the Joshua Schall Audio Experience: Recent Episodes
Joshua Schall
Welcome to the Joshua Schall Audio Experience
On my podcast, you’ll hear episodes of my popular short-form Consumer Packaged Goods (CPG) news segment "Consumed", a long-form CPG entrepreneurship interview segment "Formula For:", deeper dive segments "Deep Dish CPG", public speaking engagements, and any of my new and current thoughts that I record specifically for this audio experience!
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Sometimes if your patient enough, the world’s largest (and most diversified) food, beverage, and nutritional supplements company, will eventually “remix” one of your worst predictions into a real possibility again! If you’ve followed my content for long enough, you’ve seen me publicly take countless “victory laps” that essentially patted myself proudly on the back for making correct marketplace predictions. At this point, the strategy and M&A leadership at many mega CPG companies are just following my prediction playbooks at this point. But since no one has built a “tracker app” to reconcile my endless stream of predictions yet, I must stay honest and call myself out when I flat out miss judge marketplace movements. So, what was this bold prediction that I got wrong? Just over three years ago, within a piece of content analyzing the almost $6 billion acquisition of The Bountiful Company, I laid out this vision for what Nestle Health Science could look like in the 2030s. It began with explaining my base case around how Nestle CEO Mark Schneider, having professional experience in healthcare, realized that “we are a sick society” and there’s a ton of opportunity for Nestle to diversify away from slower-growing food and beverage products, and become “a health and nutrition powerhouse.”And that part has become 100% true, as Nestle has made market moves to prioritize better nutrition, improved its already market-leading positioning for today’s current “made to stock” product consumption reality, but also aligned itself for tomorrow’s consumer demand focused on personalization. Yet, this is where that personalized nutrition prediction starts going wrong...as Nestle decided to shutter (Freshly) an important piece of its personalized nutrition equation that will define the CPG industry of the future. But less than a year later, and right after Wonder Group acquired another meal delivery kit company Blue Apron, Nestle creates a strategic partnership with Wonder Group that included a $100 million investment. So, Nestle is technically back in the meal kit delivery business again, but this time with a hands-off approach that potentially has much wider potential. This strategic partnership obviously begins with Nestle earning another important foodservice revenue stream. But a $100 billion plus company doesn’t get excited over some immaterial short-term foodservice revenue…I think Nestle learned some expensive lessons from Freshly and sees a much bigger long-term opportunity with Wonder Group’s super app multichannel business model. Nestle might have the upper hand right now by owning a portion of the personalized nutrition equation that will define the CPG industry of the future, that’s only one component of the larger interconnected health personalization trend that can’t be wholly owned and will instead require strategic partnerships to unlock value. But in the meantime, Nestle is playing the moves that are available on the proverbial chess board as it hopes to play an important role in severally limit nutritional diseases in the future. It was announced a few weeks ago that Nestle would launch its first major U.S. brand in nearly three decades. Vital Pursuit is a frozen product line that looks to meet the needs of consumers taking GLP-1 medications and other individuals focusing on weight management.
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Nookie-flavored cookies that you stuck up your YEAH…to my knowledge never became a thing, but that doesn’t mean the late-90s/early-00s alternative metal band Limp Bizkit wasn’t still destined to be a CPG product inventor. Fred Durst and the guys were visionaries, but they needed a big-time partner to make it a reality…and those types of sales cycles take a long time. What am I talking about? 7-Eleven recently unveiled Big Bite Hot Dog Sparkling Water…about 24 years after Limp Bizkit launched its biggest album called “Chocolate Starfish and the Hot Dog Flavored Water.” But just like the album title was intended to sound fictional…the 7-Eleven product launch was just a marketing joke. Although popularity of the stunt has led to the c-store to rethink its availability…no word on if that will coincide with the upcoming Limp Bizkit concert tour.
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If you needed to grab something fast at the convenience store, to help energize you through a busy day, what is your energy beverage selection? Since we live in the “Age of the Endless Aisle,” there are more options in every CPG category than during any other point in our history. Even within the smallest retail channel (in terms of average square footage), convenience stores will undoubtedly have coolers filled with RTD coffee beverages and energy drinks, hot or frozen foodservice varieties of the same, powdered stick pack energy supplements for you to add into a bottled water, and even various pill or capsule supplements. And it’s that proliferation of caffeine-containing beverages, along with them being well-entrenched into our daily lives, that's causing “energy everything” to become a certified consumer movement. But if “energy everything” is that rising tide (as I just described), why isn’t it lifting all boats…or in this case all energy beverage subcategories? While U.S. energy drink sales have swelled to over $22 billion, essentially doubling over the last five years, the smaller format subcategory of energy shots hasn’t quite lived up to that robust growth trajectory. In fact, U.S. energy shot sales have continued to hover just under $1 billion and consumption has been slightly down over that same five-year period. So, it begs the question…what the heck is going on? Well…I have a number of theories that I'll explore in this content with many of them centering around the detrimental effects of a decadelong energy shots market domination by 5-Hour Energy. While Red Bull, Monster Energy, and even the energy drink platforms of PepsiCo and Coca-Cola Company tried small format energy shots, those big beverage brands were more focused on larger format energy drinks and that ultimately caused internal strategic conflicts. With 5-Hour Energy being the only sizable business that focused solely on that smaller format, the energy shots brand became stagnant as the energy drinks market saw huge competition that forced lots of product innovation...becoming the superpower of energy drinks to successfully reposition itself within the broader beverage market, appealing to a wide range of consumers. Moreover, energy shots are marketed directly and specifically as an energy source, while energy drinks are marketed as a lifestyle beverage that offers the functional benefit of energy. And in today’s world, there are as many energy drinks as there are personalities, and your choice can say a lot about you and your personality. To go one step further…drinks have become status symbols or basically aspirational mixtures, representing flavor taste, lifestyle taste, and identity by association. Additionally, it’s my belief that energy shots lack the refreshment qualities that carbonated energy drinks provide. And more consumers every day are looking for the total package. So, with all that extra liquid…it gives brands the ability to be thoughtful with ingredient innovation that won’t override taste, which has been a challenge to keep up with in recent years for energy shot manufacturers. But where does the energy shots subcategory go from here? I think the energy need state is massive…and that gives the format a chance to evolve into something that offers more than functionality. And this might be the perfect time to attempt a categorical transformation, as the 800lb gorilla of 5-Hour Energy is fed up being 90% of a struggling subcategory and finally launched large format energy drinks.
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What’s the biggest risk to the insane growth trajectory of GLP-1 pharmaceutical weight loss solutions? Explosive demand in the U.S. market has outstripped supply…causing prolonged shortages of these medications. GLP-1 market leaders, Novo Nordisk and Eli Lilly, have warned supply constraints would likely extend into late-2024. That has unfortunately increased the circulation of counterfeit versions through unregulated outlets that can carry serious health risks. But good news could be on the horizon…at least for the maker of Ozempic and Wegovy. Last month, Novo Nordisk announced intentions to acquire its primary contract manufacturer responsible for filling and packaging its GLP-1 injection pens…Catalent for $16.5 billion. While the move won’t solve everything, it provides strategic flexibility to an existing supply network that includes another $8 billion spent on expanding manufacturing sites in France and Denmark.
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Is the “often imitated, never duplicated” influential epicenter of all ingestible CPG categories ready to disrupt its next market? And while the “best and brightest sports nutrition brands are now (or will soon start) competing against large CPG incumbents in every functional food and beverage subcategory over time…this isn’t another content piece about the competitive landscape “changing of the guard” happening within mega functional CPG markets like energy, hydration, or protein. Instead, I want to provide further support for another one of my ongoing sports/active nutrition predictions…which is more brands will begin disrupting the global stock markets. The inspiration for this content came from reading last week’s UK financial news piece that confirmed earlier speculations around UK-based sports nutrition brand Applied Nutrition moving forward with plans for a potential late-2024 IPO on the London Stock Exchange…seeking to value the company at more than $1.25 billion. For those that are unfamiliar with the sports nutrition brand, it began in 2014 when Thomas Ryder acquired one of the small struggling supplement lines he stocked in his specialty supplement store…believing its main product Critical Mass was being marketed incorrectly. Applied Nutrition would then go through an extensive strategic overhaul of every element from redeveloping products to rebranding and even shifting production away from Canada and into Belgium before deciding to build a manufacturing facility a year later. In 2021, JD Sports (the British sports-fashion retailer) made a significant minority investment that valued the company at about $100 million. The following calendar year, Applied Nutrition sustained the momentum by landing its first major grocery listings in the UK at ASDA, launching its Body Fuel line extension that started with an RTD hydration drink to take advantage of the “PRIME Effect,” and creating its first overseas subsidiary in the United States. But about 9ish months after entering the U.S. market, “All Black Everything” became (from what I know) the first sports nutrition brand headquartered outside of North America to land on all 4600 or so Walmart locations across the country. With successful large retail expansion also happening in the UK market, the beginning of 2024 saw the Applied Nutrition IPO rumor mill start up. And this was further supported when the company brought in Andy Bell to be Chairman, a seasoned entrepreneur that had taken his own company public six years ago…and hired an investment bank to advise on the process. I'll explain that despite respecting the asset-heavy build model, consistent top- and bottom-line growth, and overall ethics of the founder/company...I believe the reported valuation sought is more inflated than the Michelin Man! Also, the final section will breakdown arguably the most important market for Applied Nutrition, which is also the largest in terms of global supplement sales...as big changes have happened recently (or will begin happening soon) within the U.S. subsidiary of Applied Nutrition.
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Can you influence behavior through taxation? In fact, legislators generally have three goals in mind as they prepare tax laws: raise revenue, create fairness, and ability to influence behavior. Sin taxes, which are used to discourage the purchase and use of products that pose a risk to health, are as old as the original New England colonies. Today, we typically see these sin taxes placed on tobacco products and alcoholic beverages. But the World Health Organization, armed with new data…is calling on the United States to add sugary sweetened beverages to that sinful list. This sugar tax nonsense needs to stop. While the ability to raise revenue and simultaneously achieve some communal goal like improved public health might sound appealing, governments should not seek to discourage any activity, except for those that interfere with the rights of other individuals.
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Sometimes a relative stranger, during a small collection of conversations, can make an outsized impact by suddenly awakening a light within you. If you think that sounds like hyperbole…how about I share my recent experience with this phenomenon. In the last several years, I’ve had a handful of beverage industry friends tell me to check out this tea-plus brand named Equitea. Admittedly, in a rushed state…I would glance at the product pages and say something relatively positive about the emerging category and/or its product composition and packaging. But it wasn’t until Danny Stepper asked me to moderate a panel at The Beverage Forum that changed everything. As I’m putting together the conversation framework…I start digging deeper into Equitea because its co-founder and CEO, Quentin Vennie, was one of the panelists. This is when I learned about the founding reason for Equitea and then the more recent tragic event that evolved the brand purpose. Maybe it was partly due to the proximity of myself becoming a new father, but suddenly I felt this amplified connection to Quentin’s story. Getting to know him better (on- and off-stage) became the unexpected (but in a totally good way) top highlight of mine from The Beverage Forum. And as you’ll quickly notice, this recorded conversation feels like it just rolls right into it…and that’s because it was a totally authentic human interaction that Grant captured after we got off stage together. While that might feel a bit different than typical story arcs in previous episodes, this whole “Pivotal segment concept” was created because I wanted to break down barriers and show the human beings that exist beyond these CPG brands. With “great products” becoming ubiquitous across the CPG industry, they must evolve into a vehicle to build rich compelling stories that create consumer connection. In this case, it’s packaged tea-plus products called Equitea that exists to destigmatize mental health, expand pathways to wellness, and help make cognitive wellness-centered products more accessible and equitable. Finally, for those that want to hear more from Quentin, the accompanying Joshing Around "The Beverage Forum 2024" vlog episode (that will be uploaded to my YouTube channel very soon) should help fill that void and likely add more context to portions of this recorded conversation.
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There’s something extremely admirable about those that “fight for the little guy.” Having worked in large CPG conglomerates like Mars, Daniel Scharff knew the advantages these mega companies have over small brands scratching and crawling for any opportunity. So, in late-2019…he began hosting Bay Area events that gave founders of the smallest emerging CPG brands a chance to demo products and network. But we all know what happened next, though being forced to pivot towards building virtual community the following year might have been the silver lining for Startup CPG. Instead of pausing everything, Daniel didn’t lose sight of his original intent. These smallest CPG brands were most affected by delays in planogram resets, so Startup CPG quickly developed helpful content, tools, platforms, and creatively sourced other incredible sales opportunities that helped minimize negative impact. And it was that initial value provided, when founders arguably needed it the most, that reverberated quickly amongst the community, thus helping catapult Startup CPG into becoming the largest and fastest growing CPG community. In our conversation, Daniel explains how this business growth has allowed Startup CPG to host more community events around the country, launch even bigger programs to help brands with what matters most, and form influential strategic partnerships. Moreover, and relating to that last point with its “GNC Next Big Thing” contest…we talk about the power of authentically putting yourself out there and staying real and transparent. But these are just a few of the fascinating topics within our recent conversation…
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Pizza and Beer. We take the pairing for granted…despite it being a must-have at any party and a marriage ingrained in our gastronomic culture. The simple and humble combination of pizza and beer represents more than the sum of its parts…which is especially true when we look at it through a recently announced bold co-branding lens. Nestlé-owned pizza brand Tombstone is teaming up with New Belgium to create pizza-flavored Voodoo Ranger IPA. Without a doubt this product collab is awesome…but how do we make the tie-up even more impactful? I’d utilize Tombstone as the anchor by securing an end cap in the frozen foods section. Then, I’d add a flashy (but small) floor display with the pizza-flavored beer next to the coolers. And for good measure…offer customers a coupon when they buy both products together. Now enjoy!
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As the largest proposed supermarket merger in U.S. history remains expectedly tied up because of an ongoing FTC antitrust lawsuit, it’s totally understandable that speculation continues to build around if a combined Kroger-Albertsons will have a significant effect on how CPG brands do business with the new retailer. And while I have a multitude of my own theories of how this mega-merger plays out, worrying about my version of the future isn’t as actionable as hearing today’s reality directly from source. That’s why I asked the VP of National Merchandising at Albertsons Companies, Buster Houston, to breakdown many important “art and science” aspects of the grocer’s merchandising strategy…including his “locally great and nationally strong” metric. We also talked through how startup CPG brands can improve their attractiveness when trying to court Albertsons, but also what it takes to outperform competitors when given store placements. Additionally, we run through a few recent standout CPG brands that exceeded expectations…including how the grocer partnered with Mr. Beast for one of his most viral YouTube videos. Our conversation was fast-paced, entertaining, and filled with lots of insights…so I hope you enjoy.
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Ready-to-mix (RTM) powder to ready-to-drink (RTD) liquid format expansion could very well become the dominant build model process amongst functional beverage entrepreneurs…though a recent hydration category example could be elemental in proving my strategic thesis correct. While I might be a bit biased considering my professional background, I believe the sports nutrition space has always been the “often imitated, never duplicated” influential epicenter of all ingestible CPG categories. But many years ago…when I said things like “the best and brightest sports nutrition brands could compete against any large CPG incumbent when it comes to functional food and beverage,” it got its fair share of laughs. But then the massive mainstream success of Bang Energy happened in the late-2010s…and suddenly, my early conviction around a non-consensus view began to not look so crazy. Moreover, it also consciously (or subconsciously) inspired many sports nutrition brand entrepreneurs to take the leap from powder supplements to beverage. And though it’s several years behind the energy category’s “changing of the guard,” the same “RTM powder to RTD liquid” strategic format expansion playbook is starting to pick up momentum within the hydration category. Yet, my “beverage identity crisis” thesis within the hydration category still needed that one “mega brand” example to really catapult it forward. What I didn’t know at the time was that a month later, LMNT would announce on its social media that after two years in development, the brand would launch LMNT Sparkling Electrolyte Water, an RTD version of its extremely popular powdered stick pack hydration supplement. According to audited financial numbers filed with the SEC, LMNT generated just over $206 million in net sales for the 2023 calendar year (up 162% YoY). In terms of profitability, LMNT had gross margins of 56.7% in 2023. And I give them major kudos for the initial online launch strategy, but the sports drink market isn’t won or lost over transactions on Shopify and/or Amazon. So, despite the perfectly controlled launch execution and online commercialization strategy…LMNT still needs to address its next big challenge within the packaged beverage commercialization gauntlet, expanding into large wholesale channels. Though by saying that, I’m not advocating that LMNT should go too-wide too-fast with that sales channel expansion. In fact, LMNT is sitting pretty right now…generating close to $42 million in net income last year. That means they can “fund” the digital-first beverage strategy and fail forward as they learn the offline retail sales and beverage distribution game. Similarly, LMNT has been frugal and scrappy in how it raised outside capital, which limits pressure to be aggressive for liquidity event timeline purposes. But saying all that…I think LMNT should consider a strategic investment from an industry leader that has the expertise and resources that can enable the brand to scale more effectively in this next format and channel diverse phase. Nutrabolt (owner of C4 Energy) wants to build the health and wellness version of Unilever. While some portfolio expansion might come from internal brand development, I believe most will happen because of accretive deal making and full-on acquisitions that extends Nutrabolt into more key consumer-driven wellness platforms. While Bloom Nutrition was Nutrabolt's first minority investment…it won’t likely be its last, and maybe LMNT would be a great second act to get more exposure to the hydration category.
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Doesn’t it seem every beverage category is not what it used to be…as consumers are drinking up beverages that have benefits beyond just quenching their thirst. Even the largest (most sacred) packaged beverage categories are no longer safe…as carbonated soft drinks volume have been declining for much of the last decade. Consumers continue to move closer towards this four-way intersection of taste, convenience, nutrition, and functionality. And functional sodas…that often have a focus on adding prebiotics, plant fiber, or botanicals to support gut health, fit right squarely in the middle of that! What has always made this emerging category so intriguing to me stems from the fact that consumers can make a healthier choice without really changing a lot of their typical behavior. That’s a slam dunk in my world, but this story isn’t only being told by functional soda brands like Olipop and Poppi. In fact, I believe I’ve found the hidden gem of the entire category. And in the episode, I’ll be chatting with the co-founders of Mayawell…Vicente Reyes and Oliver Shuttlesworth. Beyond sharing some founding story details, we discuss the inspiration for the Mayawell product composition and why that differentiation is an important foundational pillar. We also talk frankly about the early ups and downs that startups face when operating within nascent beverage categories. And why marketplace maturity sometimes provides the clarity needed to make bold branding adjustments that bring the entire strategic narrative to life. Moreover, we breakdown the functional soda categorical evolution that now sees Mayawell (and others) taking closer aim at Big Soda. But these are just a few of the fascinating topics within our recent conversation…
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Over the last dozen years as a CPG industry strategist, I’ve seen A LOT of “trade-in promotions” used across different product categories to meet different business objectives. Maybe a CPG brand wants to support its sustainability credentials through recycling incentives. Or maybe it’s focused around rewarding customer loyalty when exchanging an older product version. Though often it’s utilized when a CPG brand believes it has a superior product to categorical incumbents that’s unnoticed by the market. As an example, Heyday Canning recently created a pop-up shop that allowed visitors to exchange a competitor’s product for a can of Heyday Beans. Alternatively, the most unique recent example of a trade-in promotion was when Cleveland Browns sponsor, DUDE Wipes, gave fans a chance to swap out their old jersey from any of the previous crappy 37 quarterbacks for a new white jersey.
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Is there a hidden meaning behind FitLife Brands calling MusclePharm “our most significant organic growth opportunity”? For those unaware, the supplement brands that are within the FitLife Brands portfolio are now categorized in four segments…NDS Products (which are a collection of brands mostly sold in the GNC franchise system), iSatori Products (which are a collection of brands sold through a diversified retail mix), Mimi’s Rock Corporation Products (which are a collection of brands mostly sold on Amazon), and then MusclePharm Products (which was acquired on October 10, 2023). In total, the FitLife Brands portfolio is sold through more than 20,000 retail locations globally. In the first quarter of 2024, FitLife Brands Inc. (NASDAQ: FTLF) had revenues of $16.5 million…which was up 54% YoY. On face value that obviously looks impressive, but you had both the Mimi’s Rock and MusclePharm acquisitions that happened in 2023 and greatly impacted the comparable growth percentage. If you look at the revenue from a QoQ perspective, FitLife Brands revenues increased around 24%. While there's strategic initiatives going on at legacy FitLife Brands and Mimi's Rock, the most intriguing segment within FitLife Brands is also currently its smallest...MusclePharm. In the first quarter of 2024, MusclePharm segment revenue was $2.1 million. And if you were wondering about YoY comparatives, let’s just say the Eric Hilman run MusclePharm bankrupt version outsold this current version. But that’s probably an apples-to-oranges comparison because Eric Hillman was focused on survival by any means necessary, and FitLife Brands is attempting to make strategic business decisions that support and optimize long-term growth. Despite that, MusclePharm revenue on Amazon is growing MoM, with platform subscriber growth continuing to be strong. And what might be helping that of late is the return of MusclePharm Combat protein bars that were relaunched in April. But I’m fearing that FitLife Brands might be getting excited about early indicators of sales performance, getting overly-confident, and might be getting caught up in the last (and biggest) part of that old MusclePharm sales playbook. And CEO Dayton Judd even had to take jabs last quarter's comments I made about “launching more and more products” before then in the same breath going mentioning FitLife Brands was exploring the product format “no-no zone” I talked about with RTD beverages...whether that's an energy drink or protein shake. But I'll breakdown all the strategic elements within the recent FitLife Brands announcement...including how it impacts projected margins and how that relates to FitLife Brands future supplement industry M&A strategy overall.
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Most successful CPG products do not arrive out of nowhere; they’re remixes of existing ones. While most remixed CPG product innovations have “easy to understand lineages,” Pop-Tarts (and its lesser-known competitor) wouldn’t fit that description. See…the food technology advancement that packaged those fruit-filled pastries in Mylar wrappers and made them shelf-stable was remixed from a 1961 product launch called Gaines-Burgers. Well…if we didn’t love dogs enough…you’re about to learn about another reason. And you probably didn’t pick up on it from the name, but Gaines-Burgers was the very first shelf-stable soft food for dogs. Three years later, Post Holdings’ product engineers applied similar technology to preserving food for human consumption. Yet, a product launch fumble by Post allowed for hated rival Kellogg’s to commercialize its portable breakfast “Fruit Scones” first…which was quickly renamed as Pop-Tarts to honor the pop-art movement dominating the decade.
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If you get too close to the sun, you will burn. This is the recent story of Premier Protein. BellRing Brands (NYSE: BRBR) is a portfolio that owns a collection of convenient nutrition brands like Premier Protein and Dymatize Nutrition, which was previously wholly-owned by Post Holdings. A fast-paced and busy lifestyle is pushing consumers to switch to quick and healthy meal options. This has resulted in above average categorical growth rates and increased household penetration of RTD protein shakes that promote active lifestyles. Additionally, powders are becoming more mainstream, and category proliferation has created an environment where more consumers are purchasing both every day and performance nutrition positioned protein products at grocery stores and mass retailers. Bellring Brands had a strong 2024 Q2 with net sales reaching $494.6 million, which was up 28.3% YoY. Premier Protein (~85% of BellRing Brands total revenue) grew 33.8% YoY, which came from large volume increases. Dymatize Nutrition was up 4.6% YoY, stemming from volume and price increases. Moreover, I provide three deep dives into the functional CPG portfolio's "hero SKU families" of Premier Protein RTD protein shakes and Premier Protein and Dymatize protein powders. As I’ve detailed in the past, Premier Protein has been partnering with the biggest and most reputable players in the industry to make large CAPEX investments…which has now given them a scalable, regionally diverse supply chain that will enable many years of robust growth. And you might be thinking, “what does that have to do with Premier Protein getting too close to the sun and getting burnt?” Well…generally speaking, business growth is a sign of success. However, when supply is still constrained, and demand is greater than expected…you can get yourself in trouble fast. This past quarter, Premier Protein tried to push the boundaries on promotional activity…and continue launching new flavors (that excite the marketplace), all without the needed retailer and internal inventory buffers. Because of that, Premier Protein likely will need to pull back on promotional activity in the second half of its fiscal year. I’d caution them to slow down a bit, rebuild inventory levels (with the production ramp up) and get ready for the 2025 “New Year, New You” period. Why? I think 2025 has an interesting setup brewing within the RTD protein beverages marketplace: (1) I believe there will be A LOT more brand competition within this protein category format (including Dymatize), (2) I believe mass and grocery retailers will start to give RTD protein beverages more placements outside of the typical healthy living/pharmacy space, and (3) all these activities will be blanketed with likely higher protein input costs. So, things should be fun to say the least!
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What does a famous scene in Goodfellas and a renegotiation of the PepsiCo and Celsius distribution deal have in common? Celsius Holdings (NASDAQ: CELH) had quarterly revenue of $356 million, which was up 37% YoY. During the trailing twelve months, Celsius Holdings smashed through the billion-dollar mark…with the energy drink brand generating $1.41 billion in revenues over that period. According to Circana last 13-week data, Celsius was the number one brand driver of unit and sales growth in the energy drink category. In addition, according to the trailing 4 weeks of Circana all tracked channel data for the period ending March 31, 2024, Celsius is now securely the third-largest energy drink brand in the category. Its market share grew about four percentage points YoY to 11.5% now. And I don’t want gloss over this accomplishment…because it’s the first time in over a decade that an energy drink not named Red Bull or Monster Energy has had a 10% share in the U.S. market. Celsius energy drinks saw massive growth in convenience stores, foodservice (e.g. fast food restaurants), mass retailers like Walmart, the club channel in retailers like Costco, and the Amazon marketplace. CELSIUS is now the best-selling energy drink on Amazon. Additionally, the early international market development groundwork starting to formalize with CELSIUS extending its relationship with Suntory Beverage & Food and also saw the first major international market expansion under the PepsiCo umbrella, as sales and distribution activity in Canada began in December 2023. It's my opinion that international expansion presents significant opportunity for incremental growth over the next three to five years. With Celsius at basically full distribution now…the TDP growth will have to come from increased items carried per store. In this quarter, average SKUs per retailer increased to 20.6 from 13.5 in the prior-year period…causing TDP growth of 55% YoY and 27% sequentially. Going forward, Celsius will increase items per store through a combination of product strategies like flavor expansion, scaling the new Essentials lineup, and reintroducing iterated line extensions like fizz-free. Additionally, they will seek more store placements like leveraging cold display activity in Celsius-branded coolers. Finally, I connect the dots between one of the greatest movies of all-time, Goodfellas...and a recent 8-K report about the amended PepsiCo and Celsius distribution deal. In return for extra incentives on sales of Celsius with adjustments for promotions, John Fieldly likely asked for some extra non-compete coverage in the energy drink category. There’s been some speculation that PepsiCo was interested in trying to unravel the mess of a structure that is Congo Brands/Alani Nu/PRIME (most likely get a share of Alani Nu), but it looks like that option is being put in witness protection (at least for the near-term).
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Maybe it wasn’t the most impressive first official reporting period for Glanbia’s new CEO…though it’s not always about how you start that’s important, but how you finish, right? Glanbia Performance Nutrition is one of two wholly-owned segments of Glanbia plc (LON:GLB), a multibillion-dollar global nutrition company. The brands in the Glanbia Performance Nutrition portfolio include; Optimum Nutrition, BSN, think!, Isopure, Amazing Grass, and SlimFast. I'll use the recent earnings report, earnings call, and associated news to update you on how Glanbia Nutritionals and Glanbia Performance Nutrition is performing against the complex operating environment. Glanbia Performance Nutrition had 2024 first quarter revenue that decreased 1.9% compared to last year. The brand portfolio had volume growth of 1.4%, but that was more than offset by price decline of 3.3% YoY. Additionally, I'll dive deeper into Glanbia Performance Nutrition geographical and product categorial performance (performance nutrition, healthy lifestyle, and weight management). BTW I’m thinking about the creation of a change.org petition for the Glanbia Performance Nutrition division name to be amended to The Optimum Nutrition Company. This one brand alone now accounts for 64% of the total GPN revenue. In 2024 Q1, Optimum Nutrition had 5.6% growth coming from both pricing and volume gains…and U.S. market retail consumption growth in tracked channels was basically flat over the 13-week period ending March 23, 2024. Additionally, Optimum Nutrition generated over $1.1 billion in revenue last year...which makes it the number one sports nutrition brand in the world and also the top sports nutrition brand in 18 different countries. Finally, I talk through a collection of hot takes or things I’m left pondering about Glanbia at this current time. These include where the struggling legacy brand SlimFast sits inside of an evolving weight management category that has seen huge spikes in GLP-1 weight loss solutions (e.g. Ozempic, Wegovy, Zepbound, etc.), think! protein bars and Girl Scouts collaboration, recent marketing strategic partnerships (McClaren F1, Spartan Race, and Sky Sports), dry whey and cocoa commodity pricing, and ISOPURE picking up momentum.
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41 months after I posed the original question, The Simply Good Foods Company has finally given me the answer I’ve been waiting for! So, I’ve been alluding to this “eat or be eaten” phase of The Simply Good Foods Company for the last 3.5 years. But only a few days after posting that January 2021 Simply Good Foods prediction, the company released its first quarter earnings report and then-CEO Joe Scalzo dropped some details on the conference call that I turned into another more detailed prediction mostly exploring plant-based protein convenient nutrition names...one of which was a relatively under-the-radar brand named Only What You Need (OWYN). And for those that haven’t seen last week’s headlines yet (and are confused by all that previous information), The Simply Good Foods Company announced that it had entered into a definitive agreement under which it will acquire OWYN for $280 million in cash. For my finance people that enjoy knowing the deal specifics, that purchase price represents a multiple of approximately 2.3x estimated 2023 net sales and 13.3x estimated adjusted EBITDA, including run-rate synergies. Seeing the gap in the protein beverages market, OWYN was created in 2017 to delivered enough plant protein and the right combinations of amino acids for muscle building and repair…plus enough calories to provide sustainable energy during workouts and training. In that same year, CPG legend Jason Cohen and longstanding partner Clearlake Capital invested in OWYN and helped fill key management positions with people who had deep industry experience…one of which, Mark Olivieri, was arguably the most impactful. He led brand marketing that evolved the brand purpose of OWYN to stand for truth and transparency and positioned OWYN as not just another plant-based option, but as a riskless plant-based option. He built a strategic narrative around the belief that the detrimental health impacts of over-claiming and under-testing is not just a marketing issue, but also is a social issue. Mark Olivieri would eventually become President and then CEO in August 2021, leading them through a few key investment transactions, and staying true to that quest to fuel bodies with cleanest nutrition…thus turning OWYN into a powerhouse brand across multiple sales channels, product formats, and pack types. In fact, within the last 52-week period ending March 24, 2024…OWYN is the fastest growing RTD protein shake brand in the market (growing 10 times more than the categorical average). Why I said OWYN “gets slept on” too much within the protein category is they are in the early phase of building a truly distinctive brand that has increasingly, mainstream appeal with a highly engaged, passionate core customer. But the remaining part of this content piece will focus on why (beyond the brand strategic narrative stuff that) I thought OWYN was a strategically compelling M&A opportunity way back in 2021 and why Simply Good Foods finally saw the light now...and then what does this mean to the convenient nutrition competitive landscape (Should market leaders like Premier Protein, Fairlife/Core Power, and Muscle Milk be nervous?)
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Who wins in a fight…Travis Scott or Kylie Jenner? No, this isn’t one of those weird man vs. woman fetish wrestling matches…I’m referring to an alcoholic beverage brand fight. It was recently announced that beauty CPG category mogul and “Kardashians” personality Kylie Jenner is launching Sprinter…a canned vodka soda cocktail. But if you remember…Kylie Jenner’s baby daddy (aka the talented rapper and cultural icon) Travis Scott launched agave-based hard seltzer brand Cacti with beverage giant Anheuser-Busch in 2020. While the liquid got meh-level customer reviews at the time, Cacti was abruptly discontinued at the end of 2021 after a crowd-crush incident happened during the Houston Astroworld concert. However, Travis Scott has been utilizing a subliminal marketing push since last December…suggesting Cacti will be returning with a new and improved product in 2024.
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Does it matter that Liquid Death “swung on and missed” its first attempt at extending its platform beyond the ready-to-drink beverage category? If you checked out my “beverage identity crisis” content from last week, I had originally intended to include these Liquid Death format expansion insights in that piece. But there was a bit too much strategic nuance that I believed would create confusion with the previous content’s central focus. So, instead…I figured I’d give this important recent Liquid Death business activity its own content…because there’s honestly a lot to unpack (learnings wise) that I believe can be valuable to my community of CPG industry leaders. In typical Liquid Death fashion, the beverage brand shared an entertaining video in mid-February 2024 to promote it had created a new powdered electrolyte hydration supplement drink mix. Death Dust comes in three flavor variants, each were formulated with the approach of them being lightly and naturally sweetened and flavored. Liquid Death also leveraged known flavor IP from its flavored sparking water SKUs. The Death Dust powdered hydration supplement stick packs were launched on Amazon (and direct-to-consumer) only. From a marketplace perspective, dollar sales for sports drink mixes were up 53% YoY for the last 52-week period ending 3/26/24. So, that’s obviously an attractive adjacent category for a beverage brand with the “platform strategy friendly” tagline of “Murder your thirst.” And even though the billion-dollar sports hydration powder market is filled with heavy hitter brands owned by the likes of Unilever, PepsiCo, The Coca-Cola Company, and KDP…the unit economics of these products in terms of categorical gross margins (but especially net margins) are still quite desirable to Liquid Death. Now…for those pundits (that spewed hate when Death Dust launched), talking about Liquid Death profitability struggles and how this was a “Hail Mary” type move to save the company, come on guys let’s be real here! Liquid Death has only been around since 2019…achieving triple-digit growth for three consecutive years and generating $263 million in retail sales last year. It’s in over 120K retail locations and has become the fastest-growing brand in the water, flavored sparkling water, and tea categories. Liquid Death can pull that feat off because of its ability to achieve the rare feat of successfully building a truly distinct and memorable brand. Within the CPG industry, you’ll hear A LOT of entrepreneurs say, “our CPG brand this or that.” But few ever get past being simply a company that attempts to sell undifferentiated products. Yet, when you can sell a product that also brings someone an extremely desirable emotion like belonging/connection or status…you’ve done something special. But this isn’t just another one of those “I love the Liquid Death brand strategy” pieces of content…you’ve heard that story too many times already. Instead, I wanted to analyze nuanced strategic aspects about the Liquid Death “beverage identity crisis," which include the...CPG industry innovation paradox, double-edged sword effect of using known flavor systems, utilizing “lean startup” ideologies, leveraging the beautiful, underappreciated value of an online marketplace like Amazon. Liquid Death might not think “Death Dust” was a big swing, and by categorical size it wasn’t, but we are still talking about a relatively young CPG brand that missed on its first format (and I’d argue functional beverage) expansion.
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40,000 convenience store owners have spoken, and they had A LOT to say about the growing energy drinks category. And even if you aren’t super familiar with this beverage category’s sales insights, I’m sure you intuitively recognize that convenience stores are the most important in terms of channels for energy drinks in the U.S. market. But here are the top 3 biggest “categorical” takeaways from the recent Goldman Sachs Beverage Bytes survey. The first is a market reaction to what I coined “energy everything” years ago…with performance energy drinks taking share from the coffee category. The second is that CELSIUS is likely to win the most incremental shelf space in 2024…just slightly ahead of C4 Energy. And finally, is that Red Bull is losing cooler space because the brand’s proprietary coolers are being replaced by CELSIUS and C4 Energy coolers.
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I already predicted the massive MyProtein rebrand would face a “no pain, no gain” reality, so what is THG CEO Matthew Moulding all fired up about? THG (aka the company formerly known as The Hut Group) recently updated the public markets by releasing its 2024 Q1 trading statement. I’ll be utilizing that financial information, along with notes I took listening to the earnings conference call, and any relevant publicly disclosed information to obviously update you on the recent performance of THG Nutrition division that includes the world's largest online sports nutrition brand MyProtein, but also utilize everything to provide insights surrounding the global supplement markets. For those unaware, THG is self-described as “a vertically integrated, digital-first consumer brands group, retailing its own brands in beauty and nutrition, plus third-party brands, via its complete digital commerce solution, Ingenuity, to an online and global customer base.” During the first quarter of 2024, divisional revenue for THG Nutrition was approximately $188 million, which was down 5.8% YoY. Maybe what’s more concerning is that revenue dropped about 10.5% from last quarter. That’s a bit abnormal, as the “New Year, New You” Q1 seasonality boost of new buyers into the marketplace usually helps supplement companies grow revenues QoQ. So, what’s up with these poor growth rates when the overall global supplement market continues to grow? I'll dive into several things going on here at MyProtein including: its global digital sales channel strategy and retail partnerships in physical retail, integration of supply side acquisitions, the effect the previous pricing strategy had on the sports nutrition brand's customer file, and let’s just say A LOT is riding on the success of the MyProtein global rebrand. Early results of the biggest rebrand in the 20-year history of MyProtein is said to be promising in that brand awareness has grown four percentage points higher since rolling out in its home market of the UK. More importantly though…THG Nutrition leadership needs to pay close attention to key commercial metrics over the next year because to continue moving upstream in positioning (and unlocking sales channel diversification opportunities within the American market) it needs to ensure this rebranding decision is well received by and generates brand affinity with those less price-sensitive customers. Additionally, I've provided a few recent marketplace actions made by MyProtein that could be associated with unlocking future winning chess moves. Finally...I'll provide you with another funny Matthew Moulding LinkedIn moment that directly tossed shade at all the flip-flopping pundits and analysts for being stupid and suggesting THG should “sell or close the Beauty and Ingenuity divisions, and just keep Nutrition because then the company would be valued at least double.” I’m sure this is the type of stuff that the British media, financial, and business worlds hate…but it further supports my belief that it’s inevitable that all (or parts of) THG will be listed in the American stock markets soon enough.
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In today’s functional CPG market, how would you categorize what is (or isn’t) a beverage? There’s a growing format expansion trend within key functional beverage categories that's causing most consumers to provide a widening variance in definitions. But the mainstreaming version of the “beverage identity crisis” was something I started talking more about publicly during the “Great Shutdown” period because there was this perfect storm of converging factors that provided an extra tailwind for this format expansion trend within key functional CPG categories. Yet, it’s that reversed format expansion playbook direction of “ready-to-mix (RTM) powder to ready-to-drink (RTD) beverage” that I want to unpack some more for you. That’s primarily because it could very well become the dominant build model process amongst functional CPG entrepreneurs…one that we will begin seeing play out repeatedly within other growing functional CPG categories, thus causing more “beverage identity crisis” scenarios in the future. The massive mainstream success of Bang Energy consciously (or subconsciously) inspired many sports nutrition brand entrepreneurs to take the leap from pre-workout powders to energy drinks. See…those tens (or hundreds) of millions in high-margin energy drink adjacent categorical retail sales were now seen as more than numbers in a spreadsheet or bank account, but members of an audience. And it’s those powerful audiences that have become defensible competitive moats and valuable business assets for CPG brands. Admittedly, sports nutrition brands (like C4 Energy, GHOST, and Alani Nu) didn’t invent the “build an audience first strategy,” but they’ve perfectly leveraged it by also operating within the shadows of harder to track sales channels like specialty and ecommerce…where they can incubate powdered pre-workout energy supplement platforms that can then be extended into the beverage format. And the proof is in today’s retail sales data for just how disruptively successful this “build process” has become within the energy drinks market. And what should be even more scary (for at least categorical incumbents), is that below the Top 10 energy drink brands, there’s many more strong powdered pre-workout energy supplement platforms that are in different phases of beverage commercialization strategies. Oh…and surprise-surprise, this “changing of the guard” isn’t just isolated to the energy category. Albeit a few years behind, the same thing is starting to play out within the hydration category. Beyond energy and hydration, I'll also cover the last of the “Big 3” mainstream functional beverage categories because protein is a bit different. While sports drinks and energy drinks are several multiples larger in total market size compared to hydration and energy powdered supplements, ready-to-mix protein powders outsell RTD protein beverages when you consider the entire multichannel sales landscape. So, it probably begs the question…why don’t we then see the highest number of “powder to liquid” format swapping sports nutrition brand disruptors in the protein category? I'll explore those differing barriers-to-entry considerations...but explain why 2024 and 2025 could end up being filled with impressive launches by sports nutrition brands “protein powder market leaders” that have strong audiences of loyal customers. Finally, I'll analyze three other functional CPG categories (greens, relaxation, and gut health) that each should see similar blurring of categorical definitions in the next handful of years.
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Will insurgent CPG brands capture an even greater share of category growth as innovation by large companies remains limited and consumers seek meaningful value propositions? While accounting for less than 2% of market share in their respective categories, insurgent CPG brands captured nearly 20% of incremental category growth last year. And you might be asking yourself, what is an insurgent CPG brand anyways? Bain & Company defines them as those that generate more than $25 million of annual revenue in tracked sales channels, have growth more than 10 times the categorical average growth rate over the past five years, and have maintained at least 10% growth over the past two years. That analytical rubric recognized 97 brand names…some of which you’ll recognize (like GHOST, Celsius, Bloom, and RYSE) because I’ve recently recorded long-form content with its founders.
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Is it time for protein bar brands to party like it’s 2019 again? I was recently asked about shifting convenient nutrition marketplace dynamics…including some questions directed towards delivery formats. And it was the bar delivery format that seemed to draw the most curiosity within that conversation. Maybe it’s because of what happened to the protein bar category because of the “Great Lockdown.” Maybe it’s because out of bars, liquids, and powders…it has the lowest current retail sales growth rate, but the highest household penetration. Or maybe it’s because of the sharp contrast from five short years ago when the protein bar M&A market was arguably at its peak. But during 2020 and 2021, many of us industry analysts/strategists looked past the near-term categorical struggles and pointed to the fact that underlying drivers (feeding long-term secular trends) were unchanged, and the inevitable consumer behavior normalization would continue to support bar format growth. Admittedly, some of that bounce back was slower than consensus expectations, but in this content I wanted to review several “signals” that I’ve been watching over the last 15 months which could be telling us that the protein bar market is ready to party again. These flashing signals include...several converging macro-economic data points, product-based differentiation, second-order effects from the rise in GLP-1 weight loss solutions, and then the final two are more focused on the attractiveness of the space (and format) to “build within” and then dealmaking and liquidity event probabilities and possibilities.
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Sharing is caring, right? I believe that commercial-scale precision fermentation facilities will be like data centers, which eventually became ubiquitous. And, like data centers, these commercial-scale precision fermentation facilities could one day be relied upon to make a vast array of vital products. But that future might hinge on how open or closed this food technology eventually becomes. Most precision fermentation startups are heavily funded by tech billionaires and venture capitalists. Why? Boilerplate “fight climate change” answers might be used publicly, but it’s about betting on the potentially enormous upside that comes with market domination of whole commodity groups and categories. But it’s those massive private investments that subsidize early deals that help overcome consumer adoption challenges around price. So, the debate over open-source food tech research is “complicated” and I’m sure global regulatory agencies will make it worse soon.
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If you were comparing the beverage brand PRIME to a childhood toy franchise, which one do you think would be the best fit (and why)? Prime Hydration grew 510% YoY, reaching just shy of $660 million in U.S. tracked channels. If you combined with non-tracked channels (and international markets), that number would likely be north of $800 million in 2023. Furthermore, it was announced before the end of 2023 that the brand sold its one-billionth bottle in less than two years. PRIME is (or maybe the appropriate verb tense now would be “was”) a rocket ship brand. But as PRIME blasts towards officially reaching billion-dollar brand status, in terms of U.S. tracked channel retail sales in 2024…it inevitably faces the immoveable object in business finance called the “law of large numbers.” So, when you see these PRIME haters regurgitating NielsenIQ retail sales data that shows sales volume being down over the last four weeks in early March 2024…that is what’s going on, as the brand is now facing tougher comparatives. And I think I saw similar PRIME hydration retail sales data trends in the UK, so regardless of what side of the pond you’re on…it’s likely a similar storyline being propagated across mainstream (and social) media. But this content isn’t about simply providing you retail sales data trends…those numbers were just a required contextual base of knowledge that allows me to explore possible underlying drivers more easily without having everyone confused. Also, to spice things up…I’ll bring most of these underlying driver possibilities to life through a storytelling analogy with children’s toys. That being said, the celebrity/creator packaged goods trend is one that sees the most popular talent of today…becoming the biggest CPG brands of tomorrow. It’s because when you hit on the “right celebrity + right product” element, you can pull forward brand awareness to a level that takes competitors years or many millions of dollars. The major benefit of the creator packaged goods trend is that Logan Paul and KSI are masters of at winning consumer attention through today’s kingmakers…aka digital platform algorithms. Moreover, PRIME benefited from the “Liquid IV Effect” democratizing the hydration category…and because a large share of the most diehard audience of Logan Paul and KSI are under 18 years old, they’ve proven to be extremely powerful individuals in creating commercial value by injecting a level of youthful energy that made the beverage category fun, thus introducing it to a new younger demographic that wasn’t originally passionate about the sports drink market. Which brings us back to the connecting PRIME and kids toys with consumer behavior principles. And why I made the analogy with kid’s toys is that there’s well-marked patterns that created massive successes in the past. Think about key features that drive toy franchise fads…limited supply (or perceived supply constraints) that create rarity, elements of collectability, low price, and usually “made cool” because of an influential group. Do those sound like they relate to the PRIME growth story as well?
