Popular reusable coffee cup label SoL Cups will end its Australian operations on Thursday, after what founder Rebecca Veksler described as a household spending boom that benefitted some businesses far more than others.
Launched in 2016, SoL Cups offered a range of reusable coffee cups and glass bottles for consumers, and bespoke branded products for major corporate partners.
But Veksler this month announced SoL Cups will wind up, seven years after she started the brand as a 21-year-old entrepreneur.
“Together we saved millions of single-use coffee cups from landfill, and together we made conscious choices to do better for the planet, and to inspire those around us to do better too,” she told followers on social media.
Speaking to SmartCompany, Veksler detailed what she saw as the cause of the company’s downturn: collapsing sales through the COVID-19 pandemic, followed by major consumer spending growth which obscured the hardships faced by some retail brands.
COVID-19 lockdowns dented consumer faith in highly tactile reusable products, particularly coffee cups designed to be handed between customers and baristas on a consistent basis, she said.
And while SoL Cups had an e-commerce presence, it favoured in-person stockists like book shops and gift stores, all of which reduced its trading capacity through the strictest public health measures of 2020.
“All those boutiques, those beautiful homeware stores and lifestyle stores that would have stocked us, suddenly put a freeze on what they were spending in terms of their purchasing power, because customers just stopped buying things, and everybody reverted to purchasing online, essentially,” she said.
When shopping did resume, it did so in force.
Retail spending and postage data shows Australians drastically increased their e-commerce spending on physical goods in 2021 compared to 2020 levels, with elevated spending carrying on deep into 2022.
Yet those figures don’t tell the full story, Veksler says.
“There was a boom in an e-commerce perspective, but in a very particular niche thing: home, lifestyle, beauty, personal care, all of those gorgeous things we were doing and enjoying when we were at home,” she said, leaving products like hers, designed for on-the-go office use, lagging behind.
Not only that, but SoL Cups’ allegiance to its network of in-person retailers also hampered its post-lockdown recovery.
“Unfortunately, you just can’t compete with brands that were already built for e-commerce before COVID hit,” she said.
“Those fantastic brands that were already literally designed around e-commerce had the leg up because they already had the spending power and the space.
“Whereas all these small brands… you can’t compete with a budget of $300,000 a month to spend on advertising.
“They essentially become invisible.”
The level of e-commerce and digital marketing investment needed to bring SoL Cups to the status of some digitally-geared competitors was simply too much for the brand to take, Veksler said.
Changing consumer behaviour through late 2022 and 2023 only made it harder to get by, she added, given the shrinking marketing budgets of the corporate clients who comprised much of SoL Cup’s customer base.
After a months-long “emotional grieving” process for the brand, Veksler voiced her appreciation for sustainability-minded customers who came to her brand in the first place.
The founder’s focus on wellness is not yet over, either, with Veksler hard at work on a holistic healthtech startup.
That effort will continue in a spending environment drastically different from the one which existed before the pandemic, and in the shadow of businesses catering to a kind of commerce and clientele that simply do not exist in the way they once did.
Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
