CEO Kelly Vlahakis-Hanks in her California soap factory.
Credit: John Gilhooley, courtesy Earth Friendly Products
“Skin is your largest organ,” says Kelly Vlahakis-Hanks, CEO of Earth Friendly Products. “If you’re washing it 20 times per day you want something that’s not going to irritate. If you have harsh products, you’re not going to want to use them, and that makes you more susceptible to getting ill.”
It’s not just Ecos. Every soap maker seems to be enjoying a coronavirus demand bubble. Tim Rose is an EVP at Costco, where he’s worked for 36 years sourcing everything from soap to fruit to gasoline. “We’ve seen panic buying before, but nothing can beat this,” says Rose. “We’ve never sold as much soap.” There’s good reason why soap is the most basic and effective anti-virus countermeasure — its amphiphillic nature means that one end of a soap molecule is hydrophillic (likes to bind with water) while the other is hydrophobic and prefers to bind with proteins and lipids, like those protecting and encapsulating viruses and other pathogens.
Ecos and many of EFP’s other products are certified “Safer Choice” by the EPA. They’re biodegradable, with no petroleum-based surfactants. Instead the company uses coconut oil sourced from sustainable plantations – Vlahakis-Hanks recently visited one plantation in the south Pacific islands of Vanuatu. “We’re PH-neutral,” she says. And the Ecos dish soap has an ingredient to treat eczema. “You don’t want the skin breaking down. That makes it more vulnerable.”
As soon as the coronavirus lockdown orders began, the Huntington Beach, California-based EFP got its factories in California, Illinois, Washington and New Jersey declared essential businesses. Straining to keep up, Vlahakis-Hanks has added second and third shifts. Even so, they had to inform an e-commerce partner that they wouldn’t be able to fulfill the flood of 5,000 soap orders per day. As a family owned company, EFP doesn’t disclose financials; Forbes estimates annual revenues to be in the neighborhood of $150 million.
The company was founded in 1967 by Eftychios Vlahakis, known as Van. He was born in Crete, lost his father in a World War 2 concentration camp, and in 1953 at age 18 emigrated to Chicago. He studied chemistry at Roosevelt University and after school got a job formulating cleaning products. Exposure to harsh chemicals used in his work caused him headaches and skin irritation, so Vlahakis (who died in 2014) set out to make his own kinder, gentler cleaning products.
“He was way ahead of his time,” says Rick Fully, who met Vlahakis in the 1990s and has served on the company’s board. “Van understood that chemicals can be very powerful. You need to use the proper chemical at its proper strength.” The philosophy behind growing Ecos was simple, says Fully: “What else can we clean without messing up the environment and hurting everybody.”
Rose, at Costco, got to know Vlahakis when the chain began selling Ecos. “He was not the typical loud businessman. He cared. About skin, and about people.” In 2013 a movie was made of Vlahakis’s rags-to-riches life called Green Story; it features Malcolm McDowell as a bad guy conniving to force the Vlahakis character to sell his company. Kelly Vlahakis-Hanks was played by Shannon Elizabeth (American Pie 1 and 2). Her husband Eric Hanks says the movie “captures the essence” of his father-in-law, who wasn’t interested in parting with the enterprise he had spent nearly 50 years building, and certainly wasn’t interested just in making money.
Kelly had been groomed by Van to take the reins for nearly a decade, and she walks the walk. It’s been nearly 7 years since EFP went carbon-neutral and installed solar panels on their roofs. Now that the systems are paid off, they get free, green electricity. The company gives employees grants to offset costs of installing solar at home or to buy plug-in vehicles. And there’s a bonus for living within a certain radius from work. Starting pay is $17 an hour. Costco’s Rose says he’s noticed when he has visited factories that “workers are happy and proud of what they do.” Not only does it cost a lot to train new workers, says Vlahakis-Hanks, “we want to keep people. We’re proud of our corporate memory.”
Some memories may be best suppressed. When Van died in 2014, legal wrangling began between Kelly Vlahakis-Hanks and her two elder half-siblings — an estranged half-sister and John Vlahakis, who for years had served as an officer of the company. In 2015, John pled guilty to a federal charge of tax fraud pertaining to his use of company credit cards, and paid $300,000 in restitution. That same year John attempted to persuade Kelly to sell Earth Friendly Products and the Ecos brand in a deal that would have valued the company at $150-200 million.
Workers on the Ecos line.
Courtesy Earth Friendly Products
The siblings settled their soap opera in a 2015 arbitration. Kelly now has firm control over the company, which is about the same size as arch-rival Seventh Generation was in 2016 when Unilever bought it for $700 million. The biggest player in soap, Colgate-Palmolive CL , generated $2.4 billion in net income on $16 billion in 2019 sales last year and recently donated 25 million bars to help in fighting coronavirus.
Right now Ecos factories are running at 30% faster rate than previous peak and making up for social distancing requirements by running third shifts. Last week the company did shut down operations for a day to do a deep cleaning and give workers a chance to rest.
They’re inspired by new demand emerging in unusual markets. A retail partner recently introduced to the Chinese market the Ecos baby-friendly detergent (certified “Safer Choice” by the EPA), which features the “Disney Baby” marketing seal of approval. A 50-ounce bottle of the stuff is about $10 online, but in China it sold out so quickly there was none available at any price. Rather than disappoint discerning new parents — who are having 15 million babies a year in China — the retailer placed an emergency order to Ecos. “They wanted more so bad we airfreighted laundry detergent,” says Fully.
A new Ecos soap innovation will help reduce those freight costs. Called Ecos Next, it’s a dehydrated laundry soap that comes in a box, weighs almost nothing, and looks like little sheets of paper. It’s the Ecos answer to detergent in “pod” form, as popularized in recent years by Procter & Gamble PG ’s Tide. Because of the more delicate chemical makeup of Ecos soaps, they haven’t been able to figure out how to put it in a pod, so instead they dry it out into sheets, one per load. The next Ecos line extension: cleaner, gentler hand sanitizer. Says Vlahakis-Hanks, “We’re hoping that once this is over we will end up with customers we never had before.”