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MyProtein is the world's largest online sports nutrition brand. So, you could say that “physical stores” aren’t much of a thing at MyProtein…or at least they weren’t in the past. More recently, MyProtein has invested in retail partnerships where the functional CPG brand places a limited (or exclusive) SKU range as part of bigger demand generation strategy. That could be as simple as offering a larger pack size of Clear Whey at Costco or something more unique like a healthy frozen meals licensing partnership within UK-based food warehouse Iceland. But it is a dynamic retail investment that signals MyProtein wants to drop the “online” part and simply become the world’s largest sports nutrition brand. It’s called Myprotein Kitchen…and it’s a concept store that provides customers with multi-sensory brand touchpoints that will also the sports nutrition brand to better understand customer behavior.
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Basically with what Quest Nutrition has been able to accomplish, competitors believe "it's basically cheating" at this point. In this latest episode, I'll utilize the Q2 2024 Simply Good Foods Company (NASDAQ: SMPL) earnings report, earnings call, and supplemental presentations that were filed on 4/4/2024 as the backdrop to provide broad nutritional snacking market insights. In fiscal Q2 2024, both Atkins Nutritionals (aka the Atkins diet) and Quest Nutrition performed well against the categorical competitors in tracked channel retail takeaway, with Quest Nutrition specifically having strong YoY growth at 13.1%. What's at the heart of the Quest Nutrition success? Quest Nutrition is still known for the original Quest Bar. That means the company needs the bar business to be healthy for any of this innovation risk to make sense. Here’s the good news…the core bar business is growing. In fact, this year it had tracked channel retail takeaway growth of 6%. Additionally, Quest Nutrition has proven it's one of the few brands that can successfully extend across multiple product forms...and its customer base expects them to come into an indulgent snacking category and flip it into great tasting (high protein, low sugar) offerings. The snacks segment of Quest Nutrition, which now accounts for almost half of all retail sales, saw retail takeaway growth increase 21%. But if we take this one layer deeper…the salty side of the Quest snacks segment had quarterly retail takeaway growth of about 40%. Quest chips now make up just over 20% of the total Quest Nutrition revenue and provides around 30% of new users to the brand. Salty snacks are where I’d argue the most excitement lies, but it seems the brand believes (at least right now) there’s more low-hanging fruit within sweet snacks. I say that because it was recently announced that Quest would launch a new bake shop platform for the fall of 2024. The offerings will start with high protein, low sugar, and great tasting muffins and a brownie. The company believes this new platform will bring new consumers to the active nutrition category and further expand usage occasions for the Quest Nutrition brand. Additionally, Quest Nutrition will prioritize its recently revamped RTD protein beverages more and even extend the packaged liquids form factor into protein iced coffee. These product innovations will be underpinned by a comprehensive marketing plan as part of the “Its Basically Cheating” advertising campaign with actor Kumal Nanjiani. This is another big step forward for Quest Nutrition…that will reach billion-dollar retail sales status by the end of this year. Finally, I run through what's causing the weak brand performance at Atkins Nutritionals and explain actions the company is taking to change it…especially against the backdrop of GLP-1 weight loss solutions. In my opinion, you’re going to see weight management brands like Atkins (and others) get repositioned on the right side of GLP-1 second-order effects through both product innovation (e.g. Atkins strong)...but most of the “innovation” will come in the targeted communication marketing strategies.
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Market growth breeds commercialization activity. This was an idiom I created many years ago to describe the reactive nature of the functional CPG industry. And it would certainly describe what has played out within the hydration and energy categories over the last 5-7 years. These functional CPG segments have both seen an explosion in market growth that drove rapid experimentation and development within an ever-expanding number of usage occasions. Additionally, consider that both the hydration and energy categories sit squarely within my “divine triad of CPG” of having strong gross margins, high frequency of use, and passionate brand communities. So, it’s hard to not be enthralled by everything…which might be partly why Market Insights Director at SPINS, Scott Dicker, and I regularly feature them in our quarterly functional CPG categorical deep dives. Beyond providing some recent categorical retail sales data snippets, we describe several driving forces impacting comparative results...including the growing “beverage identity crisis” that stems from consumers more regularly swapping between ready-to-drink and ready-to-mix form factors. But don’t worry…that’s not the only time we reference how the supplement industry is altering the strategic plans at large incumbent beverage brands. In fact, Scott and I cover some of those trending hydration and energy category storylines that are hidden below the “Big 2” market share leaders. Additionally, we explain why these “incubated within the supplement industry” brands can scale faster than any other time in business history. These are just some of the fascinating topics we chatted about in this episode...
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FitLife Brands gave more than 25 million reasons why it believes in the MusclePharm turnaround. So, why am I not impressed? For those unaware, the supplement brands that are within the FitLife Brands portfolio are now categorized in four segments…NDS Products (which are a collection of brands mostly sold in the GNC franchise system), iSatori Products (which are a collection of brands sold through a diversified retail mix), Mimi’s Rock Corporation Products (which are a collection of brands mostly sold on Amazon), and then MusclePharm Products (which was acquired on October 10, 2023). In total, the FitLife Brands portfolio is sold through more than 20,000 retail locations globally. In the fourth quarter of 2023, FitLife Brands Inc. (NASDAQ: FTLF) had revenues of $13.3 million…which was up 148% YoY. On face value that obviously looks impressive, but you had both the Mimi’s Rock and MusclePharm acquisitions that happened in 2023 and greatly impacted the comparable growth percentage. If you look at the revenue from a QoQ perspective, FitLife Brands revenues declined around 4.3%. While there's strategic initiatives going on at legacy FitLife Brands and Mimi's Rock, the most intriguing segment within FitLife Brands is MusclePharm. But even though MusclePharm was owned for the vast majority of Q4, its contribution to the FitLife Brands quarterly performance was immaterial because they needed to procure inventory (as basically no inventory was acquired in the asset purchase), and they needed to negotiate new retail agreements with MusclePharm’s existing wholesale customers. So, what that all means is the MusclePharm business really didn’t begin ramping up in terms of both wholesale and online sales until this current first quarter of 2024. Because of that…FitLife Brands gave some additional forward-looking statements based on preliminary first quarter numbers to show the early turnaround progress at MusclePharm. In the first quarter of 2024, MusclePharm segment total quarterly revenue will be around $2.25 million. That’s a slight drop in revenue YoY from the 2023 bankrupt MusclePharm era and even a more significant drop from the $3.8 million in Q3 revenue the company generated before the FitLife Brands acquisition. So, then what is needed for FitLife Brands to turnaround MusclePharm? FitLife Brands isn’t looking to hit a homerun with the MusclePharm turnaround…or so I thought before I heard the comments on the earnings call and them sharing a new element of the strategic gameplan. But I’m fearing that FitLife Brands might be getting excited about early indicators of sales performance, getting overly-confident, and might be getting caught up in the last (and biggest) part of that old MusclePharm sales playbook…launching more and more new SKUs. I'll breakdown all the strategic elements within the recent FitLife Brands announcement that they're bringing back the MusclePharm Combat Crunch protein bars...including how it impacts projected margins within the MusclePharm segment, how that relates to FitLife Brands return on investment, and future supplement industry capital deployment strategy overall.
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GOLI Nutrition announced in mid-March that it would be acquired by a collection of investors that includes its Mexico distributor, a private equity firm, and one of the company's original founders. More interestingly, the transaction, which has the full support of the company's lenders, is part of a pre-packaged bankruptcy process in Canada. Wait…what? You mean the company that introduced the world to apple cider vinegar gummy supplements just filed for bankruptcy? Weren’t they doing like a half-billion in revenue just a few years ago? Regardless of today’s bankruptcy process reality, that climb from nothing to $502 million in net sales within basically 26 short months is insanity. Yet, some supplement brands are like shooting stars. They burst through the industry in this spectacular arc, but they don't stay long. They just leave a trail of lessons we can learn. Mentioned in the bankruptcy documents was the fact that GOLI Nutrition sustained significant losses to the tune of $100 million since March 2022. Furthermore, GOLI Nutrition management outlined a collection of reasons they believed attributed to those significant losses. So, I'll put on my professor outfit and extract some insightful lessons those stated reasons, but also add some of my own opinions around the fall of GOLI Nutrition that could be helpful to supplement industry stakeholders. Some of those lessons include...how GOLI Nutrition supported this type of massive sales growth (along with some details on the Better Nutritionals contract manufacturing bankruptcy and court documents). Also, the market timing elements that helped GOLI Nutrition, but also subsequently caused liquidity constraints. Moreover, I talk about the apple cider vinegar supplement trend that created massive competitive risk for GOLI Nutrition...from third-party brands but also the same large retailers they had vendor relationships that created private label offerings. This leads into my discussion around the lack of strategic narrative at GOLI Nutrition that led them to being simply a product company. Finally, the “Mo Money, Mo Problems” lesson that any CPG entrepreneur should take to heart and that's you must have financial buffers in place for legal matters…whether that’s protecting intellectual property, guarding your hero product name from the godfather of apple cider vinegar CPG, or ensuring opportunistic class action lawyers or competitors don’t take you down. Can the new ownership unlock new growth opportunities? In 2023, GOLI Nutrition did around $119 million in net revenue…but lost close to $63 million. The business consortium acquiring GOLI Nutrition seems to think they can “launch their way out of this mess” and I disagree with this strategic approach. GOLI Nutrition needs financial discipline first and foremost. That means walking back a lot of sales, marketing, and product moves that just don’t make sense anymore. In doing so, GOLI Nutrition will almost certainly drop further from a top-line revenue perspective over the next few years. After that…who knows (and I do hope they achieve business growth again), but I’d be focusing more right now on surviving over thriving.
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I’ve said it once and I’ll say it again...not all indulgent snack brands need a “better for you” makeover! Earlier this year, Pringles launched a new version with blended multigrain and sweet potato ingredients. And I’m not Pringles guy…so I wasn’t ready to die on that hill. But now I’m hearing that PepsiCo’s Frito-Lay division is “vowing to increase its use of nutritionally diverse ingredients.” Now…if you want to enrobe Rold Gold pretzels with a sweet protein-rich icing…sounds fun. Maybe use a micro-filtered milk in Tostitos cheese dips…sounds proteintastic! But if you try putting chickpea flour in my Spicy Nacho Doritos…nah! I won’t let my beloved childhood snack violate the “Law of Line Extension” and I make it my new life’s work to stop you! 😉
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O-H-I-O! Other than that kind of annoying chant, what’s the easiest way to know that someone is from Ohio? They will usually tell you! As an Ohioan myself (see what I did there?), I’ll admit we don’t have special water that allegedly pumps through New York pipes that make their bagels and pizza so great. We also don’t have much sunshine like Florida, but there’s always one interesting insight I share with my startup CPG entrepreneurs about Ohio. Throughout much of the last few decades, Columbus has served as America’s top test market for businesses trying out new products in the real world before deciding to roll them out nationally. The demographics of Ohio’s state capital have always been indicative of the rest of the United States…just on a smaller scale where you can see high-rises and rural farmland within a 15-minute drive.
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It’s no secret that A LOT of social situations are still very much centered around drinking alcohol (and specifically beer). But how does that tradition potentially shift against the backdrop of more people becoming conscious of their physical and mental health? Drinking a non-alcoholic beer was considered somewhat embarrassing and even stigmatized within the U.S. market, but the beverage category has gone through a renaissance of late. In fact, over the last handful of years, I’d argue there’s no other aspect of drinking culture that has enjoyed both this level of profound level of sales growth and huge cultural impact as non-alcoholic beer. So, as my interest in this captivating beverage category has increased substantially…I’ve continually found myself searching out those independent upstart brand stories that connect with my own “mindful drinking” journey. And you’ll hear about that connection when Jamie Fay explains what inspired him to create RationAle Brewing. Beyond talking through the RationAle Brewing strategic narrative, Jamie and I deeply analyze the driving factors and consumer behavioral trends behind the non-alcoholic beer categorical evolution. Additionally, we talk through how RationAle Brewing, despite being the fastest velocity non-alcoholic beer brand in the set, is staying disciplined as category hype grows. But furthermore…Jamie and I talk about his veteran CPG move to intentionally build RationAle Brewing in a strategic manner that’s efficiently flexible enough to attack when opportunities are right (especially as the company kicks off its largest round of fundraising yet). Lastly, we pontificate a bit around how we see the “future of zero proof” beverages playing out long-term. But these are just a few of the fascinating topics within our recent conversation…
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Short-term arbitrage or long-term strategy? Either way…is it time for supplement brands to start hedging those TikTok Shop bets? It shouldn’t be news to anyone at this point, but the U.S. House of Representatives overwhelmingly passed a bill last week that would give ByteDance about six months to divest the U.S. assets of TikTok or face a ban. If that desired result sounds familiar, it’s because the idea of a TikTok ban has roots in the Trump administration. In fact, a deal was even worked out where Oracle and Walmart would become minority owners in ByteDance. That deal eventually fell through, and Trump’s ban was struck down by a federal court. By the time Biden came to office, he rolled back Trump’s executive order and began private negotiations with TikTok. ByteDance was founded in 2012 and is now valued at just under $300 billion. ByteDance is often seen as the world's leading company on algorithms because its flagship apps TikTok (and TikTok’s sister app in China) are powered by commanding recommendation engines that make its apps extremely attractive to users. And it’s those powerful algorithms within the popular Gen-Z app that are at the heart of this ban TikTok national security debate. American lawmakers are concerned about TikTok’s relationship with mainland China. Like with most big Chinese companies, China's ruling Communist Party has set up a party branch at ByteDance. Scrutiny over ByteDance expanded further after the government took a stake in its local subsidiary that awarded the Chinese government a board seat at the subsidiary. So, American lawmakers are worried that the Chinese government will pressure ByteDance to share U.S. data gathered on TikTok, which the CCP could potentially use for nefarious reasons. In this content, I'll also share my strategic game theory breakdown on why banning TikTok has now become a lose-lose situation. Additionally, I share details around the social commerce trend that's powering TikTok Shop. The meteoric rise of TikTok offers supplement brands a plethora of opportunities from brand storytelling to sales expansion and various collaboration strategies. Whether it’s FitTok/GymTok advice, Hot Girl Walks, hydration in those Stanley Cups, or under-desk treadmills, TikTok has defined many health trends. So, it shouldn’t surprise you that as much as 85% of the total U.S. market TikTok Shop sales were with health and beauty products. One of the biggest health category merchants has been RYSE, which I'll share comments from its founder Nic Stella in regards to the power of leveraging TikTok. But don’t let those huge RYSE TikTok Shop sales numbers blind you because there are still risks for functional CPG brands beyond those stemming from the total ban of TikTok. This was something I recently talked about with one of the top CPG industry lawyers Ryan Lewendon. But either way, I don’t see a future without social commerce. It has now become too entrenched, too popular, and too valuable within the U.S. market. Moreover, details were leaked on an Amazon and Meta partnership where customers would be able to shop Amazon’s Facebook and Instagram ads and check out with Amazon without leaving the social media apps. As social commerce continues its rapid ascent, it cannot be overstated enough that supplement brands must adapt their digital strategies to fully exploit these emerging customer relationship channels to maintain a competitive edge in this increasingly dynamic business landscape.
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I grew up the typical Rust Belt kid eating mostly a hodgepodge of way-too-sweet, packaged foods and beverages. I’d like to think my “white trash palate” has evolved in the last few decades, but some things are harder to kill than 50 Cent. And you might be asking yourself…what does this have to do with your conversation with the founder of the energy drink brand Gorgie, Michelle Cordeiro Grant? Well…at this past year’s NACS Show, this recovering artificially flavored and sweetened Energy+ drink enthusiast tasted a few naturally sweetened and lightly flavored Energy+ drinks that were great…one of which that left an impact on me was Gorgie. So, naturally I wanted to lean-in further, especially after learning about the founder’s unconventional yet fascinating path to the CPG industry. In our conversation, Michelle explains how that business superpower allowed her to think differently and inspired many key strategic elements within Gorgie. We also breakdown the growing importance woman are playing within the energy drinks market. Plus, take it a step further and explain why it’s the perfect time to apply a much-needed female-first lens to the beverage category. Additionally, Michelle shares important lessons she’s learned in year one building an energy drink brand. Finally, we talk through some untapped exploratory sales channels and what Michelle’s lifestyle branding goals are for Gorgie long-term. But these are just a few of the fascinating topics within our recent conversation…
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Maybe making beer that uses vaginal yeast as one of its key ingredients isn’t going to take off anytime soon, but that doesn’t mean sex no longer sells within the CPG industry. We’ve come a long way from gas station boner pills, as the once-taboo sexual wellness space is booming…with the category now widely available at mainstream retailers. From a CPG strategist point-of-view, this is the time for entrepreneurs to remix sexual wellness products that do not meet modern-day consumers’ expectations. Whether that’s in any of the subcategories from sexual performance to reproductive health, remember that having a great product is only the entry fee to compete in today’s CPG market. Embrace the fact that although more consumers are becoming comfortable discussing these intimate topics, you can enhance your brand experience by helping navigate these difficult conversations and leaning into community building strategies.
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CELSIUS and PepsiCo. Nutrabolt and Keurig Dr Pepper. Bloom and Nutrabolt. NOBULL and TB12. What do these deals have in common (besides the fact that you’ve seen me break each of them down in content on my channel)? The only law firm in the world dedicated exclusively to the CPG community, Giannuzzi Lewendon. While insights from those massive deals are weaved into our conversation, I took the law firm’s partner Ryan Lewendon through my gauntlet of A to Z “CPG land” impactful topics. To be completely honest…this is the type of conversation for those REALLY into the CPG industry. Ryan and I talk about how integral the “divine triad of CPG” is…plus the importance of maximizing strategic optionality by building the brand with intention, both from organizational and customer-facing variables. We also ponder what the future of CPG looks like when its data-driven with layers of artificial intelligence. Moreover, we talk about the good, bad, and ugly around the strategic partnerships involving celebrities and the creator economy. Finally, we take that a step further and talk about today’s kingmakers (algorithms) and why the rise of social commerce has its possible downsides within functional CPG product categories. But these are just a few of the insightful topics within our recent conversation…
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During marathon sessions, gamers are only interested in unhealthy snacks and caffeinated drinks. I mean that was the long-held stereotype, right? Hey…don’t snipe the messenger though, I’m simply attempting to triangulate what the heck Bodybuilding.com is thinking with its recent move! Most functional CPG products do not arrive out of nowhere; they’re remixes of existing ones. And in a few rare cases, remixed CPG product innovations don’t have “easy to understand lineages.” Like when Bodybuilding.com remixes its sports nutrition private label that’s called REMIX Nutrition. Back in August 2020, REMIX Nutrition launched a collection of protein powders with officially licensed Hostess snack flavors like Twinkies, Zingers, and Cupcakes. Now…you guessed it, REMIX Nutrition has been remixed into a gamer-focused supplement line. So, maybe it’s a cheeky way to pay homage to that debunked stereotype?
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Within trendspotting content (when I first started YouTube in 2018), I mentioned how the growing energy drinks market (with all those jolts of stimulation) would eventually lead to a state of overstimulation where consumers would increasingly start shifting more attention towards relaxation. Admittedly, A LOT of my mindshare given to that hypothesis was likely directed towards leveraging a particular trending agricultural ingredient. And this is where synchronicity between Ben Witte (Founder/CEO of Recess) and I likely began. Yet, this phenomenon continued as we both saw the evolving marketplace in a manner that required brands to market the solution, not the ingredient. And I mention all that “separate but intertwined” backstory because our “great minds think alike” dynamic builds extensive layers of insights within our conversation about arguably the next big CPG space. Ben and I will cover how spotting that early marketplace insight helped inform key decisions at Recess that built powerful strategic optionality. We also dive deep into what’s driving the “better for you Relaxation” space and how Recess is intentionally building a broad-reaching platform business within that emerging category that’s inclusive of three distinct product lines, numerous formats, and only slightly nuanced value propositions. Additionally, we breakdown the strategic differences between what is needed to create a new category versus going into an existing category and trying to capture market share. As a special bonus, I got Ben to walk us through his “Recess Flywheel” strategy that has been creating more and more rapid retail growth. But these are just a few of the fascinating topics within our recent conversation…
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Many years ago, when I started proclaiming that the best and brightest sports nutrition brands could compete against any large CPG incumbent when it comes to functional food and beverage…oldhead CPG industry folk (especially beverage people) thought I was crazy. But at this point…I can just let that one super important beverage category retail sales scan data do most the talking for me. Energy drink brands that have roots in the supplement industry now account for over $3 billion in retail sales. And while most know the growth stories of CELSIUS, C4 Energy, GHOST, and Alani Nu, by now…I’m going dig a layer just below those brands and highlight a fast-charging challenger that could soon crack the top 10 best-selling energy drink list. In my wide-reaching conversation with Nic Stella, we cover topics like how his ability to spot early internet content and commerce connections have become a foundational element to the growth behind RYSE and RYSE Fuel. We also talk through a few different strategic partnership strategies…from flavor licensing to sponsoring UFC champions and professional sport teams. Moreover, Nic gets REAL about the beverage business and outlines a growing trend that I’ve long dubbed “the great beverage mirage.” Finally, we talk through his decision to lean into TikTok...which made him a key character in the brand story and catapulted RYSE to the top categorical spot on TikTok Shop. But these are just some of the insightful topics we talked about in this episode...
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CELSIUS and Ferrari. Monster Energy and was Mercedes-AMG for many years but is now with McLaren. And you can’t overlook the current top Formula 1 team…Red Bull. It’s probably hard to imagine now, but there was a time in the early 1990s when there weren’t any energy drinks sponsoring F1 racing teams. Similarly, it’s probably hard to imagine now…but in next thirty years we might be saying the same thing about supplement brands. Now…I’m sure every F1 racing team has some type of product allocation arrangement with certain supplement brands, but that’s rookie-level sports marketing tactics compared to the recent THG and Williams Racing partnership. THG Ingenuity will provide Williams Racing with a broad range of services, including across technology, ecommerce, and sustainability, while Myprotein will assist with nutrition. Will this be the tipping point for the supplement industry to dive deeper into F1?
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Billion-Dollar Vibes Only. But does CELSIUS have what it takes to jump either Red Bull or Monster Energy in the next several years? Celsius has now been fully integrated within the PepsiCo distribution system now for the last year and also fully integrated into PepsiCo’s annual planning cycle. Celsius Holdings (NASDAQ: CELH) had quarterly revenue of $347 million, which was up 95% YoY. More importantly, Celsius Holdings smashed through the billion-dollar mark in its full-year revenue numbers. In 2023, the energy drink brand generated $1.32 billion in revenues…which was up a staggering 102% YoY. According to IRI last 52-week data, Celsius was the number one brand driver of unit and sales growth in the energy drink category. Celsius was responsible for 31% of the category growth, driving $1.09 billion in incremental sales. In addition, according to the trailing 4 weeks of IRI SPINS all tracked channel data for the period ending December 31, 2023, Celsius is now securely the third-largest energy drink brand in the category. Its market share went from 4.9% in the third quarter of last year to 10.5% now. And I don’t want gloss over this accomplishment…because it’s the first time in over a decade that an energy drink not named Red Bull or Monster Energy has had a 10% share in the U.S. market. Celsius energy drinks saw massive growth in convenience stores, foodservice (e.g. fast food restaurants), mass retailers like Walmart, the club channel in retailers like Costco, and the Amazon marketplace. CELSIUS is now the best-selling energy drink on Amazon and also number one energy drink brand on Instacart grocery marketplace. So, it’s safe to say that CELSIUS is the official energy drink of the Internet Generation. Additionally, the early international market development groundwork starting to formalize with CELSIUS forming a new relationship with Suntory Beverage & Food and also saw the first major international market expansion under the PepsiCo umbrella, as sales and distribution activity in Canada began in December 2023. It's my opinion that international expansion presents significant opportunity for incremental growth over the next three to five years. With Celsius at basically full distribution now…the TDP growth will have to come from increased items carried per store. Because while the average items carried per store has increased exponentially since the PepsiCo partnership…it still lags Monster and Red Bull considerably. Going forward, Celsius will increase items per store through a combination of product strategies like flavor expansion, scaling the new Essentials lineup, and reintroducing iterated line extensions like fizz-free. Additionally, they will seek more store placements like leveraging cold display activity in Celsius-branded coolers. Finally, I recall a "called shot" by Celsius Holdings CEO John Fieldly three years ago and explain why I wouldn't bet against his crystal ball predictions as “the energy drink category is now a 3-team race.”
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Sometimes when you’re looking for billion-dollar opportunities…you can easily overlook those little details that can change everything. In last quarter’s Glanbia content, you might have noticed my irritation growing because over the inability of Optimum Nutrition to have a protein RTD offering that’s competing closely with the likes of market leaders…Premier Protein, Fairlife/Core Power, and Muscle Milk. But maybe I was looking at this problem from the wrong angle…maybe the answer to competing in the growing protein beverages market is through ISOPURE. But you might be asking why hasn’t ISOPURE been successful to those massive levels either yet? And in this content I'll explore that...and more! Glanbia Performance Nutrition is one of two wholly-owned segments of Glanbia plc (LON:GLB), a multibillion-dollar global nutrition company. The brands in the Glanbia Performance Nutrition portfolio include; Optimum Nutrition, BSN, think!, Isopure, Amazing Grass, and SlimFast. I'll use the recent earnings report, earnings call, and associated news to update you on how Glanbia Nutritionals and Glanbia Performance Nutrition is performing against the complex operating environment. Glanbia Performance Nutrition had 2023 full-year revenue of $1.8 billion, which was an increase 4.8% compared to last year. The brand portfolio continued to have strong pricing power in the market (with it being up 5.4%), but volume was down 0.6%. Additionally, I'll dive deeper into Glanbia Performance Nutrition geographical and product categorial performance (performance nutrition, healthy lifestyle, and weight management). BTW I’m thinking about the creation of a change.org petition for the Glanbia Performance Nutrition division name to be amended to The Optimum Nutrition Company. This one brand alone now accounts for 62% of the total GPN revenue. In 2023, Optimum Nutrition had 17% growth coming from both pricing and volume gains…and U.S. market retail consumption growth in tracked channels was 13.7% over the 52-week period ending December 31, 2023. Additionally, Optimum Nutrition generated over $1.1 billion in revenue in 2023...which makes it the number one sports nutrition brand in the world and also the top sports nutrition brand in 18 different countries. Finally, I talk through a collection of hot takes or things I’m left pondering about Glanbia at this current time. These include where the struggling legacy brand SlimFast sits inside of an evolving weight management category that has seen huge spikes in GLP-1 drugs (e.g. Ozempic, Wegovy, etc.), the think! protein bar brand (which has regained sales momentum after the “Great Shutdown” period) will see an exciting licensing partnership come sometime later this year, and why I think Glanbia is addressing the growth opportunity within the digital channel in the incorrect manner.
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While “gut health” has transitioned from just another trending topic to an important aspect of health that impacts everything from energy levels to immunity…it also brought with it tons of new market growth and product development within the food, beverage, and supplement CPG categories. Because of this…there’s little doubt in my mind that consumers are certainly more aware and educated than ever about gut health. But even someone that’s been increasingly fascinated (for most of his career) with unlocking the valuable intersection of gut microbiome, technology, and consumer packaged goods, I still get frequently tripped up with the ever-evolving advancements, new marketplace linkages, and gaps in knowledge that those create about the consumer health topic. So, I decided again to ask my good friend Noah Voreades…who’s a scientific researcher and founder of the boutique consulting firm GenBiome that focuses on the intersecting areas of personalized nutrition, gut microbiome, genetic testing, CPG, and digital health. He’s undoubtedly the perfect person to add an exceptional amount of depth to an insightful conversation covering many important trends and disruptive forces that will most-certainly impact the future of microbiome space. Along with catching you up on the evolution of the “gut health” CPG category, we go a step further and talk about some exciting edges of product innovation and explain who might hold the keys to next wave of microbiome ingredient Innovation. We also explain why governmental programs like SNAP and the emergence of “food as medicine” is pushing large retailers to start fully embracing a health/wellness positioning. Additionally, how personalization layers like registered dietitians, wearable data, and artificial intelligence will play a growing role in the category’s future. Plus, we dive into the possible categorical impacts from GLP-1. Finally, we tackle an often-overlooked part of gut health…the small intestine. Which reminds me that I want to quickly show some love to Nimble Science for supporting this piece of content.
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While it doesn’t happen often, duality can be a powerful force when considering the impact of a CPG industry trend. As an example, the decline in brain function is most often associated with the final third of your life. So, that’s why you typically see cognitive health supplement commercials featuring testimonials from older consumers. But spin around and you’ll see the other market opportunity. Purchase intent for cognitive health supplements is nearly the same between Millennial consumers and Baby Boomers. The simple fact that something exists that can give consumers a possible mechanism to achieve “more” within their daily lives is highly desirable. So, the next time someone mentions the cognitive health trend…think just as much about me drinking an energy drink containing Cognizin as you do your grandpa taking those jelly fish supplements.
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You’ll hear me lovingly describe Caroline Levy as someone that confidently dances to the beat of their own drum, but what I was referring to was my belief that the most successful people in business have conviction when others don't. Because don’t get it twisted…building conviction isn’t for the faint of heart. Yet, those courageous enough to go through the journey will find that if it’s coupled with passion…the result is electrifying. That statement I think perfectly quantifies Caroline Levy’s renowned career as one of the top equity analysts in the consumer space, trusted board member of brands like CELSIUS Holdings, Health-Ade, and Athletic Brewing, and overall strategic thinker that’s uncovered key consumer trends well before they became mainstream. Sounds right up my alley, right? So, I knew our conversation was going to be electric, but it honestly even exceeded my lofty expectations. Despite covering a ton of categorical ground in a relatively short amount of time…you can expect of deep conversation that spans from the dynamic energy drinks market to the emerging gut health functional beverage space…and even the disruptive non-alcoholic beer category. Moreover, we share our thoughts on why CPG brands should be focusing more on delivering value over volume. Finally, Caroline and I put on our economist hats…look into our CPG crystal balls and share some thoughts around the near-term outlook for beverage deals. But those are just some of the interesting topics we talked about in this episode...
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Amazon continues to expand its market leadership as the number one retailer of supplements ahead of even physical retail chains like Walmart. In the last year, Amazon has generated about $13 billion in categorical sales…up around 15% YoY. But the word "Amazon" also has created such a visceral reaction amongst much of the legacy supplement industry ecosystem. Depending on the person’s perspective you’re asking, you’ll get a slightly different reason for why they blame Amazon for the demise of the supplement industry (or should I say the previous version of the supplement industry they are nostalgic about). See…what I noticed starting in the mid-2010s was a collection of legacy supplement industry stakeholders growing continually more frantic about changing power dynamics. In fact, fear was quickly building that any semblance of yesteryear’s much tighter gatekept supplement industry ecosystem would soon be extinct. So, what do you do if you’re a cash cow generating legacy supplement industry player losing your gatekeeping powers? You utilize those massive internal resources to put leverage on who you believe ruined the “good ole days.” In terms of “how” these legacy supplement industry stakeholders are deploying those massive internal resources against Amazon…it's both backchanneling and then public-facing "compliance marketing" strategy. Regardless, it all rolls up into these previous gatekeepers calling on Amazon to reign in supplement industry bad actors by suggesting the online marketplace implement more and more compliance hurdles. This effort was arguably successful twice in 2021…as Amazon updated its requirements for listing dietary supplements on the platform. But that doesn’t appear to be enough…because there has been an uptick of public-facing pressure towards Amazon by these legacy supplement industry stakeholders. And even if Amazon hasn’t responded yet…this strategy might have done one better by indirectly getting the FDA’s attention, hence the three separate warning letters sent to Amazon from 8/18/23 to 12/20/23. But to help add some depth to the compliance side and balance my business perspective, I asked Brian Yam, who has two decades of regulatory affairs and quality assurance experience across every side of the supplement industry, to join me in a recent conversation. We deeply examined topics such as why the FDA is placing pressure on Amazon, if this could eventually lead to a market-bending precedent across today’s retail models, why FDA might be more effective placing proxy enforcement pressure elsewhere, plus we go talk about the under the radar short- and long-term possible implications to all supplement industry stakeholders.
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14 months after co-founding the private equity firm Skky Partners, Kim Kardashian finally took a bit of her own advice to "get your f*cking azz up and work." It was recently announced that the first capital investment for Skky Partners will be to acquire a “significant minority stake” in truffle-infused hot sauce and condiment brand TRUFF. Now…stick with me here for a moment because I’m going to connect some dots that will lead to a future Kim K investment. Skky Partners notes that food and beverage CPG won’t be its exclusive investment focus, but this TRUFF deal got me thinking about how Oprah loves truffles. Oprah also has her annual “favorite things” list, but this is about Kim K. So, what’s one of her favorite things from this year? In a Vogue interview, she shouted out Mid-Day Squares.
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In my world, hearing about (this or that) successful brand or person launching a new energy drink has become an almost weekly occurrence. I could understand how a casual market observer could easily get desensitized to it…or maybe even a bit dismissive like some pundits seem to have gotten about the trending functional beverage category. But I’ve tried to pride myself on deciphering what’s noise from who’s actually making music. When the energy drink brand Juvee launched in October 2022, I could tell there was some intent behind pairing the right audience and right product…plus choosing to launch with (and continue to support early) instant delivery partners like GoPuff. Additionally, what I believed was the smart decision to not make Juvee explicitly about the esports/gaming market despite having unique provenance within the hardcore of that growing niche market. But it was after an industry friend in common connected me with Sam Keene, Co-Founder of Juvee…that all my earlier thoughts started to make a lot more sense. In our conversation, Sam and I cover everything from how his early years at Red Bull had an outsized impact on the creation of Juvee a handful of years later. We also share insights about the growing importance of having an established audience/community when building within the CPG industry. Additionally, we talked through the interesting details behind last month’s acquisition of Juvee by the beverage portfolio Sprecher Brewing. Moreover, we explore what Sam’s most excited about post-deal…from the Juvee growth plan to his new CMO role being able to bring stories to life for each of the Sprecher brands. But those are just some of the interesting topics we talked about in this episode...
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Goodbye activewear brands just selling apparel and/or footwear. Hello activewear brands that are no longer constrained by their original categorical boundaries. From Nike to lululemon to Alo, these activewear brands aren’t just selling apparel…they’re selling a lifestyle. But I’ve started to pay closer attention to the strategic decisions at Alo of late because the brand keeps moving further into my domain…which is the emerging and intersecting categories of functional food, beverage, and nutritional supplements. I’m not going to provide all the product extension breadcrumbs here, but Alo reportedly started to originally develop a line of ingestible beauty and wellness supplements in 2019. With the pandemic-aided “work-from-home athleisure fashion trend” powering those next few years, Alo smartly put that project on the proverbial focus back burner. Then, in August 2023…Alo officially launched its Stackable Wellness System. The initial three ingestible beauty and wellness supplement SKUs were all utilizing a single-serving gel pack format…containing vitamins, minerals, and “hormone-balancing” adaptogens that addressed daily needs in skincare, immunity, and physical recovery. Along with the fact that most of these products sold out on Day 1, Alo also created a retail partnership with Sephora to sell its beauty and wellness segment. Feeling good from early feedback on its product extension strategy, Alo decided to double-down on the Stackable Wellness System last month by introducing five more SKUs…this time in the traditional capsule format. Those now eight SKUs of the Alo Stackable Wellness System (great or not) are only the entry fee to compete in the market. Instead, winners/losers in the broader consumer goods space (let alone CPG) are largely determined by what you build off those great products. This is why the smartest companies are focused less on product-based differentiation, as they know that competing on that alone will only provide a transient advantage. With today’s fast-follower low barriers-to-entry supplement business landscape, your best product features are too easy to copy and an insufficient defensible moat. The solution is having a bold strategic narrative…because that enables brands to create a unique story that will guide their entire internal and external business activity. Alo is a brand with a bold strategic narrative. In today’s marketplace, younger consumers are increasingly looking for visionary brands that are radically and bravely changing both our individual and global cultures with exciting and bold new lifestyle choices. It’s that strategic narrative boldness that attracts these younger consumers, but also provides a distinctiveness that’s highly defensible from competitive landscape perspective. By continually and almost gradually changing shape to predict its customers’ needs, Alo seeks to seamlessly become truly essential, visible, and celebrated parts of its customers’ lives without them even realizing it.
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When legacy CPG brands hear about trending movements like leveraging upcycled ingredients, I imagine all the oldheads sitting in a conference room acting like a scene from The Office. Oh…but then there’s the 117-year-old family-owned Spangler Candy Company, that’s headquartered in the great state of Ohio. See...the candy maker must have recently instituted “bring your Gen Z granddaughter or grandson to workday” because it just invented the perfect circularity strategy. The Spangler Candy Company produces arguably the most beloved Valentine’s Day product…those candy conversation hearts. Sweethearts are individually stamped with phrases using specialized but antiquated equipment. This printing process often creates mistakes like blurry or splotchy words. This year, the brand is spinning those mistakes as intentional, upcycling those unreadable candies into their own dedicated “Situationships” box so that young people can “give the gift as blurry as their relationships.”
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Premier Protein just confidently deployed a product strategy that could be key to its future growth…now it just needs to get the execution details right! BellRing Brands (NYSE: BRBR) is a portfolio that owns a collection of convenient nutrition brands like Premier Protein and Dymatize Nutrition, which was previously wholly-owned by Post Holdings. A fast-paced and busy lifestyle is pushing consumers to switch to quick and healthy meal options. This has resulted in above average categorical growth rates and increased household penetration of RTD protein shakes that promote active lifestyles. Additionally, powders are becoming more mainstream, and category proliferation has created an environment where more consumers are purchasing both every day and performance nutrition positioned protein products at grocery stores and mass retailers. Bellring Brands had a strong 2024 Q1 with net sales reaching $430.4 million, which was up 18.7% YoY. Premier Protein (~83% of BellRing Brands total revenue) grew 18.9% YoY, which came from large volume increases. Dymatize Nutrition was up 20.9% YoY also stemming from volume increases. Moreover, I provide three deep dives into the functional CPG portfolio's "hero SKU families" of Premier Protein RTD protein shakes and Premier Protein and Dymatize protein powders. As I’ve detailed in the past, Premier Protein has been partnering with the biggest and most reputable players in the industry to make large CAPEX investments…which has now given them a scalable, regionally diverse supply chain that will enable many years of robust growth. And you might be thinking, “what does that have to do with Premier Protein deploying a new product strategy?” Premier Protein has dabbled in a seasonal flavor strategy (on and off) for years, but it’s the recent Salted Caramel Popcorn launch that I believe signals that they’re advancing into a more dynamic LTO flavor strategy. This “drop culture” mentality is used A LOT within the performance nutrition powders (and energy drinks), but never in the protein beverage space. Why? Well…Premier Protein isn’t the only brand that has been dealing with manufacturing capacity constraints around aseptic low acid processing to produce RTD shakes over the last several years. That is an industrywide challenge…which means every other competitor doesn’t have enough capacity for its already top-selling products, so they will continue being gun shy on launching new innovations (flavors or ingredient decks) when the format would the same. That then makes Premier Protein having enough manufacturing capacity to not only meet its expected growth, but allow for innovation aggressiveness, a competitive advantage.
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How crazy is it to think that the “Church of Dr. Andrew Huberman” has grown to millions of regular worshippers in only a few short years? And this is at a time when attention spans are getting shorter, Americans’ trust in scientists is declining, and misinformation seems to be rampant...but maybe that’s actually a key part of this recipe for success. Admittedly, I’m not a Huberman Husband or have been indoctrinated into Hubermania (yet)…but it’s the broader cultural phenomenon, that’s powering the “Huberman Effect” which I’m acutely aware of (and been enormously fascinated by). Only a few decades ago, a Christian identity was so common among Americans that it could almost be taken for granted. As recently as the early 1990s, about 90% of U.S. adults identified as Christians. But today, about two-thirds of adults are Christians. The change in America’s religious composition is largely the result of large numbers of adults switching out of the religion in which they were raised to become religiously unaffiliated. But don’t confuse religiously unaffiliated with atheism…because Americans do not suddenly have a lack of belief. The first law of thermodynamics teaches us that energy cannot be created or destroyed, only altered in form. So, if that energy “cannot be destroyed” then where did it go? Christianity began getting replaced with secular institutions like sports, social tribes, and political parties…these communities (and many others) are all brands, and America is a strong believer in brands. But this content will explore how Dr. Andrew Huberman plays into this disruptive cultural phenomenon and why I think entrepreneurs are “missing the forest for the trees” when they think about not only Dr. Andrew Huberman but really any attention-getting personal brand.
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There are rules that need no introduction. They're not documented in books nor authorized by law, and still, they govern our daily lives. The problem with unwritten rules is they’re unwritten…and that leads to misunderstandings, especially in a constantly changing world! Take the supplement industry…there was this unwritten rule that children were generally off limits. That is unless that brand was owned by Big CPG. Then, the “Great Lockdown” happened in 2020! A LOT of converging forces produced a perfect storm of opportunity within the kid’s health supplement market. In the last almost three years, the supplement subcategory has grown by almost 50 percent…and that demand is not expected to slow. What’s next? I expect more kid supplements geared towards brain health and stress support…and don’t be surprised if you start seeing pre-teen health influencers!
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Footwear, apparel, and now nutrition…does the Tom Brady-infused NOBULL have what it takes to build a “complete wellness company”? To be fully honest, it’s been maybe four or five years since I’ve thought deeply about the TB12 brand. While the ideological foundation of the brand was (and still is) compelling, I became disinterested relatively quickly…as the level of execution required to bring that brand distinctiveness to life just wasn’t initially apparent. But my TB12 interest was reinvigorated this week…along with a bolstered belief that it could potentially have an intriguing future, after I read trending news headline. Tom Brady has struck a deal to merge his wellness company, TB12, and his apparel line, Brady Brand, with the sportswear brand NOBULL. The combined company will retain the NOBULL name…and Tom Brady becomes its second-largest shareholder after Mike Repole, who bought a majority stake in the company in July of 2023 through his investment firm, Impact Capital. So, what would an astute businessman like Mike Repole (i.e. turned Vitaminwater and BodyArmor into household beverage names) want with TB12 that was rumored to be generating less than 8-figures in revenue (CPG segment) and was losing tons of money on the bottom line. Firstly (and most obviously), Mike Repole is acquihiring Tom Brady. This isn’t Mike Repole’s first rodeo with this “sports marketing” strategy…as he iterated Gatorade’s playbook in the 2010s after noticing consumers spending more time on social media platforms and becoming more involved with “celebrity” parasocial relationships. So, that’s at least partly why BodyArmor decided to have athlete investors over the typical athlete spokespeople…thus allowing them to leverage their growing authentic microphones and public interest in an athlete’s life away from sports. But beyond the obvious interest in having one the greatest winners of all-time (Tom Brady) on his team, Mike Repole had the same “diamond in the rough” feeling that I got many years ago around the TB12 brand. And no, I’m not talking about the supplement product line…because those (great or not) are only the entry fee to compete in the market. With Tom Brady much more intentionally focused and engaged on business, the holistic wellness methodology of TB12 turns bolder and has more defensible distinctiveness. But then you also align it with the larger NOBULL strategic narrative…plus you can’t forget the added benefit of the CPG industry savviness from Mike Repole, and there’s a real possibility something extremely special could happen within this pursuit towards becoming a billion-dollar “complete wellness company.” From Nike to lululemon to even Alo (which is a brand I’ll discuss further on my channel very soon), these activewear brands aren’t just selling apparel…they’re selling a lifestyle. Reorienting around wellness and adding Tom Brady’s star power gives NOBULL a lot of strategic optionality throughout its ambitious build process…which is great and most likely directs them towards an IPO in the relatively near future.
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When you think about the celebrity packaged goods movement, which food/beverage categories come to mind first? I’m going to guess that very few of you had frozen dinners pop up in your head…but maybe that changes soon. Manufactured in partnership with Golden West Food, and available exclusively at Walmart, “MasterChef” Gordon Ramsay, Guy Fieri, and several other celebrity chefs are bringing their colorful charisma to the frozen section. For many years, frozen food companies attempted to attract younger consumers with healthier and updated options. And it seemed like all that product innovation would go mostly unnoticed…that is until March 2020. The new and improved frozen foods section became a huge winner in the “Great Lockdown” era. So, what’s next? I guess offering consumers the ability to essentially reach right into the TV and grab what that celebrity chef is cooking!
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Did we just become best friends Matthew Moulding? Because any CEO of a multibillion-dollar company that throws “Easter eggs” into an internal companywide video and then shares it publicly on Linkedin is my kind of guy! THG (aka the company formerly known as The Hut Group) recently updated the public markets by releasing its 2023 Q4 earnings report. I’ll be utilizing that financial information, along with notes I took listening to the earnings conference call, and any relevant publicly disclosed information to obviously update you on the recent performance of THG Nutrition division that includes the world's largest online sports nutrition brand MyProtein, but also utilize everything to provide insights surrounding the global supplement markets. For those unaware, THG is self-described as “a vertically integrated, digital-first consumer brands group, retailing its own brands in beauty and nutrition, plus third-party brands, via its complete digital commerce solution, Ingenuity, to an online and global customer base.” During the fourth quarter of 2023, divisional revenue for THG Nutrition was approximately $210 million, which was down 3.9% YoY. If we look at THG Nutrition revenue for the entire 2023 calendar year, the segment generated about $831.5 million…which resulted in flat YoY growth. So, what’s up with these poor growth rates when the overall global supplement market grew in 2023? I'll dive into several things going on here at MyProtein including: its global digital sales channel strategy and retail partnerships in physical retail, integration of supply side acquisitions, the effect the previous pricing strategy had on the sports nutrition brand's customer file, and let’s just say A LOT is riding on the success of the MyProtein global rebrand. Finally...I guess at the end of each year CEO Matthew Moulding prepares a recap video that he plays at the beginning of its big staff presentation meeting. I’ll be the first to admit that I know very little about David Beckham and Robbie Williams, so I’m likely not doing all the middle fingers to the British media or additional business “easter eggs” justice that were in the whole video, but after both faced their own bouts of criticisms from the British tabloids, they chose to escape in the United States. See where I’m going there…I spun you around in circles, just to give you further support for my mid-2022 prediction that THG would spin off its “nutrition segment” into a standalone public company and that new entity would IPO in the U.S. markets because of the more favorable multiples. If you’ve listened to the last few earnings calls, analyst Q&A sessions has seen CEO Matthew Moulding go from nervous laughs (and denying acquisition offers) to eventually confirming those “parts are worth more than the whole” M&A offers…and now he’s full-on stating that THG has internally adjusted accounting/finance requirements and American IPO optionality is improving by the day. While THG hasn’t taken definitive action yet, things seem to be progressing relatively quickly and you never know when an S-1 filing with the SEC might show up.
