Vessel launches AI platform to tackle beauty’s billion-dollar excess inventory problem

Vessel has made its public debut after operating behind the scenes. The start-up offers the infrastructure to donate excess beauty inventory to avoid landfills and incineration — the typical route the industry takes.

The services-as-software start-up has facilitated over US$83 million worth of product donations from brands such as Groupe L’Occitane subsidiary Sol de Janeiro and the Estée Lauder Companies’ Smashbox. The donations are said to have reached over 5.5 million consumers and kept more than 2,000 tons from landfills or incineration.

The company’s public debut arrives as the personal care industry looks for novel ways to fulfill sustainability demands. Reducing waste is becoming a growing concern as global municipal solid waste generation is forecast to surge from 2.1 billion tons in 2023 to 3.8 billion metric tons by 2050, according to the United Nations Environment Programme Global Waste Management Outlook.

Vessel highlights that beauty brands waste approximately US$163 billion in surplus stock annually. Brands also often pay to have the excess inventory destroyed, “because historically destruction has been cheaper, simpler, and safer than giving products away.” 

Vessel acknowledges the difficulties of donation at scale that have prompted brands to opt for destroying or discarding excess inventory. Destruction requires “one vendor, one invoice, one certificate,” whereas donating has traditionally taken more work.

Vessel aims to promote donation over destruction using an AI-powered service designed to make the logistics of donation at scale feasible.

“The world’s leading brands have always wanted to do more with their excess inventory, but until now, donating at scale hasn’t been a secure, practical, or economically viable option,” says Teddy Raskin, co-founder and CEO of Vessel. 

“We built Vessel so that brands no longer have to choose between doing what’s right for their business and what consumers expect. If we redirect even 1% of wasted excess inventory, that’s more than US$1.6 billion in products reaching people who need them, at a lower cost than destroying it.”

Vessel has facilitated over US$83 million in product donations.

Guaranteed to cost less

Vessel outlines the organizational barriers to donation, stating that “someone had to vet recipients, book freight, document every delivery, and ensure products did not resurface for resale.” The company says it addresses these barriers through its comprehensive service.

Vessel’s GoodOS technology evaluates over 550,000 nonprofits, leveraging over 160 million data points to identify the best matches between beauty brands and donation organizations. Organizations only receive Vessel Certified status once they pass expert human review.

The team books the freight and keeps track of shipments, filing the records that a brand’s finance and sustainability teams may need. The donation model also addresses fiscal concerns by redirecting budgets brands have allocated to destruction. Vessel guarantees donating costs less.

“Changing behavior at scale is hard, especially when the right option has also been the more expensive one,” says Auren Hoffman, general partner at Flex Capital and founder of SafeGraph and LiveRamp. “Vessel changes that. It uses AI to do the vetting, matching, and logistics work that was the bottleneck, making donating cheaper than destroying.”

Vessel raised US$5 million in seed funding led by Heritage Group Ventures, with participation from Flex Capital, Ford Street Ventures, and I2BF Global Ventures. Its advisors include leaders in beauty, consumer health, and logistics, including Revlon, Kenvue, and Ryder System.