How Eco-Diaper Disruptor Kudos Landed Target as It Courts Millennial Parents

Why it matters:

• The U.S. baby diapers market totaled an estimated $7.97 billion in 2024 and is projected to grow at a 2.42% compound annual growth rate through 2029, according to Statista research.
• Finding eco-friendly diapers has become increasingly important for millennial parents in recent years, prompting several product innovations from both startups and national brands.
• Kudos, the 2021-launched DTC subscription brand, features a 100% cotton lining— a key differentiating factor that appeals to parents seeking natural product solutions and also helped it land on Target’s shelves.

Choosing the right diapers can be one of the most difficult decisions for parents of newborns and infants.

Parents not only consider the baby’s comfort and health, but also the performance of the diaper and its environmental impact. In fact, finding eco-friendly diapers has become increasingly important for parents in recent years, prompting several product innovations from both startups and national brands.

Among those brands is Kudos, founded by Amrita Saigal, a former Procter & Gamble Engineer and graduate of the Massachusetts Institute of Technology. She created Kudos diapers as a product that seeks to both minimize the environmental impact of diapers and provide a more natural alternative for parents, touting its 100% cotton liner as its signature, differentiating feature in the category.

The brand, which has also expanded into a line of wipes, received a big boost from a 2023 appearance on Shark Tank, where it earned investments from both Guest Shark Gwyneth Paltrow and Shark Mark Cuban. Since then, it has raised another $3 million from a group of venture capital funds.

It also gained another big boost from retailer Target, which rolled the brand out last year to 375 stores nationwide and made it available on its website.

Kudos gains insights from DTC launch

Launching as a direct-to-consumer (DTC) brand helped Kudos gather a lot of feedback from users of the product, said Moira Finicane, Head of Marketing at Kudos and one of its first employees. The company established a panel of consumer advisors early on, and Kudos consulted them on a range of topics related to their diaper purchases, from packaging to preferred brands and retail shopping habits.

“We use them for insights on everything,” Finicane said.

One of the key discoveries from these consumer insights was that consumers were most concerned about the parts of the diaper that came in contact with the baby’s skin, she said. Kudos’ main target audience, millennial mothers, have increasingly sought out products that are deemed better for their health and better for the environment, she said.

And the brand is “hyper-focused” on that mission when it comes to what's touching baby skin, Finicane said. “That’s what led to the 100% cotton lining.”

Another key finding has been that these core consumers tend to conduct extensive research before making a purchase. That led the company to take what she described as an “educational approach” to marketing the brand, with a focus on content that explains the benefits and an effort to present that content across the right platforms.

That included extensive collaboration with the eco-friendly mom community on Instagram, Finicane said.

“These people were doing all the research that other parents were looking at,” she said. “They were a really key partner for us, and that was a big part of our growth on the DTC side.”

[Read more: 3 Startups Reveal Their Roadmap for Developing and Launching a Successful Sustainable Product]

Differentiating in the $7.97 billion U.S. baby diaper market

The total U.S. baby diapers market is expected to total $7.97 billion in 2024, and is projected to grow at a 2.42% compound annual growth rate through 2029, according to Statista research.

Kimberly-Clark, the parent of the Huggies Diaper brand, and Procter & Gamble, which owns Pampers, together account for about 75% of diaper sales in the United States, according to a Nonwovens Industry report, citing data from Euromonitor. Private labels account for another 16% to 18%, and other brands, including Kudos, Dyper, and Hello Bello, account for just 3% to 4% but are growing their share of a sluggish diaper market overall amid relatively low birth rates.

But there’s a category bright spot. “The United States is experiencing a growing trend in eco-friendly baby diaper options, driven by increasing consumer demand for sustainable products,” the Statista report concluded.

In addition, the pandemic heightened parents’ concerns around their babies’ health and increased their demand for transparency, according to Euromonitor.

“In response, companies vying for value growth are increasingly banking on a greener supply chain, more diversified portfolios, smart technologies, as well as claims and social campaigns that align with consumers’ priorities and values,” the Euromonitor report stated.

Getting into Target: Kudos catches the eye of a buyer at a trade show

After a few years of growing the business and refining its brand through direct-to-consumer sales, Kudos caught the attention of a Target buyer at a trade show. Although that buyer was not responsible for the diaper category, they relayed the message to the right people at Target, and both companies realized that Kudos could potentially meet an unmet need for Target shoppers.

“For over 60 years, the disposable diapers that have been on shelf at retailers like Target have been plastic-lined,” Finicane said. “We are really disruptive in bringing real innovation. I think the uniqueness of our product really played a role here.”

Customer loyalty and vocal support on social media also played a role in demonstrating to Target that Kudos had a significant built-in customer base. Target also realized that Kudos solved a real consumer need, Finicane said, citing the diaper brand’s eco-friendly positioning in a category overwhelmingly dominated by more traditional diapers.

Finicane said that the initial calls with the Target buyer were positive, as the two companies realized they had much in common.

“Diapers are a really saturated market,” she said. “But [Target] recognized the [eco-friendly] white space because they are so consumer-obsessed in the same way we are.”

Target also seeks to celebrate parents and parenting, Finicane said, which also aligns with the Kudos brand ethos. In fact, the company’s name—a synonym for “applause” or “commendation”—is meant to praise parents for their efforts, she said.

Kudos’ positioning as a premium brand that seeks to be widely accessible from a retail price perspective also aligns with Target’s position in the market, Finicane said.

[Read more: Digital Shelf Labels Light Up Big and Small Retailers' Bottom Lines]

Adjusting packaging for in-store retail with color, design, and bold messaging

Kudos has made a few adjustments in its transition from DTC to retail on Target’s shelves, Finicane said, including changes in its packaging. Kudos realized that the packaging would need to tell as much of the story as possible during a quick perusal by passing shoppers.

“We knew that we had an important opportunity to catch the guests’ attention on shelf, so we were super deliberate about the packaging that we put out there, both on the messaging front and the design front,” Finicane said.

The company realized that its key attribute—and the one that attracted Target to the brand in the first place—was its 100% cotton liner. Kudos quickly realized that this needed to be the “hero” on its packaging. The boxes proclaim in large red letters that the product inside is “100% cotton-lined diapers. Not plastic.”

With some advice from Target, Kudos also opted to lean into a single color in its packaging design. Although at first the company considered using different color packaging for each of its diaper sizes, it decided to focus instead on a single shade of light blue that helped it stand out in the category, Finicane said.

In addition, while Kudos’ DTC offering features a monthly supply of diapers—which can be ordered via subscription or by individual purchases of a 30-day supply—the retail packages are designed around an estimated 10-day supply, in six different diaper sizes. The Target and DTC offerings complement each other, Finicane explained, by allowing subscribers to use Target for fill-in purchases, for example.

“We want to give Kudos to people in whatever way they want to get Kudos,” Finicane said. “We see that as part of our mission and focus on increasing access.”

Kudos also has a three-pack of high-quality, sustainable wipes, and is looking at further expanding its product line to include training pants, Finicane said.

In the meantime, Kudos is also focused on ensuring that it can meet the unexpectedly strong demand that the Target rollout has generated.

“We are thrilled with the success and the guest reception to Kudos that we’ve seen at Target,” Finicane said. “We’ve been working around the clock to be able to fulfill the orders and keep up with that demand.”

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here.