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I’ve declared in the past that CPG brands must pivot from linear thinking to advancing a truly circular economy. Yet, I’m 100% sure I wasn’t envisioning this strategic transition in the same way as the sports drinks brand Release. Where does “the world's first fully reusable energy drink” source its “upcycled functional ingredients”? At the same place it became a top-selling beverage brand…Amazon. Confused? Well…whether Amazon delivery drivers simply have trouble finding public restrooms or they are indeed being pushed to unrealistic productivity standards, those smiling trucks are usually filled with water bottles of urine. So, prankster turned CPG entrepreneur Oobah Bulter decided that “material” would be perfect for a sustainable sports drink. After that, he added some slick branding and Amazon marketplace strategies…and the algorithm did the rest of the work.
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I think my base case for last year's Nutrabolt "outlandish prediction" is still sound, albeit I was too bullish timing-wise on the IPO markets. But it's what I mentioned at the very end of that prediction…about Nutrabolt wanting to build the health and wellness version of The Kraft Heinz Company, which also aligns to the inspiration for this content. On January 17, 2024, Nutrabolt (makers of C4 Energy) announced that it made a significant minority investment into Bloom Nutrition. The investment provides Nutrabolt with an ownership stake of approximately 20%, making the company Bloom's largest investor. It’s important to note that the Bloom co-founders (Mari Llewellyn and Greg LaVecchia) will remain the majority shareholders. This investment is part of a larger $90 million financing that comes at a perfect time for the TikTok viral Greens & Superfoods powder that has evolved from simply being a successful community-driven digital business to now a top-selling wellness product across mega-omnichannel retailers like Target and Walmart. This resulted in Bloom becoming one of the fastest-growing brands in supplement industry history. In this content, I'll breakdown the investment from both brand perspectives...and discuss what it could mean to the broader greens supplement market.
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In the late-2010s, the supplement industry experienced a commercialization paradigm shift with stick packs because of what I dubbed the “Liquid I.V. Effect." What was once a packaging format most notably utilized for product sampling in the supplement industry became a foundational strategic element of a billion-dollar supplement brand. Now…it’s undeniable that stick packs have quietly become a ubiquitous packaging format central to many leading supplement products, as its value comes from its ability to live harmoniously between the needs of brand marketers and consumers. But is it possible that supplement industry stakeholders are getting too hooked to that trending convenient packaging format? CPG packaging is more than a shipping container or a specifically designed product holder…it’s a vessel that has huge effects on how a consumer feels about your brand. And that has A LOT to do with the “reward center” of our brains and the core of reinforcement that creates our behavioral patterns…dopamine. Now…I’m fully aware and even a bit complicit in the fact that the multitrillion-dollar CPG industry are master manipulators at creating dopamine hits. Whether it involves advertising strategies or visual elements of packaging…and even how the larger shopping experience is presented…its well documented that all these create dopamine hits with consumers. But it wasn’t until I had a conversation with an industry friend a few years ago at SupplySide West that he opened my eyes to the role stick packs could be playing in all this…especially with younger consumers. Gen Z consumers have had a smartphone in their hands and access to social media accounts since they were born, which has made them dopamine junkies. Companies using algorithms to leverage our dopamine-driven reward circuitry aren’t going anywhere…anytime soon. And it’s that marketplace reality which could be prompting certain packaging considerations that feed the growing consumer demand for more dopamine hits. Consider what happens when supplement consumers rip open a single serving stick pack daily compared to merely cracking open a 30-serving canister of pre-workout powder once. It's all about speeding up the frequency of those “pleasurable events.” That being said, the consideration of stick packs might not be warranted in every new product development discussion…and also just putting your powder in a stick pack won’t guarantee success. It’s important to remember that there’s a much bigger design psychology at play here…one that must be understood when unlocking the dopamine map of your potential customers.
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Milk is a liquid produced by mammals, and a plant, as I’m sure y’all realize, is not a mammal. Big Dairy is paying me to say that plant milks are HAHA just kidding. But the controversy around this nomenclature isn’t new. In fact, twelve years ago…the FDA even issued a warning letter to Cytosport about the fact that their flagship protein supplement, Muscle Milk, contained no actual milk. Hold on though because this content is about to get really meta. PepsiCo just announced that it is bringing Muscle Milk into the plant-based category. And I got an early chance to try these Muscle Milk Plant Protein Shakes at the NACS Show. Regardless of what I thought about the liquid…is Muscle Milk setting itself up with a Groundhog Day situation?
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I want to welcome you back to another episode of what I’ve branded Pivotal since these interview-style segments tackle impactful CPG industry topics and lessons from the business leaders that live it EVERY DAY! At the end of 2022, when I pitched the idea to host these collaborative holistic categorical deep dive sessions with the wellness-focused data company SPINS, Scott Dicker (Market Insights Director - SPINS) and I knew we wanted to start close to our passions with a sort of sports/active nutrition industry “State of the Union.” Well…believe it or not, we are already on the fifth quarterly installment of this series…and figured it was best to give you an updated version of that original content where we run through a collection of different trending sports/active nutrition themes. In our conversation, we cover everything from the changing of the guard and fragmentation within massive categories like energy, hydration, and protein, to why the “Huberman Effect” is causing many to reorient their consumption behaviors towards healthspan optimization. Additionally, we explain how huge opportunities will come to unlocking the “post-work but before bed” wellness occasion. Moreover, we explore how overlooked ingredients of the past are getting a reframed second life with today’s active lifestyle consumers. But these are just a few of the insightful categorical themes in our recent conversation…
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During the 15-year stretch from 2004 to midway through 2019, the top three brands within the U.S. energy drinks market went unchanged (e.g. Red Bull, Monster Energy, and Rockstar Energy). But then Bang Energy blasted past Rockstar Energy that summer with a staggering 700%+ YoY growth rate…ending the 2019 calendar year at around $1.2 billion in sales. This sent shockwaves across the packaged beverage space for many reasons, but I want to focus on a particular aspect of the “Bang Effect.” It’s time we all give Bang Energy the respect it deserves for what the brand did in the late 2010s to totally disrupt the energy drinks market. A great tasting “carbonated water with sugar or sweetener, flavor, and caffeine” just wasn’t going to be enough anymore…because energy without the “plus” had started looking boring to the market! Bang Energy put Energy+ on the map, which forced Monster and Rockstar into defensive product strategy mode, and at the same time conscious (or subconsciously) inspired many sports nutrition brand entrepreneurs to take the leap from pre-workout powders to energy drinks. While I might be a bit biased considering my professional background, I've always believed the best and brightest sports nutrition brands could compete against any large CPG incumbent when it comes to functional food and beverage. Even if they won’t ever admit it publicly, large energy drinks incumbents are worried about the “often imitated, never duplicated” influential epicenter of the CPG industry…sports nutrition. Why? Well…it reminds me of something I said in a recent piece of content about the sports drinks market. Gatorade had been accustomed to fending off direct attacks from known competitors. However, what happens when the market leader must fend off a rapidly multiplying amount of legitimate indirect attacks from lesser-known competitors? Now…swap Gatorade for Red Bull and Monster Energy. What Red Bull and Monster Energy want is for new categorical entrepreneurs to follow existing energy drink category playbooks (that they created). Following that “build process” within today’s energy drinks market is almost guaranteed to fail because traditional category leaders understand how to compete against it. But now…sports nutrition brands have started to change the game. And the proof is in the pudding for how disruptively successful this “build process” has become within the energy drinks market. If we took the top 10 energy drink brands in 2023, you’d have half that were in one way, or another incubated within the sports nutrition space (e.g. Celsius, GHOST, C4 Energy, Alani Nu, and Bang Energy). If we just take those five “incubated in sports nutrition” market leaders…they generated over $3.6 billion in retail sales in 2023. Finally, consider the strong list of powdered pre-workout energy supplement platforms that are below those Top 10 energy drink brands…and in different phases of beverage commercialization strategies. A collection of names like RYSE Fuel, Bucked Up Energy, G Fuel, Recon1 Energy, and Jocko Go…that’s an aggregate of several hundred million more in energy drink retail sales. And I won’t even go one more a layer deeper because you get the point here…as this “changing of the guard” within the energy drinks space is only getting started.
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Just when you thought Amazon couldn’t up its artificial intelligence game any further, the retailing giant introduced one of its most influential resources yet. No, Autofac…I mean Amazon isn’t letting the machines lose yet, but they did introduce generative AI to one of the oldest and most important features on Amazon…customer reviews! To see this in action, let’s look at Optimum Nutrition Gold Standard Whey. The first generative AI layer you’ll notice is with an overall review summary, which is super helpful when a product has over 200K customer reviews. The second generative AI layer summarizes reviews tied to a specific common trait and then allows you to easily see the positive vs. negative customer sentiment. For supplement brands selling on Amazon, don’t get caught sleeping because this will undoubtedly affect your conversion rates.
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The Simply Good Foods Company isn’t salty with the recent performance at Quest Nutrition, but it does want more. In this latest episode, I'll utilize the 2024 Q1 Simply Good Foods Company (NASDAQ: SMPL) earnings report, earnings call, and supplemental presentations that were filed on 1/4/2024 as the backdrop to provide broad nutritional snacking market insights. In Q1 of fiscal 2024, both Atkins Nutritionals and Quest Nutrition performed well against the categorical competitors in tacked channel retail takeaway, with Quest Nutrition specifically having strong YoY growth at 20%. What's at the heart of the Quest Nutrition success? Quest Nutrition is still known for the original Quest Bar. That means the company needs the bar business to be healthy for any of this innovation risk to make sense. Here’s the good news…the core bar business is growing. In fact, this year it had tracked channel retail takeaway growth of 16%. Additionally, Quest Nutrition has proven it's one of the few brands that can successfully extend across multiple product forms...and its customer base expects them to come into an indulgent snacking category and flip it into great tasting offerings that are higher in protein (and lower in the stuff that you don’t want like carbs and sugar). The snacks segment of Quest Nutrition, which now accounts for about 45% of all measured channel retail sales, saw retail takeaway growth increase 24%. But if we take this one layer deeper…the salty side of the Quest snacks segment had quarterly retail takeaway growth of about 45%. Quest chips now make up just over 20% of the total Quest Nutrition revenue. Furthermore, around 30% of new users to the brand have come from chips. Salty snacks are where I’d argue the most excitement lies, but it’s just one bullish brand layer stacked on many other categorical ones within the Simply Good Foods Company. I think most people forget about how innovative Quest Nutrition has been since the very beginning of the brand, and its constant product innovation that has been a key driver of new buyers into the brand and increased the household penetration. So, I'd expect Quest Nutrition to be eying up several sizable conventional salty snack categories that have multichannel potential. Finally, I run through the what all the weak brand performance at Atkins Nutritionals means and what actions the company is taking to change it…especially against the backdrop of GLP-1 weight loss solutions. As part of the new CEO’s assessment of what is needed to unlock the high potential of the Atkins Nutritionals brand, a comprehensive revitalization plan was developed based on extensive consumer research.
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Republican and Democrat congressional members can’t agree on almost anything anymore. That is unless we are talking about their favorite energy drink. Vending machines sprinkled across government buildings are stocked exclusively with CELSIUS. One government staffer noted, “Congress would probably go into a government shutdown without CELSIUS.” And maybe that’s the real reason Dunkin’ recently decided to authorize merchandising the energy drink brand in store locations…because they knew “America runs on CELSIUS.” So, not only are the energy drinks used to fuel workouts and celebrate life’s best moments, CELSIUS also plays an important role in providing our nation’s lawmakers with essential energy to carry out critical work. And that diverse fandom might seem like it happened overnight, but don’t get it twisted CPG industry entrepreneurs it took CELSIUS almost two decades to become the approachable lifestyle brand it is today!
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What happens when you combine the number one brand in the convenient nutrition category, a sales channel revenue diversification opportunity with 150K U.S. locations, and a beverage portfolio that’s recently shown an affinity for strategic partnerships? If you’re an avid follower of my quarterly content that analyzes the performance of the functional CPG brand portfolio BellRing Brands (NYSE: BRBR), that introductory word problem might sound vaguely familiar. And that’s because at the very end of last month’s video, I stated Keurig Dr Pepper (NASDAQ: KDP) needs to consider entering into a strategic sales and distribution partnership with Premier Protein. The protein beverage U.S. market size is estimated to be somewhere just north of $6 billion. Outside of private label penetration, the top five largest protein beverage brands in the U.S. market would be Premier Protein, Coca-Cola owned tag team of Core Power and Fairlife, Ensure (owned by Abbott Labs), Boost (owned by Nestle), and Muscle Milk (owned by PepsiCo). If you look at the entire protein beverages market, multipack SKUs drive the bulk of the sales activity...but I’m not sure that’s ideal long-term from a consumer or market outlook perspective. When you hear players like Premier Protein talk about how the protein beverages have less than half the household penetration of protein bars, it’s used to signal a huge long-term growth opportunity. While I agree with this…you also must realize a key driver of that is the consumer cost of entry. How can brands like Premier Protein create a lower cost of entry for consumers to trial protein beverages? They need to embrace a DSD distribution strategy. With stating that…I’m also acknowledging that’s easier said than done, and it’s a two-way street that requires more of the DSD distribution network to embrace the protein beverage category. I’ve been publicly predicting KDP needs to get more protein beverage exposure since October 2021. It's that 26-month-old YouTube video that’s a bit of a cult classic within the beverage CPG space because it correctly predicted the Nutrabolt/C4 Energy deal, the La Colombe deal, and the Athletic Brewing investment. Protein was mentioned as one of the five beverage categories KDP needed to invest in over the next three years, but I didn’t predict Premier Protein as the conviction M&A target. In fact, it was the only beverage category I didn’t give a prediction because I thought protein input type created too much strategic optionality. But with KDP CEO changes upcoming in 2024, I've adjusted my previous thoughts. KDP typically seeks out sizable deals that are more complex, resulting in portfolio expansion and distribution scale. As an example, when KDP did deals for C4 Energy, La Colombe, and most recently Electrolit to fill category white spaces…those new brands create more scale and expand the KDP portfolio, which makes its capabilities become stronger. So, its drop sizes get bigger, merchandizing gets more impactful, KDP can service each store more frequently, and its commercial relationships tighten. One of the biggest areas of impact from these recent deals has been in the convenience channel. Sounds like just the thing that Premier Protein can benefit from…and they’re also the type of brand that can help feed the KDP flywheel, right?
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After decades of Gatorade sports drinks market dominance, blurring categorical lines and emerging legitimate competitors have begun to create one of the most intriguing functional CPG spaces to watch in the coming years. The overall U.S. market size of sports drinks is just shy of $13 billion…growing around 12% YoY. Increases in total household penetration, average spending per household, purchase frequency, and spends per unit/trip are driving the sales growth. The current market leader is still Gatorade, at 60% of the categorical share. But there’s no shortage of action within the sports drinks, isotonic beverages, electrolyte packets, hydration products…or whatever else people call them category. And it’s that increasingly difficult task of labeling the functional CPG category that’s arguably at the center of this sports drink market shakeup. Because Gatorade both invented modern-day sports drinks and successfully maintained being the category creator for the beverage category's first half-century, the PepsiCo owned brand pretty much defined every aspect of that category’s rulebook. The biggest threat to Gatorade over the last decade had been BodyArmor. At the peak of its sales in 2022, it reached about one-quarter the size of Gatorade. But it was a few product and sports marketing incremental innovation moves at BodyArmor that created second- and third-order effects…thus opening a whole new world of opportunities for competitors. Here's something to think about…almost all hydration category consumers consider themselves to be living an active lifestyle, but almost every hydration category consumer also isn’t a professional athlete or competing in some sporting activity. That makes the current high-intensity sports marketing not super-relatable to their lives. So, where BODYARMOR took one small step, Liquid IV took one giant leap forward in democratizing the hydration category. And it was the “Liquid IV Effect” that splintered the hydration category even further and that's the big concern by Gatorade. So, even though Gatorade is still the clear market leader right now, PepsiCo is accustomed to fending off direct attacks from known competitors. However, what happens when PepsiCo must fend off a rapidly multiplying amount of legitimate indirect attacks from lesser-known competitors? The growth of PRIME has been rapid and impactful…surpassing Electrolit in sports drink sales after less than two years in market. Electrolit "was" an indirect attack from a realitively unknown competitor...that is until the recent Keurig Dr Pepper (KDP) long-term sales and distribution partnership announcement. Additionally, sports nutrition brands like GHOST to incubate hydration powdered supplement platforms that can in the future extend into beverages is scary. And then there's also a slew of other beverage brands like Vita Coco, that I don’t think usually comes to mind in the evolving functional hydration space. But don't count out Gatorade yet, as “a wise man gets more use from his enemies than a fool from his friends.” Gatorade has been the category leader for 50+ years because they take advantage of the information competitors give.
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Maybe I’m just in the holiday spirit because our Christmas tree is right outside the door of my home office, but I’ve always considered this time of year as a high point for CPG industry marketing. I don’t think it has much to do with Christmas cheer though…instead it likely centers around the universally known fact that consumers typically buy more items…and CPG marketers must work extra hard to earn attention and dollars. That being said, one of my all-time favorite CPG marketing efforts combines Hip Hop artist Lil Jon, the Kool-Aid man, and a remix of a classic Christmas song. And if that’s not your sort of thing...maybe we show love to Coca-Cola, that has been featuring Santa Claus in holiday advertisements for almost a century.
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I consider myself extremely lucky that I didn’t ignore those topics, activities, and ideas that dominated a significant amount of my time throughout life. While I don’t think I have any special talents, I’ve been passionately curious about the intersections of those things…and that has allowed me to create this wonderful professional life today. That being said, I’m naturally drawn to people that have similar approaches to life. So, it shouldn't be of any surprise to you why Mark French and I have become friends. Currently, Mark is the CEO of the clean sports nutrition brand Don’t Quit, but his entire past is a masterclass on how living at the intersections of your passions can create massively successful results. In our conversation, we cover everything from how his intrapreneur spirit at one of the largest media companies in the world led him into his first CPG venture to those lessons being applied with the recent merger of X2 Performance and Don’t Quit Sports Nutrition. Additionally, we expand on how that business combination happened and why its synergies should be powerful within the beverage industry. Moreover, we explore the aspirational brand storytelling approach of Don’t Quit and where the powder supplement format might fit into his future strategic gameplan. But those are just some of the interesting topics we talked about in this episode...
Special thanks to Cognizin for supporting this awesome piece of content.
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What does the Republican Party’s 2012 nominee for U.S. President Mitt Romney, the thirteenth-largest global private equity firm, and a supplement brand portfolio that will likely IPO next year…have to do with each other? A LOT more than you might think! On December 13, Bain Capital signed a definitive agreement to acquire a significant stake in 1440 Foods. You might not recognize the brand portfolio name 1440 Foods, but it was created from the leftover sports and active nutrition division (i.e. Pure Protein, Body Fortress, and MET-Rx) that Nestle Health Science didn’t want in The Bountiful Company deal. Current 1440 Foods CEO is Azania Andrews, who had a 9.5-year tenure at the largest global brewer Anheuser-Busch. She most notably led business and commercial strategy for Michelob ULTRA, transforming the beer into the fastest-growing brand in America by repositioning it to focus on active lifestyles and better-for-you choices. in the last 20 months leading 1440 Foods, she has done a great job transforming what Nestle Health Sciences thought was trash by overhauling the Pure Protein and Body Fortress brands and growing all three convenient nutrition brands revenue in 2023. Yet, if all is good at 1440 Foods…why take on a major investment from Bain Capital? Last week, when any CPG pundit talked about the Bain Capital and 1440 Foods deal…they cited the PE firm’s existing CPG holdings Valeo Foods and Dessert Holdings. But that information seemed like one of those sentences thrown into a complex math problem from early grade school that tried to confuse you. Instead, the critical information (to decode what’s next) might be a bit more hidden. In the 1440 Foods and Bain Capital deal press release, they give the boilerplate reasoning for the investment…to fuel innovation, expand distribution, and build upon the strong brand momentum. Now…that might very well be the base case because, well that’s the strategic gameplan for any leading lifestyle nutrition company, but Bain Capital isn’t interested in hitting singles and doubles. The home run play is to utilize parts or all its previous Nutraceutical International (now known as The Better Being Company) playbook from the 1990s.
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Do you remember in late 2021 when I predicted that the "gummification of the supplement industry" would finally start making its way into the sports nutrition category? Those of us forward-leaning strategists have known forever that some of the biggest growth areas within the sports nutrition industry are likely to come from a widening of traditional definitions, as well as products coming to market in alternative delivery forms. That sounds like a perfect set-up for what’s been going on within the creatine subcategory, right? If you haven’t been paying attention…I’d like to welcome you to the “Creatine Gummies” era! What started in early 2022 with Bear Balanced…has now ballooned into dozens of copycat competitors. This supplement trend has gotten so popular, you even had the largest retailer in the world Walmart recently add CON-CRET creatine gummies to its shelves nationwide.
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From Canopy Growth acquiring a majority stake in BioSteel four years ago…to the rise and fall of the supplement turned sports drink brand, I’ve attempted to contextualize the marketplace data and provide insights into would be valuable to the functional CPG community. But with BioSteel officially emerging from bankruptcy recently with a new owner, I thought it would be important to reconcile some of my “what’s next” predictions from the last piece of content. And who’s better at helping me do that than the new owner himself…Dan Crosby. In our conversation, we cover everything from where the crazy idea initially originated to acquire the bankrupt assets of BioSteel to his first impressions after owning the sports nutrition brand for just over a week. Additionally, we talk about his projected sports marketing strategies (including the NHL deal) and how those will look compared to the last version of BioSteel. Moreover, we explore where the beverage format fits into his strategic gameplan. Plus, sales channel strategies, manufacturing plans, and a whole lot more…this one covers a lot of ground, so I hope you guys are ready for it.
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What’s up guys, it’s your boy Joshy Pooh! OK…OK…that poor attempt at copying Maxx Chewning was not authentic. So, I guess according to the famous Dan Lourenco saying "authenticity is undefeated," I'm taking a loss here. But let’s talk about the recent GHOST x Sour Strips collaboration a bit though. Tons of content out there already on the amazing taste of the products and overall cool factor, which is par for the course with GHOST, but here’s what I loved about the collab…the tactful ability of GHOST Lifestyle to navigate its two existing sour candy licensing partnerships. And I want to stress the word partnership, because without strong, trusting, and dare I say authentic long-standing partnerships with Impact Confections and Mondelez International…the Sour Strips collaboration is just another totally awesome idea that never sees commercialization.
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There has been A LOT of change at the convenient nutrition brand HUEL. But on the other hand, A LOT has stayed the same…which is maybe at the heart as to why HUEL has been so successful. But you might remember that almost exactly two years ago, I made my last piece of dedicated content about HUEL (https://youtu.be/UOiTExb1fk0). In that previous content, I was primarily focused on breaking down the predicted huge discussion that HUEL leadership was internally partaking in…about exit event optionality. Either HUEL would look to go through an IPO process, or it would opt to sell the business likely to a strategy buyer. And this is the same crossroads they are technically still at today. Just to update you on the financial picture at HUEL for fiscal year 2023, the CPG brand generated net revenues of about $233 million...which was a 28% YoY growth from the previous year. HUEL grew active customers by 22% YoY to over 900K and passed the 300 million (what they call “complete food”) meals mark sold in over 80 countries since inception. HUEL also increased its physical retail presence by 51% YoY, and their products are now offered in over 11K store locations. In the last year, HUEL has also expanded its product portfolio by launching its first ever non-protein supplement called HUEL Daily Greens and reimagining the energy drinks market with Huel Daily A-Z Vitamins. Both products are still a smaller part of HUEL’s overall revenue, but they align with the product development innovation strategy that has made the company successful. In the functional CPG industry, most successful products do not arrive out of nowhere; they’re remixes of existing ones. That’s the essence of what the core HUEL “complete food” meal products are…flipping the historical messaging around meal replacements from this negative “restriction diet” focus into this positive, proactive convenient food focus. It seems so simple, but the skill of those like HUEL…who are winning in this category is nothing short of exceptional. According to recent interviews with HUEL leadership, the brand (with healthy margins and manageable sales growth) is in a position of being self-sufficient from funding. That being said, HUEL has long-term investors that would like to get a liquidity event soon. Moreover, HUEL leadership has ambitious long-term goals that could be accelerated with a major investment from a strategic buyer for majority share or a full M&A process…and similar could be said if they chose to go public through an IPO process. Which I guess brings us back full circle to the decision ahead...should HUEL IPO or get acquired by a large strategic buyer. I run through both paths in this content...plus provide my thoughts on two potential buyers: Unilever and Glanbia.
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Is the sports and active nutrition space really the influential epicenter of the CPG world? I’ve made that confident declaration A LOT lately, but I have to be honest…behind closed doors I’m just waiting for someone to call me out one of its massive blind spots (like sustainability). But as Deion Sanders recently said, "you better come get us now because this is the worst we will ever be." While there’s still tons of industry-wide work that needs to be done, I’m inspired by a recent innovative sustainability project by the largest global online sports nutrition brand MyProtein. Faced with the common “out of date stock product disposal” challenge, the company decided to think circularly by combining Myprotein ingredients and upcycled materials to produce a sustainable fish feed pellet. So, if you see Nemo looking fit…you know why!
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I’m not sure if the Canadian bankruptcy courts are just wildly more efficient than in the United States, but we already have a major announcement in the BioSteel court-supervised sale process. For those that haven’t been following my previous content on this business activity…and recognize BioSteel probably from all the prominent sports marketing deals (e.g. NHL sponsorship), you might be wondering why previous owner Canopy Growth didn’t just find a potential buyer itself? It did two separate times in the last year but Canopy Growth still didn’t receive any satisfactory bids for Biosteel...likely because the potential buyers looked under the hood and weren’t able to see a short enough path to profitability. But don’t get it twisted…that doesn’t mean the BioSteel assets were worth nothing. There were interested parties waiting…they just needed the bankruptcy process to essentially erase all the Canopy Growth mistakes, thus making the acquisition opportunity much more attractive. Of those interested parties, BioSteel received eight total bids, but only six of which substantially complied with the terms and were considered qualified. The winner of the BioSteel bankruptcy process was DC Holdings Limited, which does business as Coachwood Group. This Canadian holding company primarily specializes in the nutraceutical, sports nutrition, and health product sectors, but it also has a portfolio of real estate investments. Admittedly, when I saw the deal news…I didn’t recognize the holding company, its Founder/CEO Dan Crosby, or its main brand asset called Canadian Protein. Now…that doesn’t mean anything, as I have blind spots like everyone, especially when you consider Dan Crosby creates a significant amount of entrepreneur content online, Canadian Protein is one of Canada's largest e-commerce supplement brands, its products are also sold in Costco Canada, and it looks to manufacture most (if not all) its own products. While the new ownership hasn't released any public information on the BioSteel turnaround plans yet, I'll breakdown where the likely strategic path. Just to get this out of the way…any thoughts that BioSteel would quickly bounce back to recent revenue levels is absurd. This isn’t a knock-on the new ownership, but how that recent BioSteel revenue was generated matters.BioSteel won’t go back to playing the sports marketing game (at the highest levels) that Gatorade invented/mastered and BodyArmor emulated. Yes, BioSteel got to a level of sales in the Coke/Pepsi dominated beverage category that few brands ever reach, but I’m not even certain packaged RTD beverages will be a core focus of the new company. If so, maybe they make it available exclusively through Costco Canada…as rebuilding out a full-on North American beverage team and strategy seems too risky right now. My guess is that BioSteel will be rolled back to something that looks more familiar to the times before Canopy Growth initially invested in the brand and went all in on sports drinks. So, with Canadian Protein as our guide…BioSteel will likely get a revamped (and streamlined) supplement lineup and it will be mostly sold online.
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G Fuel decided to invite “the suits” into its cool kids’ club. Will this result in a similar FaZe Clan-like collapse or does this turn out differently for G Fuel? If you haven't seen the headlines yet from November 16th, G Fuel announced that it received a significant cash investment from private equity firms Kingswood Capital Management and First Bev. Precise terms of the 8-figure deal were not immediately released, but the deal provides significant growth equity for G Fuel. Alongside the investment, Bryan Crowley, a seasoned CPG executive with previous stops at Casa Azul Spirits and Soylent (just to name a few), will take over as the new CEO of G FUEL. Current leadership members…including Founder Cliff Morgan are said to be continuing leadership roles within G Fuel. Those are the scant press release details (outside of some additional "fluff" quotes from key stakeholders), but you guys know just sticking to that basic information isn’t my style. So, the bulk of this content will focus on the following items: Gamma Labs strategic shift into gamer supplement market, recap and reconciliation of my G Fuel energy drinks predictions from 2019, recap reconciliation of my 2019 predictions, breakdown viability and market attractiveness of “gaming” energy drinks, and what could be next for G Fuel after this strategic investment.
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Gamers are no longer that stigmatized nerdy and overweight young white male cohort who live in their parents’ basements. With an increasing number of people playing, broadcasting, and watching esports, the multi-billion-dollar gaming ecosystem is without a doubt cementing itself as a straight up cultural phenomenon. So, maybe it’s time to retire the stereotype that gamers are only interested in unhealthy snacks, caffeine drinks, and pizzas for marathon gaming sessions? Nissin Foods, maker of popular instant noodle brand Cup Noodle, is releasing a product in Japan that provides gamers with both sustenance and energy…in the form of caffeinated noodles. What’s Next? Totino’s kicking up its FaZe Clan partnership with a GHOST Energy orange chicken flavored pizza roll?
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I think it’s finally time for THG to file the necessary SEC paperwork, so my September 2022 MyProtein prediction can become a reality. THG (aka the company formerly known as The Hut Group) recently updated the public markets by releasing its 2023 Q3 earnings report. I’ll be utilizing that financial information, along with notes I took listening to the earnings conference call, and any relevant publicly disclosed information to obviously update you on the recent performance of THG Nutrition division that includes the world's largest online sports nutrition brand MyProtein, but also utilize everything to provide insights surrounding the global supplement markets. For those unaware, THG is self-described as “a vertically integrated, digital-first consumer brands group, retailing its own brands in beauty and nutrition, plus third-party brands, via its complete digital commerce solution, Ingenuity, to an online and global customer base.” During the third quarter of 2023, divisional revenue for THG Nutrition was approximately $195 million, which was down 2.3% YoY. If we look at THG Nutrition segment revenue for the first 9 months of 2023, it generated about $619 million…which was up 0.4% YoY. Why are these growth rate low? especially if we look out over the last two years (being up only 3.7% in that period)? I'll dive into several things going on here at MyProtein including: its ecommerce sales channel strategy, integration of supply side acquisitions, MyProtein rebrand causing short-term revenue impacts, and pricing strategy in an inflationary environment. Though it only makes up one-third of the total portfolio revenue, THG Nutrition accounts for almost all its profitability. While THG Nutrition isn’t a standalone business, strategy within the segment (over the last two years) has been focused on creating optionality. I predict that sets THG up to spun-off its “nutrition segment” into a standalone public company. This new entity will likely IPO in the U.S. markets because of the more favorable market conditions. Finally, I dive into arguably the top 3 growth drivers that THG Nutrition needs to focus on over this next year to make themselves more attractive to the U.S. investment community.
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I’ve said it once and I’ll say it again…it’s crazy how the number one brand in the entire convenient nutrition category (e.g. Premier Protein) can still have so much untapped organic growth opportunity! BellRing Brands (NYSE: BRBR) is a portfolio that owns a collection of convenient nutrition brands like Premier Protein, Dymatize Nutrition, Powerbar, and Joint Juice, which was previously wholly-owned by Post Holdings. A fast-paced and busy lifestyle is pushing consumers to switch to quick and healthy meal options. This has resulted in above average categorical growth rates and increased household penetration of RTD protein shakes that promote active lifestyles. Bellring Brands had a strong Q4 with net sales reaching $472.6 million, which was up 24.6% YoY. Premier Protein (~83% of BellRing Brands total revenue) grew 30.2% YoY, which came from mostly volume increases. Dymatize Nutrition was down just under 1% YoY stemming from a slight volume decrease. Moreover, I provide two deep dives into the functional CPG portfolio's "hero SKU families" of Premier Protein RTD protein shakes and Dymatize protein powders. In this quarter, BellRing Brands leadership decided to discontinue the operations of PowerBar in the North American market, but the company will continue offering the brand internationally. Finally, I explain several different growth opportunities that are untapped at Premier Protein. These include how operational improvements will create more revenue and my predictions that Premier Protein will start to diversify both its highly concentrated domestic sales channel mix (e.g. convenience stores) and geographical revenue mix.
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Remember those good ole days of Instagram when everyone shared an embarrassingly high number of food photos? Well…maybe it’s time to party like it’s the early 2010s again, but this time utilize those food photography skills in a useful manner. If Google Lens is best described as a search engine for the real world, then SnapCalorie would be that guy with a six pack your girlfriend has pictures of saved in her phone but told you not to worry about. SnapCalorie is an advanced computer vision-powered app that uses AI to get an accurate calorie count and macronutrient breakdown of a meal from a single photo taken with a smartphone. The fact is that human beings are terrible at visually understanding what they’re putting in their bodies. So, in the “Age of Ozempic” this technology could be a huge value-add.
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After a month of owning MusclePharm…has FitLife Brands given us any hints of what’s to come next? For those unaware, the supplement brands that are within the FitLife Brands portfolio are categorized in three segments…NDS Products (which are a collection of brands mostly sold in the GNC franchise system), iSatori Products (which are a collection of brands sold through a diversified retail mix), and the recently acquired Amazon-focused brands within Mimi’s Rock Corporation. In total, the FitLife Brands portfolio is sold through more than 20,000 retail locations globally. In the third quarter of 2023, FitLife Brands Inc. (NASDAQ: FTLF) had revenues of $13.9 million…which was up 67% YoY (yet all quarterly growth plus more was attributed to the February 2023 acquisition of Mimi's Rock affecting the comparatives). In a short amount of time post-acqusition of Mimi's Rock, FitLife Brands has been able to cut around $3.5 million in annualized SG&A costs. This strategic activity confirms what I’ve stated in the past about the company being sound operators that lean towards fiscal conservatism, but I’m still a bit weary on how this will play out with adding in MusclePharm, a second “major” acquisition that happened within about eight months. FitLife Brands officially closed the $18.5 million acquisition of the bankrupt MusclePharm on October 10, 2023. So, are we to expect that FitLife Brands will utilize the same Mimi’s Rock integration gameplan with MusclePharm? In this content, I'll predict the likely strategic turnaround plan at MusclePharm that includes rebuilding the Assault pre-workout platform and refining the Combat protein platform. While it’s silly to believe that MusclePharm won’t require a whole bunch of energy put towards turnaround efforts, I think FitLife Brands leadership is underselling its potential in 2024.
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Some stressed out entrepreneurs drown themselves in alcohol, my stress relieving “vice” is that nighttime bowl of ice cream. I subscribe to the theory that there’s no problem too large that sugar can't solve. But what if the problem was that sugar-loving consumers want to maintain the same taste of their indulgences but curtail their sugar consumption? For many indulgence focused CPG brands that offer sweets, sugar reduction remains a top priority. While adding sweeteners (usually the artificial ones) was typical…sucralose, erythritol, and others have been getting beat up in the court of public opinion. But the largest food company in the world, Nestle, continues to search for alternate options through food technology advancements. One recent breakthrough uses an enzymatic process to reduce intrinsic sugar in ingredients such milk by up to 30%...with a minimal impact on taste and texture.
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Is there still some Bang left in Jack Owoc’s fight for the company he founded? While the bulk of this content is going to be focused on reconciling what I previously predicted Monster Beverage would do with the Bang Energy asset to the actual turnaround strategy that Rodney Sacks (Monster Energy CEO) has been slowly providing details of within their quarterly earnings conference calls. And since Monster did just release their 2023 Q3 earnings report, I'll start this content off by running through some high-level financial data. This will obviously update you on how the existing brands within the Monster Beverage portfolio have been performing recently, but more importantly give context for my expanded strategic commentary on energy drink market dynamics and trends…plus it will make the Bang Energy information more relevant and impactful. Though the portfolio of Monster Beverage brands have a larger market share in the U.S. convenience channel than Red Bull, I'll bring up data that shows why the Bang Energy acquisition is maybe more important than you think when it comes to competing against CELSIUS, C4 Energy, and GHOST Energy. I'll also share information on many of the most important strategic gameplan elements that should help the Bang Energy expected turnaround opportunities become reality. These elements include: why Bang Energy is being distributed by the Coca-Cola DSD system, what those initial results were and Monster Energy sales strategy going forward, and why Monster Energy is cutting many Bang Energy flavors. Finally, we can’t talk Monster and Bang without some legal chatter, right? We already know that on July 31, 2023…Monster Beverage Corporation completed its acquisition of Bang Energy. As you can imagine that deal clears up A LOT in the legal dispute area…but not everything.
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Remember that scene in Talladega Nights where the original driver leaves the track and Lucius asks the pit crew if anyone wants to jump in the car and go fast? Well…Celsius Holdings is the energy drinks version of Ricky Bobby! This is only the third quarter that Celsius energy drinks was fully integrated into the PepsiCo DSD distribution system after the August deal announcement. Celsius Holdings (NASDAQ: CELH) had quarterly revenue of $385 million, which was up 104% YoY. According to IRI last 52-week data, Celsius was the number one brand driver of unit and sales growth in the energy drink category. Celsius was responsible for 28% of the category growth, driving $950 million in incremental sales. In addition, according to the trailing 4 weeks of IRI SPINS all tracked channel data for the period ending October 8, 2023, Celsius is now securely the third-largest energy drink brand in the category. Its market share went from 4.4% in the third quarter of last year to 10.5% now. And I don’t want gloss over this accomplishment…because it’s the first time in over a decade that an energy drink not named Red Bull or Monster Energy has had a 10% share in the U.S. market. Celsius energy drinks saw massive growth in convenience stores, foodservice (e.g. fast food restaurants), mass retailers like Walmart, the club channel in retailers like Costco, and the Amazon marketplace. In the quarter, CELSIUS became the best-selling energy drink on Amazon and also number one energy drink brand on Instacart grocery marketplace. So, it’s safe to say that CELSIUS is the official energy drink of the Internet Generation. Additionally, the international expansion groundwork with PepsiCo is getting laid now, so Celsius energy drinks can capture what they believe is a significant opportunity for incremental growth over the next three to five years. Finally, CELSIUS has a household penetration of about 25%, compared to 11.1% a year ago. This makes the energy drink brand the number one growth brand in household penetration. CELSIUS have incurred substantially more in marketing and advertising expenses, but it’s not misaligned with revenue growth. In fact, it’s almost the same with YTD Celsius revenue growth at 104% and the marketing and advertising expenses up 108%. This shows us that marketing strategies (though outsized from years prior) are driving ROI.
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CELSIUS is climbing the energy drinks leaderboard, but to catch Monster Energy…maybe they need to think like Monster Beverage Corporation and The Coca-Cola Company. So, I’m scrolling through a slew of business news the other day and I see a Bloomberg article headline…seemingly taken from an interview with Celsius Holdings CEO John Fieldly that states “potential acquisition on the horizon.” While I'm quite certain John Fieldly wouldn't show his cards like that, I actually think a certain publicly traded beverage portfolio acquisition makes a lot of sense for Celsius Holdings (NASDAQ: CELH) to target in the near-term future. Just to finally rip the Band-Aid off, I’m suggesting that Celsius Holdings acquires The Vita Coco Company (NASDAQ: COCO). Throughout this content, I'll share my investment thesis on this super interesting beverage industry M&A prediction.
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Digital marketers at functional CPG brands better watch how they flex on Instagram. When Powerade reformulated its beverage to contain more electrolytes earlier this year, The Coca-Cola Company decided to take a few swipes at hated rival PepsiCo...owner of Gatorade. In one of these “Powerade vs. Gatorade” social media posts, it featured a side-by-side comparison of electrolytes and vitamins with the caption reading, “don’t underestimate our electrolytes” followed by a flexed arm emoji. Harmless enough, right? Wrong! The “National Advertising Division” sided with Gatorade’s compliant that the ad implied that Powerade “delivers superior heath, hydration, and performance benefits and through the flexed arm emoji, that drinking Powerade will make consumers stronger than Gatorade.” This decision could have broad implications, as functional CPG brands will need to understand that common emojis can convey claims that require substantiation.
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If there’s one thing consistent about Glanbia each year, it’s that the global nutrition group always makes at least one acquisition. Glanbia Performance Nutrition is one of two wholly-owned segments of Glanbia plc (LON:GLB), a multibillion-dollar global nutrition company. The brands in the Glanbia Performance Nutrition portfolio include; Optimum Nutrition, BSN, think!, Isopure, Amazing Grass, and SlimFast. I'll use the recent earnings report, earnings call, and associated news to update you on how Glanbia Nutritionals and Glanbia Performance Nutrition is performing against the complex operating environment. Glanbia Performance Nutrition had 2023 YTD revenue increased 2.7% YoY, but that was a sequential slowdown from the first six months in 2023. The brand portfolio continued to have strong pricing power in the market (with it being up 8.9%), but volume was down 6.2%. Additionally, I'll dive deeper into Glanbia Performance Nutrition geographical and product categorial performance (performance nutrition, healthy lifestyle, and weight management). BTW I’m thinking about the creation of a change.org petition for the Glanbia Performance Nutrition division name to be amended to The Optimum Nutrition Company. This one brand alone now accounts for 61% of the total GPN revenue. In the first nine months of 2023, Optimum Nutrition had 14.5% growth coming from both pricing and volume gains…and U.S. market retail consumption growth in tracked channels was 9.5% over the twelve-week period ending September 10, 2023. Finally, I talk through a collection of hot takes or things I’m left pondering about Glanbia at this current time. These include where the struggling legacy brand SlimFast sits inside of an evolving weight management category that has seen huge spikes in GLP-1 drugs (e.g. Ozempic, Wegovy, etc.), why Optimum Nutrition needs to grow its protein RTD beverage offering, and why Optimum Nutrition needs to go back to the drawing board with Amino Energy to win any share in the energy drinks market.
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Will upcoming changes to Atkins Nutritionals help them survive in the “Age of Ozempic”? In this latest episode, I'll utilize the 2023 Q4 Simply Good Foods Company (NASDAQ: SMPL) earnings report, earnings call, and supplemental presentations that were filed on 10/24/2023 as the backdrop to provide broad nutritional snacking market insights. In Q4 of fiscal 2023, both Atkins Nutritionals and Quest Nutrition performed in the top-tier of categorical competitors in retail takeaway, with Quest Nutrition specifically having strong YoY growth at 26%. What's at the heart of the Quest Nutrition success? Quest Nutrition is still known for the original Quest Bar. That means the company needs the bar business to be healthy for any of this innovation risk to make sense. Here’s the good news…the core bar business is growing. In fact, this year it had tracked channel retail takeaway growth of 22%. Additionally, the Quest bars and sweet snacks (e.g. Quest Peanut Butter Cups and Quest Candies) retail takeaway growth was about 25%. That being said, salty snacks are where I’d argue the most excitement lies within the Simply Good Foods Company…as retail takeaway growth in the quarter was about 40%. Quest chips now make up just over 20% of the total Quest Nutrition revenue. Furthermore, 30% of new users to the brand have come from chips. Finally, I run through the what all the weak brand performance at Atkins Nutritionals means and what actions the company is taking to change it…especially against the backdrop of weight loss drugs like Ozempic. As part of the new CEO’s assessment of what is needed to unlock the high potential of the Atkins Nutritionals brand, a comprehensive revitalization plan was developed based on extensive consumer research.
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There seems to be an “anything goes attitude” emerging within the beverage industry. Want to make an alcoholic Mountain Dew? Sure! Want to create a caffeine-free Monster Energy with alcohol? Sounds wonderful! And if you want to make fun of a product concept on April Fool’s Day one year…and reveal commercial plans for basically the same thing the next year, we’re here for it! Well…if you haven’t heard yet, White Claw will be launching a non-alcoholic premium seltzer soon. White Claw 0% will come in four flavor variants, include electrolytes, and contain 15 calories per can. What’s next from the Mark Anthony Group…Mike’s Non-Alcoholic Lemonade? Hey…if beverage IP is truly holistic, then alcoholic beverages should be able to transition into non-alcoholic beverages, right? But on face value this feels a tad bit weird though…
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Pivotal is an interview-style segment that tackles topics in consumer packaged goods (CPG) and fast moving consumer goods (FMCG) from the business leaders that live it EVERY DAY! As another quarter recently ended within the functional CPG space, it’s seemed only right that I ask my good friend and Market Insights Director at SPINS, Scott Dicker, to join me again for another one of our legendary holistic categorical deep dive sessions. Since this is our fourth quarterly installment of the Josh & Scott show, we decided to kick it up a notch with a triple-feature of key trending categories. In our conversation, we cover everything from the “Olipop Effect” impacting gut health supplements to why multifunctional gut health formulations are picking up momentum. Additionally, we explain how huge opportunities will come to a handful of the most popular functional mushrooms as mainstreaming starts to bring them out of the natural channel. Moreover, we explore how there’s a growing duality of market positioning happening within the cognitive health category. But this is just a snippet of the fascinating gut health, functional mushrooms, and cognitive health categorical topics we explored in this episode...
