Cookware startup Caraway sees 274% increase in sales since March

Jordan Nathan, Founder and CEO of Caraway, joined Yahoo Finance's The Final Round to discuss the company's latest seed funding round and the increase in sales its seen over the past few months.

Video Transcript

SEANA SMITH: Let's switch gears here a little bit and talk about an at-home cooking brand that is surging in popularity since the beginning of a quarantine. And for that, I want to bring in Jordan Nathan, a founder and CEO of Caraway. It's a direct-to-consumer home cooking brand. And Jordan, it's great to have you on the show this afternoon.

Now, you've seen a nearly 300% surge in sales since the beginning of March. That's quite an increase in demand for your product. So I guess how are you keeping up with that? And how are you navigating this rise in consumer demand at a time that it's very challenging for businesses to operate how they work before the coronavirus outbreak?

JORDAN NATHAN: Absolutely, and thanks for having me on the show. Yeah, we've certainly seen a big spike in at-home cooking with people being quarantined. And it's been, you know, on one hand really exciting to see a lot of sales coming through. But on the other hand, quite challenging on the supply chain.

We've actually been out of stock since early April. Selling on a backorder, we've definitely had our fair share of delays on the supply chain. You know, with our warehouse, we're trying to follow all CDC guidelines. So shipments are going out much slower. So really trying to do our best to get products to consumers on time with the overwhelming demand.

SEANA SMITH: And Jordan, as the CEO of Caraway, I mean, how have you been adapting to this working-from-home environment? Is it something that you continue to do before? We talked to a number of executives here on Yahoo Finance about their plans. And some are saying that they don't plan to have as many employees return to the offices once the stay-at-home measures are relaxed. What are you doing at this point? And how do you change your strategy at all?

JORDAN NATHAN: Yes, our team's been working from home since early March. I fully expect us to likely be working from home through fall if not the end of the year. And we've actually been hiring throughout this whole time. So our team's gone from four to 10 employees. We've actually on-boarding more people than we had in the office prior. And so really evaluating the landscape.

You know, there's a number of great tools out there that we've really worked to integrate into the brand to increase communication across the company. And so, you know, as we approach times of potentially moving back into the office, you know, I think we might look to implement some leaner policies and/or make it optional to work from the office or work from home.

AKIKO FUJITA: I want to go back to the big surge that you talked about-- the big bump that you've gotten in business. How many of these are for starters, if you will, is for like, first-time buyers? I'm just trying to understand how sustainable this is. I think a lot of us in March got into cooking. We got into baking. How long does this last do you think?

JORDAN NATHAN: Yeah. We definitely see a lot of consumers reaching out to us who haven't cooked in five years and are excited to get some new cookware to get in the kitchen. You know, I think where people spending more time at home. They're now shifting resources from elsewhere into revitalizing their home, making it somewhere that's more reflective of their personality and the space that they want to be in.

And so as we look at the category, we think the trend's really going to continue over the next couple of years. And I think this was really kind of a spark some people needed to get back into the kitchen or start thinking about redesigning their kitchens or thinking about things like organization. And so we definitely expect over the next number of months for this trend to continue.

RICK NEWMAN: Hey, Jordan, Rick Newman. Do you source in China? Do your products come from China? And have you had to deal with disruptions there? I mean, first, we had the tariffs. But now, obviously, major issues just with stuff getting out of China since they were suffering from the virus before we were.

JORDAN NATHAN: Yeah, so we manufacture overseas in Asia and China-- definitely have had our fair share of delays. I think, fortunately, for a lot of brands, when COVID hit, it overlapped with Chinese New Year. So had a little bit of a buffer to buy up on inventory.

But in a category like ours where there's increased demand, every brand producing from our factory isn't as seeing increased demand that put more constraints on the factories. We've got delays trying to get product over into the US. And so it's definitely just been a much slower process and really challenging to get product to consumers in time.

RICK NEWMAN: And it's not back to normal yet on the China side?

JORDAN NATHAN: Very close. But due to overwhelming demand, that's been, you know, a competition within factories to try to get your product out first. And even booking freight over to the US, there's just a lot less workers out there to get the products out. And so, you know, we've seen really some small delays across a number of areas. And overall, it leads to a couple of weeks if not month plus.

SEANA SMITH: And going off of that, you also just recently closed a $5.3 million seed round. How do you plan to use this additional funding? And what are some areas of opportunity that you're identifying right now that you could potentially fold into?

JORDAN NATHAN: Yeah, well, this is a super exciting step in our journey. We just launched in September so still a few months old, but really excited to use the capital we just raised to increase our team size. We've just gone from four full-time to 10 full time. We're really interested in expanding to the rest of the kitchen.

We sell ecofriendly nontoxic cookware and really excited to take that same mission and principles within our first product and expand it throughout the full kitchen and then really think about distribution. I think as stores start opening up, there might be really big opportunities within brick and mortar and potential low real estate cost. So, you know, as the next few months go by, there might be some really interesting opportunities within actual physical retail, which was something we weren't planning to do as early as this fall.

SEANA SMITH: All right, joining me here, the founder and CEO of Caraway. Great to have you on the show. Thanks so much.

JORDAN NATHAN: Yeah, thanks so much.