Store of the Future   //   May 1, 2024

Eco-friendly brands are taking over big-box garden aisles

The lawn and garden aisle is getting a refresh this year, with eco-friendly brands like Murphy’s Natural bug spray and smarty lawn company Rachio gaining more shelf space.

Murphy’s Naturals, which closed an $8 million Series B in March, is one company aiming to scale its retail distribution nationwide. This season, it’s now sold on Walmart and REI shelves this year after seeing net revenue growth of 45.7% over the past four years.

Mackenzie Donegan, director of marketing at Murphy’s, said the 10-year-old company’s focus on using non-toxic and all-natural ingredients in its repellant has grown steadily as shoppers become more conscious of chemical makeup — it saw 106% net revenue growth in 2020 alone, the year it expanded its Target wholesale reach. The company is working on expanding its product line and manufacturing capability and aims to hit $100 million in revenue by 2030.

“People do care about sustainability when they think about outdoor products,” Donegan said. “There’s higher expectations on both how companies are making decisions and, I think, how consumers are expecting that their product purchases align with their personal values.”

Murphy’s isn’t alone in seeing demand for more lawn and garden products that are more mindful of their environmental impact. Rachio, which makes “smart lawn” care products like irrigation systems that shut off when it rains, now sells smart sprinkler controllers and smart hose timers in Walmart; the hose product is also sold at Costco. On the direct-to-consumer front, lawn care startup Sunday has gained market share with its system of tailoring products to customers based on soil samples.

The growth comes at a time when those in the home and garden industry are hopeful for spring weather conditions that encourage outdoor spending. Springtime is typically the biggest season for the home improvement and garden sector. And it’s often a time when brands roll out new, trending products. Hal Lawton, CEO at Tractor Supply Co., said during the company’s first-quarter earnings call last week that its 500 garden centers so far are performing at expectations, and dubbed 2024 “the year of the garden center,” according to a transcript. “The team has come out of the gate strong to ensure we have a differentiated assortment and availability in time for the planting season,” Lawton said.

But for the companies riding the wave, much of the business is seasonal. At Rachio, chief marketing officer Aaron Pollack said last year’s short spring impacted the timing of its sales, which didn’t start ticking up until April instead of February. But this year, Pollack said demand has already picked up better compared to last year — especially with the wholesale addition of Walmart and Costco.

Awareness, he said, is one of the biggest challenge for eco-friendly companies attempting to compete in the outdoor space. In the case of a garden hose or watering system, many people simply use whatever system comes with their house. Pollack said Rachio’s products can water a lawn with 20% more efficiently than conventional systems. “It’s just getting awareness, not of our own brand, but that the product even exists, that there is even a smart way to water your lawn,” Pollack said.

Rachio has seen 20% year-over-year growth. But the addition of bigger mainstream brands like Walmart shows that the sector has potential for growth, Pollack said. “Adding Walmart was a huge win for us, just so people know that product category even exists,” he said. “The fact that after 10 years they’re finally selling a Rachio product tells you that the smart yard product is starting to become a little bit more in the consciousness.”

From a consumer standpoint, Pollack said he sees more pesticide-free companies cropping up and gaining interest. Rachio has a marketplace-style service on its own website that it introduced last year, which is predicted to drive up to 10% of its revenue this year. It sells about 30 other products on the site, including eco-friendly lawn care items like those from Sunday. “We chose Sunday over dozens of other types of products because they have a lot of organic products that are pesticide-free and much better for the environment, and that’s trending pretty high,” Pollack said.

Pollack said that while Rachio has had existing wholesale relationships — like in home improvement stores like The Home Depot and Lowe’s — the increased interest in better-for-planet products helped grease the wheels in conversations with more mainstream retailers. While there are an average of 17 connected devices in someone’s home, that has yet to spread to the outdoor space, Pollack said.

“I imagine Walmart knows as much as anybody about what consumers are trending toward,” Pollack said, noting a rise in more tech-enabled lawn and garden products at trade shows like CES. “There are smart yard products coming fast and furious… I think you’re going to see a shift happening this summer and next summer.”

Once the deal is inked, though, getting products to stand out to customers can take a concerted effort.

Murphy’s Donegan said that the company recently redesigned its products in a bid to make it clearer what the products do. “It wasn’t necessarily clear we were a mosquito repellent,” Donegan said of the old packaging. “It would take them a few seconds to realize it, and we said, ‘That’s an issue for us and our consumers.’”

The new labels feature bigger, bolder product names. The color scheme uses complementary green hues that help it stand out on a shelf. And, keeping with the company’s ethos, the new product design doesn’t use plastic or dyes. Donegan said the redesign eliminated silica gel desiccants and some plastic coverings on its candle packages. The bottles are also made with more post-consumer recycled plastic.

These updates, Donegan said, are being done not just to help the company clean up its own footprint but to make it stand out to shoppers.

“When you look at tour competition, there’s no one who is doing the ‘better for you’ and having a brand personality,” Donegan said. “Consumers are aware that brands sell stories, and they want the story they’re purchasing to align with their own.”