Special thanks to Cognizin for supporting this awesome piece of content.
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With the per capita sales volume of ketchup falling slightly over the last five years, the Heinz marketing team members knew they needed to collectively step-up big time. Knowing that remixing some played out CPG industry strategy wasn’t going to work...Heinz turned to the United States Mint for inspiration. Thankfully, we aren’t going to see more green ketchup again either! Instead, Heinz is remixing the decadelong “State Quarters Program” that was estimated to increase demand by nearly $3 billion. Dubbed Saucemerica, Heinz is releasing 50 limited-edition packets for each state. While the packets are filled with classics like ketchup, mustard, mayonnaise, ranch, BBQ and tartar sauce, the designs are each inspired by a particular state. You can get your hands on these limited-edition condiment packets at movie theaters, sports stadiums, and fast-food drive-thrus.
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Pivotal is an interview-style segment that tackles topics in consumer packaged goods (CPG) and fast moving consumer goods (FMCG) from the business leaders that live it EVERY DAY! This is going to be a sort of special edition Pivotal episode because it was filmed onsite at this year’s NACS Show in Atanta. While my guest certainly doesn’t need an introduction at this point, I would be remiss not to give major props to John Fieldly. Since taking over as CEO in 2017, Fieldly has built Celsius into one the fastest-growing beverage companies in the world. Celsius, whose brand positioning has evolved from a focus on weight management to fitness and now wellness lifestyle, has emerged as the third best-selling energy drink behind only Red Bull and Monster. John and I talked a bit about the importance around that brand strategy evolution, along with a handful of growth drivers that have been unlocked due to last year’s PepsiCo deal. We also discussed how Celsius is driving hard into an overlooked sales channel strategy that in 2019 I declared (if successful) would put the energy drinks category on the “beverage Mount Rushmore.” This unedited conversation was filled with tons of other fun but insightful moments that I’m certain you won’t want to miss...
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Even if you don’t understand those trendy TikTok dances, it doesn’t mean there isn’t a mix of skill and hard work, along with timing and luck that goes into capitalizing on these new kingmakers of the world. If you can consistently “catch lightning in a bottle” by holding consumer attention with the help of these digital platform algorithms, congratulations…you’ve just become one of the most sought-after assets in the world. What’s the conversion rate on billions of views, likes, comments, and shares…plus a year-old shoe brand, an unlaunched skincare brand, and family merch? D’Amelio Brands recently raised capital at a $100 million valuation. The newest investment will be used to launch a CPG food brand in an unknown product category. With motivations of “crossing generations,” Be Happy Snacks is giving me “slightly better-for-you MrBeast Feastables vibes.”
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Is there a more riveting “what could be next” story playing out right now across any part of the CPG industry then with the brand portfolio Congo Brands? For those unfamiliar, here’s a quick recap on the Congo Brands portfolio and its "creator/celebrity" partnerships...PRIME is the current star performer, selling ~$550 million of hydration beverages across large tracked channels over the last 52 weeks, and was created along with Logan Paul and KSI. Alani Nu is no slouch though, selling approximately $400 million worth of energy drinks across tracked channels over the last 52 weeks. The supplement brand turned beverage powerhouse was created with husband/wife team of Haydn Schneider and Katy Hearn. Finally, 3D Energy is an energy drink brand that has garnered decent success (albeit super small compared to PRIME and Alani Nu) and it was created with Christian Guzman. But within this content, I'll run through some possible interesting future ideas for each brand (including acquisition potential). Plus, I'll cover why I think Congo Brands could be looking at an IPO in late-2024.
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Remember in the movie "Hustle & Flow" when Terrence Howard's character said "it's hard out here for a pimp." Well...I have no idea about that, but I do know legacy CPG brands are having a hard time coming up with effective ways to stop consumers’ infinite scroll. Their latest effort revolves around using the power of going gross. By introducing weird flavor combination LTO products, legacy CPG brands are using a branch of cognitive science called scheme theory against consumers. But instead of boring you with more consumer psychology, I want to share my top 3 nastiest gross-out marketing stunts…at number 3, Valentine’s Day 2021 saw Kraft launch candy flavored Mac & Cheese. At number 2, what was PepsiCo thinking when it combined MTN Dew and its Flamin’ Hot snack flavor. And the top spot goes to…French’s Mustard flavored Skittles…yuck!
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Stay with me here for a second, but the pursuit of the ultimate Pokémon card is a thrilling adventure that ignites the hearts of collectors. It encompasses the joy of discovery, the excitement of serendipity, and the satisfaction of completing a quest. Now…swap Pokémon card for PRIME Hydration drink or that’s how I envision Logan Paul pitched the idea! PRIME just launched its newest limited-edition flavor Glowberry…which on its own wouldn’t warrant my attention, but this go-to-market strategy is unique. Exclusively within its physical retail merchandise globally, PRIME will mix-in a limited number of Glowberry bottles that have slightly different label design. About 10% will feature a “rare design” and only 2% will feature an “ultra rare design.” This is a genius idea that will likely alter CPG brand strategies going forward.
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Everywhere you turn, iron-clad sports nutrition brands of the past are now showing cracks in their armor. So, should the recent BPI Sports news have really surprised you? I’m going to let you in on a not so little secret within the supplement industry. Supplement brands are competing for every dollar from consumers who have a heightened sensitivity to costs, and though the supplement consumer has proved once again that it’s highly resilient…gone are the days of generating a reliable, perpetual growth trajectory through the previous business strategies that fueled decades of industry success. For those not familiar with the sports nutrition brand, I'll quickly walk down memory lane...detailing the strategies that made BPI Sports into one of the fastest-growing sports nutrition brands of that early to mid-2010s era. But for those that haven’t already read the headlines last week, BPI Sports filed voluntary petitions for protection under Chapter 11 of the Bankruptcy Code. It was listed that BPI Sports had revenue of $12 million year-to-date and $23.4 million in 2022. It also stated the company had $2.2 million in estimated assets, with three-fourths of that coming from inventory. On the other side of the accounting ledger, BPI Sports had an estimated debt load of $7.6 million. Its largest creditor was supplement contract manufacturer and brand portfolio Hi-Tech Pharmaceuticals, which was owed $4.9 million in trade debt as its main supplier. In its case summary, BPI Sports stated that it negotiated a restructuring agreement with Hi-Tech Pharmaceuticals that will convert its remaining debt to 100% of the equity in the legacy sports nutrition brand. You might be asking…why didn’t BPI Sports just look for a buyer itself? The court dockets note it did in fact try but had a “failed sale process that did not obtain the approval of the minority investor.” So, with BPI Sports facing business difficulties caused by insufficient cash flow to address debt servicing requirements and operational requirements that necessitated several merchant cash advance loans…it was best for the going concern value of BPI Sports’ assets and operations to file for Chapter 11 bankruptcy protection. Finally, assuming Hi-Tech Pharmaceuticals does indeed acquire BPI Sports, I'll give my prediction on what happens next.
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It has been over six months since my last MusclePharm bankruptcy update, but don’t misinterpret that silence as somehow indicating the court proceedings must have been good vibes only. If you followed my Bang Energy bankruptcy content, you know that process took around 260 days. But it was complex, involving creditor claims in the billion-dollar range…and had that infamous hostile takeover element to it! Surprisingly enough…the MusclePharm bankruptcy has taken even longer, though with far less in creditor claims. Why? Well…that likely could be pointed in the direction of the previous largest shareholder, CEO, and Chairman of MusclePharm, Ryan Dexler. Even though almost all secured and unsecured creditors agreed on the proposed path forward for liquidating the remaining assets and value of MusclePharm, Ryan Dexler took various legal actions against Empery Asset Management. And this is understandably so…as Ryan Dexler put many millions of his own capital into MusclePharm over the years. But within the Empery collateralized loan that got MusclePharm in this mess, there was a clause within the signed intercreditor/insubordination agreement that disallows Ryan Drexler the ability to file legal challenges. So, after the courts enforcement of that Empery document, and the its approval of the asset purchase and sale agreement for MusclePharm this past week...we might have a new strategic acquiror of the legacy sports nutrition brand. While there’s still some details that need to be worked out before you see this information spread across the press release news wires, the strategic commentary in the latter part of this content will assume the “stalking horse bid” with FitLife Brands, Inc. (NASDAQ: FTLF) works out. Moreover, I'll update you on the recent evolution within the brand portfolio and how that triggered a much needed sales channel diversification at FitLife Brands. Finally, I'll run through how Eric Hillman performed (in terms of financial metrics) over the last 10 months as MusclePharm CEO.
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They say that “imitation is the sincerest form of flattery,” but I’m not sure this one passed the vibe check. When my creative director Grant Furness showed me the twitter jokes circulating around in late-May about Swift Lifestyle, I thought can you imagine the conversation that brand owner had with his design agency…or most likely the international freelancer on Fivver. It’s like “Hey Bro! I want my sports nutrition brand to look like GHOST Lifestyle…you know one of the most recognizable companies in the industry that I’m about to compete in. Yeah…just literally copy it, but to make it more swifty by tossing in an aggressive looking bunny rabbit…maybe just use one that looks like another sport nutrition brand called Sneak.” Which if you really think about that decision…it’s very meta IYKYK.
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MyProtein is in the early stages of rolling out a global rebrand, but is it impactful enough to make the future clearer for the THG Nutrition division? On September 14, 2023, THG (aka the company formerly known as The Hut Group) updated the public markets by releasing its 2023 first half earnings report. I’ll be utilizing that financial information, along with notes I took listening to the earnings conference call, and any relevant publicly disclosed information to obviously update you on the recent performance of THG Nutrition division that includes the world's largest online sports nutrition brand MyProtein, but also utilize everything to provide insights surrounding the global supplement markets. For those unaware, THG is self-described as “a vertically integrated, digital-first consumer brands group, retailing its own brands in beauty and nutrition, plus third-party brands, via its complete digital commerce solution, Ingenuity, to an online and global customer base.” During the 2023 first-half, divisional revenue for THG Nutrition was approximately $423 million, which was up only 2.6% YoY. Why is that growth rate low…especially if we look out over the last two years (being up only 3.7% in that period)? I'll dive into four major things going on here at MyProtein, which its ecommerce sales channel strategy, integration of vertical integration acquisitions, pricing strategy in an inflationary environment, and trickle down impacts from poor performance in other THG segments. Additionally, I'll talk through the positives and negatives surrounding the global rebrand of MyProtein. Finally, I run through some “what could be next” type scenarios for THG Nutrition that includes acquisition offers and a possible spin off into its own publicly traded entity.
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In my Biosteel content from July 6, titled "BioSteel Sales Misstatements & SEC Investigation | Canopy Growth Next Steps with Sports Drink", I knew major decisions would need to be made for brand survival, but I completely overlooked the probability of a BioSteel bankruptcy…mostly because Canopy Growth CEO said he still had “great confidence” in the sports drink brand. But on September 14, 2023, Canopy Growth announced that in an effort to simplify its business and reduce cash burn, it had ceased funding the Biosteel business unit. Moreover, the sports drink brand would seek bankruptcy protection under the “Companies' Creditors Arrangement Act” in the Ontario (Canada) Superior Court to conduct a court-supervised sale process for its business and property for the benefit of its stakeholders. Why would Canopy Growth opt for a court-supervised sale process of a growing beverage brand instead of just finding a potential buyer itself? Surprise! It was just disclosed that Canopy Growth had hired Goldman Sachs to find a buyer for Biosteel or at least attract an additional investment dating back to late 2022. So, despite Goldman Sachs engaging with two dozen potential buyers, the process returned no actionable bids. Throughout 2023, Canopy Growth has been in full-blown business transformation mode…seeking cost reduction actions to increase profitability and reduce overall debt position. Canopy Growth is now seeking to be centrally “focused and positioned for North American cannabis sector leadership utilizing an asset-light strategy.” So, as you could guess we have a square peg and a round hole situation now. Biosteel isn’t focused on cannabis, and it acquired a manufacturing facility not even a year ago…so it’s also no longer asset light. But earlier…I also referenced another “external” development over the last 90ish days that could have influenced this business decision. Earlier this month, the U.S. Department of Health and Human Services (HHS) recommended to the DEA that marijuana be reclassified. Additionally, President Joe Biden recently asked his administration to review how cannabis is classified under the Controlled Substances Act. So, is this the “light at the end of the tunnel” or another false start for the U.S. cannabis industry? Canopy Growth getting rid of Biosteel makes us understand which side of the coin one of the industry powerhouses is betting on. Finally, I'll end this content by talking through what’s next for Biosteel…and who could potentially end up with the sports drink asset.
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Even Edward Bernays would be impressed with whoever is behind the onslaught of propaganda against PRIME. First, several school districts in countries like Australia, Canada, and UK issue parental warnings or straight up ban the drinks. Plus, Canada supposedly recalled PRIME…even though the beverage brand doesn’t distribute into the country yet. And you might think crazy international folks, but even American Karens are urging the legislative branch to put pressure on the FDA. But shout out to Senate Majority Leader Chuck Schumer’s speech writer for throwing in some fire quotes like “one of the summer’s hottest status symbols for kids is not an outfit, or a toy—it’s a beverage.” Again, the origin of making PRIME public enemy number one is unknown, but PRIME needs a two rules of functional CPG refresher…consumers are dumb, and hedging against that reality is essential.
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Pivotal is an interview-style segment that tackles topics in consumer packaged goods (CPG) and fast moving consumer goods (FMCG) from the business leaders that live it EVERY DAY! For the past several months, you’ve probably noticed that branded beverage cooler over my shoulder. I call it my “get shit done” cooler because it’s stocked with mostly C4 Smart Energy drinks but also a variety of other functional beverages that contain the brain energy ingredient Cognizin. Whether it’s signals from growth in social listening data or successful brand partnerships landed recently, there’s a lot of momentum building for Cognizin. So, I figured why not catch up with Gerard Adams, who has been leading the Kyowa Hakko USA segment of Kirin Holdings for the last 18 months. In our conversation, we cover everything from the Japan Brewing Company’s 100+ year evolution to how that beverage experience (and the pharmaceutical division that grew from it) greatly benefits it’s “health science” ambitions. Gerard and I also chat through how Kyowa Hakko’s ingredient positioning and aggressive growth plans are intersecting perfectly with Kirin Holdings’ expansion into more functional CPG brand acquisitions…especially when you consider how everything integrates with greater consumer benefits and aligns with the company’s “Creating Shared Value” initiatives. But these are just some of the fascinating topics we chatted about in this episode...
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I’m going to let you in on a not so little secret within the supplement industry. Supplement brands are competing for every dollar from consumers who have a heightened sensitivity to costs, but the supplement consumer has proved once again that it’s highly resilient. And while the level of investment funding and quantity of M&A transactions are down this year (compared to the previous few years), things have fared relatively well for the supplement industry. The markets are rightsizing, lofty valuations are getting washed out of the system, and companies are getting used to higher interest rates. Combine that with the significant capital now sidelined on the private equity side and stockpiles of cash at strategics waiting for deployment…and I believe things could be improving on the finance deal side of the supplement industry in the near-term future. Does that mean everything is heading right back to the dozen or so years of Goldilocks between the Great Recession and the Great Shutdown? No…investors have gotten more careful, and there’s less FOMO. Money isn’t free anymore…and I don’t believe it will get significantly cheaper anytime soon as the Federal Reserve will face challenges stemming from wage inflation battles within the labor movement 2.0. So, investors must recalibrate, but deals will indeed keep getting done. Though I believe the supplement industry investment theme over the next few years will be coined “getting back to the basics!” And that phrase can obviously mean many different things to many different people, but I’m thinking about it through a synergistic lens. Let’s look at a trio of supplement industry deals that were announced in the last few weeks: Nutra Holdings acquired Nested Naturals, Thorne HealthTech was acquired by the global private equity firm L Catterton, and the final recent “back to the basics” synergistic supplement industry deal I wanted to bring to your attention is between OBVI and the coffee brand Coffee Over Cardio. But instead of me just babbling on about this M&A transaction, I asked my good friend Ronak Shah (Co-Founder and CEO of OBVI) to join me for a quick chat on camera. In that conversation, we run though the backstory on how the deal materialized, the investment thesis, and what’s next on the deal horizon for OBVI.
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CPG brands must understand how quickly and dramatically they can be dragged into cultural battles that impact the bottom line. Does that mean CPG brands should deemphasize purpose-driven moves around identity and culture? It depends…mostly predicated on what I like to call The Rule of Nike. Because the fact is that most consumers want CPG brands to serve their basic needs by understanding what they care most about, not try to win at every flavor of the week’s cultural moment. But in those cases where “what consumers care most about” is aligned with the core values of a CPG brand, you stand strong in your belief…even if it means sacrificing everything because that’s a very real possibility in today’s CPG industry…where substitutes are plentiful and switching costs for consumers are low.
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Pivotal is an interview-style segment that tackles topics in consumer packaged goods (CPG) and fast moving consumer goods (FMCG) from the business leaders that live it EVERY DAY! If I asked you to make a list of the fastest-growing supplement brands of the 2020s, I’d consider you downright silly if you didn’t include the name Bloom. Excuse the punny joke, but if you weren’t aware…business is absolutely “bloom’in” at the supplement brand that Greg Lavecchia (Bloom CEO & Co-Founder) created with his wife and fitness influencer Mari Llewellyn. In our conversation, Greg and I cover everything from Bloom’s "overnight success" and how the power of an audience-first CPG strategy propelled the early days to how 2020 changed everything for the company...in a good way. We also deep dive into Bloom’s exceptional strategic alignment between its digital marketing playbook, sales channel strategy, and its Greens & Superfoods product. But these are just some of the fascinating topics we spoke in our conversation together...
Thank you to Synergy Flavors for supporting this Pivotal episode.
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If I was a writer at one of those big clickbait paywalled media companies, this content’s title might read “AI unveils Satan’s new energy drink!” To decode that a bit, and no I didn’t make this energy drink name up, but Europe-based HELL Energy recently decided to let advanced AI systems craft every aspect of its newest product offering. AI started by formulating the perfect (and complaint) performance energy drink. It then digitized three flavor variations, tasted them, and utilized predictive intelligence to select the winning mix of Tutti-frutti & Berry-Blast. Finally, AI used the latest industry trends and sales data to design all packaging elements and various marketing efforts. But while most publicly disclosed AI usage by the largest CPG brands has been well…gimmicky, I can tell you from experience that the disruptive technology is being utilized in very meaningful ways under the hood.
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It has been just over two years since I last created a piece of content focused on Thorne Healthtech, so it’s probably long overdue for an update…especially considering something big just happened! Outside of that August 2021 IPO deep analysis on Thorne Healthtech, the only other YouTube mention of the company was in this year’s annual outlandish supplement industry event prediction content. But if you read the headlines (and remember that prediction), you know that I was mostly correct. Thorne Healthtech was in fact undervalued by the public markets and I was correct that Thorne Healthtech would be acquired in 2023…but I was wrong about the buyer. On August 28, 2023, Thorne Healthtech announced that it entered into a definitive agreement under which L Catterton would acquire all outstanding shares of common stock of Thorne for $10.20 per share in cash. The transaction value of approximately $680 million represents a 94% premium to the unaffected closing share price. Now…shareholders will still need to approve, but Thorne's independent Special Committee and Board of Directors have each unanimously approved the agreement. There’s the press release details, but you guys know just sticking to that basic information isn’t my style. For this content, I want to get into the following items: why is the private equity firm acquiring Thorne…along with an update on the last two years of operational performance, and then what could the future look like together. Overall, I believe L Catterton is a great partner to fuel Thorne's long-term growth aspirations of being a major player within the next era of health…one that will certainly be data-driven and wellness-centric with a guiding focus on preventive care that extends the healthspan of each individual.
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Too often, I see “better for you” or functional CPG brands thinking strategically about customer personas in these clean binary constructs. I get it though…an avid premium kombucha buyer would never have a shopping cart that’s also full of Oreos, hot and ready fried chicken, and cans of fake spray cheese, right? Well…CPG entrepreneurs with that kind of limiting mindset about consumer behavior leave A LOT of opportunities on the playing field. Just because a growing number of consumers are avoiding sugary sodas in favor of health halo beverages, it doesn’t mean they aren’t still indulging in other parts of their diet. In a world that often feels difficult to manage, an indulgent treat provides a moment of pleasure and has grown in acceptance as critically important for emotional well-being.
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Even as food inflation moderates slightly, private-label brands continue to pose an expanding level of competitive threat to functional CPG brands. What? Why would a functional CPG brand be worried about competition risk from private-label products? They are just cheaper basic versions of national brand products anyways, right? While those cheapest copycat focused private-label brands like Great Value at Walmart or Market Pantry at Target are still thriving, those (and many more) would be bucketed into what I consider private-label 1.0. What happened next...was that economic conditions from the Great Recession caused shoppers (especially Millennials) to get even savvier. Because of this, they were more willing to give private-label brands a chance, despite growing up in a family that consistently bought branded CPG products. Retailers took advantage of that and invested heavily into store brands and shifted their private-label product development strategy away from imitation and into creating innovative products of their own. Retailers did not only change the ingredients of the products, but also have started entering very small and sometimes experimental segments. Thus, private label not only helps with better-priced alternatives to common products…but allows a consumer to enter premium, niche categories without compromising their spending. This maturation in everything aspect of private-label products is what I consider private-label 2.0. It seems that in today’s CPG business landscape…the competitive clash between premium-positioned branded CPG products and retailer private-label brands seems to be at an all-time high. But what if I told you things are going to get tougher! We are about to start the private-label 3.0 era, and I have the playbook that every premium CPG brand needs. Private labels will continue adapting to the changing consumer landscape, be it a surge in demand for traditional value-orientated solutions, or requests for something beyond the historical standard. It seems without a doubt at this point that retailers will continue to maneuver within the set of different price-tier solutions…with more premium private label products being developed to enter various niches. So, don’t get caught overlooking those same retailers that are your wholesale customers when doing competitive analysis…because they are equally a threat to your fellow functional food, functional beverage, and supplement brands.
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Serious question…have you ever seen an overweight squirrel? Yeah…me either, and I saw tons of them at Kent State University where the black squirrel is an unofficial mascot. Maybe us humans should be looking at those cute…I wish I had one as a pet, squirrels as our spirit animals for weight management. They do the basics everyday…exercise, sun exposure, and nutritionally dense meals full of acorns. Not interested in that latter part…heck I didn’t even know humans could eat acorns until I discovered a new instant hot breakfast cereal brand Folk Revival that’s using acorn flour. Being that it’s gluten-free, wheat-free, and packed with key nutrients, let’s hope that my black squirrel college friends will have enough to eat if acorn flour takes off in the functional CPG space.
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After a decade of consistent leadership coming to an end soon, will there be major changes ahead for the multibillion-dollar global nutrition company? Glanbia Performance Nutrition is one of two wholly-owned segments of Glanbia plc (LON:GLB), a multi-billion dollar global nutrition company. The brands in the Glanbia Performance Nutrition portfolio include; Optimum Nutrition, BSN, think!, Isopure, Amazing Grass, and SlimFast. I'll use the recent earnings report, earnings call, and associated news to update you on how Glanbia Nutritionals and Glanbia Performance Nutrition is performing against the complex operating environment. Glanbia Performance Nutrition had 2023 H1 revenue of $889 million, which increased 3.4% YoY, but that was a sequential slowdown from Q1. The brand portfolio continued to have strong pricing power in the market (with it being up 10.9%), but volume was down 7.5%. Additionally, I'll dive deeper into Glanbia Performance Nutrition geographical, product format, sales channel, and categorial performance (performance nutrition, healthy lifestyle, and weight management). BTW I’m thinking about the creation of a change.org petition for the Glanbia Performance Nutrition division name to be amended to The Optimum Nutrition Company. This one brand alone now accounts for 60% of the total GPN revenue. In the first half of 2023, Optimum Nutrition had 16.2% growth coming from both pricing and volume gains…and U.S. market consumption growth was 14.3%. Finally, I talk through what it could mean for Glanbia as longtime Group Managing Director, Siobhán Talbot, is retiring and current head of the Glanbia Performance Nutrition division, Hugh McGuire, will take over starting January 1, 2024. Is this a big deal? The short answer is yes! So, what does the next 3-5 years at Glanbia look like? Hugh himself stated the normal boiler plate CEO changeover stuff in statements, but I think Glanbia needs to utilize its strong financial position to make a transformative acquisition. I still think blood is in the water over at THG (aka The Hut Group and MyProtein). That large transaction could be accompanied by a spin off its Glanbia Performance Nutrition division into a standalone company with a dual listing in the United States and Ireland. That’s the kind of legacy creating move that Hugh McGuire likely pitched to the board during the interview process…or at least be something living rent free in his head.
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Have you ever wondered why so many of the largest global supplement companies utilize a multilevel marketing strategy? Is it just that effective or is there something deeper at play? I can’t be the only supplement industry professional that’s ever wondered why an MLM brand like Herbalife sells more supplements in 90 days than a massive brand like Optimum Nutrition can throughout an entire year. Or that an MLM brand like USANA Health Sciences sells a billion dollars of supplements annually. Or that MLM brands like Shaklee, Shakeology, and Isagenix each sell hundreds of millions in supplements annually and rank in the top 25 biggest companies in the space that aren’t owned by a CPG conglomerate. And then finally I can’t forget about the largest MLM company in the world by revenue…Amway. But to explain the outsized impact Amway plays on all this MLM & the supplement industry stuff, I need to go back several decades before the company was founded when vitamin ingredients switched from being extracted from food to synthesized in a lab. During that same timeframe in the mid-1930s, Carl Rehnborg founds the California Vitamin Company…which is generally recognized as introducing the first multivitamin/multimineral supplement sold in the United States. In 1939, the name of California Vitamin Company is changed to one that might be much more familiar to the consumers today…Nutrilite. While Carl Rehnborg might hold a special place in the supplement industry history, he actually had a much larger impact on the multilevel marketing space. That’s because in 1945…he invented the form of direct selling that is now called multilevel marketing. Nutrilite devised an approach whereby distributors purchased products at a thirty-five percent discount and then played the dual role of retailing products to non-distributor consumers while also recruiting new distributors in a pyramid-type incentive structure. But while Nutrilite might have started the deep connection between supplements and MLM, the Direct selling Association notes that today’s largest single “direct sales” product category is wellness. This category of products (which includes supplements), represent 35.6% of total sales in the Network Marketing sales channel…and wellness is the fastest growing category of all. Furthermore, I'll explore a few other historical linkages between multilevel marketing and the supplement industry...including why women and Mormons in the State of Utah are important to this story.
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Hundreds of class actions lawsuits get filed each year against food and beverage CPG companies. While many of those legal complaints would be classified as reasonable, I want to take this in a totally different direction. I want to run down my top 3 weirdest lawsuits filed against food and beverage CPG companies over the last few years. Coming in at number three, Kellogg’s was sued because their Strawberry Pop-Tarts didn’t contain enough strawberries inside. Coming in at number two, Tootsie Roll was sued because its unfair to the candy marketplace they use sugar and trans-fat. But my number one spot goes to Texas Pete being sued because the hot sauce is made in North Carolina, not Texas.
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After another insanely positive quarterly performance, Premier Protein is now the number one brand in convenient nutrition, but it’s a recent “under the radar” partnership announcement that has me thinking about a previous crazy prediction I made in early 2021. BellRing Brands (NYSE: BRBR) is a portfolio that owns a collection of convenient nutrition brands like Premier Protein, Dymatize Nutrition, Powerbar, and Joint Juice, which was previously wholly-owned by Post Holdings. A fast-paced and busy lifestyle is pushing consumers to switch to quick and healthy meal options. This has resulted in above average categorical growth rates and increased household penetration of RTD protein shakes that promote active lifestyles. Bellring Brands had a strong Q3 with net sales reaching $445.9 million, which was up 20.3% YoY. Premier Protein (~80% of BellRing Brands total revenue) grew 19.9% YoY, which came from almost equal growth in volume and price. Dymatize Nutrition was up 32.3% YoY stemming from large volume increases. Moreover, I provide two deep dives into the functional CPG portfolio's "hero SKU families" of Premier Protein RTD protein shakes and Dymatize whey protein powders. I also explain why a recent expansion of the co-manufacturing network announcement with SunOpta should have you believing in my $2 billion prediction for Premier Protein. But you might be thinking...why is this important and how does a billion-dollar plus RTD shake product line, that’s already the market leader, grow 100s of millions more each year to reach $2 billion in 2025? Few points to make here: (1) this additional manufacturing capacity helps them keep their full lineup of flavors on shelves…and more skus per store and larger TDPs generally equal higher sales. (2) delivering products more efficiently will create cost savings that can be reallocated back into growth activities like marketing. (3) the additional capacity will speed up company backstock replenishment again…which gives the sales and marketing teams more confidence to get aggressive on growth activities that increase velocity in the short-term. Finally, more manufacturing capacity allows for innovation aggressiveness when format would the same as top-sellers. What I mean by that is…if Premier Protein had a new plant-based protein innovation they believe is a winner, but no capacity for its already winning proven products…they would be gun shy on launching that. So, as you can see…there’s A LOT more upside in the brand!
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Vibe this, vibe that, if CELSIUS really wanted to create an impactful flavor, maybe the next one should be PepsiCo Vibe. This is only the second quarter that Celsius energy drinks was fully integrated into the PepsiCo DSD distribution system after the August deal announcement. Celsius Holdings (NASDAQ: CELH) had quarterly revenue of $326 million, which was up 112% YoY. According to IRI last 52-week data, Celsius was the number one brand driver of unit and sales growth in the energy drink category. Celsius was responsible for 23% of the category growth, driving $667 million in incremental sales. In addition, according to the trailing 4 weeks of IRI SPINS all tracked channel data for the period ending June 18, 2023, Celsius is now securely the third-largest energy drink brand in the category. Its market share went from 4.3% in the second quarter of last year to 8.6% now. Celsius energy drinks saw massive growth in convenience stores, foodservice (e.g. colleges), mass retailers like Walmart, the club channel in retailers like Costco, and the Amazon marketplace. Additionally, the international expansion groundwork with PepsiCo is getting laid now, so Celsius energy drinks can capture what they believe is a significant opportunity for incremental growth over the next three to five years. I need to start off by saying that I misjudged the Celsius and PepsiCo partnership. I was certainly not bearish on the tie-up, but I didn’t think it would perform this well…this early! In the current quarter, net sales to Pepsico amounted to $184.8 million. But overall…kudos to the Celsius team for what appears to an outsider to be a seamless transition.
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It’s only been a week since Monster Beverage officially completed the acquisition, but leadership is finally unmuting itself about what’s next for Bang Energy. While the bulk of this content is going to be focused on reconciling what I previously predicted Monster Beverage would do with the Bang Energy asset to the strategic gameplan that leadership at Monster Beverage started to disclose during the 2023 Q2 earnings conference call, I'll also start off this content off by running through some high-level financial data. This will obviously update you on how the existing brands within the Monster Beverage portfolio have been performing recently, but more importantly give context for my expanded strategic commentary on energy drink market dynamics and trends…plus it will make the Bang Energy information more relevant and impactful. Though the portfolio of Monster Beverage brands have a larger market share in the U.S. convenience channel than Red Bull, I'll bring up data that shows why the Bang Energy acquisition is maybe more important than you think when it comes to competing against CELSIUS, C4 Energy, and GHOST Energy. Finally, I share information on many of the most important strategic game plan elements that should help the Bang Energy expected turnaround opportunities become reality. These are: why Bang Energy is being distributed by the Coca-Cola DSD system, why Monster Energy is cutting many Bang Energy flavors and products like VPX Redline, Bang Energy packaging and product positioning changes, and what legal battles are still active with Bang Energy founder Jack Owoc.
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Just like the hard seltzer craze from a few years ago and flavored malt beverages many moons before that, history looks to be repeating itself once again…as too many beverage entrepreneurs are rushing into a red-hot market. Yes, the RTD cocktail category has now grown to 5 percent share of the alcoholic beverage market…and yes, breakthrough innovation opportunities are always out there but most new categorical announcements have been boring! On the other hand, there was maybe one of the most exciting recent announcements…with the partnership between Ocean Spray cranberry and Absolut vodka. Beyond the Coca-Cola and Jack Daniels RTD cocktail coming to life…and the hope for even a LTO non-caffeinated Red Bull and Vodka to become a reality, there are few ingredients that go other in an alcoholic beverage like vodka and cranberry juice.
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A multi-sensory brand experience creates a stronger emotional connection, and that’s why I think GHOST’s next big move should be building a curated lifestyle shop on the ground floor of its Chicago headquarters. While I'll provide historical context for that GHOST Lifestyle prediction, it all surrounded the pre-launch belief that GHOST Energy would be a mega success. That opened up GHOST Lifestyle to two things: a broader mainstream consumer would be introduced to brand, and it opened GHOST up to the age-old problem within the CPG industry…which is that scaling your brand usually involves onboarding more intermediaries. The fact is that creating long-term close bonds between customers and CPG brands isn't easy given the nature of the industry. The examples are plentiful within the CPG industry, but the bigger a brand gets, typically the further it wrongfully distances itself from its most passionate customer cohorts. And that’s becoming a greater issue in today’s market where a higher percentage of customers expect CPG brands to add value to their lives beyond simply providing a great product. Yes, some just want to buy a great product that’s available at the time of need for a fair price, but GHOST built its business by having intimate relationships with customers. So, how do you keep that going when your energy drink will soon be in 100K+ retail locations that are being serviced by intermediaries or intermediaries of intermediaries? You need to take that already tight brand strategy and supercharge every brand touchpoint by viewing them through a multisensory lens. I'll use GHOST as a pseudo case study to help you better understand the growing strategic need for multi-sensory brand touchpoints against the increasingly competitive functional CPG categorical backdrop.
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Snoop Dogg is one of the most successful musicians in the world, but he’s also no slouch when it comes to impacting the consumer packaged goods (CPG) industry. So, what can CPG professionals learn from the hip-hop legend? I’ve always believed that hip-hop and CPG entrepreneurship are linked together. This is probably why you see so many hip-hop artists that are involved with CPG entrepreneurship or investing in this consumer sector. While Snoop Dogg might not have the headline grabbing exits of someone like Jay Z, you might be surprised to learn just how active he is across the CPG industry. The most obvious way the 20-time Grammy nominee extends his street cred beyond the music industry is with CPG brand partnerships…which you’ve probably seen him being his celebrity star power to the recent Corona beer TV commercials. But Snoop Dogg also lends his name, image, and likeness to successful products like Australian-based 19 Crimes. The wine brand has been partnering with the rapper since 2020 when it first released a California varietal. Similarly, after buying his original 90s record label Death Row Records, Snoop Dogg has been busy also licensing that IP into CPG with a collaboration with the Nelk Boys and Happy Dad Seltzer. It’s important to note though that Snoop Dogg isn’t just a powerful face in the CPG industry, he’s also an extremely active product creator. Paying homage to his 1994 hit song “Gin and Juice,” Snoop Dogg has owned a flavored gin brand since 2020. He’s also into creating non-alcoholic beverages as well, with the recent launch of a premium lifestyle coffee company. On the food side, Snoop Dogg partnered with and invested in Outstanding Foods, the maker of PigOut plant-based pork rinds. But maybe the biggest food project he’s been working on is in partnership with another rapper Master P…and CPG behemoth Post Holdings. Snoop Cereal has the stated mission “to build economic empowerment and to add diversity to grocery stores with Black-owned breakfast food.” The fact is that Snoop Dogg transcends the music space and defines entertainment history. But it’s also my belief that lyrics from his extensive catalog of music spanning more than three decades and quotes from various interviews will provide strong lessons for any CPG professional. I picked out a handful of my favorites that I know will bring you value…
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Who owns the word Monster or more broadly any word in business? The company most willing to battle to protect its trademark, and in the case of the word Monster…that would be Monster Energy. Some have called the energy drink brand a trademark bully…filing 100s of trademark objections in the last few years. While I believe guarding a CPG brand’s iconic assets is paramount, can those choices sometimes cause unintended consequences? Here's one of those perplexing scenarios. Monster Energy is a major supporter of the broader esports ecosystem. As expected, many gamers drink Monster Energy. Yet, Monster Energy has also objected to video game creators using “Monster” in their title. Could consumers get confused that these video games are co-branded? Maybe. Could these actions eventually cause uproar among gamers that drink Monster Energy? Maybe.
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Do you remember a few years ago when I laid out my long-term vision for the wellness retailing world…one where pharmacies and specialty supplement retailers would start merging conceptually? Though small underlying market forces have been slowly confirming that future, a GNC announcement last week might have altered everything. In August 2021, a year-ish after the company’s Chapter 11 bankruptcy saga ended, I asked myself “what could the GNC shopping experience of the future look like?” In that content piece, I defined the future as being sometime in the late-2020s and into the early-2030s…so there was definitely a focus towards presenting radical innovation ideas. Despite that, the GNC “Store of the Future” concept wasn’t rooted in fantasy but focused on four fundamentals of retailing: how to get more people in the front door, how to get them in the front door more often, provide things that matter most to consumers, and offering on-brand on-trend products and services. And then a few months later in November 2021, as I was talking about a recent partnership between the startup Hims & Hers and GNC’s main competitor, The Vitamin Shoppe…I provided more detail around how I envisioned that initial step of pharmacies and specialty supplement retailers merging. Why do I bring up these two previous pieces of 2021 content? GNC just unveiled its revamped GNC Pro Access paid loyalty program featuring what they’re calling GNC Health. This unique offering will provide GNC Pro Access members free healthcare services, including telehealth appointments with licensed medical professionals to address urgent care and personal health needs, as well as access to a curated set of over 40 generic versions of most urgent care medications and 70+ generic personal health medications across lifestyle, dermatology, mental health, sports performance, anti-aging, and sexual health care. So, GNC essentially echoed some of my previous strategic thoughts and I want to commend them for acknowledging that the legacy retail business model is dead. This was a big first step into providing a frictionless truly personalized shopping experience that leverages integrated big data throughout every step within the customer’s wellness journey to help them reach more goals with a higher probability.
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The gut health soda brand Olipop is on track to reach $200 million in sales this year. Does that scare the Big 3 soda portfolios? Yes, soda consumption has been falling in America for roughly two decades. But you must remember that Coke, Pepsi, and KDP are masters at backfilling demand through acquisitions to sustain their large share of overall liquids consumption. The only scary thing would be if the entrepreneurs at Olipop or its main competitor Poppi were the type of lunatics to stiff-arm all offers and go at it solo like the legends over at La Croix, 5-hour Energy, or Arizona Iced Tea. Regardless, the next big challenge for these functional sodas is getting price points down further to make them more attractive to Shelly from Ohio.
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If you've ever thought, "I really wish someone would invent a condiment version of the Coca-Cola Freestyle machine," well then, it's your lucky day! With HEINZ REMIX, the Kraft Heinz Company is tapping into the growing consumer behavior towards personalization and social media trend around mixing things or doctoring up the flavor of condiments. This invention also perfectly aligns with the new contextual strategic approach that The Kraft Heinz Company adopted in late-2020. A major focus of that strategic shift was for the CPG giant to become the leader for taste, flavor, and experience anywhere you’re eating. HEINZ REMIX attacks that out-of-home market, as sauces have always been one of the key ways to make restaurant food your own. But more importantly…what sauce combination are you making the first time you see a HEINZ REMIX machine in the wild?
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If I was just another mainstream consumer searching for the right probiotics, it would without a doubt be a super confusing shopping experience…and I see that as a major problem. Probiotics are the go-to for gut health…and outside of highlighting yogurt as a clear food example, probiotic supplements would be where most consumers reach if they were looking to maintain or improve the "good" bacteria in their body. But probiotic supplements can be costly, and their formulation varies widely. Traditionally, probiotic supplements were tailored to those looking to better their digestive health, but positioning has recently broadened into areas such as immunity or mood support as mainstream consumers better understand that nearly all internal systems of the human body are influenced by the gut. Moreover, incorporating these functional ingredients into snacks and beverages is driving further growth for the already multibillion-dollar probiotics industry. I say all this because while consumers are certainly more aware than ever about gut health…and probiotics are more commercially available than ever…could that perfect storm be creating unintended consequences? If you’ve shopped for probiotics recently, you likely got tripped up by the labeling guideline reasons for all that genus, species, and strains naming convention stuff for probiotics...which led you to focus on numerical measures. If a supplement has one probiotic…then a supplement with two or heck twenty probiotic strains must be better, right? But it’s possible that some combinations of strains may not work together. Or what is an even more common numerical measure is how supplement brand marketers emphasize colony forming units (aka CFU) count on the bottle. Probiotic supplement brands have pushed CFU count as the major point of differentiation because it gives consumers an easy number that they can use to compare competing products. That makes sense on some levels…except for the fact that the CFU count doesn’t mean much on its own and only tells a consumer what kind of numbers a probiotic supplement starts with…not how many bacteria make it to your gut alive. Comparison by CFU count also generates a business challenge for the supplement industry because of its commoditization effect. So, supplement brands looking to increase the efficacy and attractiveness of finished products containing probiotics need to lean into clinically researched strains and avoid getting caught in the price by CFU count commoditization trap. But the biotics market overall has become increasingly fascinating to me yet I’ll be the first to admit that I’m far from the subject matter expert that will get into the nitty gritty of science, especially when it seems as though researchers are discovering more about the gut microbiome basically every day. So, I decided to ask my good friend Noah Voreades to join me in an insightful conversation that helps drive home some points about the probiotics market.
Special thanks to Nutiani for supporting this awesome piece of content.
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It's crazy to think that I started working in the supplement industry 17 years ago! While most believe that MusclePharm was where everything started for me, I actually got my first supplement industry job when I was in college getting my undergraduate degree. As a contributor on the Bodybuilding.com Forums in 2006, I caught the attention of BEAST and was asked to join their sports nutrition brand as internet company rep...which today would be akin to a combination of digital jobs like community management, social media strategist, and customer service rep. That led to BEAST founders Tony and Maria Alteri giving me more and more opportunities that eventually saw me traveling the country to raise brand awareness. The 3ish years I was employed by BEAST was great, but after graduating with my MBA in 2009...I left the supplement industry for a few years until returning to take the MusclePharm role. That wild experience gave me the confidence to launch J. Schall Consulting 11 years and grow it into the premiere strategy consultancy that covers the emerging and intersecting categories of functional food, beverage, and nutritional supplements. But that story was to say that I likely wouldn’t be who I am today without the help of BEAST. But I recently found out that the IP portfolio that includes all rights to the highly recognizable and trusted BEAST brand was for sale. While its natural that I played out scenarios in my mind about buying BEAST myself, I concluded that it wouldn't be the right move for me at the time because of conflicts of interest with my consulting client base. That being said, the BEAST IP asset portfolio is full of a hodgepodge of short-term value that can be turned on day 1 and long-term opportunity, but also will obviously take the right interested buyer to extract it all out to the largest potential. So, for funsies...I ran through some possible fun interesting “right” acquirors that includes MrBeast, Marshawn Lynch (aka Beast Mode), Monster Beverage, and other fitness influencers like that use Beast, Beast Mode, or other similar protected words in their personal branding. But I’ll also cover the most likely acquirors…which I believe would be the three-headed monster of a BEAST competitor in the supplement market, a supplement retailer that would turn it into a pseudo private label ala 1st Phorm, or a supplement industry contract manufacturer. These bolt-on acquisitions or vertical integration M&A moves provide the most strategic value compared to say a value-seeking PE firm that doesn’t have complimentary assets. I’m sure there’s a number of other M&A ideas that could fit here…but more than anything, I hope whoever acquires the BEAST IP assets can be a great shepherd to the almost three-decade-old brand that gave me my start in the supplement industry.
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Pivotal is an interview-style segment that tackles topics in consumer packaged goods (CPG) and fast moving consumer goods (FMCG) from the business leaders that live it EVERY DAY! As another quarter ends within the functional CPG space, it’s only right that I ask my good friend and Market Insights Director at SPINS, Scott Dicker, to join me again for another one of our famous holistic categorical deep dive sessions. This time we decided to tackle the evolving weight management category. In our conversation, we cover everything from the current level of consumer interest in the weight loss dietary outcome in America and recent scan data trends on several direct and indirect weight management supplement categories to how food and beverage CPG brands are selecting mass-market culturally accepted gluttonous categories but viewing them through a lens of restraint. We also explore how the entire weight management category needs to adapt its positioning against the backdrop of the FDA approval of more and more pharmaceutical solutions…plus non- or low-invasive aesthetic service businesses popping up in every zip code. But these are just some of the fascinating topics we spoke in our conversation together...
Special thanks to NuLiv Science for supporting this awesome piece of content.
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The Coca-Cola Company is no rookie when it comes to brand licensing…that is unless we are talking about the kid from the Rookie of the Year movie. Heck…The Coca-Cola Company is basically an elaborate licensing company when you realize about two-thirds of its total revenue are generated by "concentrate sales" aka licensing of its secret ingredients in syrup form. But that’s neither here nor there, because ole Henry Rowengartner got something new up his sleeve. The Coca-Cola Company can be seen pretty much everywhere in the grocery store, right? Well…add the produce section to the list because the beverage CPG giant is entering into a licensing deal with an agricultural company to leverage the Minute Maid and Simply logos on select items. While the licensing revenue will help the petty cash fund grow…I think a bigger win is if this strategy helps boost branded juice sales.
