COVID-19 forced Thankyou to rebuild its supply chain, but it also saved the business
While it destroyed many businesses, COVID-19 generated a major spike in the demand for a product that Thankyou produced — and it saved the business.
In early 2020, social enterprise Thankyou received an unexpected $1 million bill that almost shut its doors for good.
Thankyou had just spent two years completing a new strategic plan, known internally as Project Salvation. It was a deep examination of the company’s fundamentals, co-founder and managing director Daniel Flynn says, and had led to the business walking away from its founding product — bottled water.
It currently sells soaps, shampoos and baby care products, the profits of which are redirected to charity.
“They say growth covers a multitude of sins, and it’s true,” he said.
“Project Salvation was about looking at our fundamentals because we were noticing patterns. Thankyou was really good at launching stuff, really good at getting a certain amount of market share, but would hit a ceiling and couldn’t break through.
“It happened over and over.”
For years Thankyou had wrestled with the sustainability of its water product, but after examining all available options for improving that sustainability, the team ultimately decided that none would work.
“It was like ok cool, let’s de-launch our genesis product,” Flynn said with a laugh.
“Wow, what a risk, but let’s focus on the categories where we are working really well. Let’s rethink how we’re going to build the future of the organisation, how we’re going to enter other countries.”
So when that unexpected bill arrived in January 2020, Thankyou was already in a precarious position.
“We’d overcharged a big customer, and they’d overpaid,” Flynn said.
“That is strange, on our front, and on their front. And it happened over a long period of time. So it was just bizarre. But it hit us at a really bad time.
“We’d spent 2018 and 2019 working on the strategic plan, but we’d also felt the effects of the market softening and competition was battering us on every front.
“But we thought we had an unstoppable plan. Then the bill hit.”
Around half of those working at Thankyou lost their jobs, and it still looked like the organisation might not survive.
“That was the end of the runway. In our hearts, Thankyou will never stop, but at the time we were realising on paper this thing could stop,” Flynn said.
An unlikely saviour
Two months later, Australia was dealing with the beginnings of the COVID-19 pandemic. While it destroyed many businesses, as demand for hand sanitiser spiked, it saved Thankyou — even if it did force the organisation to rebuild its supply chain.
“We had hand sanitiser, so we could supply all the retailers, and we also supplied some pretty big government contracts. We made $10 million clear profit, that we could then give (charitably) within the following few months.”
Two years on, the pandemic continues to influence Thankyou’s strategy, though not in a positive way. Now there’s even fiercer competition among handwash and sanitiser producers.
“The pandemic means everyone who wasn’t in handwash and hand sanitiser is now in the space,” Flynn said.
“There’s now a lot of deep discounting. A lot of our competitors are now sold 70-80% of the time on promotion, so the value has just dropped out of the category. So we are feeling the fire of that burning platform of those categories.
“But we’re full of hope for what’s coming. If that was all we did then we’d just want to pack up because it’s so relentless.”
What’s coming is a big launch year in 2023 and an evolution of the plans Thankyou laid the groundwork for with Project Salvation but were scuppered by the pandemic. Flynn and the team aren’t disclosing those plans yet, but it will involve expansion into new categories, and perhaps even new markets.
“Next year is a huge year for us, we’re launching a new product, we’ve got some old stuff coming back out that’s been reimagined, and we’ve got a new chapter dropping in our series of books,” Flynn said.
“Inside Thankyou, we have never had as much hope, energy and excitement. Next year and the year after people will start to get a sense of ‘oh gosh they really are going for it’.”
