the assurances they need in an industry that’s not regulated,” says chief operating officer Ben Smith. To accomplish that desire, Athletic Greens sought certification from NSF International (the National Sanitary Foundation). The organization’s independent audit “helped us establish the credibility and efficacy of the product,” Smith adds.
Previous third-party logistics provider for Athletic Greens was ‘a little basic’
Along with the growth in sales came the need to shore up the company’s supply chain to ensure the uninterrupted flow of product to consumers. Its previous third-party logistics provider was “low-cost, but a little basic,” says Smith.
What Athletic Greens needed was a partner that could help it to scale rapidly without degrading the customer experience.
And that meant acquiring “better transparency of information, access to data, control over how we were presenting orders, and a lot more flexibility.”
Athletic Greens undertook an extensive search for a vendor that could support direct-to-consumer (DTC) fulfillment and an accompanying e-commerce platform. One company that wasn’t on the initial list was DTC specialist OceanX. But a late outside recommendation placed the vendor on Athletic Green’s radar, and the choice was made.
Athletic Greens was drawn to OceanX
Smith says Athletic Greens was drawn to OceanX for more reasons than the vendor’s growing list of DTC accounts. “Their facilities were immaculate,” he recalls. “They showed interest in our product and brand. It put a lot of pressure on them [to participate] halfway through the RFP process. For them to have a shot at this, they needed to be able to turn it around quickly.”
It was good timing for OceanX, which was looking to expand the roster of customers for its e-commerce and subscription-management platform. It had begun life as the technology arm of direct marketer Guthy-Renker. Later, OceanX went looking for outside accounts, which today account for roughly half its business. In addition to Athletic Greens, recent additions include beauty and skincare specialist Glossier, nail polish seller Olive & June, and hair care brand Madison Reed.
The transition between 3PLs
Athletic Greens’ previous 3PL owned the logic routine that allowed it to vary what was sent to customers for promotional purposes. It wanted to bring that capability in-house, at the same time it was implementing an enterprise resource planning (ERP) suite. Once those tools were in place, it was ready to address the fulfillment and distribution part of the equation.
The company’s small SKU count helped to ease the transition from the old 3PL to the OceanX platform. At one point, both providers were holding inventory, which was shifted entirely to OceanX over a period of approximately four weeks.
OceanX operates four fulfillment centers for the U.S. and Canada, two of which — in Southern California and North Carolina — took over Athletic Green’s inventory. Turns are high, with product remaining in the warehouse for between 60 and 90 days. Managing fast-moving stock “has been a little more challenging with the scale and growth we’re seeing,” says Smith. “Inventory is a little bit tighter than we’d like it.”
OceanX and Athletic Greens Partnership
Kevin Gorman, vice president of sales and business development with OceanX, says the two companies worked closely to integrate Athletic Greens’ recently acquired technology, most notably its ERP application from NetSuite.
“They’ve been a great partner with us,” Gorman says. “Since we were previously an internal solution, we wanted to partner up with the likes of a Netsuite. Now we’re building APIs [application programming interfaces]. The friendlier we can make our connections with other providers, the easier it is to onboard new customers.”
Those new connections will allow Athletic Greens to get access to more information on a real-time basis, Smith says, adding that such enhancements are in the cards for the coming months. For the time being, Athletic Greens is continuing to rely on just two of OceanX’s fulfillment centers, although it’s looking to partner with the provider for in-country service in Canada.
“We don’t believe our previous 3PL would have been able to manage the growth like OceanX has,” Smith says. “Now we’ve got better access to carrier rates and improved service levels. We can see in real time what’s going on. And over time, we’ll definitely look to utilize more of their D.C.s.”