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I was made aware of the Biosteel early in its history by my hockey sports agent friend, but the Canadian sports nutrition brand didn’t pop up in any of my content until October 2019 when the fully integrated cannabis company Canopy Growth Corporation paid $51 million to acquire 72% majority control. If you've seen Biosteel in the headlines recently, it's due to an ongoing SEC investigation surrounding the hydration company following improper revenue recognition standards that caused “material misstatements” in its financial reporting by overstating around $24 million in revenue within the last two fiscal years. While these accounting issues are "what" happened, I want to additionally explore possible "whys" that include a number of Biosteel underlying forces, sports drink market dynamics, and strategic decisions. This includes covering details around why the initial Canopy Growth M&A intent became challenged, how Biosteel pivoted hard into beverages with the help of Constellaton Brands, and the huge marketing costs accumulated by playing the game Gatorade invented/mastered and BodyArmor emulated (while PRIME is winning by playing another game). Finally, I'll breakdown what comes next...which includes huge cost cutting initiatives if they want to survive long enough to eventually leverage their cannabis market advantage against the major beverage companies that will one day be available in the U.S. market.
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Most beverage industry veterans’ thought was prediction was crazy months ago…but it looks like my super-secret Magic 8 Ball strikes again! Be honest...did you really believe my March 14, 2023 prediction that Monster Energy would eventually acquire the bankrupt assets of Bang Energy? But while I’ve already started to take my prediction victory lap, there’s still a legal hurdle and many business unknowns left that I want to talk about in this Bang Energy bankruptcy update content. The final legal hurdle will be on July 12th, at which hearing the Debtors will seek Court approval of the sale of substantially all their assets to Blast Asset Acquisition LLC in accordance with the asset purchase agreement. But barring some outlier reason that would almost certainly cause an immediate liquidation of Bang Energy…Monster Beverage Corporation is the new owner of the company’s intellectual property, goodwill, about $250 million in wholesale revenue producing DSD and retail relationships, everything involved with manufacturing and distribution facilities (even though some of that has been sold with or without a leaseback agreement), an owned DSD network (but from what I’ve heard…Huron Consulting recently cut that), and then human capital. So, what’s next? Well…little is known about what Monster will do with Bang, but the most UNLIKELY scenario would be Monster deciding to shut down the brand, effectively removing a competitor from the marketplace. While Monster Beverage and Monster Energy are used interchangeably sometimes…we can’t forget that Monster Beverage is a collection of many energy drink brands. Monster Energy is obviously the biggest, but they also own a collection of conventional global energy drinks that it picked up in the “trade” with The Coca-Cola Company that closed in June 2015. These brands include NOS and Full Throttle in the U.S. market, and names like Burn and Relentless that are used globally. I state this because it shows that Monster is willing to have a collection of similar products in each of the same global markets. That means Monster Beverage should be familiar with the strategies and tactics needed to support both its Reign Total Body performance energy drink brand and Bang Energy that created the energy drink sub-category. This performance energy drink market consolidation play is important because Monster is struggling to fend off upstart brands like GHOST, C4 Energy, RYSE, Alani Nu, and CELSIUS. So, I think positioning-wise…Monster uses Bang Energy as a low-cost performance energy drink offering to prop up price integrity and brand equity around its Reign Total Body brand. There’s also a question of distribution…does Bang Energy move into Coca-Cola DSD trucks or does Monster separate it out and utilize independent DSD networks? But the rise and fall of Bang Energy will certainly be a story that Harvard Business School will try to distill down into a case study for learning purposes. I’ve covered many bankruptcies over the last handful of years, but this one is about as unique as we will ever experience. I say that because the craziness in every aspect of life since 2020 has desensitized us to what is or isn’t an outlier. The Bang Energy story is an outlier in both the extreme entrepreneurial ups and the extreme business lows…both you can learn from.
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Nestle will transform into a "health and nutrition powerhouse.” That’s at least what I predicted in an August 2021 YouTube video. Since then, Nestle has acquired the plant-based supplement brand Orgain, Brazilian supplement brand Puravida, New Zealand supplement portfolio The Better Health Company…plus buying a coffee brand from Starbucks and increasing nutrition-related manufacturing investments. That’s A LOT of activity, but an investor group with $5.3 trillion in assets under management isn't happy with the speed or progress of the Nestle transformation. Why? Despite all those recent major investments, about 60 percent of Nestle's total sales (excluding pet care and specialized nutrition within Nestle Health Science) still come from products that are considered “unhealthy.” That causes harm to public health, but maybe more importantly to these investors…it creates systemic risks to returns.
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Fresh eyes on challenges, promising health and wellness brands, can’t lose…right? In this latest episode, I'll utilize the 2023 Q3 Simply Good Foods Company (NASDAQ: SMPL) earnings report, earnings call, and supplemental presentations that were filed on 6/29/2023 as the backdrop to provide broad nutritional snacking market insights. In Q3 of fiscal 2023, both Atkins Nutritionals and Quest Nutrition performed in the top-tier of categorical competitors in retail takeaway, with Quest Nutrition specifically having strong YoY growth at 25%. What's at the heart of the Quest Nutrition success? Quest Nutrition is still known for the original Quest Bar. That means the company needs the bar business to be healthy for any of this innovation risk to make sense. Here’s the good news…the core bar business is growing. In fact, this quarter it had tracked channel retail takeaway growth in the quarter of 25%. Additionally, the Quest Nutrition snacks segment (e.g. Quest Chips, Quest Cookies, Quest Peanut Butter Cups, etc.) is now nearly 45% of measured channel retail sales for the brand and specifically the Quest Chips are now around 20% of the total brand revenue. Finally, I run through the new CEO's strategic gameplan that has very different focuses for Quest Nutrition and Atkins Nutritionals...with the latter needing to figure out where the legacy brand sits inside of an evolving weight management category that has a growing consumer interest in weight loss drugs like Ozempic.
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As your CPG brand grows bigger, something naturally happens that has a divergent relationship with customer intimacy. In the CPG industry, scaling your brand usually involves onboarding more intermediaries. The fact is that creating long-term close bonds between customers and CPG brands isn't easy given the nature of the industry. The examples are plentiful within the CPG industry, but the bigger a brand gets, typically the further it wrongfully distances itself from those core customers. And that’s becoming a bigger issue in today’s market where customers expect CPG brands to add value to their lives beyond simply providing a great “made to stock” product. So, CPG brands must focus on building in a company culture that rewards the creation and adoption of unscalable customer-centric strategies. The goal is to prioritize customer intimacy even as your brand goes through the typical legacy growth construct of the CPG industry. This business strategy increases customer loyalty and fosters customer-driven revenue growth…and companies that excel in customer intimacy combine detailed customer knowledge with operational flexibility. While there are tons of different customer intimacy building strategies across departments, many of which have become more scalable by leveraging technological and social platforms…I want to focus on a specific product development one that I’ve dubbed “Creatively Small.” I will also share a Siete Family Foods (Siete Small Batch) case study that will really drive the "creatively small" strategic points home.
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One of the greatest investing minds in history is also an avid Coca-Cola drinker. Besides owning billions in Coca-Cola stock, Warren Buffett also has a theory on why the soda brand is the global leader...and it has to do with "taste memory." The Oracle of Omaha believes the taste of Coke doesn’t accumulate in your mouth like other types of soda. Warren Buffett goes on to say that he’s never seen a word written about this phenomenon. Well…maybe because it’s more made up than Nessy and Big Foot. I asked a few of the top certified flavor scientists in the world…and they called bullshit. Coca-Cola’s popularity is simply because consumers enjoy all the sensations that come along with it…including the nostalgia, great taste, sugar, and caffeine content…not some hidden secret.
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Mountain Dew is the unofficial drink of gamers…or at least that’s the stereotype, right? So, why did the energy drink version of Mountain Dew called Game Fuel end up failing? Mountain Dew is essentially the base of the food pyramid for people who spend marathon gaming sessions in front of a computer or console. The practical reason is obviously because Mountain Dew has more caffeine than Coke or Pepsi. And while not as much caffeine as coffee, a packaged drink has less effort and minimal upkeep. Caffeine consumption is something that all professionals enjoy but especially computer programmers in the mid-90s during the start of the Internet age. The direct connection to computer culture can be traced to an integral software development and coding manual published in 1995 that said one of the main ways a manager can support his programmers “is simply buy large quantities of Mountain Dew.” But when does the relatively cheap, brightly colored, caffeinated, and fun beverage get directly involved with the esports and gaming community? That would be in 2005 when Mountain Dew ran a promotion called “every 10 minutes” where they gave away Xbox 360 consoles. But the more famous linkage was in 2007 when Mountain Dew promoted the launch of Halo 3 with a new flavor called Game Fuel. So, here’s where the story of Mountain Dew, gamers, and a product called Game Fuel really starts. The energy drink version of Mountain Dew Game Fuel (or should I saw MTN Dew Amp Game Fuel) wasn’t launched until January 2019, but that limited-edition flavor history, annual gaming-themed promotions, strategic partnerships with game developers, alignment with gaming personalities, consistently increasing esports sponsorships, is important in that MTN Dew didn't overlook the community cost barrier to entry into the esports and gaming market. Even though MTN Dew would be seen as one of the positive non-endemic brands that didn’t simply “buy a seat at the table” only after all the writing was on the wall that esports had massive potential...why didn't MTN Dew Game Fuel work out?
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If you ain’t delaying…are you really Chapter 11 bankruptcy auction banging? Believe it or not…it’s been something like 250 days since Bang Energy filed voluntary petitions for protection under Chapter 11 of the Bankruptcy Code. That might seem like a long time, but Chapter 11 bankruptcy cases, especially complex ones involving creditor claims in the billion-dollar range, are not quick…and that doesn’t consider the hostile takeover element that’s relatively unique here. But this isn’t a piece of content about how the Bang Energy bankruptcy proceedings have amounted to almost 1500 document filings that equal 10s of thousands of total pages…thus likely making this one of the most expensive cases in Florida bankruptcy court history. Instead, I want to focus on the recent delays to the bankruptcy auction announcement. To be honest, it’s hard to keep up on how many delays they’ve had, but it’s probably up to four or five at this point. Now…there are two schools of thought on why this has been happening. The first one revolves around the theory that Bang Energy was such an attractive asset that the initial bankruptcy auction was filled with many strong and diverse bids. And so, to make the best decision for creditors, it would require a longer review period. That makes sense, right? But what if the most recent delay is due to an outside regulatory agency...which can only mean that my original prediction in mid-March that Monster Energy would acquire Bang Energy (https://youtu.be/Kr_PMyydlCw) is still alive. Because something I hadn’t noted in earlier content was the potential regulatory hurdle that Monster Energy would face because of its leadership position in the U.S. energy drinks market. Finally, I’ll talk through a few hypothetical scenarios based on what would happen next if each of the different diverse categories of acquirors won the Bang Energy bankruptcy auction.
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Did anyone else have former First Lady Michelle Obama starting a kid’s nutrition CPG brand on their Bingo Card? Well...you can check those December 2021 receipts on my YouTube video named HollywoodHouse Foods (https://youtu.be/-zXXmAS7bFI). But all jokes aside, I'm glad to see the Michelle Obama continuing her White House efforts to bring this next generation of kids into a healthier future. Beyond her ownership in Plezi Nutrition, Michelle Obama will “position the company to be a change agent and model for how food and beverage CPG brands can support the childhood health." If that sounds like big checks to cash for a first time CPG entrepreneur, it’s important to remember that Michelle Obama is no rookie in the space…as she previously held a Board of Directors seat for six years at the largest private label food manufacturer in America.
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If you’re an astute follower of my content, you’ve heard me mention the concept of precision fermentation (and/or name notable startups that are commercializing such material for functional CPG brands) in numerous pieces of content over the last handful of years. That being said, I’ve somehow overlooked the fact that I haven’t given precision fermentation the respect it deserves with its own dedicated content. But regardless of mentioning it before...how about we start with what the heck precision fermentation is and how it differs from what has been used in food production for thousands of years ago. Traditional fermentation uses intact live micro-organisms to modulate and process plant-derived ingredients. It results in products with unique flavor, nutritional profiles, and modified texture. Precision fermentation is a significantly newer technology that has been used within the food industry for let’s say the last two decades. Precision fermentation has now emerged as a leading edge of food and beverage ingredient innovation…with the list of mega-companies investing in the process growing extensively of late. Precision fermentation uses microbial hosts as “cell factories” for producing specific functional ingredients. Not only is precision fermentation being explored as a launchpad for cultivating new protein sources, but it’s also highly versatile in its capacity to be tailored toward producing other key food and beverage ingredients for texturizing, flavoring, and stabilizing.Unlocking the potential of precision fermentation within the CPG space has been made possible with the use of artificial intelligence to rapidly identify ingredients that may offer improved functionality or added health attributes. AI is the heartbeat of the precision fermentation movement. To keep this content concise, I'll focus on functional CPG applications involving nature-identical animal proteins (e.g. Perfect Day and The Every Company). There’s a few different short- and long-term value propositions that differentiate this precision fermentation material from the mainstay commodity ingredient that I mention including functionality and quality considerations, sustainability, and hedging commodity costs with supply chain stability. Finally, I'll walk through the different challenges and potential slowups around adoption of precision fermentation that's likely ahead for the food technology.
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There’s A LOT of misunderstandings when it comes to recessions. While it may seem counterintuitive, recessions aren't all bad news. The clouds that settle over the economy during a recession do in fact have a few silver linings…so I want to talk about the long-term impact of those within the context of the grocery business. And just so we’re on the same page, when I say grocery business…I’m talking about the CPG industry yes, but also grocery retailers, contract manufacturers, and agricultural businesses.
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Pivotal is an interview-style segment that tackles topics in consumer packaged goods (CPG) and fast moving consumer goods (FMCG) from the business leaders that live it EVERY DAY! This episode is a special one for a three reasons...(1) we recorded it in person at the "Carlsbad mecca of functional ingredients" aka Compound Solutions, Inc. headquarters (2) Matt Titlow gave us the FULL origin story from the company's inception to the major pivot points throughout the 25 years and where we are now. And then finally, the conversation was recorded during the month that marked the 25th business anniversary of Compound Solutions, which is a entrepreneurial feat that shouldn't be understated in any industry but specifically the supplement industry. I've known Matt personally going over 12-13 years, so I pepper him with insightful questions and even get him to ponder what the next 25 years looks like for Compound Solutions. But these are just some of the interesting topics we chatted about in this episode...
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CPG marketers are constantly trying to come up with ways to stop consumers’ infinite scroll, so why not utilize a remixed version of an 1860s military strategy, right? While most think about “shock and awe” as simply a massive application of firepower by the military, the real battleground is within the opponent’s mind. “Shock and Awe” accomplishes psychological victory by influencing the will and perception to get the adversary to do what the attacker wants. That might seem just a tad extreme for CPG industry strategy, but let’s swap a few words or phrases around and it would read like this…While most think about “shock and awe” as simply a massive production of content assets by CPG brands, the real challenge is within the consumer’s mind. “Shock and Awe” accomplishes attention getting by intriguing and influencing to get the consumer market to do what the CPG brand wants. Now…that sounds a bit more CPG strategy-esque, right? We are well past the point that more content is going to be the answer to disrupt the infinite scroll and get attention in today’s information-heavy society. CPG brands need to realize that precisely targeted communications could be the online equivalent of smart bombs, but also “shock and awe” can’t be carried out entirely online. Some kinetic force is still needed because you can’t fully “shock and awe” with information operations alone in the CPG industry. But this kinetic force is not sought on a large scale, but to give the impression that CPG brands can influence a consumer’s mind. What the heck am I talking about? Let’s dive deep into why CPG brands are using a shocking strategy that aims to combine playfulness and consumer interest into limited edition items that attract both social media attention and sales.
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Pivotal is an interview-style segment that tackles topics in consumer packaged goods (CPG) and fast moving consumer goods (FMCG) from the business leaders that live it EVERY DAY! Now, I don’t want to oversell this special edition episode, but it’s kind of a big deal. It would have been a big episode even during good times but consider the collective facts…I spoke with the founder and recently ousted CEO of Bang Energy Jack Owoc…at a time when the initial stalking horse bids were happening in that Chapter 11 bankruptcy auction and when his social media accounts have been taken away. Our conversation weaves in and out of a variety of impactful and insightful subject matter that includes who Jack thinks will acquire the company he founded and the reasoning behind it. Since Jack is locked out of company matters, he doesn’t have any insider knowledge…and neither do I…so any of these predictions were offered up for entertainment purposes only. If you haven't watched any of the other Bang Energy bankruptcy updates, make sure you check them out on my YouTube channel. (Note: this conversation was recorded on May 22nd, 2023)FOLLOW ME ON MY SOCIAL MEDIA ACCOUNTS
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The Vitamin Shoppe was just sold...again (technically)! What started as highly probable rumors became reality. In a deal that’s expected to close in the second half of 2023, The Vitamin Shoppe’s owner, Franchise Group, would be taken private through a $2.6 billion management buyout. The group buying the portfolio is led by current Franchise Group CEO Brian Kahn but includes a consortium of other investment banks and private equity firms. After the transaction is complete, the current Franchise Group management team, including the CEO, will continue to lead the company and run its current portfolio of retail brands. I'll explain what that MBO could mean strategically for current Vitamin Shoppe vendors, employees, and even little ole me. Additionally, I will update you on the recent business performance for The Vitamin Shoppe. I'll utilize the 2023 Q1 Franchise Group (NASDAQ: FRG) earnings report and conference call to provide quarterly segment-level financial details for The Vitamin Shoppe. I will also dig deeper into several areas of The Vitamin Shoppe, such as franchising activity and merchandising category trends (including the retailer's increased sports nutrition and private label brand focus).FOLLOW ME ON MY SOCIAL MEDIA ACCOUNTS
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Are growth vibes at Celsius Holdings drying up…or is this desert oasis as lush as Greenland…or was it Iceland that’s green? (D2: The Mighty Ducks reference anyone?) This is the first quarter that Celsius energy drinks was fully integrated into the PepsiCo DSD distribution system after the August deal announcement. Celsius Holdings (NASDAQ: CELH) had quarterly revenue of $260 million, which was up 95% YoY. According to IRI last 52-week data, Celsius was the number one brand driver of growth in the energy drink category. Celsius was responsible for 23% of the category growth, driving $552 million in incremental sales. In addition, according to the trailing 4 weeks of IRI SPINS all tracked channel data for the period ending March 26, 2023, Celsius is now securely the third-largest energy drink brand in the category. Its market share went from 3.7% in the first quarter of last year to 7.5% now. Celsius energy drinks saw massive growth in convenience stores, mass retailers like Walmart, the club channel in retailers like Costco, and the Amazon marketplace. With all this sales growth, Celsius must find balance in marketing initiatives as they level up. Everyone knows they have cash, a big name behind them now, and a desire to keep the public markets happy with growth. That mix can be a money pit if not managed right. What I like about the recent Formula 1 Ferrari team deal though is the global marketing appeal. I’ve mentioned this a few times in previous content, but this hasn’t been smooth sailing for the energy drink brand that acquired its Nordic distributor in late-2019 and formed a joint venture with its Chinese partner. With the rocky elements with the global supply chain, geopolitical tensions, and the strong U.S. dollar…Celsius has smartly focused its attention and resources on fueling the insane growth within the domestic market. But that’s going to start changing soon…or at least that’s what I predict. For one…PepsiCo is the energy drink brand’s preferred global distributor. With PepsiCo being the second biggest in terms of beverage distribution globally, there’s significant opportunities to capitalize on global scale. The first largest global beverage distributor is obviously Coca-Cola and if you look at how it helps Monster Energy, international sales make up 37% of the total revenue. Now…it’s apples to oranges comparison because Monster Energy has a collection of internationally specific brands for those markets. But international makes up only 4.4% of the total Celsius revenue. So, regardless of not having any cheaper portfolio brand options…even a decent go-to-market strategy in the different markets that are popular for energy drinks should yield strong results in 2024 with the help of PepsiCo.FOLLOW ME ON MY SOCIAL MEDIA ACCOUNTS
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The gang’s all here again…which should be huge news for Premier Protein heading into the back-half of its fiscal year. But as I normally do with my performance update content of publicly-traded functional CPG brands, I will use the recently filled earnings report, earnings conference call, and any relevant publicly disclosed news, in this case it’s BellRing Brands (NYSE: BRBR) 2023 Q2 earnings release, to obviously update you on the performance of brands in that portfolio, but also use it as the backdrop to discuss market insights within the active nutrition formats of the liquids and powders. BellRing Brands is a portfolio that owns a collection of convenient nutrition brands like Premier Protein, Dymatize Nutrition, Powerbar, and Joint Juice, which was previously wholly-owned by Post Holdings. A fast-paced and busy lifestyle is pushing consumers to switch to quick and healthy meal options. This has resulted in the increased household penetration of RTD protein shakes that promote active lifestyles. Bellring Brands had a strong 2023 Q2 with net sales reaching $385.6 million, which was up 22.3% YoY. Premier Protein (~80% of BellRing Brands total revenue) grew 26.2% YoY because it was able to exercise pricing power because of its strong brand equity in the inflationary market. Dymatize Nutrition was up 10.5% YoY stemming from price increases. Moreover, I provide two deep dives into the functional CPG portfolio's "hero SKU families" of Premier Protein RTD protein shakes and Dymatize whey protein powders. Finally, I explain why Premier Protein bringing back a collection of its slowest velocity SKUs speaks to the confidence that BellRing Brands leadership has in its production expansion plans. In the latest quarter, they saw double-digit production growth and expect to have incremental capacity in 2024 north of 20%. I’ve talked about this extensively in previous content, but the company has a plan they are executing on for additional supply which included adding capacity to existing co-manufacturing network, expanding the co-manufacturing network, and having former big poppa Post Holdings build an aseptic processing facility to produce RTD shakes. Additionally, the footprint in each of these new facilities is much larger and allows for a quicker ramp up in the case of adding more production lines. You might be wondering how a billion-dollar RTD shake product line, that’s already the market leader, can grow 100s of millions more each year? Remember, for one…Premier Protein hasn’t been able to do much marketing or pull any substantial promotional levers. Secondly, they didn’t have their full lineup of flavors on shelves at most retailers until very recently. And finally, they’re severely under-distributed in the grocery and mass channels. So, there’s A LOT more upside in the brand, believe it or not…and that doesn’t even consider Dymatize continuing its growth story.
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What if I told you there’s a 23.75 percent chance the supplement industry will be unrecognizably annihilated in the next year? While I don’t want this to be a “sky is falling” moment that creates panic and mass hysteria, we do need to walk through a very scary…very plausible “black swan event” that would completely disrupt the supplement industry as we know it today. I’ve been modeling out probabilities of certain external threats to the functional ingredient supply chain for some CPG clients, of which one is growing in concern…the geopolitical risks that are building from the growing tensions between China and Taiwan. A recent poll of more than 350 international relations experts estimated that there’s a 23.75 percent chance of a Chinese attack against Taiwan within the next year. You might think that probability is still quite low, but we’ve already seen the Chinese Communist Party increase mobilization of both the People’s Liberation Army air force and navy towards Taiwan. Similarly, the U.S. Congress greenlit a $3 billion Pentagon budget to provide military aid to Taiwan and the President just authorized $500 million worth of weapons aid to Taiwan using the same emergency authority that has been used more than 35 times for Ukraine. Which should be making us ask ourselves: Why is China making these colossal investments and why is America ramping up support? Prudence dictates that we must at least consider the worst.Now…this doesn’t guarantee a China versus United States war...and focusing on those extremes miss the bigger point that any attack on Taiwan by China would most certainly mean governmental sanctions and trillions in world trade deterioration. And we are talking many multiples of economic impact to what has happened because of the Russia Ukraine conflict. If you weren’t aware, outside of something like protein powders, the vast majority of functional ingredients used within the American supplement industry are sourced from the Chinese manufacturing sector. With the American supplement industry being “all in” on China for supply, U.S. and China relations are breaking down, and saving the supplement industry will most likely not be a matter of national security for America. That means things can get scary fast. So, what's next? I'll explore that and more...but it's important to remember that even if your supplement brand feels great about your supplier relationships now…don’t get caught sleeping at the wheel. FOLLOW ME ON MY SOCIAL MEDIA ACCOUNTS
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Glanbia is certainly making that cheddar…figuratively and literally, but which GPN brand has been cutting the cheese lately? Glanbia Performance Nutrition is one of two wholly-owned segments of Glanbia plc (LON:GLB), a multi-billion dollar global nutrition company. The brands in the Glanbia Performance Nutrition portfolio include; Optimum Nutrition, BSN, think!, Isopure, Amazing Grass, and SlimFast. I'll use the recent earnings report, earnings call, and associated news to update you on how Glanbia Nutritionals and Glanbia Performance Nutrition is performing against the complex operating environment. Glanbia Performance Nutrition had 2023 Q1 revenue growth of 4.6% YoY on a constant currency basis from strong pricing increases. Additionally, I'll dive deeper into Glanbia Performance Nutrition categorial performance (performance nutrition, healthy lifestyle, and weight management). BTW I’m thinking about the creation of a change.org petition for the Glanbia Performance Nutrition division name to be amended to The Optimum Nutrition Company. This one brand alone now accounts for 60% of the total GPN revenue. This quarter, Optimum Nutrition had 20.8% growth and even more impressive U.S. consumption growth of 36.1%. With these recent Optimum Nutrition growth numbers…I want to be one of the first to congratulate the performance nutrition brand on becoming the most recent categorical brand to reach $1 billion in annualized revenue. Finally, I talk through a recent Glanbia M&A transaction and what that could or should signal from my perspective. I know I’ve talked about this a year ago, but it feels like Glanbia is at a bit of a crossroads right now. Path number one…do nothing substantial from an outside perspective and just use excess liquidity to rebalance risk tolerance to increase marketing and/or product innovation. Path number two…add a large asset through M&A. I’ve thrown out two compelling ones lately…THG (aka Myprotein), but you’d need to divest the beauty segment. The other was the precision fermentation startup Perfect Day that would have all kinds of interesting future plays. Path number three…Glanbia should start the corporate communications around a spin off its Glanbia Performance Nutrition division into a standalone company with a dual listing in the United States and Ireland. Either way…Glanbia has certainly become an increasingly fun behemoth to watch, right?
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Love it or hate it…artificial intelligence (AI) has started to take over different areas of our lives and there’s no escaping it. While everyone is talking ChatGPT, I’ve been captivated by another AI revolution that has just started to impact the CPG industry. Did you know that some of the "influencers" you follow might not even be real? I mean its common knowledge by now that influencers are great at adding digital platform filters, using photo editing software, and understanding which angles or poses are the most flattering…but I’m talking about something even more fake than that. Virtual influencers are computer-generated characters that can be human-like, with realistic features, personalities, and characteristics. While they're not yet mainstream, they're certainly growing in popularity with some of them amassing millions of followers and equally large earnings from paid brand partnerships…some within the CPG industry. And while the idea of a virtual influencer achieving legitimate, wide-scale fandom may seem like a modern idea, fictional celebrities can be traced all the way back to a time well before computers were invented. But where these virtual humans hit the digital platforms was in 2011 when Ami Yamato started creating YouTube vlog content with a virtual persona. Then five years later, @lilmiquela started posting photos on Instagram that had people questioning if this character was real. Now...AI systems like ChatGPT could soon blur an important line. So far, it has been well understood that there is a real person behind the scenes of these digital characters, but that likely won’t be the case going forward. Combine that with that fact that today’s virtual influencers look less like anime characters and more like humans each day, and CPG brand portfolios like Pernod Ricard are starting to go “all in” on them. The Olmeca Tequila virtual influencer Maria Margarita is he best example of this extreme usage by a CPG brand…outside of creating virtual versions of brand mascots. Additionally, this content will cover the "pros" and "cons" of working with virtual influencers and why they might one day become ubiquitous in our metaverse-filled world. FOLLOW ME ON MY SOCIAL MEDIA ACCOUNTS
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The Chapter 11 bankruptcy era of the beverage empire that Jack Owoc built has been wild. A LOT more has happened since I uploaded my last major Bang Energy bankruptcy explained update in mid-March (https://youtu.be/Kr_PMyydlCw). But that probably shouldn’t surprise you at this point, right? If you remember, I stuck my neck on the line and said that Monster Energy would end up acquiring its hated rival Bang Energy. Well...a few weeks later a well-respected equity analyst at Stifel put out a research note that stated Monster Energy was the best-positioned to acquire Bang Energy. His logic for that prediction almost exactly paralleled mine. This third piece of content in the Bang Energy bankruptcy series will update you on the revenue decline at the energy drink brand. It will also discuss the Bang Energy CEO Instagram handle drama that could be best described as his brash personality leading to a very public counterattack to the hostile takeover of the company he founded. Even Jack Owoc tagging me in those Bang Energy posts and reading each of them…it wasn’t until putting together some notes for this content that it struck me how desensitized I had become to this Bang Energy bankruptcy circus.I’ve covered many industry bankruptcies over the last handful of years and this one is about as unique as we will ever experience. And just to add more shit on to the pile…we can’t forget that Monster Energy just won another judgement against Bang in the 'Super Creatine' false advertising case. Finally, the original date of the Bang Energy bankruptcy auction has passed…yet the energy drink brand hasn’t changed hands. What’s happening here? Well...the Florida bankruptcy court approved an extension that moves the Bang Energy bankruptcy auction from April 27th to now May 25th.FOLLOW ME ON MY SOCIAL MEDIA ACCOUNTS
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Maybe it’s a bit extreme to say that the global supplement market sees American industry stakeholders as disorder-level narcissists, but at one point in the not so long-ago history it was probably very true. As dynamic forces from borderless digital platforms and online marketplaces continue to disrupt the supplement industry, it’s more important than ever that brands with global ambitions must have a deep local respect towards tastes, requirements, culture and social norms, and consumer behaviors. That much needed strategic paradigm shift is at the core of why I wanted to create this new content series. It will focus on deep conversations with trusted industry strategists and practitioners that focus on key international regions/territories. To kick this content series off…I couldn’t think of a better way than to tackle the complex and fragmented European supplement market with Nick Morgan, who is the owner of strategy consultancy Sports Integrated and market data company Nutrition Integrated. In our conversation, we cover everything from the changing retail landscape to trending brands and product categories…plus marketplace challenges and opportunities that have been caused from shifting consumer behaviors and motivations. We also explore some contemporary industry news that spans THG takeover bids, the PRIME hydration effect, and why Grenade’s Oreo bar collab has market bending potential. These are just some of the interesting topics we chatted about in this episode...
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It’s “spring cleaning time” at The Clorox Company…and unfortunately throwing away about a billion dollars’ worth of supplement brand acquisitions might make sense! My guess is A LOT of you didn’t even know that The Clorox Company owned a collection of supplement brands…let alone ones that in aggregate cost the CPG company just under a billion dollars to acquire. Why would a CPG portfolio that was built around an iconic bleach cleaning product be interested in supplement brands? Well…The Clorox Company believes it has been a health and wellness company for over 100 years. In May 2016, The Clorox Company announced it acquired the digestive health supplement brand Renew Life for $290 million. Less than two years later, Clorox acquired Nutranext for $700 million. That portfolio name probably doesn’t ring a bell to many, but it included the multivitamin brand Rainbow Light, anti-stress and sleep brand Natural Vitality, early collagen nutricosmetics brand Neocell, a small vitamin and mineral supplement brand called Stop Aging Now, and they also owned the legacy sports nutrition brand Champion Performance. Beyond the margin accretive potential from cost synergies with its previous acquisition of Renew Life, The Clorox Company was staring at a bigger challenge….one that Nutranext could help solve. Nutranext’s portfolio of consumer brands had strong digital sales, including through the brands’ DTC websites. To put it plain and simple, Nutranext might have been strategically aligned with The Clorox Company’s “health and wellness” identity, but its intent in 2018 was focused on making a $700 million acquihire bet on the future of retail. Did that very expensive strategy work out like The Clorox Company had hoped? I'll explain the complicated nature of answering that, but more importantly explain if headline news that The Clorox Company is looking to divest its supplement brands is “pure rumor and speculation” or what I call high probability. In my opinion, it’s time for Clorox to unwind this ingestible “health and wellness” nonsense and embrace that they’re a cleaning and disinfecting solutions business. FOLLOW ME ON MY SOCIAL MEDIA ACCOUNTS
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AB InBev has GHOST Energy. Molson Coors has ZOA Energy. Heck…Monster Energy acquired CANarchy craft brewing collective. And now the third-largest craft brewer in America, Sierra Nevada Brewing, has acquired a minority stake in the better-for-you energy drinks brand RIOT Energy. If you haven’t picked up on it…brewing companies are targeting pockets of beverage industry growth potential to replace the “beer occasions” that aren’t as prevalent anymore. The aptly named “Beyond Beer” strategy has ushered in a new era of category convergence. Well…Sierra Nevada Brewing seems committed long-term to diversification, because this RIOT Energy investment also accompanies the buildout of a massive “CanDo Innovation Centre” that will produce and package products outside of conventional beer. This all makes me wonder though…when will major players like Constellation Brands, Heineken, and Boston Beer Company make a play into the energy drink space?
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Grammy-nominated Hip Hop artist Jack Harlow recently invested in a beverage company based in his hometown of Louisville, Kentucky…but did he choose the right one? When you think about Kentucky and CPG…what comes to mind? Bourbon, right? The dozens of distilleries that make up the Kentucky Bourbon Trail are visited by a few million annually and the State has more than 11 million barrels of Bourbon ageing in warehouses. But just like how Jack Harlow feels a responsibility to make sure people don’t think of Louisville hip hop and only think of one white guy…maybe he also doesn’t want the Kentucky CPG industry to only be about bourbon. Which brings us to the recent collection of announcements from the Louisville-based energy drink brand Clear/Cut Phocus. The energy drink brand decided to drop the “Clear/Cut” part, brought on Jack Harlow as a co-owner, changed its CEO to a previous Bang Energy SVP of Sales, completely overhauled the visual identity of Phocus, and reformulated the drinks and stripped the portfolio down to a single new flavor. This for all intents and purposes…this wasn’t a pivot…this is now a completely new company. Jack Harlow's strategy of buying into an existing brand isn’t totally unique but is also a bit different than the norm of celebrity packaged goods behavior. Regardless, I think Jack Harlow would have been better off investing (and partnering) with Congo Brands...you know the portfolio company that owns the beverage names: Alani Nu, PRIME, and 3D Energy. But how about we don’t get caught up on the woulda, coulda, shoulda decisions of Jack Harlow. Maybe it’s better to focus on if a rapper is even the “right talent” to be combined with energy drinks being the “right product” in this celebrity packaged goods equation because rapper-themed energy drinks have a multi-decade track record of poor performance. So, to that…I wish Jack Harlow and Phocus all the luck in breaking the hip hop energy drink curse. Regardless, fortune favors the bold and, increasingly, the many celebrities who’ve made the leap into the CPG industry…so we will just have to wait and see what happens.
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If you look a mess, you are a mess. Right or wrong, books are judged by their covers and so are CPG brands. So, what does your products’ shelf presence say about your CPG brand? A LOT…actually! The store shelf is often a shopper’s first point of interaction with your products and its appearance can make or break the sale. But how do you keep everything looking tidy throughout the day at 1000s of store locations? If you’re a massive company like Hershey’s, you have an army of field employees that does this routinely. What about a startup CPG chocolate brand though? A typical one is basically either out of luck or required to spend budget they might not have, but one co-founded by Jimmy Donaldson (aka MrBeast), he can mobilize his millions of loyal fans to help him clean up the Feastables shelf presentation the next time they’re at Walmart.
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With New Years revolutionists flooding the market, January is typically the best month for the two largest specialty supplement retailers. Yet, January 2023 might have been a bit different because both GNC and The Vitamin Shoppe had CEO departures. After more than four years, Sharon Leite left The Vitamin Shoppe to become the CEO of Ideal Image (North America’s market-leading aesthetic services brand). She is become replaced (maybe temporarily) by Franchise Group Inc. (parent company of The Vitamin Shoppe) CCO Lee Wright. Then...after more than two years leading GNC out of bankruptcy, Josh Burris left the leading specialty supplement retailer to eventually become the CEO of the fashion retailer Rue21. This CEO departure is a bit more interesting...which you'll hear about why I believe that in the content. So, now you can see what connected together GNC, The Vitamin Shoppe, and January 2023. But is there something happening within the specialty supplement retail channel marketplace dynamics or impending recessionary period that caused these CEO departures? Spoiler alert...things are looking relatively good for the specialty supplement category, but I'll explain why I'm still not bullish on these types of retailers flourishing in 2023?
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Did you know there’s a new resident DJ…I mean CEO at The Simply Good Foods Company? And does that mean there’s about to be cake thrown at competitors of Quest Nutrition and Atkins Nutritionals soon? In this latest episode, I'll utilize the 2023 Q2 Simply Good Foods Company (NASDAQ: SMPL) earnings report, earnings call, and supplemental presentations that were filed on 4/5/2023 as the backdrop to provide broad nutritional snacking market insights. In Q2 of fiscal 2023, both Atkins Nutritionals and Quest Nutrition performed in the top-tier of categorical competitors in retail takeaway, with Quest Nutrition specifically having strong YoY growth at slightly more than 27%. What's at the heart of the Quest Nutrition success? While the Quest Nutrition snacks segment (e.g. Quest Chips, Quest Cookies, Quest Peanut Butter Cups, etc.) is now nearly 45% of measured channel retail sales for the brand...Quest Nutrition is still known for the original Quest Bar. That means the company needs the bar business to be healthy for any of this innovation risk to make sense. Here’s the good news…the core bar business is growing. In fact, this quarter it had tracked channel retail takeaway growth in the quarter of 24.1%. What’s at the heart of that? Well…obviously in this current environment there’s price inflation, but ex-inflation…what’s the volume growth coming from? The classic Quest Bar recently went through a major upgrade. Also...Quest Nutrition finally named a celebrity endorser (i.e. EDM DJ Steve Aoki), which has been on the strategic roadmap since The Simply Good Foods Company acquired the protein snacking brand in August 2019. Finally, I run through The Simply Good Foods Company CEO succession plan and give my thoughts around what I think the departure of Joe Scalzo and arrival of Geoff Tanner means for the company's future.
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Pivotal is an interview-style segment that tackles topics in consumer packaged goods (CPG) and fast moving consumer goods (FMCG) from the business leaders that live it EVERY DAY! As we close out another exciting quarter within the functional CPG space, it only seemed right that I ask my good friend and Market Insights Director at SPINS, Scott Dicker, to join me again. Instead of doing another broad-stroke Active Nutrition “State of the Union” type content piece, we decided to dive deep into one…or I guess two categories that have been on fire lately and are also personal favorites. If you haven’t guessed by now…we are talking energy drinks and sports drinks. In our conversation, we cover everything from recent categorical scan data trends to how the fall in beer consumption could be impacting energy drink growth rates…plus the evolution and democratization of these beverage categories. We also explore if energy drinks (or the broader energy everything concept) has now become a “must have” and not a “nice to have” consumer purchase decision. These are just some of the fascinating topics we chatted about in this episode...
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Sway House was started in January 2020 after the TikTok talent management company, TalentX Management, essentially chose a handful of its influencer clients to live in a Bel Air mansion rent-free and collaborate on videos for the various digital platforms. While there were several Sway House members not listed on the lawsuit, I’m only going to only focus on those included names…which were Blake Gray, Noah Beck, Bryce Hall, Griffin Johnson, and Josh Richards. If you aren’t a member of Gen Z (which based on my YouTube analytics is likely the case), then those five names likely might mean nothing to you. But just to give you a sense of their distribution power…they combine for over 100 million TikTok followers and 30 million followers on Instagram. The idea of a content house, or also known as a collab house, creator house, or content collective, started in 2014 and are intended to be an innovative solution to the problem that's caused by more creators and massive flows of content on popular digital platform, making it difficult to attract and hold followers. I know I sound like a broken record at this point, but the most popular creators of today are becoming the biggest CPG brands of tomorrow but there’s more to the equation than just having a uber-popular creator co-founder that can pull-forward awareness. Creator packaged goods brands must still be great at all the “blocking and tackling Xs and Os” CPG operator stuff. And that’s why partnerships with strong CPG operators or companies are so important to enhance the probability of success in the long run. There needs to be a credible person (and/or team) behind a creator packaged goods brand. Sway Fitness had that in the business entity PhD Fitness LLC, which they originally started working with on fitness content in 2021. Who is PhD Fitness LLC you might ask? As the press release stated, Sway Fitness was created by a combination of the scientific expertise of Dr. Jim Stoppani, business acumen of JYM Supplements' CEO Mike McErlane, and global influence of Sway House. Sway Fitness launched at GNC in February 2022 with several creatively named flavors of Sway Fitness Pre-Workout and Sway SHEESHH Energy Sticks. Unfortunately, the execution of Sway Fitness allegedly wasn’t there on both sides of the partnership. While I mentioned earlier that A LOT of the typical issues with creator packaged goods comes from not having sound CPG operators around the projects…this seems to be the opposite problem.
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If you believe sports supplements (e.g. pre-workout) must be packed to the brim with ingredients, or they shouldn’t be created at all...hopefully you'll have an open mind while consuming this content. In mid-January 2023, Gymshark announced on its social media that it created a branded pre-workout supplement. It would be available only to the UK market and for a limited time only (LTO). Obviously, that LTO time period was super short…because as of recording this in the back-half of March 2023...the branded pre-workout can be nowhere to be found on the Gymshark website. So, why am I even talking about this particular LTO pre-workout launch over the dozens that happen weekly by mid-size or larger supplement brands? It’s solely due to the company behind it. Gymshark is a fashion brand, and not just any fashion brand, but one that generates well over half a billion dollars in global revenue. So, there’s an oddity to what Gymshark did by deciding to launch an LTO product within the dietary supplements market. While I can’t remember everything, I’m pressed to pinpoint any like-for-like comparison with this business strategy made throughout history by other fitness apparel brands like Nike, Adidas, Under Armor, or Lululemon. That being said, I did once explore the idea of fitness equipment/content companies like Peloton, Tonal, or Mirror would explore buy, build, or partnership opportunities within the functional CPG categories. It was in that previously mentioned "most probably" strategic direction that unlocked the Gymshark Pre LTO playbook. They created a strategic partnership with a supplement brand Applied Nutrition and essentially white-labeled their popular pre-workout product called ABE (which stands for All Black Everything). While it seemed most "advanced consumers" and industry professionals were hating on the trendy fitness apparel brand for this LTO supplement launch, I think most were completely missing the valuable insights and lessons to learned...
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What does a YouTube channel (NELK) that gained popularity from outlandish pranks and the supplement industry have to do with one another? NELK (and their lifestyle brand FULL SEND) are riding a trend that’s also fueling massive CPG industry success from the likes of MrBeast (Feastables), Emma Chamberlain (Chamberlain Coffee), and Logan Paul (PRIME Hydration). Everyone thinks the C in CPG stands for consumer, but they’re dead wrong. The most popular creators of today are becoming the biggest CPG brands of tomorrow. Creator packaged goods is a relatively new phenomenon. You’ve probably heard the term creator economy, but for those unfamiliar…it basically describes individuals that commercially capitalize on digital platform output (aka content creation). There are 10s of millions of creators today, most just making the world a noisier place, but a small fraction add value to niches and/or transcend beyond these digital platforms. See…there’s a mix of skill, hard work, timing, and luck that goes into capitalizing on these new kingmakers of the world…which are the everchanging algorithms of these various digital platforms. If you can consistently “catch lightning in a bottle” by holding consumer attention with the help of these digital platform algorithms, congratulations…you’ve just become one of the most sought-after assets in the world. The social currency of views, likes, comments, and shares, now have exchange rates that supersede basic salary and fee-based compensation of decades past…that is if you know how to properly articulate and aestheticize your defining personality traits. Because that’s really the cheat code here…creators have the potential to build extremely valuable brands, but not all are creators and creator projects are created equal. And that’s why partnerships with strong CPG operators or companies are so important to enhance the probability of success in the long run. There needs to be a credible person (and/or team) behind a creator packaged goods brand. NELK and FULL SEND now have that in John Shahidi...though they've seen different results across two different CPG product categories. While Happy Dad Hard Seltzer has sold over 3 million units since its launch and is currently the number one followed and engaged Hard Seltzer brand on social media, FULL SEND supplements has struggled in comparison. I'll breakdown what's going on with FULL SEND and explain why I think the NELK Boys are likely not the ideal creators for the supplement industry currently…or at least with offering a typical full supplement product line.
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A LOT has happened since the parent company of Bang Energy filed for Chapter 11 bankruptcy protection on October 10, 2022. If you checked out my previous comprehensive “Bang Energy Bankruptcy Explained” content about five months ago, you’ve likely been wondering what’s going on at the beverage empire that Jack Owoc built. Well…I've been watching everything closely and read most of those 1000+ court documents, that amounted to thousands of pages, in hopes that I can provide a comprehensive update on the Bang Energy bankruptcy case and breakdown what everything ultimately means for the company and the entire energy drinks market. Firstly, this is a highly contested bankruptcy case that involves A LOT of egos, emotions, and energy drink competitors being among Bang Energy's largest creditors. Secondly, you have many factors at play that is causing the revenue to decline sharply at Bang Energy, including a DSD distribution swap away from PepsiCo, false advertising case with Monster Energy that's causing a packaging changeover, large retailers delisting or deprioritizing Bang Energy for upstarts like GHOST Energy, C4 Energy, RYSE, Alani Nu, and CELSIUS energy drinks, and then Huron Consulting Group implementing a cost optimization plan that put in motion that included a large SKU rationalization, a commercial real estate sale and leaseback strategy, and cuts to marketing spend…just to name some of the actions. Thirdly, Jack Owoc started seeing the writing on the wall and with not many viable options left to save Vital Pharmaceuticals (VPX Sports) that he birthed 30 years ago, Jack Owoc leaked the potential Bang Energy IPO. Next, Bang Energy put out a press release that says the board of directors “acknowledge Jack Owoc’s vision in founding this leading brand and creating a world-class product in the energy drink category,” but he has been relieved of his CEO and Chairman of the Board duties. We are now in a full-on hostile takeover situation after I assume Jack Owoc went nuclear when he realized that his most hated rival Monster Energy could very well acquire Bang Energy. I'll explain why I believe Monster Energy would want to acquire Bang Energy, but also consider a few other options with the bankruptcy auction scheduled for April 27th, 2023.
Bang Energy Bankruptcy Explained
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What I’ve dubbed the “Bodybuilding.com hot potato game” is basically the best analogy I could create that describes what has happened to the specialty supplement ecommerce website over the last 4ish years. Bodybuilding.com has been involved in three confirmed mergers and acquisitions transactions since July 2019…with a fourth possibly happening soon. The first was a related-party transaction that happened between Liberty Expedia Holdings and Expedia Group. About a year later, Expedia Group was facing huge market pressures from you know what in 2020 and had to shed all of its non-core travel assets. The private equity firm The Najafi Companies took advantage of the fire sale and attempted to stabilize the struggling Bodybuilding.com but decided to cut its losses early and sell two years later to Retail Ecommerce Ventures, which is owned by Tai Lopez and his partner Alex Mehr. Now…Retail Ecommerce Ventures is reportedly in financial trouble and have hired advisors to consider a variety of strategic options that include lining up a potential buyer for its portfolio companies, putting up intellectual property as collateral for loan/investment, or filing for Chapter 11 bankruptcy protection. What does this all mean for Bodybuilding.com? I’ve consistently said in numerous content pieces over the years that there’s still value in Bodybuilding.com, but is it worth repairing? What the website doesn’t need is another “let’s do as we’ve always done but a little cheaper and expect better results” owner. What Bodybuilding.com needs is a transformative thinker that has sufficient capital and the patience to turn this ship around. Maybe I need to message Ryan Deluca and see if he wants to pull a Steve Jobs return to the company he founded 24 years ago from his garage at the age of 20. But since this is a developing story…I’m going to end right here and wait until we have more information. When things get less opaque, I’ll be here to share all the implications that it could have on supplement industry stakeholders.
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Just like midnight changes everything for Cinderella, MusclePharm did something right before the start of the intellectual property public auction that also changes everything. While MusclePharm being the Cinderella “underdog story” of the sports nutrition industry might be a huge stretch, the company is certainly down on its luck and dreaming of a better life someday. To even have the chance at a better life, we must swap an important detail around in this Disney story. Instead of the fairy godmother, MusclePharm has the United States Bankruptcy Court District of Nevada. Yes, many of you already read the headlines, but on December 15, 2022, MusclePharm filed voluntary petitions for protection under Chapter 11 of the Bankruptcy Code. Why did it take me so long to get this MusclePharm bankruptcy content created for you? Well…at first the bankruptcy filing was quite bare, which signals to me that it was obviously rushed. So, I waited for more details to emerge because I wasn’t going to make content on boiler plate nonsense that just wastes everyone’s time. But what started slow, sped up fast, and in the last about 80 days, there’s been about 300 court documents (and counting) that amounts to more than 1000 pages. I’ve read through much of that in hopes that I can provide facts on the MusclePharm bankruptcy and breakdown what everything ultimately means for the company and the entire sports nutrition market. This includes a hedge fund battle between a portion of the hedge fund Empery Asset Management and White Winston, a list of the major creditors in the MusclePharm bankruptcy case, confirmation that Eric Hillman is CEO and an update of January 2023 financial progress, and what's the likely post-bankruptcy path for the legacy sports nutrition brand MusclePharm.
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With the help of PepsiCo, can Celsius Holdings knockout enough competitors in 2023 to reach $1 billion in revenue? This is the first quarter that Celsius energy drinks were integrated into the PepsiCo DSD distribution system after the August deal announcement. Celsius Holdings (NASDAQ: CELH) had quarterly revenue of $178 million, which was up 71% YoY. For the 2022 full-year, the energy drink brand had $653.6 million in annual revenue, which was up a remarkable 108% YoY. According to IRI last 52-week data, Celsius was the number one brand driver of growth in the energy drink category. Celsius was responsible for 22% of the category growth, driving $474 million in incremental sales. In addition, according to the trailing 12 weeks of IRI MULO+C Total Energy data for the period ending January 1, 2023, Celsius is now securely the third-largest energy drink brand in the category. It’s market share went from 3.4% in 2021 to 6.4% in 2022. Celsius energy drinks saw massive growth in convenience stores, mass retailers like Walmart, the club channel in retailers like Costco, and the Amazon marketplace. I also quickly run through some thoughts around the Celsius strategic pillars that CEO John Fieldly laid out in the earnings conference call. Finally, I mention some hot takes around a recent collection of Celsius Holdings headlines like the Flo Rida litigation, signing Jake Paul, and additional marketing announcements.
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Did Optimum Nutrition just join an ultra-exclusive club within the supplement industry? Glanbia Performance Nutrition had 2022 revenue growth of 13.9% YoY on a constant currency basis from strong pricing increases. They also benefitted from the mid-2021 acquisition of LevlUp, a gamer (esports) nutrition brand. Glanbia Performance Nutrition is one of two wholly-owned segments of Glanbia plc (LON:GLB), a multi-billion dollar global nutrition company. The brands in the Glanbia Performance Nutrition portfolio include; Optimum Nutrition, BSN, think!, Isopure, Amazing Grass, and SlimFast. I'll use the recent earnings report, earnings call, and associated news to update you on how Glanbia Nutritionals and Glanbia Performance Nutrition is performing against the complex operating environment. Additionally, I'll dive deeper into Glanbia Performance Nutrition categorial performance (performance nutrition, healthy lifestyle, weight management, and international). I also share a collection of hot takes or things I’m left pondering about Glanbia after hearing GPN strategic priorities going forward. This includes a larger long-term prediction about Optimum Nutrition, pondering acquisition targets like MyProtein and a precision fermentation startup like Perfect Day, and explanation around why the mismanagement of BSN is only getting worse by the day.
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When making that prediction in November 2022, I never imagined it would come true so quickly, but it’s time to explain what the life after Sharon Leite might look like at The Vitamin Shoppe. Taking over the CEO role at The Vitamin Shoppe will be Lee Wright (or at least he’s filling those shoes right now). I say that because he’s also the Chief Commercial Officer for the parent company Franchise Group. I'll run through his background and also explain the possible significance his previous employer Conn's HomePlus might have on Franchise Group. Additionally, I will update you on the recent business performance for The Vitamin Shoppe. I'll utilize the 2022 Q4 Franchise Group (NASDAQ: FRG) earnings report and conference call to provide quarterly and full-year 2022 segment-level financial details for The Vitamin Shoppe. I will also dig deeper into several areas of The Vitamin Shoppe, such as franchising activity and merchandising category trends (including the retailer's increased private label brand focus).
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Pivotal is an interview-style segment that tackles topics in consumer packaged goods (CPG) and fast moving consumer goods (FMCG) from the business leaders that live it EVERY DAY! After years of keeping the industry in suspense, the FDA recently concluded that CBD can’t be regulated under existing frameworks for dietary supplements and foods/beverages. What? Why? Huh? While I read the FDA announcement both at face value and between the lines, the current state of CBD within the CPG industry is the type of nuanced subject matter that requires additional expertise if I’m going to reach the level of insights I believe you deserve. So, with a multi-year background at the FDA and current C-Suite experience at the publicly traded CBD supplement company cbdMD (NYSE: YCBD), I knew Sibyl Swift, Ph.D. would be the perfect person to help me with this content. Beyond the ins and outs of the recent FDA announcement, we talked about our confidence in Congress to help, how the DEA is getting involved with enforcement of synthetic cannabinoids, and what the Twitter advertising announcement might mean for allowability of other business tools in the near future. Those are just some of the fascinating topics we chatted about in this episode...
Sibyl Swift, Ph.D. LinkedIn
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Can you imagine living without peanut butter, sugary treats (e.g. candy or cake), breadcrumbs, or condensed milk? The fact is that these daily CPG staples and many more would likely not exist today if it wasn’t for the innovative minds of Black Americans throughout history. While this is not intended to be a definitive list of historically prominent Black Americans in the CPG industry, it hopefully will serve as a starting point on your own educational journey. One that I can actually help a bit further with, as I made another piece of content in February 2021 (https://youtu.be/_Ud2_I-68c0) that shared more stories of Black Americans who shaped the CPG industry. I hope you enjoy these CPG industry historical stories that I find interesting. I’m highly motivated to do this for a mainly two reasons. Firstly, I’m a big believer that the more you study history, the more you can anticipate the future. This is especially helpful to a forward-leaning strategist that has an eye for pattern recognition. Secondly, every year I grow older (and hopefully a bit wiser), I’ve found it more important to study the American history that they don't teach in schools. History is an academic subject. But the "history of history" and how subjective observations became objective truth is rooted deep in marketing strategy. It’s vital to remember that before the greatest marketers in the world sold consumer packaged goods, they sold stories that became truth over time. In this content, you'll stories about: George Washington Carver, Norbert Rillieux, Lisa Price, Mary Beatrice Davidson Kenner, Joseph Lee, and Reginald F. Lewis.
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FTC targets one of the biggest supplement brands with a “first of its kind” Amazon case only two months after updating its advertising guidance document for the supplement industry. I tried to warn you in previous content about the FDA and FTC that things would be getting gnarly in for supplement industry stakeholders in 2023! On February 16, 2023, the Federal Trade Commission (FTC) took action against The Bountiful Company, maker of Nature’s Bounty dietary supplements, with “review hijacking” on Amazon and using them to deceive consumers. Review hijacking happens when sellers find ways to grab positive customer reviews from other products and integrate them into their own listings. Sometimes its Amazon sellers looking for abandoned products that were popular before, then stealing the listing, and making use of the old page reviews to create a false sense of trust for their product. Other times its Amazon sellers merging its new products with different well-established products that had more product ratings and reviews, higher average ratings, and “#1 Best Seller” and “Amazon’s Choice” badges. According to the FTC, The Bountiful Company did the latter, by taking advantage of an Amazon feature that allows vendors or sellers to create or request the creation of “variation” relationships between some products that are similar but differ only in narrow, specific ways – such as color, size, quantity, or flavor. Why would The Bountiful Company (allegedly) do that? It's well-established that new products launching on Amazon face a "cold start" problem because of minimal traffic and zero reviews. Beyond explaining in-depth the FTC & The Bountiful Company "review hijacking" case, I want to explain why a nuance of Amazon’s involvement and relationship with The Bountiful Company could create huge implications to supplement brands selling on the Amazon ecommerce platform. All I can say is that when it comes to mixing Amazon, the supplement industry, and recent regulatory agency focus (FDA or FTC), Amazon will be watching closely and making the necessary changes to safeguard itself. Yes, it might sell an estimated $11 billion in supplements annually, but that doesn’t matter in the grand scheme of things. So, if the FTC has noted its plans to focus on review hijacking, and the supplement category was made the example of its first case, it inevitably means that Amazon will be making changes that effect everyone from 1P vendors to 3P sellers of supplements.
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Offense and defense are terms that we’re mostly familiar with when talking about sports, but these words are also applicable in business strategy. The easiest way to think about offensive versus defensive business strategy is that when a company is playing offense, its making investments that move the business forward. Alternatively, when a company is playing defense, its making investments to prevent potential downside. Offensive and defensive strategies are equally important, but when you utilize them depends on numerous considerations. That being said, I want to focus on a saying in sports that “defense wins championships.” So, who’s the “King of Defense” in the beverage CPG world right now? Monster Beverage Corporation (NASDAQ: MNST). It’s no exaggeration to say that Monster Energy is one of the most successful beverage brands in the world and if business championships are determined by financial success…Monster Energy would be a dynasty within the CPG industry. In this content, I'll run through a few examples of Monster Beverage Corporation defensive product strategies, including the most famous example...launching of Reign Total Body Fuel to slow down Bang Energy. These defensive product launch examples will also include the newest ones with Reign Storm "Clean Energy" to slow down CELSIUS, Monster Tour Water to slow down Liquid Death, and even maybe something they have up their sleeves for the highflying GHOST Energy.
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Are there evolving sociological patterns that could be driving the massive growth of energy and nootropic products? I’d argue that the consumer interest in caffeine has never been higher. I’ve seen a collection of recent surveys that state between three-fourths and more than four-fifths of American adults consume caffeine daily. While coffee has been powering Americans before America was even a thing, more recently consumers are increasingly grabbing some of the other “energy everything” product categories. It makes sense, right? We live in the “Age of the Endless Aisle,” where there are more options in every CPG category than during any other point in history. It’s that proliferation of caffeine-containing products and them being well-entrenched into the lives of most Americans that's causing “energy everything” to become a certified consumer movement. Whether hitting the gym, staying at the top of your game during busy workweeks, or simply preparing for weekend activities, consumers continue to reach for energy drinks and energy supplement that are packed with caffeine and oftentimes nootropic ingredients to provide a physical and mental boost. I’ve recently mentioned that if 2022 quarter four is any indication of what will play out in 2023, the U.S. energy drinks market will likely hit an astounding $20 billion. Moreover, growth in pre-workout powders, more broadly with energy supplements, and the nascent cognitive enhancing nootropic market, we’d need to add in another handful of billions in U.S. consumer spending. While there are some obvious changing consumer dynamics causing this positive market activity, I'll go much deeper than those and breakdown two hidden growth drivers (e.g. Hustle Culture and Keeping Up With the Joneses Effect) that I believe are accelerating the popularity of energy and nootropic products that are focused on improve physical and cognitive performance. For the final part of this content, I'll consider the beforementioned shifting marketplace dynamics and hidden growth drivers to talk about what’s next within the energy and nootropic categories from a product attribute perspective.
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Are the recent Premier Protein and Dymatize Nutrition product innovations enough or is it time for BellRing Brands to go M&A hunting in 2023? As I normally do with my performance update content of publicly-traded functional CPG brands, I will use the recently filled earnings report, earnings conference call, and any relevant publicly disclosed news, in this case it’s BellRing Brands (NYSE: BRBR) 2023 Q1 earnings release, to obviously update you on the performance of brands in that portfolio, but also use it as the backdrop to discuss market insights within the active nutrition formats of the liquids, powders, and bars. BellRing Brands is a portfolio that owns a collection of convenient nutrition brands like Premier Protein, Dymatize Nutrition, Powerbar, and Joint Juice, which was previously wholly-owned by Post Holdings. A fast-paced and busy lifestyle is pushing consumers to switch to quick and healthy meal options. This has resulted in the increased household penetration of RTD protein shakes that promote active lifestyles. Bellring Brands had a strong 2023 Q1 with net sales reaching $367.2 million, which was up 18.3% YoY. Premier Protein (~80% of BellRing Brands total revenue) grew 22.9% YoY because it was able to exercise pricing power because of its strong brand equity in the inflationary market. Dymatize Nutrition was up 2.5% YoY stemming from price increases. Moreover, I provide two deep dives into the functional CPG portfolio's "hero SKU families" of Premier Protein RTD protein shakes and Dymatize whey protein powders. Finally, I recall my previous comments and predictions from early to mid-2021 to explain the product innovation strategy at BellRing Brands that includes the breakfast occasion (e.g. Premier Protein cereal and Premier Protein frozen pancakes), nighttime occasion (e.g. Premier Protein Good Night), and plant-based protein (e.g. Dymatize Plant).
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Last year saw a rise in legislative and regulatory attacks on the supplement industry. Should supplement industry stakeholders be concerned things will continue or even worse…accelerate in 2023? If you caught my recent content regarding the revised FTC health products guidance document, at the very end of it...I stated that whether it was that particular regulatory update, state legislatures attacking supplements, federal legislatures calling for supplement industry regulatory reform, or several questionable FDA moves against the supplement industry…it should be easy to see that the government is paying more attention. I went on to say that this increased attention can only mean major changes are likely ahead. So, buckle up supplement industry…things could get wild here in 2023. It was through some of the comments and direct messages, that I received in regards to the content, which made me realize most of my audience was interested in learning more about what exactly is impacting the supplement industry from a legislative and regulatory standpoint. While I could certainly provide an extensive update myself, this is the type of nuanced trending subject matter that would undoubtedly benefit substantially from bringing on someone that’s on the ground fighting these baseless proposals that would damage the supplement industry. That’s why, as an added bonus, I asked my good friend Kyle Turk, who also happens to be the Director of Government Affairs for the Natural Products Association (NPA) to join me in an insightful conversation.
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Have you heard the story of how Cola-Cola gave the white business community of Atlanta an ultimatum to help Dr. Martin Luther King Jr.? So, I’m not sure if this unofficial content series will eventually become an official one, but I do want to more frequently share obscure CPG industry historical stories that I find interesting. I’m highly motivated to do this mostly because as every year I grow older (and hopefully a bit wiser), I’ve found it more important to study the American history that they don't teach in schools. History is an academic subject. But the "history of history" and how subjective observations became objective truth is rooted deep in marketing strategy. It’s vital to remember that before the greatest marketers in the world sold consumer packaged goods, they sold stories that became truth over time. So, how did I stumble on this lesser-known intersection of the CPG industry and civil rights history? Maybe some of you already know this, but I publish a weekly curated strategic newsletter called funCPG (Sign Up - https://bit.ly/3FrO7Oa). A few editions ago, the publish date was on Martin Luther King Jr. Day and I started curiously exploring if he had any favorite CPG products. While I couldn’t find much, I did uncover a letter MLK had sent to The Coca-Cola Company in March 1965. A bit more queries into the Google machine and bam…I’m deep down a rabbit hole of American history that I hadn’t heard about until that moment. And though the story is extremely interesting by itself, you know me…I want to pack this with edutainment value, so I’ll also be sharing how the bold move by The Coca-Cola Company was a major propellent to an element of corporate social responsibility.
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Who is TINA and why does she seem to hate the energy drinks market? In mid-December 2022, Truth in Advertising (TINA) and the UConn Rudd Center for Food Policy & Health sent letters to more than 40 energy drink companies urging them all to review their marketing. Why? TINA believes these energy drink companies are engaging in deceptive and unfair marketing tactics that are targeting minors. While 40+ energy drink companies were targeted, none more so than GHOST Lifestyle. TINA didn’t just send a warning letter to GHOST; they also filed a 22-page complaint against the brand with the FTC and FDA. The complaint detailed how TINA believes that GHOST targets minors through a multifaceted deceptive marketing strategy. It includes GHOST’s utilization of licensed candy flavors, partnership with gaming lifestyle brand FaZe Clan, and usage of certain social media influencers. Beyond that, TINA also believes that GHOST failed to adequately disclose that its products are only intended for healthy adults and may be harmful to children and make unsubstantiated and unapproved health claims about its products. In this content I will share my thoughts around the Truth in Advertising complaint, but also why GHOST was specifically targeted, what implications that might or might not have to the brand, and also expanding those insights to explain the potential impacts to the entire energy drinks market. To help add a layer of depth to this content, I also asked Daniel Fabricant, President and CEO of Natural Products Association (NPA), to join me for an insightful conversation on this subject matter. Disclaimer - Do not misinterpret anything in this content for me saying that efforts by TINA have any malicious intent behind them. In fact, I applaud non-profit organizations like TINA for their important role within the business ecosystem. Moreover, if there are data supported changes that would be beneficial, I’m more than happy to work with TINA in some capacity to improve marketing within the energy drinks space.
NPA Letter to TINA
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Logan Paul, KSI, and the team at Congo Brands just launched PRIME Energy, but does it any stand any chance at outselling PRIME Hydration? If you haven't noticed, the internet has gone crazy for PRIME Hydration with the company stating its 2022 sales number reached around $115 million. Remember that’s basically with 11.5 months of business activity, and in Year 1 out the gate. That’s essentially unheard of with any new beverage launch that isn’t a brand or product extension by one of the biggest beverage brand portfolios. What’s even more impressive is that PRIME is expected to match its annual 2022 sales in the first quarter of 2023. It took less than a year in market for PRIME Hydration to become the fifth largest sports drink brand in America. PRIME is riding the celebrity packaged goods trend where the most popular creators of today are becoming the biggest CPG brands of tomorrow. When you hit on the “right celebrity + right product” element, you can pull forward brand awareness to a level that takes competitors years or many millions of dollars. The major benefit of the celebrity packaged goods trend is that Logan Paul and KSI are masters of at winning consumer attention through today’s kingmakers…aka digital platform algorithms. So, what does this all mean for the relative success of the PRIME Energy lineup? While PRIME Energy has A LOT going for it, I also think there will be strategic misalignments with the energy drinks market and a large share of the most diehard audience of Logan Paul and KSI. Does that mean the energy drinks will be a failure? No. I could easily see these making a run at the top 10 energy drinks in the next 2-3 years. I could also see the entire PRIME brand being acquired in the next 2-3 years by one of the biggest beverage portfolios if they can get comfortable with potential "key man risk."
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Pivotal is an interview-style segment that tackles topics in consumer packaged goods (CPG) and fast moving consumer goods (FMCG) from the business leaders that live it EVERY DAY! So, if we were putting together a 21st century beverage industry version of Mount Rushmore, my recent guest would have to be up for major consideration. From successful exits at ZICO Coconut Water, CORE, and BODYARMOR, to his current involvement in ZOA Energy, Chamberlain Coffee, and Athletic Brewing…Danny Stepper is that dude. Danny Stepper (Co-Founder and CEO of the beverage incubator L.A. Libations) and I had an absolute gem of a conversation, where we touched on everything from the foundational importance of starting his career at The Coca-Cola Company to how he unsuccessfully dodged Hollywood…yet that entertainment industry experience has proven extremely fruitful at LA Libations, as the intersections of beverage and entertainment multiple. These are just a snippet of the topics we chatted about in this episode...
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Imagine you create a piece of content that gets millions of views. How long would it take you to make a follow-up? A few hours later…the same day…or maybe a few days at the most, right? I guess you could say the Federal Trade Commission (FTC) wouldn’t cut it in today’s creator economy. That’s because it took the regulatory agency 25 years to update its previous 1998 guidance document, “Dietary Supplements: An Advertising Guide for the Industry.” You might be thinking that A LOT has probably changed in the supplement industry over the last 25 years…and you’d be right. During that time, the supplement industry has gone from a fledgling enterprise still seeking legitimacy, regulatory structure, and recognition…to a mainstream behemoth with sales north of $60 billion in the U.S. market alone. Since the FTC waited an absurdly long time to update its supplement industry advertising guidance, you might also be thinking that the regulatory agency must simply be ignorant to the breadth and depth of change that happened within the supplement industry. That’s silly though…the FTC isn’t blind…plus what happened in the supplement industry isn’t particularly unique. Every sector of the economy is drastically different than it was in 1998. So, what took them so long? Section 5(a) of the FTC Act provides that “unfair or deceptive acts or practices in or affecting commerce are declared unlawful.” So…in the eyes of the FTC, the legal fundamentals around consumer protection remain mostly unchanged. That doesn’t mean all that change within the supplement industry didn’t converge with the more than 200 cases filed by the FTC challenging false or misleading advertising claims since 1998…causing layers of nuanced confusion for stakeholders. Is the updated document from the FTC titled “Health Products Compliance Guidance” perfect? I think holding any governmental agency to a standard of perfection is asinine. But maybe with more specific and current examples, the revised guidance document will hopefully be a tremendous tool for the supplement industry to build marketing campaigns and meet FTC’s current expectations. Additionally, I’m not a lawyer…so while I’ve played nice within the evolving expectations of the FTC for more than a decade…I don’t interface directly with the regulatory agency on a regular basis. That’s why I thought it would be best if I brought on my good friend Ivan Wasserman, managing partner at Amin Talati Wasserman LLP, which is one of the nation's leading regulatory and intellectual property law firms, to explain the commonalities, differences, and surprises that he noticed in the FTC document Health Products Compliance Guidance.
Health Products Compliance Guide
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What happens when a bunch of shred zepplins, swolezillas, and Broseidons circle around a stack of price inflated sports nutrition products and start making event predictions about the supplement industry? This will basically be the personification of that imaginary scenario! My one big rule for these annual prediction lists is that I don’t allow carryover from previous years. Additionally, since these are "outlandish" predictions, I try and take Happy Gilmore level swings. The second rule was put in place because it optimizes for entertainment, but it also makes for killer “I told you so” callout clips if I get any of these correct. That being said, one disclaimer because I don’t want those pesky federal agencies contacting me…I do not have insider information on any of these mentioned predictions and this list was thrown together for entertainment purposes only. I say that because outlandish or not…I’ve gotten lucky about 40 percent of the time on these predictions throughout the years. Some fun correct ones were, (1) predicting BBCOM would get acquired in 2019 (2) GNC getting taken private through bankruptcy in 2020 (3) GHOST Energy outselling its supplements in 2022. We also could still see some outlandish predictions come true years later like a pair from the 2019 edition that said AB InBev would buy Bang Energy and MusclePharm would be taken private.
But in no particular order, here are my five supplement industry event predictions that could happen in 2023:
- Year of the Bankruptcy (or Fire Sale)
- Nutrabolt (C4 Energy) Goes Public
- GHOST Energy Becomes the Fifth-Largest Energy Drink Brand
- MyProtein (THG Nutrition) Has a Impressive Bounce Back Year
- Nestle Health Science and Unilever Both Make Another Supplement Brand Acquisition
And then finally this year’s bonus prediction with no explanation…Laird Superfood gets acquired.
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Which sports and active nutrition industry trends do I predict will be the biggest in 2023? Believe it or not, this will be my fifth annual list of sports and active nutrition industry trend predictions. Many of you know that I cut my teeth in the sports nutrition space…plus I’ve always believed the best and brightest companies in sports and active nutrition are the influential epicenter for the entire CPG industry. So, there’s always an extra layer of maybe self-generated pressure that I put on myself to come up with insightful and impactful trend predictions in this particular content piece. Also…for those that are new to my content, I only have one big rule for these annual trend prediction lists. I don’t allow carryover predictions from previous years. This makes it more challenging, but also a little strange because trends are typically multiyear in nature…with the strongest ones lasting a decade or more. So, if you have some extra time and want to multiply your insights…I’d suggest checking out my previous annual sports and active nutrition industry trend prediction content pieces. They’re still hugely relevant and packed with value.
In no particular order, here are my prediction for five of the biggest Sports Nutrition Industry Trends in 2023:
- Gut Performance = Buying Gut Health Ingredients for athletic performance
- Load Up on Only What You Need = Affordability and Value-Orientated Consumer Behavior
- Big Brick Poppin' = Large Retail channels winning the share of dollar sales and contribution to growth
- Flex Your Brain = proactive consumption for a high achieving life
- Supplementing with Purpose = Rise of purpose-drive sports nutrition brands
BTW this year’s Top 5 sports and active nutrition industry trend predictions is super cool because it’s powered by one of my favorite ingredients Cognizin. Whether it’s for work, exercise, gaming, or just everyday life, Cognizin is the gold standard for focus, mental energy, and comprehensive brain health. Give your customers an award-winning ingredient for brain health with Cognizin. Learn more by visiting www.Cognizin.com.
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Better, softer, yummier…is this newly reformulated Quest Bar a gamechanger in sustaining market leadership in the active nutrition snacking category? In this latest episode, I'll utilize the 2023 Q1 Simply Good Foods Company (NASDAQ: SMPL) earnings report, earnings call, and supplemental presentations that were filed on 1/5/2023 as the backdrop to provide broad nutritional snacking market insights. In Q1 of fiscal 2023, both Atkins Nutritionals and Quest Nutrition performed in the top-tier of categorical competitors in retail takeaway, with Quest Nutrition specifically having strong YoY growth at slightly more than 25%. What's at the heart of the Quest Nutrition success? While the Quest Nutrition snacks segment (e.g. Quest Chips, Quest Cookies, Quest Peanut Butter Cups, etc.) is now nearly 45% of measured channel retail sales for the brand...Quest Nutrition is still known for the original Quest Bar. That means the company needs the bar business to be healthy for any of this innovation risk to make sense. Here’s the good news…the core bar business is growing. In fact, this quarter it had tracked channel retail takeaway growth in the quarter of 16.8%. What’s at the heart of that? Well…obviously in this current environment there’s price inflation, but ex-inflation…what’s the volume growth coming from? The classic Quest Bar recently went through a major upgrade. From my understanding, they worked with the global dairy nutrition company Fonterra on a proprietary protein innovation that provides a softer bar and will also yield a longer shelf life of softness which significantly improves the eating experience. I still haven’t gotten my hands on some of the new Quest Bars yet, but leadership did note that the Quest Bar retail takeaway growth was stemming from a direct response to consumers enjoying the reformulation. It’s still early…maybe ~6 months since the earliest new Quest Bars hit the market, so not going to 100% say all is clear, but if the upgrade does prove successful, it will take away one of the largest consumer pain points with Quest Bars and provide a sustained uptick in sales for the market leader. Also...for the final part of the content, I ran through a few headwinds and tailwinds that The Simply Good Foods Company (and competitors) will be facing in the coming year with a high likelihood of a recession.
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It’s that glorious time of year again, where my content creation morphs into a collection of Top 5 lists that either gives me the chance to highlight key insights from the last year or provides me the opportunity to put my reputation on the line as a forward-leaning CPG strategist and make predictions about the coming year. Believe it or not, this will be my fifth annual list of functional food and beverage trend predictions. For those that are new to my content, I only have one big rule for these annual trend prediction lists. I don’t allow carryover predictions from previous years. This makes it more challenging, but also a little strange because trends are typically multiyear in nature…with the strongest ones lasting a decade or more. So, if you have some extra time and want to multiply your insights…I’d suggest checking out my previous annual functional food and beverage trend prediction content pieces because they’re still hugely relevant and packed with value. This year’s Top 5 functional food and beverage trend predictions is extra special because it’s powered by NuLiv Science and their 100% plant-based compound AstraGin…that increases the absorption of many vital nutrients promoting a healthy gut environment. Whether it’s a functional food or beverage application, you want your customers absorbing and getting the most out of what they’re consuming, right? I know you do…so make sure you check out www.NuLivScience.com to learn more.
In no particular order, here are my prediction for the Top 5 Functional Food and Beverage Trends in 2023:
- 3 Rs Effect (Reshoring, Regenerative Agriculture, and Recycled)
- Algae (Inside & Out)
- Confidentially Functional Effect (Affordability & Private Label)
- Mental Health (Management to Escapism)
- Old to New Technology...It's All Disruptive
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Rick Ross is one of the most successful musicians in the world, but few realize he also dabbles in the world of consumer packaged goods (CPG). So, what can CPG professionals learn from the hip-hop legend? I’ve always believed that hip-hop and CPG entrepreneurship are linked together. This is probably why you see so many hip-hop artists that are involved with CPG entrepreneurship or investing in this consumer sector. While his overall business activity is lower compared to Jay Z, you might be surprised to learn that Rick Ross is an active investor across the CPG industry. Interestingly, Rick Ross and Jay Z both got their start in the CPG world through the same alcoholic beverage entrepreneur. Brett Berish, CEO of Sovereign Brands, who founded Armand de Brignac (aka Ace of Spades), also founded the sparkling rose brand Luc Belaire. In 2013, Rick Ross became essentially the brand’s ambassador, which skyrocketed Luc Belaire in the rap game. A decade later, there aren’t many artists as synonymous with a particular brand quite like Rick Ross is with Luc Belaire…even earning himself the nickname Rick Rozay. Likely due to the successful longtime partnership, Rick Ross is also involved in several other Sovereign Brands alcoholic portfolio companies. Now…Rick Ross might be best known for his alcoholic beverage investments, but he also dabbles in the packaged food side of the CPG industry (Rap Snacks and CTRL). It’s also my belief that lyrics from his extensive catalog of music spanning more than a decade and quotes from various interviews will provide strong lessons for any CPG professional. I picked out a handful of my favorites that I know will bring you value…
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Who doesn’t enjoy a trick, shortcut, or innovative method for accomplishing familiar tasks more easily and efficiently, right? While these type of lifehacks are heralded throughout society, it’s fraternal twin known as biohacking feels like a strange cultlike mix of amateur DIY medicine and things you’d read in futuristic sci-fi novels. Depending on which biohacking subculture you ask (e.g. grinders, transhumanists, primitivists or immoralists), you’ll get a different definition of what biohacking is, but how about we try on the one I prefer? I explain biohacking as making small, incremental diet or lifestyle changes to achieve modest improvements in your health and well-being. By that broad definition, biohacking seems like a recognizable pursuit, right? While the media likes to sensationalize the extreme actions of select biohackers, I’ve scrolled through many biohacking forums and subreddits, and followed prominent biohackers across social media platforms…and noticed almost all are trying to solve familiar problems. Biohackers want to get more and higher quality sleep. They want to perform better at work. They’d like to lose weight, gain strength, or reduce their risk of things like cardiovascular disease. Biohackers are trying to prevent or manage mental health issues like depression. So, if biohacking comes down to something we can all relate to…why hasn’t the movement exploded in popularity? I think perception and reality aren’t matching up around biohacking, and it’s time for a much needed rebrand. For many years, I’ve referred to the desire to feel better, perform better, and to see just how far one can push the human body as an individual that’s pursuing a high-performance lifestyle. It wasn’t until a recent conversation with Matt Titlow, CEO of Compound Solutions, that I learned he has been calling the mainstreaming effect of the biohacking movement…the “Best Self” category. I liked the simplicity of that term, so I’m going to rebrand my own rebrand and use it going forward. The “Best Self” movement is a broader yet direct approach to the wellness culture that doesn’t just assume one-size-fits-all. It’s the consumer that simply wants to be better each day. While the future of biohacking might one day have us resembling cyborgs, that would be closer to Z on the A-to-Z spectrum. Right now, Shelly from Ohio isn’t thinking about all those sci-fi distractions in her pursuit of “Best Self.” Today’s opportunity is targeting the “Best Self” consumers that are looking at real problems or highlighting real goals…and interested in finding real solutions.
Compound Solutions TeaCrine, Dynamine, and Caffeine Information
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It’s that glorious time of year again, where my content creation morphs into a collection of Top 5 lists that either gives me the chance to highlight key insights from the last year or provides me the opportunity to put my reputation on the line as a forward-leaning CPG strategist and make predictions about the coming year. Outside of just ranking which five sports nutrition brands I thought were the biggest winners in 2022 (plus another handful of honorable mention brands), I also toss in numerous insights about strategies that made them each supplement brand special and some important supplement industry business themes to make the content more impactful.
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Isotonic beverages, sports drinks, hydration products…whatever you call them, blurring lines and new positionings are creating one heck of a fascinating CPG category. For those looking beyond water for their hydration needs, the market is heavy with functional beverages and powdered supplements. While just about every CPG category has been filled with brands “skating on ice” trying to meet the everchanging consumer demands, none closely compared to the hydration category that was once defined pretty much only by the sports drink Gatorade. It’s that “cat and mouse” business game which is blurring the lines between category, brand, function, and format. But you’ll see throughout this content together that the functional CPG category isn’t so much about invention as it is about incremental innovation. Invention is creating a totally new thing. Gatorade was something totally new. Today, if you want to create something that has a lasting impact on the CPG world, it needs to be combo of “new” yet “familiar.” Do something too closely related to the market leader and people won’t take notice but do something too novel and they’re confused. In the CPG industry, most successful products do not arrive out of nowhere; they’re remixes of existing ones. I'll explain how brands like BODYARMOUR, BioSteel, Liquid IV, and PRIME Hydration, were all inspired by the category creator Gatorade. Finally, I'll explain where I see the hydration category going next by mentioning a few trends.
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I want to welcome you back to another episode of what I’ve branded Pivotal since these interview-style segments tackle impactful CPG industry topics and lessons from the business leaders that live it EVERY DAY! As we close out another year, it only seems right that I would focus this latest episode on both recapping some sports and active nutrition trends/themes from the last year and look forward to predicting what trends/themes are getting hotter and others that might be cooling off. Instead of just sharing my collection of categorical insights, I brought on my good friend and Senior Market Insights Analyst at SPINS, Scott Dicker, to help make this content even more valuable. Though Scott covers tons of product categories for the data insights company SPINS, the sports and active nutrition space is a personal favorite of his because of the speed of innovation and shifts in consumer behavior. In our conversation, we chatted about which sales channels are winning the categorical incrementality, how energy everything took off, why hydration is for everyone now, the creatine evolution, why precision fermentation is going to have a massive year, and how flavor partnerships might be hitting resistance. These are just some of the interesting topics we chatted about in this episode, but without further delay, here is my recent conversation with the Senior Market Insights Analyst at SPINS, Scott Dicker.
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If you watched to my last content about the (not yet officially announced) new CEO at MusclePharm, I unfortunately had to leave you on this sort of cliffhanger. While I was alerted about the MusclePharm intellectual property (IP) portfolio sale a few days before that content was published, it wasn’t my place to break that news publicly and I provided my reasoning for that to stay transparent with my audience. But this content will get the important stuff, such as why MusclePharm is selling a collection of its intellectual property, what IP was up for sale, and what are some paths for MusclePharm after this public auction. Additionally, I'll explain the accounting issues that are making those possible paths unpredictable. Despite the unknowns severely outweighing the limited public information available, I take a shot in the dark on where I think things could go…(1) bankruptcy (2) bolt-on acquisition or vertical integration M&A move provides strategic value (3) private equity or investment firm buys and simply lease back the IP to MusclePharm, collects payments, and let the new CEO Eric Hillman operate without interference. All I know is a "Part 3" is likely going to be needed soon!
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Back in December 2021, I successfully predicted that the biggest YouTuber in the world, Jimmy Donaldson aka MrBeast, would build on the successful momentum of the MrBeast Burger virtual restaurant concept and launch a CPG product. Two months later, MrBeast launched Feastables, a better-for-you snacking brand with its first product being the MrBeast Bar. The current Feastables product portfolio, which now also includes plant-based cookies, is just the beginning of a much bigger vision. What will be the next CPG product MrBeast will launch? Jimmy Donaldson already told us in a recent Forbes feature that the next CPG product launch will be in cereal, likely under the Feastables brand, but what about after that? Outside of trying my luck at correctly predicting another MrBeast CPG market move, I deep dive into the trend that’s fueling massive CPG industry success of MrBeast, but also The Rock, Logan Paul, and many others. Everyone thinks the C in CPG stands for consumer, but that’s dead wrong. The most popular celebrities and creators of today are becoming the biggest CPG brands of tomorrow. Celebrity packaged goods is a relatively new phenomenon. What's driving that shift from celebrities and creators using endorsement deals for wealth creation into entreprenuership? Fortune favors the bold and, increasingly, the many celebrities who’ve made the leap into the CPG industry. As seen with Feastables (and PRIME), celebrity packaged goods brands hold the potential of being developed into billion-dollar successful businesses capable of competing with even the most powerful CPG giants. Will MrBeast take on the beverage industry next? I think the signs are pointing to yes!
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Keurig Dr Pepper (NASDAQ: KDP) finally got off their butt and landed a key strategic partnership in the energy drinks market. On December 8, KDP and C4 Energy entered into a strategic partnership that includes a long-term sales and distribution arrangement, which is expected to meaningfully increase retail availability and household penetration for the C4 Energy brand. KDP is making a pre-tax cash investment in Nutrabolt of $863 million, in exchange for preferred equity ownership stake of approximately 30% that has additional earn-out benefits, rights to increase ownership in certain capital raising scenarios, and board representation. This will make KDP the second-largest shareholder investor in Nutrabolt behind its Founder, Chairman and CEO, Doss Cunningham. Net of the anticipated cash tax benefits, the investment represents a multiple below 4x estimated 2023 net sales, which are expected to be above $650 million. This strategic investment was something that I predicted in October 2021 in a YouTube video titled “Keurig Dr Pepper Buys These Five Beverage Companies Next.” You can watch that YouTube video here - https://youtu.be/AHrmn87c26w. In that content, I not only explain my conviction pick for the energy drink category being Nutrabolt (aka C4 Energy), but also provide logic on its valuation being cheaper than Celsius Holdings and other key points that seem eerily familiar to yesterday's news. I’ll unpack all that original commentary and more throughout the content, that hits on some under-the-radar business reasons why KDP chose Nutrabolt, a little history on the sports nutrition brand portfolio Nutrabolt, and explanation around how this investment fills an important short-term need at KDP and potentially creates a long-term advantage. I'll also explain the implications to the energy drinks market, and explain some outside stakeholders that were winners and losers in this announcement.
MusclePharm (OTCMKTS: MSLP) has a new CEO and every supplement industry veteran will recognize his name. At the time of filming this content, the CEO change isn't exactly public information yet, but I can confirm that it's Eric Hillman. Who is "Big E", which he has been signing off on MusclePharm social media interactions? Eric Hillman is the co-founder of the supplement industry distributor Europa Sports Products (now known as Europa Sports Partners). After acquiring its second-largest competitor Lone Star Distribution in 2016, the combined revenue of the company reached around half a billion dollars. So, even though Europa Sports Partners is much smaller today, Eric Hillman is a strong businessman and has value here as the CEO. I give him all my respect for what he built at Europa Sports Products and the overall impact he had in building and growing the sports and active nutrition market. But the MusclePharm that Eric Hillman is being handed needs A LOT. The chance of getting back to the heyday of MusclePharm, both in influence/impact and revenue, is a statistical anomaly, but even clawing back to the level of the last few years will be extremely tough. So, I'll explore what went wrong during the Ryan Dexler era at MusclePharm and explain if I believe Eric Hillman really help turn the company around. Disclaimer: I kept this "short and sweet" because there’s going to be a part 2. Don’t ding me for the cliffhanger, but for ethical reasons I’m not going to disclose until I see public mentions.
Europa Sports Products (May 2021 Content)
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1st Phorm isn’t like other supplement brands. That’s by design, but it seems to cause a level of ignorance by sports nutrition industry pundits that has always felt downright disrespectful to me. My belief is that outside of a rare few, the vast majority are one trick ponies that see the sports nutrition space through one lens only. Basically, they like to fit brands into boxes based on their understanding of the supplement market. The problem is that 1st Phorm doesn’t fit neatly into a box. Regardless, most of these supplement industry pundits recognize that 1st Phorm is successful by capitalistic market metrics. This does one of two things...they choose to simply ignore 1st Phorm all together or they take misguided jabs at them to try and generate attention or clicks. In my opinion, both are disrespectful. But, instead of hearing it just from me, I included a snippet of a conversation I had with Sal Frisella (President - 1st Phorm) on what he and his supplement brand thinks about it. Additionally, I breakdown a collection of strategies that are actually important and really damn impactful that 1st Phorm doesn’t get enough respect for, such as their job creation, free TransPhormation Challenges, Legionnaire Program, building the best community in the sports nutrition industry, leveraging of a vertically integrated business model, and being aggressively patient. Why is 1st Phorm different? 1st Phorm is an incremental success story…one that takes just as much patience to fully understand and appreciate.
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In a challenging business environment, where managing innovation risk has become critical, should you be expecting more than the typical brand-supplier relationship in the CPG industry? With tens of thousands of new CPG products launching every year, simply putting “new” on a bottle won’t get any meaningful market attention. There’s no doubt in my mind that innovation done right accelerates company growth in the CPG industry, but anticipating consumers’ needs, and measuring and managing innovation to address those needs, will continually get tougher. The supply side (e.g. ingredient suppliers and contract manufacturers) of the CPG industry have a vested interest in helping you beyond the lowest common denominator of just selling you ingredients or compiling the recipe or formula together to create that innovative new CPG product of your dreams. Seek out these partners, like Nutiani, as early as you can in the process to take advantage of value-added services and support. “What you don’t know can hurt you” or at least that ignorance can create disadvantages within the CPG industry. So, my baseline hope with this content was that you learned to elevate your expectations when seeking out supply side partners.
Full List of Nutiani Solutions
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Is the future of product development within the supplement industry heading towards more condition-specific or multifunctional formulation approaches? This juxtaposition in supplement industry product development approaches has been on mind for a while now...and there are so many considerations at play here coming from both the brand-level and supply side of the supplement industry, but also with how it all interacts to consumer behavior. We know that ingredient advances are enabling formulators to create products that can address a broader cluster of health conditions. At the same time, supplement brands are finding opportunities in smarter, more targeted products that appeal to specific subsets of consumers. While condition-specific is not a new approach in the supplement industry, it has gotten more prominent in the last few years though because of the overwhelming product proliferation within the supplement industry. Alternatively, we would be ignorant if we didn’t believe a subset of consumers appreciate convenient multifunctional products that can meet several wellness goals. But there’s also some other attributes at play in this condition-specific versus multifunctional debate. Though there's no central “best” approach to attack the supplement market, I'll explore this debate by looking at purchase criteria like price, personalization, marketing, and sales channel strategy. To further add depth to this content, I also included snippets of a recent conversation I had with Richard Wang, the CEO of ingredient company NuLiv Science, at the SupplySide West tradeshow.
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Purchasing volume has fallen for both Premier Protein and Dymatize, yet total revenues for the brands keep climbing…what’s going on here? As I normally do with my performance update content of publicly-traded functional CPG brands, I will use the recently filled earnings report, earnings conference call, and any relevant publicly disclosed news, in this case it’s Bellring Brands (NYSE: BRBR) 2022 Q4 earnings release, to obviously update you on the performance of brands in that portfolio, but also use it as the backdrop to discuss market insights within the active nutrition formats of the liquids, powders, and bars. BellRing Brands is a portfolio that owns a collection of convenient nutrition brands like Premier Protein, Dymatize Nutrition, Powerbar, and Joint Juice, which was previously wholly-owned by Post Holdings. A fast-paced and busy lifestyle is pushing consumers to switch to quick and healthy meal options. This has resulted in the increased household penetration of RTD protein shakes that promote active lifestyles. Bellring Brands had a strong 2022 Q4 with net sales reaching $379.2 million, which was up 11.5% YoY. Premier Protein (81% of BellRing Brands total revenue) grew 10.1% YoY because it was able to exercise pricing power because of its strong brand equity in the inflationary market. Dymatize Nutrition was up 31.6% YoY stemming from price increases. I also give some more detail later in the content about why both Premier Protein and Dymatize struggled with comparative volumes. Finally, I explain why the voluntary product recall, that was initiated by one of the company’s contract manufacturers, might not be much of a problem to available supply and brand equity at all based on information that I found throughout the financial documents.
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Did y’all really think the party was over for Celsius Holdings after the PepsiCo deal? Come on man! Celsius Holdings (NASDAQ: CELH) hit another record quarterly revenue ($188 million - up 98% YoY) and represented its 17th consecutive quarter of sequential growth for the energy drinks brand. While Celsius energy drinks saw massive growth in convenience stores, mass retailers like Walmart, the club channel, and the Amazon marketplace...the big news this quarter was that the brand announced they passed Bang Energy to become the third most popular energy drink in the U.S. market. Now…hold your horses on getting super excited about that. Firstly, this is based on one week data from IRI. Secondly, Celsius is beating a Bang Energy brand that is battered, bruised, and confused where they are at right now. Just like when retailers were delisting Coke Energy, Celsius is one of the biggest beneficiaries of the Bang Energy delisting process. So, Celsius is gaining incremental shelf space on that change, but you can’t assume Bang Energy or other fast charging energy drink brands like GHOST, C4, Alani Nu, or Ryse Fuel are going to make it easy for them to retain it long-term.
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Will revamping SlimFast and BSN be the answer to solving the struggles of both Glanbia Performance Nutrition brands? Glanbia Performance Nutrition had 2022 Q3 revenue growth of 13.7% YoY on a constant currency basis from strong pricing increases. They also benefitted from the mid-2021 acquisition of LevlUp, a gamer (esports) nutrition brand. Glanbia Performance Nutrition is one of two wholly-owned segments of Glanbia plc (LON:GLB), a multi-billion dollar global nutrition company. The brands in the Glanbia Performance Nutrition portfolio include; Optimum Nutrition, BSN, think!, Isopure, Amazing Grass, and SlimFast. I'll use the recent earnings report, earnings call, and associated news to update you on how Glanbia Nutritionals and Glanbia Performance Nutrition is performing against the complex operating environment. Additionally, I'll dive deeper into Glanbia Performance Nutrition categorial performance (performance nutrition, healthy lifestyle, weight management, and international). Finally, I share a collection of hot takes or things I’m left pondering about Glanbia at this current time, which includes the Slim Fast brand overhaul, BSN getting back into bodybuilding, and why your sports nutrition brand shouldn't follow the leader during this current recessionary period.
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On August 27, 2018, Sharon Leite officially took over the role of CEO at The Vitamin Shoppe. How has she done in my opinion? Firstly, I'll transport us back in time, so we can get a sense of what was happening at The Vitamin Shoppe when we took over the job. The peak revenue and store count era was in 2016, but cracks quickly began to show at The Vitamin Shoppe (and GNC), as they struggled to compete with Amazon, changing consumer expectations with shopping experiences, and the dissemination of the supplement category. So, when Sharon got hired, things were quickly trending negatively externally but also inside The Vitamin Shoppe…with a customer base that hadn’t grown much in years, lack of innovation culture, poor execution in every department, and an inability to evolve with the swift landscape. This was a wakeup call for change, and I remember that first real earnings conference call where Sharon laid out her plan of action. So, that’s what I’m going to judge her against…did she follow through with her transformation plan or not? Additionally, I will update you on the recent business performance for The Vitamin Shoppe. I'll utilize the 2022 Q3 Franchise Group (NASDAQ: FRG) earnings report and conference call to provide quarterly segment-level financial details for The Vitamin Shoppe. I will also dig deeper into several areas of The Vitamin Shoppe, such as franchising activity and merchandising category trends.
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Even with the gut health revolution in full swing across the CPG industry, most consumers still have a knowledge gap, but that might actually end up creating a double-edged sword effect on categorical growth. Gut health has become such a well-known trend within the food, beverage, and supplement CPG categories…bringing with it tons of new market growth and product development. (Note: I’ll cover some of that trending gut health CPG product and brand development later in the content.) But it’s natural to assume then that all this positive market activity also greatly improved consumer education, right? There’s little doubt in my mind that consumers are certainly more aware and educated than ever about gut health, but even I get frequently tripped up with the ever-evolving information and gaps in knowledge that it creates about the topic. I think it’s that consistent newness of information, and knowledge gap that it creates, which forms a paradoxical relationship with the expected massive categorical growth. In this content, I'll dive into the difference between consumer intent around gut-related conditions and gut health benefits. Additionally, the importance of the gut health ecosystem to educate consumers on the difference between various probiotic strains, or how prebiotics, probiotics, and postbiotics function differently. Also, how CPG brands must take an integrated approach to product marketing that meets the consumer where they are at…in a way that breaks down scientific findings into easy-to-understand nuggets of information. Finally, I share the importance of gut health thought leaders (influencers) and talk shop with Matt Titlow, CEO of Compound Solutions, which is the supplier of the popular gut health ingredient CoreBiome about his unique perspective on gut health within the context of the emerging CPG intersections of food, beverage, and nutritional supplements.
Compound Solutions CoreBiome Information
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I figured out the secret behind Quest Nutrition’s product innovation strategy and let’s just say they could easily be a headlining DJ at some of the biggest music festivals in the world. In this latest episode, I'll utilize the 2022 Q4 Simply Good Foods Company (NASDAQ: SMPL) earnings report, earnings call, and supplemental presentations that were filed on 10/21/2022 as the backdrop to provide broad nutritional snacking market insights. In Q4 of fiscal 2022, both brands had outperformed their average peers in retail takeaway growth, with Quest Nutrition specifically having slightly less than 25% growth. Quest Nutrition is a monster right now. The brand’s core bar business is growing. It’s on a roll from a distribution standpoint and recent innovations have been performing well. But it’s that late point that I want to focus on because the Quest Nutrition innovation pipeline has been strong throughout the last few years and leadership on the earnings call alerted us that it remains robust. So, what does Quest Nutrition have up it's sleeve next? In today’s business world, it’s hard to come up with an original thought. Once you acknowledge that, you start seeing things through a remix-filled point of view. Quest Nutrition is essentially Kanye West back in his doing 5 beats a day for 3 summers era. To put it another way…Quest Nutrition is DJ Khaled yelling at live performance in the 90s with the Terror Squad. What the heck am I talking about? The secret behind Quest Nutrition’s current innovation streak is rooted in remixing the past…its own past, well before most of its fans today knew about the brand.
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Pivotal is an interview-style segment that tackles topics in consumer packaged goods (CPG) and fast moving consumer goods (FMCG) from the business leaders that live it EVERY DAY! Many of you might know that I worked at MusclePharm in the early 2010s. This was during a time when that sports nutrition brand had literally caught lightning in a bottle. Either you had that big obnoxiously bright lime green MP in your kitchen cabinet, or you weren’t cool…it was as simple as that. More than a decade later, I look back at my last official employer before betting on myself with J. Schall Consulting as this invaluable foundational experience that I wouldn’t chance for anything. But few know that I left MusclePharm with a bad taste in my mouth. My guest on this episode is one of those people because he was the Co-Founder of MusclePharm. While Cory Gregory and I obviously chop it up about those MusclePharm days, we also talk about his crazy origin story that started underground as a coal miner. Additionally, we talk about how Cory was ahead of the curve on a lot of content and influencer marketing strategies used today and he explains why decades of consistent hard work honing his craft has led to generating several different million-dollar revenue streams. These are just some of the interesting topics we chatted about in this episode...
Cory Gregory Instagram
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Bang Energy just filed for Chapter 11 bankruptcy…which likely makes you feel a certain type of way, but I’m here to sidestep any of that emotional BS and explain what’s really going on at the empire that Jack Owoc built. So, my assumption is that the Bang Energy bankruptcy is causing such an outcry of commentary because of the combination of either (1) you like/dislike Bang Energy CEO Jack Owoc (2) you like/dislike the Bang Energy energy drink or brand (3) misunderstanding of bankruptcy. Well…I read most of those I think 75+ court documents that amounted to more than 1000 pages in hopes that I can provide facts on the Bang Energy bankruptcy and breakdown what everything ultimately means for the company and the entire energy drinks market. Will Bang Energy be going out of business or sold through the bankruptcy process, maybe...but not until at least early 2023. I'll explain the rise of VPX Sports (parent company of Bang Energy), how the "Bang Energy Effect" disrupted the energy drinks market, and how things fell a part and might never go back to the early 2020 days. Finally, I explain the implications of the Vital Pharmaceuticals (VPX Sports) Chapter 11 bankruptcy to the energy drinks market, Jack Owoc, and Bang Energy.
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We all know that the energy drinks market has been crazy these last few years. What if I told you though that I’ve got some mega merger speculation, that if it comes to fruition, would take things up a million notches on the craziness scale? What business highlights in the energy drink market have made things crazy? While the Keurig Dr Pepper (KDP) announcement that it had entered a strategic partnership with Red Bull to distribute the energy drink in the Mexican market is important, it's something new KDP CEO Ozan Dokmecioglu said in the press release that raised speculation in my eyes to a possible bigger transaction in the future…and by bigger transaction, I mean a mega merger! Can the JAB Holding Company (biggest shareholder in KDP) pull off another huge M&A transaction? Finally, I explain the power of this new combined company that will own two-thirds of the "energy everything" category and would create distribution, sales, and marketing synergies.
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This week, I attended the National Association of Convenience Stores (NACS) Show 2022 in Las Vegas. While my main purpose was to meet with old and new CPG industry friends, I did notice a handful of convenience store CPG trends that I wanted to share with you. These trends include: (1) technology and electrification of vehicles is disrupting convenience retailing (2) energy drinks passing of the guard (3) "energy everything" is thriving (4) alcoholic and non-alcoholic beverage is converging fast (5) Smaller Indulgences Are Reigning Supreme.
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After three years of basically nothing…can I get 'Things that Baffle Me' for $1000 Alex? I know any event before 2020 feels like a generation ago so maybe you forget that The Hershey Company acquired ONE Brands (maker of the ONE bar) in August 2019 for $397 million. To get yourself back in that late-summer of 2019 blissful mindset even deeper, just a week earlier than the Hershey and ONE Brands news, it was also announced that The Simply Good Foods Company acquired Quest Nutrition for one billion dollars. So, in that extremely short stretch of time, two of the most buzzworthy bar brands, positioned inside the high protein, low sugar world, were acquired. Being a protein bar company in the summer of 2019 was one of the most valuable things you could be in the growing functional food space...that is until it wasn’t! So, why would Hershey’s want to buy ONE Brands? Well…it’s part reinvention of its public perception but mostly an internal hedging process. Despite Hershey’s having no intention of completely diverging from its core business of indulgent sweets, the ONE Brands acquisition folded in quite nicely because its core product the ONE bar was an indulgent-yet-healthy-food. I'll run through why I give Hershey's (and the Amplify Snack Brands division) a pass on not meeting the ONE Brands platform brand strategy ambition level, but also explain why I'm frustrated they're letting Quest Nutrition absolutely crush them in product formats (e.g. peanut butter cups) that are core competencies with the ownership of iconic candy brands like Reese's.
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Remember the good ole’ days when health experts predicting an upcoming bad cold and flu season was the biggest worry to our immune health? Because of recency bias, it’s likely hard for most of us to detach the rise in consciousness around immune health from the last 2.5 years. Surprisingly though, if you look back to consumer health surveys from late-2019, immune system support was still a top priority. The cold, flu, and immunity market became arguably the most important topic of interest in 2020. According to the Nutrition Business Journal, that condition-specific supplements category grew at a staggering 72.3% YoY. What was once a seasonality fueled $3.4 billion supplement category, now transformed into a constant year-long pursuit that added more than $2 billion in incremental consumer spending. Even without mentioning those growth metrics, any CPG industry professional with their eyes open intuitively knew that the cold, flu, and immunity supplement market skyrocketed in 2020. That being said, what happens to the long-term outlook of the immune health CPG category after a demand pullback in 2021 and 2022? Are consumers less interested in immune health...making it a dying category? I'll breakdown a few things at play here (changing consumer health attitudes, rise in immune health functional foods and beverages and consumer skepticism). Finally, I discuss what opportunities push the immune health category growth even further in the future.
This content was supported by Compound Solutions. If you’re interested in attaining more information about CoreBiome or any of the other unique, science-backed ingredients supplied by Compound Solutions, head over to www.CompoundSolutions.com or reach out to me directly and I’ll connect you with the relevant team member.
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I proclaimed something about MyProtein last year, but will overlooking a core brand positioning element end up making me look wrong? On September 15, 2022, THG (formerly known as The Hut Group) updated the public markets by releasing its 2022 first half earnings report. I’ll be utilizing that financial information, along with the earnings call commentary and any relevant publicly disclosed information to obviously update you on the recent performance of THG and specifically the THG Nutrition division that includes MyProtein, but also synthesize everything to provide relevant insights about the global sports and active nutrition markets. While my focus will be primarily on the THG Nutrition division that houses MyProtein, MyVegan, MyVitamins, and others, I will also cover important information about THG Ingenuity and THG Beauty (including the change of plans around the Softbank investment). THG Nutrition divisional revenue for the first half of 2022 was just over $405 million…growing only at 3.3% YoY. I explain why that growth rate was so low compared to its major competitor Glanbia Performance Nutrition, along with THG Nutrition's current growth strategy, and why MyProtein could be an acquisition target.
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The fourth-largest beverage brand in the U.S. market, Gatorade, is launching an energy drink, which is cool, but I’m more interested in what the Fast Twitch product announcement means to entire sports nutrition portfolio strategy at the beverage CPG giant PepsiCo (NASDAQ: PEP). That being said, I do run through all the Gatorade Fast Twitch product details (e.g. formula and packaging), along with where the energy drink will be merchandised in large retailers. With it's lack of carbonation, Gatorade Fast Twitch potentially offers the growing $16 billion U.S. energy drink market (and large retailer energy sets) a potential strong level of incrementality. Gatorade Fast Twitch will not be the next billion-dollar energy drink brand, but it does fill a consumer pain point for those that use performance energy drinks before a workout or sports activity. Additionally, I cover the aggressive innovation strategy that PepsiCo has taken with Gatorade as of late including the launch of Gatorade Zero, Gatorade Zero with Protein, Gatorlyte, Gatorade Fit, and Fast Twitch. After the early 2019 acquisition of CytoSport (aka Muscle Milk), PepsiCo has been relatively inactive and I thought it would end up being just another sad story of a large CPG company buying a sports and active nutrition legacy brand and letting it fizzle away...but, then I got the heads up from someone that noticed PepsiCo began listing Muscle Milk and Evolve products on the Gatorade website. In the latter part of the content, I explore if PepsiCo is possibly "merging" its sports nutrition brands together? If so, what does that mean long-term? Finally, I cover the competitive landscape and categorical shifts of the U.S. sports drink market that Gatorade still owns about a 70 percent share.
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Sleep matters A LOT. Sleep is truly an interdisciplinary aspect of our health. Yet, if I was tasked to describe in one word the current state of sleep in America, I would use lackluster. Why? A recent Gallup poll showed that around 84 million Americans would describe their sleep the previous night as “fair” or “poor” but also 55% report that getting good sleep is a “major priority.” This is partly the reason why the demand for sleep support supplements has been exploding, but is the functional CPG industry ready to meet the evolving consumer needs and wants of this now much larger market? I run though the recent sales market activity, which ingredients are most popular now and in the future, which product formats are trending, and sleep friendly food and beverage growth. Finally, I run through a few reasons why I'm long-term bullish on the sleep health category.
This content was supported by NuLiv Science. If you’re interested in obtaining more information around why brands are formulating with NuLiv Science ingredients to take their products to the next level, head over to https://nulivscience.com/ or reach out to me directly and I’ll connect you with the relevant team member.
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What the heck is going on at Laird Superfood (NYSE: LSF)? At one point in February 2021, the company had a market capitalization of almost a half a billion dollars but is now getting takeover offers at 95% less. At it's core, Laird Superfood is still perfectly positioned inside the CPG triangle of better for you, plant-based, and functional. That being said, category competitiveness was always going to catch up to Laird Superfood. Along with the absurdly poor stock performance, Laird Superfood has had its share of business struggles that start and end with a cost structure that needs drastic improvement. With new CEO Jason Vieth leading Laird Superfood in 2022, you can start to see some signs of positive change. Because of that (and it being a lowball offer), Laird Superfood cannot and should not take the unsolicited offer from EF Hutton. I do though think Laird Superfood would be better off transforming its business to achieve its long-term goals outside of the unforgiving spotlight of Wall Street. That leaves Laird Superfood with maybe the following path…they could go back to EF Hutton to negotiate a higher price, but at the end of the day, EF Hutton just wants to value hunt, improve fundamentals, and then flip it to a big CPG portfolio. So, why would Laird Superfood do that when they already have a Big CPG portfolio as one of its biggest investors? Is it finally time for Danone to acquire Laird Superfood?
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Am I the only one that thinks the music is about to stop again during the energy drinks version of the musical chairs game? Last week, you might have seen a pair of Bloomberg article headlines that said Keurig Dr Pepper (KDP) was in talks to acquire the owner of Bang Energy and then quickly another that denied that M&A rumor. Either way, it brought back memories of my KDP prediction video from October 2021 (link below) that had some fun with the 2021 KDP Investor Day announcement that the beverage giant would have $20 billion in fire power to make several M&A moves. One of those beverage categories that I explored (arguably the most important) was the energy drinks category. This is because energy drinks are the most desirable category in the entire beverage industry due to high profitability and high sales velocity. In terms of the energy drinks category, KDP would rank far behind its two main competitors PepsiCo and Coca-Cola (plus they also trail far behind the two global alcohol distributors and a collection of independent energy drink brands). That categorical butt whipping CANNOT continue…especially if you’re KDP’s new CEO that took control of the beverage portfolio at the beginning of August 2022. So, do they acquire Bang Energy? If not, which energy drinks brand makes the most sense?
KDP M&A Prediction YouTube Video
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Pivotal is an interview-style segment that tackles topics in consumer packaged goods (CPG) and fast moving consumer goods (FMCG) from the business leaders that live it EVERY DAY! If you’re an OG consumer of my content, you might recognize this episode’s guest. That’s because he was also the guest on Pivotal episode number one way back in August 2018. While repeating guests won’t be commonplace, I felt like since a lot has changed in the last four years for both of us, I needed to run it back with my longtime friend and CEO/Founder of IWON Organics Mark Samuel. A few years ago, Mark committed to daily “off the cuff” value-oriented LinkedIn posts. A small decision that has now snowballed into a powerful personal brand that pays countless dividends to IWON Organics. Mark also shares how his entrepreneurial journey hasn’t always been filled with wins, but a “never quit” optimistic mindset has made him comfortable in the chaos. That carries into us talking shop about the current state of the CPG industry…the changing marketplace, margin pressure, and the impending recession. These are just some of the fascinating areas we chatted about in this episode...
Mark Samuel LinkedIn
Mark Samuel Pivotal Ep.1 (2018) = https://youtu.be/Fi2QRYOhG1Y
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Is Glanbia the bellwether for the supplement industry or will things change in the second half of 2022? Glanbia Performance Nutrition had 2022 H1 revenue growth of 14.9% YoY on a constant currency basis from strong pricing increases. They also benefitted from the mid-2021 acquisition of LevlUp, a gamer (esports) nutrition brand. Glanbia Performance Nutrition is one of two wholly-owned segments of Glanbia plc (LON:GLB), a multi-billion dollar global nutrition company. The brands in the Glanbia Performance Nutrition portfolio include; Optimum Nutrition, BSN, think!, Isopure, Amazing Grass, and SlimFast. I'll use the recent earnings report, earnings call, and associated news to update you on how Glanbia Nutritionals and Glanbia Performance Nutrition is performing against the complex operating environment. Additionally, I'll dive deeper into Glanbia Performance Nutrition sales channel, product format, and categorial performance (performance nutrition, healthy lifestyle, weight management, and international). Finally, I share a collection of hot takes or things I’m left pondering about Glanbia at this current time, which includes the Slim Fast overhaul, Glanbia Performance Nutrition outlook that might give hints to the entire supplement (and sports nutrition) industry, and why more activist investor noise might be ahead for Glanbia.
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Did you know that the specialty supplement retailer GNC had a venture investing platform? This is broadly known as corporate venture capital. It’s essentially a practice where a large corporate entity takes an equity stake in a small but innovative or specialist company with the objective of gaining a specific competitive advantage. As an alternative to traditional acquisitions, companies are making more of these minority investments. In fact, corporate venture capital now accounts for nearly a quarter of all venture capital investing and its deal value have increased more than tenfold over the past decade. When most people familiar with corporate venture capital think about the concept, they tend to beeline towards large tech companies, but this type of investing is done by every sector in the economy. That includes retailers, especially those that have the financial wherewithal. These retailer-owned (or affiliated) venture funds and/or incubators formed by retailers is becoming more common as retailers are having to evolve more rapidly to meet the needs of customers. I'll run through some recent retailer venture fund announcements and explain the different main forms, which includes improving customer experience capabilities and supporting smaller consumer brands (sometimes to further a cause). Finally, I breakdown GNC Ventures, which has made three investments in the last year (RealEats, GLAXON, and PlantFuel)...and explain what could be next for the retailer's renewed strategic focus on innovation.
GNC "Store of the Future"
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The haters are coming out of the woodwork after the PepsiCo and Celsius Holdings deal, but can’t we all be collegial and appreciate just how impressive its growth story has been? Celsius Holdings (NASDAQ: CELH) hit another record quarterly revenue ($154 million - up 137% YoY) and represented its 16th consecutive quarter of sequential growth for the energy drinks brand. While Celsius energy drinks saw massive growth in convenience stores, mass retailers like Walmart, the club channel, and the Amazon marketplace...the big news this quarter was the announced distribution and investment agreement between PepsiCo and Celsius Holdings. Celsius energy drinks were again biggest brand driver of growth to the energy drink category. Add in the PepsiCo deal, and a lot of competitors have gotten chirpy about Celsius Holdings. The category is growing immensely with no signs of stopping anytime soon, as more consumers get over preconceived notions that energy drinks are sugar-filled devil beverages. What Celsius Holdings needs to do is tune out the noise…both the good and the bad and focus on this PepsiCo transition. Celsius needs to build inventory to fill the PepsiCo system. It also needs to over-communicate to all stakeholders from old DSD partners to PepsiCo team members to internal Celsius employees from corporate to the field. This is its biggest near-term risk and opportunity.
PepsiCo & Celsius Holdings Deal | Energy Drinks Market Potential Impacts
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Did Netflix just create an ‘in real life” entertainment CPG go-to-market playbook? While I appreciated the expansiveness, sharper storylines, amazing cinematography, and darker nature of Season 4 like most other fans of Stranger Things, the CPG industry strategist in me couldn’t help but notice something else…Surfer Boy Pizza. This was a fake pizza restaurant chain that had a reoccurring theme throughout Season 4, but did you know that you could actually buy a real Surfer Boy Pizza at Walmart? The “in real life” Surfer Boy Pizza was just as much of a masterpiece as Stranger Things Season 4. It used to be pretty rare to find real products in movies, but over the last century product placement has become such a big business. This has caused media companies to have an overreliance on product placement and Netflix is showing the entertainment industry that its lack of creativity and utilization of fictional brands might be a big mistake. I breakdown why Netflix changed its consumer products strategy and what's likely next for them in their battle with Disney. What Netflix did with Surfer Boy Pizza was special, but this sort of reverse product placement, aka going from entertainment placement to CPG and not CPG placed in entertainment, isn’t completely new (Willy Wonka and the Chocolate Factory). That being said, life has a way of imitating art, especially when there’s money to be made. So, in the final part of this content, I run through five of my favorite fictionalized CPG brands from movies that could have made a killing (maybe even literally) crossing over into real life.
CC: Limitless, Coming to America, Anchorman, Fight Club, and The Stuff
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Will Dymatize have enough power remaining in its growth story to make up for some predicted Premier Protein headwinds from a product recall? As I normally do with my performance update content of publicly-traded functional CPG brands, I will use the recently filled earnings report, earnings conference call, and any relevant publicly disclosed news, in this case it’s Bellring Brands (NYSE: BRBR) 2022 Q3 earnings release, to obviously update you on the performance of brands in that portfolio, but also use it as the backdrop to discuss market insights within the active nutrition formats of the liquids, powders, and bars. BellRing Brands is a portfolio that owns a collection of convenient nutrition brands like Premier Protein, Dymatize Nutrition, Powerbar, and Joint Juice, which was previously wholly-owned by Post Holdings. A fast-paced and busy lifestyle is pushing consumers to switch to quick and healthy meal options. This has resulted in the increased household penetration of RTD protein shakes that promote active lifestyles. Bellring Brands had a strong 2022 Q3 with net sales reaching $370.6 million, which was up 8.2% YoY. Premier Protein (81% of BellRing Brands total revenue) grew 7.3% YoY because it was able to exercise pricing power because of its strong brand equity in the inflationary market. Dymatize Nutrition was up 16.8% YoY stemming from price increases. Finally, I provide some details around the Premier Protein voluntary product recall from its contract manufacturer Lyons-Magnus and explain if I think it will cause any long-term issues to the company's reputation and the reputation of the product in question.
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The Vitamin Shoppe is on pace to have it's highest topline revenue in the company's history. Yet, I would guess that most still haven’t fully grasped the results of massive multi-year turnaround plan at The Vitamin Shoppe. I know I probably sound like a broken record at this point, but it’s time to wake up people. Since The Vitamin Shoppe is shielded in the public markets by the Franchise Group ownership, the supplement retailer’s turnaround hasn’t been front and center, but overlooking it would be a mistake. Fact is, 2022 continues to set up very nicely for The Vitamin Shoppe. They will have store growth for the first time in half a decade, they have a growing customer file for the first time in half a decade, and they are positioned inside of a growing specialty category that has been recession resistant in the past. This particular episode updates you on the recent business performance for The Vitamin Shoppe. I'll utilize the 2022 Q2 Franchise Group (NASDAQ: FRG) earnings report and conference call to provide quarterly segment-level financial details for The Vitamin Shoppe. I will also dig deeper into several areas of The Vitamin Shoppe, such as franchising activity, merchandising additions (Ladder), creation of a corporate holiday, and two potentially important strategic partnerships with college campus retail operator Follett Higher Education Group and personalized fitness company FlexIt. Finally, I update you on the bid to acquire Kohl's by the Franchise Group.
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It was just announced that PepsiCo (NASDAQ: PEP) entered into a long-term agreement to be the preferred global distribution partner for Celsius Holdings (NASDAQ: CELH). PepsiCo will also make a net cash investment of $550 million in exchange for 8.5% ownership of Celsius Holdings. With the Bang Energy deal coming to an abrupt end in June 2022, PepsiCo couldn’t risk falling behind in one of the fastest growing mature beverage categories. So, what does the PepsiCo and Celsius Holdings deal mean to the broader energy drinks market? This was the deal to make for PepsiCo, as Celsius Holdings is about two to three times bigger from a revenue perspective compared to C4 Energy or Alani Nu. This was also the most disruptive option for the energy drinks market because Celsius Holdings had 300+ unique DSD partners. Most of these were added in the last two years and will create a déjà vu moment for these independent DSD partners that will again be forced to replace another massive energy drink brand on their trucks. Which energy drink brands will benefit from the market chaos? Outside of Celsius Holdings, beneficiaries will be Bang Energy, C4 Energy, and Alani Nu. Additionally, next-tier energy drink brands like G Fuel, Kill Cliff, LifeAid Beverage, and even the newly launched energy drink from the supplement industry powerhouse 1st Phorm will get some benefit from the DSD reshuffling. But arguably the biggest indirect winner of the PepsiCo and Celsius Holdings deal is GHOST Energy.
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Pivotal is an interview-style segment that tackles topics in consumer packaged goods (CPG) and fast moving consumer goods (FMCG) from the business leaders that live it EVERY DAY! My guest on this episode is a fellow Austintown Fitch High School alumnus that just happens to also be a beverage industry superstar. Chris Hunter shares how that Youngstown, OH upbringing shaped his brand building process that’s spanned categorical opposites from Four Loko alcoholic beverages to now Koia plant-based healthy beverages. We also talk about our personal and professional evolutions that went from reckless to precautionary in a few short years. Finally, Chris shares business strategy lessons from his almost two decades in the beverage industry that’s a DO NOT MISS for any current or aspiring beverage entrepreneur. These are just some of the fascinating areas we chatted about in this episode...
Chris Hunter LinkedIn
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The fitness world has always been fast-changing, but did the life-altering last two plus years create additional opportunities for supplement (sports nutrition) brands to focus on endurance activity participants? Maybe we all want to wipe this from our memories, but it wasn’t too long ago that gyms across the country were closed, bikes (both traditional and stationary exercise ones) were sold out everywhere and going for a run was one of the few legally approved ways to leave your home. While these disrupted fitness routines didn’t last forever, they did create a sticky enough imprint that has started to produce some profound contagion effects. So, what am I taking about? Are people running more, cycling more, swimming more, and hiking/walking more now? Yes. For supplement brand owners (especially those positioned in the sports nutrition niche), your next step is assessing if this potential leading indicator of long-term change justifies a strategic action. That’s because chasing every single trend (even an extremely tempting one) is not the answer, especially when it doesn’t align with your current brand strategy or upcoming rebrand. But, let’s assume that taking advantage of the trending endurance opportunity does make sense for your sports nutrition brand. I’m going to rundown a few key areas that must be considered; (1) how will you support these endurance activity participants (2) how will you overcome sales channel challenges (3) which is the best product development approach. More than ever, humans are beginning to realize that movement is an essential component in quality of life. In my opinion, endurance sports (regardless of the level), continue to grow as the fitness/wellness link strengthens. Sports nutrition brands will have to recognize that the market is less concerned about increased performance and more about health, longevity, immunity. Is your sports nutrition brand willing to look past the challenges caused by this market evolution and see its massive opportunities?
This content was supported by NuLiv Science. If you’re interested in obtaining more information around why brands are formulating with NuLiv Science ingredients to take their products to the next level, head over to https://nulivscience.com/ or reach out to me directly and I’ll connect you with the relevant team member.
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Amazon’s private-label business started in 2005 with bedding offerings under the Pinzon brand name. It then expanded into consumer electronics products and eventually other categories under Amazon Basics. It now encompasses everything from vitamins and coffee to clothing and furniture under the veil of more than 1000 brands at this point that could be over half a million SKUs. At just face value, that’s a shit load of private label brands and products. In comparison, Target has about 50 private label brands...with Good & Gather being it’s largest SKU count at more than 2000. Similarly, Walmart has about 320 private label brands and about 30,000 SKUs. So, hearing that Amazon has started to drastically reduce the number of items it sells under its own brands is probably a sound business decision. This is a huge contrast from a few years ago when Jeff Bezos gave the private label team a goal to reach 10% of Amazon sales by 2022. At the time of stating that, Amazon reported its house brands only account for about 1% of its retail sales. This is likely the main motivation behind the huge proliferation of private label items. Over the past six months though, Amazon's new leadership instructed its private label team to slash the list of items and not to reorder many of them with discussions reaching the point where a reduction in assortment could be well over half. Heck, it has even been rumored Amazon had conversations about completely exiting the private-label business. So, why is Amazon now willing to throw billions in annual revenue away by deprioritizing private labels? But, shifting this back towards the supplement industry (and brands)…what does this all mean (if anything)?
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Grubhub and Amazon recently announced they had entered into a strategic partnership. As a part of the deal, Amazon Prime members in the United States have the ability to get Grubhub Plus for an entire year free. That means somewhere around 150 million American households that reportedly have an Amazon Prime membership can use Grubhub without delivery fees in more than 4,000 U.S. cities. That’s fairly massive news if you ask me. Why? I'll explain why why each party entered into this strategic partnership. Furthermore, I'll assume this strategic partnership goes well between Amazon and Grubhub to the point that Amazon exercises warrants to reach 15 percent ownership and then begins considering the acquisition of the entire Grubhub asset. I'll breakdown the reasons Amazon would be interested in that idea. I don’t like to throw around the disruptive word willy nilly, but there’s a lot to get excited about for Amazon if things positively work out.
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Pivotal is an interview-style segment that tackles topics in consumer packaged goods (CPG) and fast moving consumer goods (FMCG) from the business leaders that live it EVERY DAY! My guest on this episode has quickly become one of my favorite new connections on LinkedIn. But when Will Nitze isn’t pumping out consistent thought provoking content that spans all over the CPG entrepreneurship spectrum, he is running the popular brain nutrition brand IQBAR. Coming from zero previous CPG experience, Will shares some of the “looks easy but it isn’t” industry lessons that any aspiring entrepreneur should take to heart. We also talk about how being a successful early mover in a new sub-category can bring copycats and how that’s actually a net positive. Additionally, we cover some of our thoughts around what the future of the brain nutrition category could look like. These are just some of the interesting topics we covered in this episode...
Will Nitze LinkedIn
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This is a special edition esports strategy conversation that I had with my good buddy Dan Lourenco (Co-Founder and CEO of GHOST Lifestyle) on behalf of Natural Products Insider. Dan and I talked through some trending topics within esports, the broader gaming ecosystem, and how the supplement industry should be responding to it. We also discussed the launch of GHOST Gamer, how officially licensed flavors are resonating with gamers, and what the FaZe Clan partnership could mean to GHOST. Fact is, GHOST has quickly supplanted itself as a major player in what has become a cultural phenomenon, so this is a conversation you won't want to miss.
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Is the weight management category of the consumer packaged goods (CPG) industry dying or is it lowkey evolving into something more interesting now? Americans are still extremely interested in weight management. Yes, it has seen several cycles of ups and downs during the pandemic era, but I’d argue the extra unwanted pounds gained by the average American during these last two or so years has only elevated the long-term outlook for the weight management category. There are the obvious health-related motivating factors, but there’s something deeper at play to why weight management has been on the top of many Americans' minds for decades. Being thin is now a social ideal and used as a social distinction from the increasingly obese masses. Physical appearance is a huge motivating factor for weight management in America. Here’s the problem that has begun to happen over time, consumers want outcomes. They may vary in their degree, but products are simply a means to the end. Weight management category consumers are notorious for trying products that promise results regardless of diet or physical exertion. So, decades of overhyped marketing of “the magic pill or food or beverage concoction” has created a loss in consumer confidence. As a result, the evolution of the weight management category will shift into more cleverly positioned food and beverage products. These products won’t have packaging that screams weight loss but will intuitively connect to dietary outcomes. They will allow consumers to come to their own conclusions on if the products will fulfill their dietary requirements.
Kara Landau (psychobiotics discussion)
This content was supported by NuLiv Science. If you’re interested in obtaining more information around why brands are formulating with NuLiv Science ingredients to take their products to the next level, head over to https://nulivscience.com/ or reach out to me directly and I’ll connect you with the relevant team member.
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Did you know that the self-help guru Tai Lopez (aka “here in my garage” guy) is the son of a professional bodybuilder? Why exactly could that useless piece of trivia knowledge be important now? Let’s connect the dots between what Tai Lopez has been focusing on professionally for the last three years and bodybuilding. In 2019, Tai Lopez and his business partner Alex Mehr founded the private equity firm Retail Ecommerce Ventures. The goal is to transform well-known undervalued retail brands into ecommerce success stories. Which retail brand in the bodybuilding world fits that description? In a recent press release, Retail Ecommerce Ventures stated they acquired the supplement online retailer Bodybuilding.com. While a lot of details are fuzzy right now, I'll explore why Retail Ecommerce Ventures and Bodybuilding.com believe this would be a potentially valuable strategic partnership.
Previous Tai Lopez (Retail Ecommerce Ventures) YouTube Video
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Pivotal is an interview-style segment that tackles topics in consumer packaged goods (CPG) and fast moving consumer goods (FMCG) from the business leaders that live it EVERY DAY! My guest on this episode is an absolute Rockstar. Before becoming the Chief Digital Officer at one of my favorite digital-first CPG brands HighKey, he was the Co-Founder of the meal delivery company Factor_ that sold to Hello Fresh for almost $300 million. We cover a crucial story at the end of our conversation about how that exit event brought him zero monetary value. Ryan also shares his thought about the changing role of the CMO inside the CPG industry. Additionally, we talked about how platform arbitrage and mediocrity will no longer cut it when you’re trying to grow through DTC ecommerce. These are just some of the interesting topics we covered in this episode...
Ryan Rouse LinkedIn
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Will the protein bar competitive landscape continue to be envious of market leader Quest Nutrition as the economy falls into a recession? In this latest episode, I'll utilize the 2022 Q3 Simply Good Foods Company (NASDAQ: SMPL) earnings report, earnings call, and supplemental presentations that were filed on 6/30/2022 as the backdrop to provide broad health and fitness snacking market insights. In Q3 of fiscal 2022, both brands had strong retail takeaway growth, with Quest Nutrition specifically having more than 30% growth. I hate using the “R-word” before its official, but with the yield curve inverting recently you have a high probability of a recession happening soon. Even the Atlanta Fed GDPNow gauge is predicting the second quarter running at negative 1%. Coupled with the first-quarter’s GDP decline of 1.6%, that would fit the technical definition of recession. So, how does the nutritional snacking category perform during this recession? Also, how does the Simply Good Foods Company do in a recession? I think many of the assumptions laid out in this content will be a net-positive for Quest Nutrition and Atkins Nutritionals. It’s a decent setup for the company to likely thrive comparative to most of the competitive landscape. It’s going to be a wild period for any functional CPG brand, but I think humans will continue to invest in themselves and the categories will be resilient even though they are considered consumer discretionary and not consumer staples.
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Pivotal is an interview-style segment that tackles topics in consumer packaged goods (CPG) and fast moving consumer goods (FMCG) from the business leaders that live it EVERY DAY! My guest on today’s episode is an absolute gem of a person. We always have a blast when we talk shop, so I was excited when I finally persuaded him to join me on camera. Most recently, Nomit Shah was the CFO that quarterbacked Onnit’s exit to Unilever, but you’ll also hear him speak from the perspective of being a highly successful startup investor and advisor. Nomit shared his thoughts around the deepening role that CFOs need to be taking on during periods of uncertainty and the challenging marketplace. We also discussed what should go into the decision-making process when CPG brands are choosing a capitalization strategy. Additionally, I ask Nomit to provide insights on common land mines and missed focal areas that CPG brands run into when readying themselves for a liquidity exit. These are just some of the fascinating topics we covered in this awesome episode.
Nomit Shah LinkedIn
This content was supported by Parker. If you’re interested in learning more information about how Parker makes ecommerce growth easier, head over to www.GetParker.com or reach out to me directly and I’ll connect you with the relevant team member to set up your $500 sign-up bonus for this month.
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It’s been about two years since a pair of PepsiCo major events caused the great energy drink DSD shake-up, so why is the beverage giant again at the heart of another shock to the growing beverage category? According to a Bang Energy press release on June 22, 2022, effective immediately, both parties will enthusiastically and strategically cooperate in a nationwide joint effort to transition from PepsiCo distribution to Bang Energy’s new DSD partners. This officially puts an early end to one of the most toxic relationships in recent beverage industry history. One that underperformed from the very beginning and sapped Bang Energy of its historic growth momentum. So, now what? Does everything that happened in the last two years just go back to normal. Well…if you haven’t learned anything about the last two years…there’s a new normal that we all need to get comfortable with now. Fact is, Bang Energy is still the third largest energy drink brand with 7.3% dollar share of a very important beverage category. Those types of free agents just don’t come around ever, so it’s no surprise that many of the same DSD partners that helped Bang generate its billion-dollar momentum will be back in the mix once again. But it’s presumed the brand will no longer be able to command exclusivity at these DSD distributors that stocked offerings with other energy brands once Bang Energy exited. Do you kick out Celsius Holdings that’s grown immensely in the last two years…no! Do you kick out C4 Energy that has had impressive growth…no! Does many of the AB InBev DSD partners allocate less resources to growing the GHOST Energy brand…hell no! So, what’s the predicted strategic game plan now for the biggest energy drink portfolios after the Bang and PepsiCo spilt?
Energy Drink DSD Shake-Up of 2020
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Pivotal is an interview-style segment that tackles topics in consumer packaged goods (CPG) and fast moving consumer goods (FMCG) from the business leaders that live it EVERY DAY! My guest on this episode is the "prebiotic dietician" and Founder/CEO of Uplift Food, Kara Landau. She was the absolute perfect guest to help me dive into the uber important functional CPG trend of gut health. Kara and I talked about how her company is making gut health approachable, how our health starts at the gut, and why taking an early investment from Mondelez International has helped her make an impact on Big CPG product development. We also tackle the fascinating convergence of psychobiotics and psychedelics that could be an important element in the future of mental health. These are just a few of the interesting topics discussed in this episode...
Kara Landau LinkedIn
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Gaming and esports can be described in many ways. It’s a vibrant and fast-growing sector of the economy. It’s a legitimate means of monetization in today’s attention economy. It’s an entertainment medium for billions of enthusiasts around the globe. With an increasing number of people playing, broadcasting, and watching esports, the already booming, multi-billion-dollar gaming ecosystem is without a doubt cementing itself as a straight up cultural phenomenon. So, why might gaming and esports also be one of the most misunderstood opportunities for supplement brands in the supplement industry right now? In this video, I will explore a variety of trending topics within the gaming supplements market and also speak with key members of the ADVANCEDgg team to provide some additional depth and first-person operator perspective to this content.
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Pivotal is an interview-style segment that tackles topics in consumer packaged goods (CPG) and fast moving consumer goods (FMCG) from the business leaders that live it EVERY DAY! My guest on this episode is Sal Frisella, President of 1st Phorm, which is one of the largest sports nutrition brands in the industry. This is not a conversation you are going to want to skip through…it was extremely fascinating from start to finish. Sal and I talk extensively through some of the special sauce aspects of 1st Phorm, including their best-in-class brand ambassador program, being 100% customer-centric, use of fitness challenges to change lives, and building a company culture that reverberates throughout their entire customer community.
Sal Frisella LinkedIn
This content was supported by Compound Solutions. In fact, you can find several Compound Solutions ingredients utilized within the 1st Phorm product portfolio, including the cognitive and physical performance enhancer, TeaCrine. If you’re interested in attaining more information on any of the unique, science-backed ingredients supplied by Compound Solutions, head over to www.CompoundSolutions.com or reach out to me directly and I’ll connect you with the relevant team member.
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How many different licensed SKUs have been commercialized within the active nutrition CPG categories since late-2016? If you said more than 200 and counting, then you’d be correct. Did that number surprise you? Well…it surprised the heck out of me and that’s coming from a deep practitioner inside the industry. That being said, how many are too many licensed SKUs in the active nutrition CPG categories? I don’t think we are anywhere near a dense saturation level when you look across the entire sales channel landscape. You might have an argument that specialty retail is getting heavier, but we haven’t hit the point of substantial diminishing marginal returns yet. In my opinion, licensing is just getting started in the active nutrition categories. GHOST Lifestyle was able to change the game with its first licensed product in late-2016, but it will take more than innovation to parity to push the supplement industry forward. It’s about being different…not better than incumbents in this next phase. To win, it will need to be done through depth of authentic storytelling that’s aligned with your sales channel strategy.
Track All Licensed Flavor Collabs in Active Nutrition CPG Categories
While I was putting this content together, I realized it was the third piece in an unofficial content series covering the licensing strategy inside the active nutrition CPG market...
- Part 1 - How Did We Get Here?
- Part 2 - Why the Opportunity Window Could Be Closing?
This content was supported by Synergy Flavors. If you’re interested in learning how Synergy Flavors can help your CPG brand stay one step ahead of the competition by developing high quality taste solutions, head over to www.SynergyTaste.com or reach out to me directly and I’ll connect you with the relevant team members.
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Pivotal is an interview-style segment that tackles topics in consumer packaged goods (CPG) and fast moving consumer goods (FMCG) from the business leaders that live it EVERY DAY! My guest on this episode is a really great friend of mine Ronak Shah, who is the Co-Founder and CEO of the fast-growing nutricosmetics brands OBVI. Ronak and I talk a lot about the OBVI online community. How it was built. What they’ve done to keep it thriving past 50K members and why it’s the most important brand asset they own. We also breakdown of the mechanics of how OBVI was able to launch so many different SKUs with being a 100% bootstrapped brand. That includes some cheat codes that OBVI has stumbled on that helps them improve their cash conversion cycle. These are just a few of the interesting topics discussed in this episode...
Ronak Shah LinkedIn
This content was supported by Parker. If you’re interested in learning more information about how Parker makes ecommerce growth easier, head over to www.GetParker.com or reach out to me directly and I’ll connect you with the relevant team member to set up your $500 sign-up bonus for this month.
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Pivotal is an interview-style segment that tackles topics in consumer packaged goods (CPG) and fast moving consumer goods (FMCG) from the business leaders that live it EVERY DAY! It’s not often you get to talk to one of your childhood TV idols. Yet, I’ve been having a lot of those pinch me is this my real-life type moments lately. For any boy growing up in the early 90s, you were absolutely watching American Gladiators. My guest on this episode is Cyclone from that hit show, but its what Barry Turner did after he was injured on American Gladiators that interests me as an adult. Barry Turner went on to become the co-founder of the massively successful health and wellness snacking brand Lenny & Larry’s. Barry and I talk about category creation challenges three decades ago and what today’s CPG entrepreneurs can learn from that early phase. Barry also shares his “Steve Jobs comeback story” and how his time off from Lenny & Larry’s created a serendipitous moment with another massive health and wellness snacking brand. These are just a few of the fascinating stories and topics discussed in this episode...
Barry Turner's LinkedIn
This content was supported by Superior Snacks. If you’re interested in learning more information about how Superior Snacks can help you take your brand's functional food product development ideas to the next level, head over to superior-snacks.com or reach out to me directly and I’ll connect you with the Master Baker himself.
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Pivotal is an interview-style segment that tackles topics in consumer packaged goods (CPG) and fast moving consumer goods (FMCG) from the business leaders that live it EVERY DAY! In this episode, I talk with a fellow Ohio native CPG professional, Matt Mullenax, who is the Co-Founder and CEO of the high-performance men’s personal care brand Huron. Matt also shares how his experience throughout the years with the personal care and men’s grooming CPG category impacted and formed the inspiration to start Huron. We also discuss the shifting relationship between men and the personal care category. Start to finish…this was one of the most insightful and fascinating conversations that I’ve been a part of on camera…one that literally spanned almost every intersection of the strategic roadmap that will give you a sense of how an emerging CPG brand is attacking today’s complex marketplace.
Matt Mullenax's LinkedIn
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The Vitamin Shoppe is on pace to have it's highest topline revenue in the company's history. Yet, I would guess that most still haven’t fully grasped the results of massive multi-year turnaround plan at The Vitamin Shoppe. I know I probably sound like a broken record at this point, but it’s time to wake up people. Since The Vitamin Shoppe is shielded in the public markets by the Franchise Group ownership, the supplement retailer’s turnaround hasn’t been front and center, but overlooking it would be a mistake. Fact is, 2022 is setting up very nicely for The Vitamin Shoppe. They will have store growth for the first time in half a decade, they have a growing customer file for the first time in half a decade, and they are positioned inside of a growing specialty category that has been recession resistant in the past. This particular episode updates you on the recent business performance for The Vitamin Shoppe. I'll utilize the 2022 Q1 Franchise Group (NASDAQ: FRG) earnings report and conference call to provide quarterly segment-level financial details for The Vitamin Shoppe. I will also dig deeper into several areas of The Vitamin Shoppe, such as franchising activity and new ecommerce marketplace dropship strategy. Finally, I recap some of my earlier thoughts on the potential Franchise Group bid to acquire Kohl's and what that could mean for the specialty supplement retailer.
Jack Gayton (The Vitamin Shoppe) = https://youtu.be/K8Uy-8qlTqE
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So, normally I wouldn’t applaud a fourth-place ranking, but I think we should make an exception in the energy drinks category. In terms of market share during the last four weeks ending April 17, 2022, Celsius Holdings (NASDAQ: CELH) impressive performance has pushed the brand past Rockstar Energy for the number four position in the energy category. This really draws some comparisons to what happened a few years ago when Bang Energy surged past Rockstar Energy with astronomic growth rates. That led to about a year of “business as normal” for Bang Energy before they decided to sign an exclusive distribution agreement with Pepsi. Will something similar happen to Celsius? The current set-up looks great, but it won’t be without marketplace challenges and competition breathing down on Celsius Holdings from all directions.
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Pivotal is an interview-style segment that tackles topics in consumer packaged goods (CPG) and fast moving consumer goods (FMCG) from the business leaders that live it EVERY DAY! In this episode, I talk with my amazing friend…aka the greatest nickname giver on Planet Earth…aka The King of all Wipes…aka the Co-Founder and Chief Commercial Officer of the fast growing personal hygiene brand goodwipes Sam Nebel. He shares how his prior experience on the franchising operations side of the specialty supplement retailer Complete Nutrition helped inspire business strategies at goodwipes. Sam and I dive into the wellness halo effect and explain how it’s impacting a brand that’s on a mission to change the way people think about hygiene. We also talk through how a handful of goodwipes market challenges and strategic lessons that you’ll notice bridges the gap to the food, beverage, and nutritional supplements CPG categories. Those are just a few of the many topics Sam and I discussed, so make sure you have some goodwipes body wipes within close proximity because you’re going to need them to clean up all the sweat from the heat we brought in this episode.
Sam Nebel LinkedIn
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Dymatize continues to carry the bigger heavier Premier Protein on its back, but are things set to change in the back-half of BellRing Brands’ fiscal year? As I normally do with my performance update content of publicly-traded functional CPG brands, I will use the recently filled earnings report, earnings conference call, and any relevant publicly disclosed news, in this case it’s Bellring Brands (NYSE: BRBR) 2022 Q2 earnings release, to obviously update you on the performance of brands in that portfolio, but also use it as the backdrop to discuss market insights within the active nutrition formats of the liquids, powders, and bars. BellRing Brands is a portfolio that owns a collection of convenient nutrition brands like Premier Protein, Dymatize Nutrition, Powerbar, and Joint Juice, which was previously wholly-owned by Post Holdings. A fast-paced and busy lifestyle is pushing consumers to switch to quick and healthy meal options. This has resulted in the increased household penetration of RTD protein shakes that promote active lifestyles. Bellring Brands had a strong 2022 Q2 with net sales reaching $315.2 million, which was up 11.7% YoY. Premier Protein (81% of BellRing Brands total revenue) grew 6.5% YoY because it was able to exercise pricing power on the market. Dymatize Nutrition was up strongly at 54.9% YoY stemming from both strong volume increases and excellent pricing benefits. I'll update you on some additional strategic decisions on the Dymatize brand that should help further grow their ecommerce sales. Finally, I provide an update on the Post Holdings spin-off distribution and explain what that could mean for BellRing Brands.
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Glanbia had one of the best quarters of growth in recent history, so why isn’t everyone celebrating it? Glanbia Performance Nutrition had 2022 Q1 revenue growth of 15.7% YoY on a constant currency basis from strong pricing and volume increases. They also benefitted 1% from the mid-2021 acquisition of LevlUp, a gamer (esports) nutrition brand. Glanbia Performance Nutrition is one of two wholly-owned segments of Glanbia plc (LON:GLB), a multi-billion dollar global nutrition company. The brands in the Glanbia Performance Nutrition portfolio include; Optimum Nutrition, BSN, think!, Isopure, Amazing Grass, and Slim Fast. I'll use the recent earnings report, earnings call, and associated news to update you on how Glanbia Nutritionals and Glanbia Performance Nutrition is performing against the complex operating environment. Additionally, I'll dive deeper into Glanbia Performance Nutrition categorial performance (performance nutrition, healthy lifestyle, weight management, and international). Next, I'll share why I think Glanbia is set-up for massive M&A activity. Finally, I give my hot take on why activist investors are starting to target the global nutrition company and if I think Glanbia should spin-off Glanbia Performance Nutrition.
Should Glanbia Consider Selling BSN? - https://youtu.be/uTWxEWotvdQ
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Pivotal is an interview-style segment that tackles topics in consumer packaged goods (CPG) and fast moving consumer goods (FMCG) from the business leaders that live it EVERY DAY! In this episode, I talk with an amazing friend that just happens to also be the CEO of Vital Proteins Tracey Warner Halama. She shares early stories about what went into the shifted consumer focus towards women that led to Vital Proteins becoming a $1B+ brand. Also, how the company has continued to double sales and stay the market leader even after the rush of competitors have come to chase the “Vital Proteins effect.” Those are just a few of the many topics Tracey and I jammed out, so you won't want to miss a second of this insightful and valuable strategic discussion.
Tracey Warner Halama LinkedIn
This content was supported by NuLiv Science. If you’re interested in obtaining more information around why brands are formulating with NuLiv Science ingredients to take their products to the next level, head over to https://nulivscience.com/ or reach out to me directly and I’ll connect you with the relevant team member.
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Go to any grocery store, convenience store, or specialty supplement retailer and you’ll see shelves stacked with similar products from different brands. While presented a tad differently on the digital shelf, the same can essentially be said when searching for CPG products on an ecommerce marketplace like Amazon. Your CPG brand has on average a few seconds to make a good impression before the customer moves on to the next option. Effective and appealing packaging design not only makes it more likely for one product to be chosen over alternatives, but it also reflects on the values of the brand. This is what makes packaging design just as important as the product itself. It has a major influence over the buying decisions of consumers. In this content, I'll run through some considerations for great CPG packaging, provide a few examples of why you might want to look at a packaging refresh or larger rebrand, and also explain the potential downside risk of reinventing your CPG packaging. Additionally, I explain ten CPG packaging trends that you should be paying attention to right now.
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It probably doesn’t need repeated, but Nike is the heavyweight champion of consumer brands. There are only a few brands that ever achieve ubiquity in popular culture like Nike. No matter where we turn, it feels like there’s a swoosh just around the corner. That being said, there's several current “lesser known” Nike business strategies that are key to overcoming the increasingly crowded and changing marketplace. These are the business strategies that I believe will make Nike an even more impressive company and extend their market leadership over the next decade. Nike has acknowledged that today’s purchase journey is fragmented, and there are multiple touch points that go into a customer's consideration process. Within this interconnected experience, Nike has a strong sense of the purpose that each of its channels serve. They’re in front of the curve and making bet on where the consumer is going...the same bets that you’ll likely need to make in your CPG brand to not only thrive but simply survive over the next 5-7 years. Are you paying attention to the Nike masterclass?
Nike & Amazon Channel Conflict = https://youtu.be/itwhH2hLeqg
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Pivotal is an interview-style segment that tackles topics in consumer packaged goods (CPG) and fast moving consumer goods (FMCG) from the business leaders that live it EVERY DAY! This episode, we talk with my good friend and co-founder of Fit Butters Ryan Bucki (aka Fitness Informant) about how they went from idea to launch in only a two weeks later. Plus, he shares some of his really creative business model strategies that sets the FIt Butters functional food product apart from the competition and made it a million dollar bootstrapped CPG brand.
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With a robust loyalty program, attractive off-mall real estate strategy, and successful retail partnerships like Sephora under its belt, Kohl's once seemed immune to many of the troubles of department stores. For months now, however, the retailer has been on the defensive from activist investors, and could be on the brink of being sold. Franchise Group, Inc., the owner of The Vitamin Shoppe (and other retail chains) has offered $9 billion, or $69 a share, to acquire Kohl’s. With Franchise Group making a run at acquiring Kohl’s...what could that potentially mean for The Vitamin Shoppe? I'll breakdown several ideas that include private label merchandising opportunities, store-within-a-store concepts, and integration of loyalty and marketing programs.
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Is MusclePharm finally embracing the fact that they are a protein company now? MusclePharm (OTCMKTS: MSLP) just disclosed that the company is expanding into the ready-to-drink (RTD) protein category with the launch of its new whey protein drink line in the summer of 2022. This is a bit of a “what took you so long” kind of moment for me. I’ve been advocating for MusclePharm to ditch the pursuit of the energy drinks market and focus on protein beverages. I will expand on those comments from previous podcast episodes and run down what we know and what I can deduce about the MusclePharm RTD protein beverage from the short press release. Additionally, I remind everyone about how this isn't the first time MusclePharm has had a protein beverage in market. Finally, I share thoughts about how MusclePharm can take a lesson from Nutrabolt on a price pack architecture strategy.
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With Quest Nutrition making the shift from being a protein bar company to a successful lifestyle brand, can The Simply Good Foods Company do the same thing with Atkins Nutritionals? Should The Simply Good Foods Company be worried about the possible upcoming recession after the yield curve inverted? In this latest episode, I'll utilize the 2022 Q2 Simply Good Foods Company (NASDAQ: SMPL) earnings report, earnings call, and supplemental presentations that were filed on 4/6/2022 as the backdrop to provide broad health and fitness snacking market insights. In Q2 of fiscal 2022, both brands had strong retail takeaway growth, with Quest Nutrition specifically having more than 40% growth. Quest Nutrition also has seen particularly massive success in its Quest Nutrition Protein Chips. It has been the single biggest contributor to the growth in Quest Nutrition household penetration growth and the product has brought in a significant number of new buyers that were incremental to the brand. That might be why Simply Good Foods Company decided to cross pollinate this product form into Atkins protein chips. The Atkins Nutritionals brand needs to also get snackier and fast. That being said, The Simply Good Food Company continues to be uniquely positioned with two large-scale channel-diversified U.S. brand leaders in the attractive nutritional snacking category that’s still underpenetrated. They will continue to seek good balance of innovation and variety across brands and forms. This will show up as the company deleverages from a bars and shakes focused product portfolio. The owner of Atkins Nutritionals and Quest Nutrition continues to do a great job at fulfilling the self-actualization goals of its customers without compromising great taste.
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Will slapping Paw Patrol characters on a powdered hydration supplement be enough to drive success for SOS Hydration in the public markets? SOS Hydration is more than just a company that utilizes entertainment IP from Paw Patrol. Founded in May 2013 by brothers and elite track athletes James and Tom Mayo and James' wife (licensed medical doctor), SOS Hydration has a strong founder-market fit that’s screams authenticity. It seems both SOS Hydration and Liquid I.V. both stumbled on the fact that “people are beginning to realize the importance of staying properly hydrated…” because they launched within months of one another. While it’s hard to quantify just how much the “Liquid I.V. Effect” helped SOS Hydration, there’s no denying that higher tides in the category raised all boats. SOS Hydration is now available in 12,000 retail locations, including CVS and Walmart. In this latest episode, I'll breakdown the SOS Hydration S-1 document and explain where I think the company could improve its operating leverage and get further market momentum. Hint: the functional CPG industry has previously neglected this need for many years.
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Pivotal is an interview-style segment that tackles topics in consumer packaged goods (CPG) and fast moving consumer goods (FMCG) from the business leaders that live it EVERY DAY! This episode, we talk with my good friend and Divisional Merchandise Manager at The Vitamin Shoppe Jack Gayton about sports nutrition categorical performance at the specialty retailer and what he’s seeing in terms of changing buyer behavior and product trends.
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Gen Z is just a more extreme version of Millennials, right? No cap I used to think the same thing a few years ago, but they are completely different, and your functional CPG brand better be ready for it. To be honest, if you’re a functional CPG brand and you aren’t thinking about Gen Z already…you’re behind! In my opinion, functional CPG brands are the inspiration epicenter for the entire CPG industry. The best of these brands are the trendsetters. Because of that, they’re often one of the first groups to pivot their marketing strategies and reach out to the latest generation of young consumers. Vibe Check? You good? Don’t worry you haven’t taken an L yet because this episode will get you up to speed fast on this group of diverse, hyperconnected, short-attention span influencers who could become your most important customers. It’s critical that functional CPG brands recognize Gen Z differences and meet them where they are, rather than where we want them to be. It’s time for functional CPG brands to finally start talking in a language Gen Z will understand and appreciate.
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Depending on how deep you follow the supplement industry, you might be asking yourself who is Smart for Life? Well, Smart for Life is a vertically integrated brand portfolio that has major exposure to the weight loss and weight management category. The company went public on February 16, 2022, on the NASDAQ under the stock ticker SMFL. Smart for Life currently owns several interesting assets; Doctors Scientific Organica (aka Smart for Life), GSP Nutrition (aka licensee of The Sports Illustrated brand for sports nutrition), the network marketing platform Nexus Offers, Bonne Santé Natural Manufacturing (contract manufacturer), and newly acquired Ceautamed Worldwide (aka Greens First). M&A has been a major aspect of Smart for Life and it will continue to be a major part of its future. They have dubbed it the “Global Buy & Build Strategy”, which is a comprehensive program to develop a robust pipeline of prospective acquisitions in addition to the companies currently operated by Smart for Life. Over the next 24 months, the company plans to acquire multiple companies aggregating a minimum of $100 million in annualized revenues. How will the Smart for Life company perform in the increasingly challenging and competitive supplement market? I'll explore that and more...
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The NCAA ruled in July 2021 that college athletes can be compensated for their name, image, and likeness (known as NIL). While there was an initial summertime burst of attention-grabbing student-athlete NIL headlines in the functional CPG industry (e.g. PlantFuel & Six Star Pro Nutrition), most are still sitting on the sidelines. Leading up to the landmark change, I felt NIL could offer fertile ground for functional CPG brands. It provided access to influential members of a consumer cohort that tend to be one of the most valuable to functional CPG brands (especially if we are talking sports nutrition). Since I worked with several functional CPG brands that were aggressively seeking deals, I assumed (I guess wrongly assumed) that the broader industry would be prepared to participate from the start. Throughout the inaugural fall college sports season, there were some wins, some telling trends in terms of distribution of deals, and a lot of groundwork laid by these first companies. During the spring season, we started to see functional beverage brands jump into the mix (e.g. Optimum Nutrition, Gatorade, and BioSteel). While these all for substantial deals for the functional CPG industry, why didn’t we see more NIL deals? One word…confusion. The key to success with NCAA athlete marketing is knowing the rules, acting fast, finding new opportunities, educating your ambassadors, and building meaningful relationships. While this may seem simple, the work that needs to be done to properly build an athlete ambassador program is quite cumbersome so make sure you build in flexibility and creativity to deal with unforeseen risks.
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Can you guess my favorite podcast of all-time (besides my own of course)? Here’s a hint…it’s a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built. Each episode of the “How I Built This” podcast features a compelling story about someone who builds a successful company from the ground up, with each guest having a unique backstory. The host is Guy Raz, a longtime NPR correspondent and journalist, who is a true master at helping each founder weave their story together by fielding questions that add color and dimension to their experiences. Not counting replays, duplicated guests from live events like the How I Built This Summit, or different versions like the pandemic-era “how I built resilience”, the popular podcast has about 215 unique episodes. Within that large library of episodes, “How I Built This” has highlighted around 50 CPG brands, which doesn’t consider serial entrepreneurs like Gary Vaynerchuk, that has founded a CPG brand, or grocery retailers that have their own CPG private labels. Since I believe current CPG entrepreneurs will love “How I Built This” for the insights and advice, and aspiring CPG entrepreneurs will find it equally captivating and inspirational, I wanted to help those new to podcast and share my five favorite episodes that highlighted CPG brands.
CPG Episodes Featured: LaraBar, Uncle Nearest Whiskey, 5-Hour Energy, Kodiak Cakes, and Tate's Bake Shop
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Man those “Cola Wars” with Coca-Cola in the late-1970s into the early-1980s must have really made Pepsi angry because did you know they went out and made a deal with the former Soviet Union to acquire a whole bunch of naval ships including attack submarines? The story starts with the Soviet Union getting a taste of Pepsi during the 1959 American National Exhibition in Moscow. More than a decade later, now President Nixon sent a Department of Commerce commission to the Soviet Union to encourage trade between the two Cold War rivals. On the trip was Pepsi CEO Donald Kendall, who was then the head of Pepsi international relations back in 1959 and had arranged for his good friend Nixon to give Khrushchev the Pepsi taste-test. This time Kendall nailed down what would become a hugely lucrative deal for Pepsi, with the two countries signing a countertrade agreement that brought Stoli vodka to the U.S. market. When the original trade agreement became close to expiring in 1989, PepsiCo wanted more cash to offset the countertrade agreement. With its faltering economy, the USSR did not have many consumer products that it could successfully sell to the West. But one thing it did have, thanks to its bloated Cold War military budget, was a lot of surplus equipment for its armed forces. And so, in what must be one of the oddest commercial agreements ever signed, then Soviet leader Mikhail Gorbachev agreed to new $3 billion deal that saw PepsiCo take ownership of…17 Soviet Navy attack submarines, 3 warships, and a handful of other ships. Under the new agreement, PepsiCo retained exclusive rights to Stoli, as well as Cristall, and another Vodka brand. PepsiCo would double their bottling plants and use sale credits to bring Pizza Hut to Moscow. However, the “deal of the century” (which it was dubbed collapsed when the Soviet Union broke apart in December 1991.
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Can we officially say now that Glanbia Performance Nutrition is back on track after a few hiccup years? Glanbia Performance Nutrition had 2021 full-year revenue of $1.44 billion, which increased 17.1% YoY on a constant currency basis from both strong pricing and volume increases. They also benefitted 1.2% from the mid-year acquisition of LevlUp, a gamer (esports) nutrition brand. Glanbia Performance Nutrition is one of two wholly-owned segments of Glanbia plc (LON:GLB), a multi-billion dollar global nutrition company. The brands in the Glanbia Performance Nutrition portfolio include; Optimum Nutrition, BSN, Think!, Isopure, Amazing Grass, and Slim Fast. I'll use the recent earnings report, earnings call, and associated news to update you on how the Glanbia Performance Nutrition portfolio is performing against the complex operating environment. Additionally, I'll dive deeper into the Optimum Nutrition (which grew 35% YoY globally in 2021) and Slim Fast brands, provide an update on the Glanbia Performance Nutrition strategic transformation project, and explain how Glanbia will likely make additional "bolt on" acquisitions within both divisions in 2022.
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Celsius Holdings (NASDAQ: CELH) set more company records as the business almost triples in revenue, but will that continue in 2022? The current set-up looks great, but it won’t be without marketplace challenges and competition breathing down on Celsius Holdings from all directions. This includes the important female energy drink buyer for Celsius, as upstart brand Alani Nu is growing at 600%+ YoY with annualized run rate revenue that close to $200 million. Celsius Holdings will need to continue focusing on expanding performance in several key sales channels that includes ecommerce (Amazon), fitness, and the granddaddy of them all...convenience stores. In 2021, Celsius Holdings reached another inflection point in its business, one which positions the energy drink brand for exponential growth and market share gains. This is above and beyond the recent brand popularity spike that has seen year-over-year quarterly revenue growth expand aggressively. In the last two years, Celsius Holdings have grown from two-tenths of a percent to now amassing just over two percent market share in the energy drink category. As the brand hits critical mass with a run rate now over $400 million in revenue, it has has been able to navigate the challenging marketplace dynamics that are creating higher barriers of entry for smaller scale new entrants that are now paying significantly higher shipping, raw materials, co-packer fees, and not being able to pass costs on and stay competitive due to Monster Energy and Red Bull pricing strategy.
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With Russia invading Ukraine this past week, what effects could it have on the functional CPG industry? I think the easiest way to understand this topic would be for me to provide a zoomed out CPG industry view, before zooming back into the functional food, functional beverage, and nutritional supplement CPG categories. Many might not be aware that Ukraine is nicknamed the breadbasket of Europe. The Ukraine and Russia conflict is further exacerbating a run-up in prices for food commodities, which have been affected by extreme weather, labor shortages and a host of supply chain issues over the past year. For food manufacturers that rely on wheat and flour as key ingredients, the Ukraine and Russia conflict is yet another element for them to weigh as they attempt to control price increases. It’s not just the threats to grain shipments that could drive inflation, as Russia is a major low-cost exporter of nearly every kind of fertilizer. If global trade of fertilizers gets disrupted, it will mean higher costs for farmers, and in turn, more food inflation. As you can see, contagion and trickle-down risks are all over the place that will impact the functional CPG categories, but what about direct hits? I'll breakdown possible finished goods trade impacts and also a few ingredients that are used in common functional CPG formulations.
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The Vitamin Shoppe grew topline revenue to its almost matching the company's history peak in 2014-2015. This is along with achieving operating profit growth of over 1800% YoY. Yet, I would guess that most still haven’t fully grasped the results of massive multi-year turnaround plan at The Vitamin Shoppe. I know I probably sound like a broken record at this point, but it’s time to wake up people. Since The Vitamin Shoppe is shielded in the public markets by the Franchise Group ownership, the supplement retailer’s turnaround hasn’t been front and center, but overlooking it would be a mistake. Fact is, 2022 is setting up very nicely for The Vitamin Shoppe. They will have store growth for the first time in half a decade, they have a growing customer file for the first time in half a decade, and they are positioned inside of a growing specialty category that isn't seeing a market slowdown because of supply-chain pressures. In this particular episode, I will dig deeper into two exciting areas of The Vitamin Shoppe; Franchise Store Development and Private Label Creation.
The Vitamin Shoppe Undercover Boss = https://youtu.be/K8Uy-8qlTqE
Sports Nutrition Industry Event Predictions = https://youtu.be/hzSpGJyPFSs
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Unilever might have been lacking direction over the last few years, but a recent strategic transformation decision now has the European CPG conglomerate positioned squarely inside my wheelhouse. According to comments made during the latest Unilever earnings call, CEO Alan Jope stated, “after months of careful review, we have concluded that accelerating the shift of Unilever's portfolio into consumer health and well-being would position the company for faster growth in the coming decades.” I agree with that assessment, but why publicly show your hand to the competition? The problem was Unilever reportedly made an offer to buy the consumer healthcare division of GlaxoSmithKline that was created as a joint venture with Pfizer. With that failed M&A move showing the strategic intentions at Unilever, it became necessary to publicly assure shareholders that this is still the direction of portfolio evolution. That being said, Unilever leadership though clarified that they would not be proposing transformational acquisitions for the foreseeable future. Instead, Unilever intends to improve value creation in three ways including bolt-on acquisitions in Functional Nutrition. With its current Functional Nutrition portfolio in mind (Equilibra, OLLY Nutrition, Liquid I.V., SmartyPants Vitamins, and ONNIT), I discuss a handful of categorical bolt-on M&A moves that would make sense for Unilever.
Functional Nutrition brands mentioned: KOS, MaryRuth Organics, HumanN, Mud/Wtr, and HUEL.
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Are several converging consumer trends finally putting enough pressure towards getting a public health tax policy approved that’s more than a decade in the making? Public health? Taxes? I know what you’re thinking, but I assure you that how these topics relate to the supplement industry is quite important. It revolves around reclassifying certain meal replacement products and dietary supplements, that do have FDA approved health claims, to be permissible medical care expenditures for reimbursement within tax-favored Health Savings Accounts (known as HSAs) and Flexible Spending Accounts (known as FSAs). This is the heart of an argument that goes back more than a decade when a coalition that included the American Herbal Products Association, Herbalife International, GNC, Council for Responsible Nutrition, and several other large companies and trade organizations began working with a bi-partisan group of lawmakers to introduce legislation promoting tax parity for certain meal replacement products and dietary supplements under HSAs and FSAs. To give some additional insider color to this topic, I had a recorded discussion (included in content) with my good friend John Venardos, the former VP of worldwide regulatory & government affairs for Herbalife International, that was a major player in that coalition at the time. Fact is, it shouldn’t have been difficult historically to understand why establishing tax deductibility for certain products that promote a healthy lifestyle, weight loss or disease prevention, is an important public health policy initiative, but consider how the importance has been supercharged because of the “COVID-19 Effect.” While this is a tax question wrapped around a public health matter, I wish the legislative branch of the government would zoom out and just try to focus on asking the hard questions around root causes that are related to obesity. We are in desperate need of a comprehensive strategy to encourage healthy nutrition and to fight obesity. An extremely high percentage of all deaths in the United States are related to poor diet and physical inactivity. These are about incentivizing the right daily choices. Maybe that starts with tax deductibility for certain products that promote a healthy lifestyle, weight loss or disease prevention or maybe it doesn’t but we need to start thinking about improving nutrition and physical activity of the mainstream population.
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As in-person trade shows come roaring back in 2022, it’s the perfect time to talk about how you can make impact at these events without spending tons of money being an exhibitor. For a lot of you that work at or own functional CPG brands, being involved at trade shows (B2B or B2C) or heck even just having the opportunity to live sample at events/retailers is very important. B2B events like Natural Products Expo West or Fancy Foods Show are the perfect place to meet with dozens or hundreds of potential wholesale accounts. B2C events like Arnold Classic Expo or the Mr. Olympia Expo are where you can get major trial and build awareness for your consumable functional CPG products. With all this pent-up demand and the desire to revenge spend like it’s going out of style, you likely want to jump back into exhibiting anywhere and everywhere possible, right? I get it, but this could also be an emotional response that makes for messy cost inefficient decisions. Stop and think about this for a second…the world has fundamentally changed because of the “COVID-19 Effect”, so why do the same ole same ole with your experiential marketing at trade shows? I recognize the handful of trade show experiential marketing hacks that I’ll discuss aren’t a one-to-one swap for exhibiting, but they will hopefully provide a springboard for you to challenge establishment mechanical thinking inside your functional CPG brand.
GHOST Lifestyle YouTube Channel = https://www.youtube.com/c/Ghostlifestyle
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Have you heard the joke about the time a baseball card, pack of chewing gum, and a piece of sports apparel walked into a retail store? No? It’s OK…there probably isn’t a joke in the entire historical catalog of jokes that combine those things. That being said, all those consumer products categories do have a commonality and that’s because it was announced in early January that Fanatics would acquire The Topps Company for $500 million. You might be thinking…that’s great, but what the heck does that have to do with the CPG industry focused content you normally put out. Well...it’s a CPG division of Topps that was left out of this M&A deal with Fanatics that has me wondering what’s next? I'll explore if the current owners of Bazooka Candy Brands can channel "2011 era" Michael Rubin and turn these unwanted assets into a multi-billion-dollar company.
Greatest CPG Brand Pivots of All-Time - https://youtu.be/tUDax0gXEZk
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If you’ve been online for even a short period of time during the past few weeks, you’ve probably encountered social media posts made up of green and yellow blocks. My thesis when I started to research Wordle was that it’s just another pandemic-era viral phenomenon. Things go viral on the internet for no good reason all the time, but that fact seems to have become more random during the last two years. After digging into Wordle a bit more, I found it was quite a intriguing case of virality that was worth spending some time thinking more deeply about. Wordle’s organic viral success provides a fascinating look into how to generate buzz, cultivate fans, and achieve the level of velocity needed to break out from the media abundance. So, what can CPG brands learn from the viral success of Wordle?
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Have you noticed the rocket ship that is the Dymatize Nutrition brand? If you are a hardcore sports nutrition consumer, I would guess you haven't and that's by design with the strategic shift that made a few years ago. In this latest episode, I'll utilize the recent BellRing Brands (NYSE: BRBR) earnings report, earnings call, and publicly disclosed news as the backdrop to discuss what it could mean to the overall active nutrition market in the liquids, powders, and bars formats. BellRing Brands is a portfolio that owns a collection of convenient nutrition brands like Premier Protein, Dymatize Nutrition, Powerbar, and Joint Juice, which was previously wholly-owned by Post Holdings. We are in the midst of a health and wellness revolution that's pushing consumers to switch to quick and healthy meal options. This has resulted in the increased household penetration of RTD protein shakes that promote active lifestyles. Bellring Brands had a strong FY22Q1 with net sales reaching $306.5 million, which was up 8.5% YoY. Premier Protein (82% of BellRing Brands total revenue) grew 4.5% YoY off demand and pricing increases. Dymatize Nutrition was up strongly at 40.6% YoY stemming from volume increases and excellent pricing benefits. That being said, is it crazy to think that BellRing Brands could have actually grown quicker this quarter if it wasn't for supply chain shortages?
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You often hear me say “a great product is only the entry fee to compete in today’s CPG market”, but what’s at the heart of that statement? The hard truth is that there have never been as many CPG brands and products as there are today. If you didn't realize that, the easiest way to experience this reality is to do a non-branded search on Amazon within some sizable CPG category. I guarantee you will be overwhelmed at the endless shelf of interchangeable substitutes. Regardless of the current “COVID-19 Effect” aided higher than normal barriers of entry, it’s still relatively easy for interested entrepreneurs to enter almost all the CPG product categories, ultimately creating extreme levels of competition. Those low barriers of entry are a double-edge sword for entrepreneurs. The same ones that likely helped your CPG brand get products made with less investment or seen by more target consumers with less investment or offered for sale nationally with less investment are also the same ones that upstart competitors are using to fast-follow you. Having a unique product used to give you at least a few months of lead time over other players, but that advantage seems to matter less and less. In this context, how do you stay ahead of your competition when you know it’s only a matter of time before they copy your best product features? The solution is having a solid strategic narrative. This is what I mean when I say, “it’s what you build off that great product that determines the long-term winners.” A strategic narrative is a concept that enables brands to create a unique story that will guide their entire business activity.
Simon Sinek TED Talk - https://youtu.be/qp0HIF3SfI4
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I’ve always believed that Hip Hop and CPG entrepreneurship are linked together. Firstly, Hip Hop is seen as counterculture to other music genres, which is similar to CPG entrepreneurship in today’s “technology” filled founder landscape. Additionally, Hip Hop and CPG entrepreneurship are both centered around being salesmanship and the ability to hustle. Moreover, Hip Hop music is rooted in remixing (or sampling) previous music, and this iterative innovation process is also core to the CPG industry. Finally, Hip Hop is more than music, it's a cultural lifestyle...which anyone in the CPG industry knows it functions in the exact same way. This is probably why you see so many hip-hop artists that are involved with CPG entrepreneurship (or investing). If you’ve consumed the first three episodes of this content series, which covered Notorious B.I.G., NAS and Jay Z, you know that I select a collection of my favorite lyrics from the hip hop artist that provide keen lessons for any CPG entrepreneur. While his overall activity is lower compared to say Jay Z, you might be surprised to learn that Drake is both an entrepreneur (Virginia Black whiskey) and investor (Daring Foods) in the CPG industry. You can learn about business in different ways and inspiration or the motivation to succeed can come from everywhere around you. I’ve noticed that, amongst the lyrics of hip hop music, many artists pass on knowledge and experiences, just like your business mentors. For me, one of the best at providing me with business value for over the last decade has been Drake. Combine that with his CPG industry entrepreneur and investing success and it shouldn’t be difficult to see why Drake is someone every CPG entrepreneur could learn from. I picked out a handful of my favorite lyrics that I know will bring you value…
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Would you like to play a game [in my best John Kramer aka Jigsaw from the SAW movie franchise voice]? So, what’s this game exactly that I’m wanting to play? It’s inspired by a random Twitter post I made in November 2021. It’s really a fool’s game to be honest. One that I seem to enjoy playing a lot in my content creation. It’s where I try to put my oracle hat on and see if I can predict the future events of market convergence. Simply put, I'm going to explain ten massive M&A moves that make way too much sense to not happen. Additionally, to make it more insightful I will explain a bit of my logic that will be bring educational and entertainment value to any business professional.
Companies named in this content include: Amazon, Kohl's, Peloton, iFit, Yeti, Solo Brands, eBay, NTWRK, Coca-Cola, Constellation Brands, Epic Games, EA, Take-Two Interactive, Pinterest, ETSY, Spotify, Sonos, Shopify, Klayivo, Chipotle, and sweetgreen.
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How did I think Sharon Leite, CEO of The Vitamin Shoppe, did on her episode of Undercover Boss? I’ll be honest, I was super excited when The Vitamin Shoppe shared the news a month or two ago that they would be featured on the wildly successful CBS reality show. Firstly, because as many of my community knows I’m a big fan of Sharon Leite and the job she was doing at The Vitamin Shoppe. Secondly, because I’ve been a longtime fan of Undercover Boss. Finally, how cool is it that the functional CPG industry as a whole and many of the individual brands that I work with get national positive mainstream exposure. I'll share all of my reactions to the Undercover Boss The Vitamin Shoppe episode and explain why Sharon will be a better leader because of this experience and The Vitamin Shoppe will be a better company because of this experience. This will help The Vitamin Shoppe reach Sharon’s goal of tripling revenue in five years and becoming the largest health and wellness focused retailer.
My Sharon Leite First Impressions Article = https://joshua-schall.medium.com/first-impressions-of-sharon-leite-ceo-of-the-vitamin-shoppe-1531fcff2339
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The metaverse is coming, but is your CPG brand ready for it? Do you hear the words web3, crypto, blockchain, NFTs, and/or metaverse and instantly think how far behind you are? Don’t worry, I’m right with you at times. I hear people are getting married in the metaverse. I hear people are holding business meetings in the metaverse. I hear people are spending millions to acquire virtual real estate in the metaverse. I hear people are collecting digital art to I guess hang on the walls of their virtual real estate in the metaverse. Walmart is even quietly preparing to enter the metaverse. No…No! It’s not this 2017 Walmart virtual shopping video that’s been circulating around the Internet lately. Finally, in what was maybe the most eye opening to the mainstream public was the fact that Facebook changed its name to Meta. That made the word metaverse almost instantaneously shoot up the Google search rankings and making it one of the biggest topics in business today. But does the metaverse actually even exist right now? I'll explore that question and ponder if it even matters since today's walled gardens that are called metaverses actually provide massive opportunities for the CPG industry.
If you are interested in supporting my sponsor, more information in GHOST Energy drinks can be found 👉 https://ghostenergy.com/
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Based on the popularity of this event prediction video from the last three years, I decided to again put my reputation on the line and try and predict the five Sports Nutrition Industry events that could happen in 2022. My one big rule for these annual trend prediction lists is that I don’t allow carryover from previous years. Additionally, since these are outlandish predictions, I try and take Happy Gilmore level swings. That makes it more entertaining for both myself to compile and you guys to consume. Plus, if I get any of these correct it makes for a great callout clips hahaha. Also one disclaimer because I don’t want some federal agency calling or emailing me. Despite getting lucky on several outlandish predictions throughout the previous years, I do not have any insider information on any of these mentioned predictions and this list was thrown together for entertainment purposes only.
- 2019 = https://youtu.be/QeWckjRrkAM
- 2020 = https://youtu.be/lz8AsyQwfww
- 2021 = https://youtu.be/w7CeUZWl2nQ
In no particular order, here are my predictions for the outlandish Sports and Active Nutrition Industry Events that could happen in 2022:
- Goli Nutrition is Acquired
- GHOST Energy Drinks Outsell GHOST Lifestyle Supplements
- Supplements Become HSA FSA Approved
- The Vitamin Shoppe Private Label Becomes One-Third of Total Sales
- Entertainment IP Licenses Explodes
- Bonus Prediction - Glanbia Performance Nutrition Acquires a Brand
If you are interested in supporting my sponsor, GHOST Lifestyle products can be purchased 👉 https://www.ghostlifestyle.com/
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Monster Beverage Corporation, maker of Monster Energy drinks, is purchasing CANarchy Craft Brewery Collective, a portfolio of craft beer and hard seltzer brands, for $330 million in cash. What? Why? OK. This shouldn’t be that big of a surprise for those of you that consume my content regularly. The deal gives Monster Beverage Corporation a foothold in the alcohol market through a nationwide network of breweries and distribution connections. This has been a goal the energy drink company has telegraphed since 2019 when CEO Rodney Sacks stated on an earnings call that they had an appetite for the alcoholic beverage market. So, why did Monster Beverage buy and not build or partner to make its alcohol dreams become a reality? However things play out in the future, this Monster Energy and Canarchy deal will certainly be an early case study to the converging beverage landscapes. Depending on success, it will likely set off a domino effect of other deeper strategic partnerships and acquisitions.
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Based on the popularity of this trend prediction video from the last three years, I decided to again put my reputation on the line and try and predict the Top 5 Retail Industry Trends or Event Predictions in 2022. My one big rule for these annual trend prediction lists is that I don’t allow carryover from previous years. This makes it more challenging, but also a little odd since trends are multiyear in nature with the strongest ones lasting a decade or more. That makes my previous predictions valuable to review as they likely still have huge commercialization value.
- 2019 = https://youtu.be/-HXUv6Qsgz0
- 2020 = https://youtu.be/eATQIpMLUiU
- 2021 = https://youtu.be/RI6EYVD8pAo
In no particular order, here are my prediction for Top 5 Retail and Commerce Industry Predictions in 2022;
- Walled Gardens Everywhere
- Year of the Robot
- Walmart Acquires Instacart
- Kohl’s Becomes a Store Within a Store
- Off-Price Retailers Have a Wildly Successful Year
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If you haven’t heard yet, Starbucks and Amazon recently entered into a retail partnership. This new store concept is called the Starbucks Pickup with Amazon Go Experience. My gut reaction to hearing this news leak a few months ago was one of exuberance. Now that the first official location in midtown Manhattan NYC is open, it’s easy to see that these pickup-only Starbucks stores paired with Amazon Go are going to be a fucking work of business partnership art. While long-term plans for this partnership are still unknown, three Starbucks Pickup with Amazon Go locations are planned for the initial test, with two more scheduled to open this year. So, why is this a really exciting retail partnership for both companies?
My Amazon Go Experience = https://youtu.be/pG_4FVLWtik
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Based on the popularity of this trend prediction content from the last three years, I decided to again put my reputation on the line and try and predict the Top 5 Sports & Active Nutrition Industry Trends in 2022. My one big rule for these annual trend prediction lists is that I don’t allow carryover from previous years. This makes it more challenging, but also a little odd since trends are multiyear in nature with the strongest ones lasting a decade or more. That makes my previous predictions valuable to review as they likely still have huge commercialization value.
- 2019 = https://youtu.be/vGBgyOrlXnY
- 2020 = https://youtu.be/F2eEJRkjhj8
- 2021 = https://youtu.be/P6igt_SM2UI
In no particular order, here are my prediction for Top 5 Sports and Active Nutrition Industry Trends in 2022:
- 1990s Seem to be Everywhere
- Gummies Disrupt
- Web3 is Coming
- Men Join the Nutricosmetics Party
- No Whey It's Gone
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Have you noticed that Quest Nutrition is impressively executing on a very difficult CPG strategy, yet The Simply Good Foods Company isn’t getting enough credit for it? In this latest episode, I'll utilize the 2022 Q1 Simply Good Foods Company (NASDAQ: SMPL) earnings report, earnings call, and supplemental presentations that were filed on 1/5/2022 as the backdrop to provide broad health and fitness snacking market insights. In Q1 of fiscal 2022, both brands had strong retail takeaway growth, with Quest Nutrition specifically having more than 36% growth. Quest Nutrition also has seen massive success in its Quest Nutrition Protein Chips. It has been the single biggest contributor to the growth in Quest Nutrition household penetration growth and the product has brought in a significant number of new buyers that were incremental to the brand. Even with YoY growth more than doubling, the Quest Nutrition Chips could have been an even bigger impact to the brand if it wasn’t for lack of inventory due to outsized growth. Once more supply is brought online in 2022, there will be a huge opportunity for Quest Nutrition to continue extending into the salty snack aisle. “COVID-19 Effect” aided or not, I predict we will be looking back at this period in a few years and remarking on how catapulted the brand from a single-product category leader to a leading multi-category platform brand.
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How did J. Schall Consulting do in 2021? For those that only know me as a “content creator” shame on you, well I guess shame on me for not better explaining who I am and what I actually do for a living. I certainly don’t make money creating content, on the contrary, it costs me a shit ton of money in opportunity costs annually but don’t worry I’m not quitting anytime soon. The variety of business strategy content does serve as a great content marketing tool for my consulting company J. Schall Consulting. Believe it or not, 2022 will mark the ten-year anniversary of J. Schall Consulting. Within the last almost decade, I’ve successfully built my boutique consulting company into a world-renowned leader in growth strategies for clients that are positioned inside the emerging and intersecting categories of functional food, beverage, and nutritional supplements. These CPG clients range in size from pre-launch to billion-dollar companies. They are also not always traditional consumer “brands”, as 2021 brought even more diversity in projects with one-third of all projects being on the supply side of the industry. These ranged from contract manufacturers to ingredient suppliers to agricultural technology to flavor companies and everything in-between. My projects focal points range throughout the full entrepreneurial ideation to consumerization cycle, with very few areas being outside of my wheelhouse. Before I get started with some recap statistics, I would like to thank everyone for making this my most impactful year ever. I know I said that last year, but we built on that momentum and that snowball rolling down the hill is growing in size. For those that trusted me by giving me some of your attention, I’m humbled and don’t take that for granted as I know the caliber of person that consumes my content and that time you give me is extremely valuable. For those that took it a step further and not only consumed but implemented something from my content into your business, you owe me dinner at the next trade show we are both at! Just kidding and thank you to those that have messaged me privately saying something from XYZ piece of content helped you in 2021. For my clients, we anticipated that 2021 wasn’t going to be easy, but everyone kept a positive agile mindset. You trusted me and I can’t thank you enough for being a major part of my successful year. If you can find a path with no obstacles, it probably doesn’t lead anywhere, right?
Digital Nomad Lifestyle = https://youtu.be/31OBQDhl-ME
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Based on the popularity of this trend prediction content from the previous three years, I decided to again put my reputation on the line and try and predict the Top 5 Functional Food and Beverage Product Trends in 2022. My one big rule for these annual trend prediction lists is that I don’t allow carryover from previous years. This makes it more challenging, but also a little odd since trends are multiyear in nature with the strongest ones lasting a decade or more. That makes my previous predictions valuable to review as they likely still have huge commercialization value.
- 2019 = https://youtu.be/h2buDf3Ei3c
- 2020 = https://youtu.be/lQF0tUteXp8
- 2021 = https://youtu.be/9oRiiQ9CAn4
In no particular order, here are my prediction for Top 5 Functional Food and Beverage Product Trends in 2022: (1) Nutricosmetics and “Eating for Beauty” Markets Converge (2) Lab to Fork Becomes Red Hot (3) Sexual Health Isn’t Taboo Anymore (4) Putting All Your Cards on the Table Becomes Table Stakes (5) Commercialized Diversity
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Welcome to the 2021 J. Schall Consulting Awards. This is the third annual year-end awards show that focuses on better for you CPG product categories, along with the grocery, brick and mortar, and internet retailers. This is the pinnacle of award shows that are light on tradition, peppered with randomness, and heavy handed with personal bias. While the awards categories were selected at random, the winners were thoughtfully considered and I provide my accompanying logic to make the content more insightful. A few of the awards categories include: ◼️ Best Better for You CPG Acquisition by CPG Competitor ◼️ Best Grocery Retailer ◼️ Best Retail CEO ◼️ Best New Experiential Store Design ◼️ Best New Better For You CPG Beverage ◼️ Best New Better for You CPG Food ◼️ Better for You CPG Beverage Brand of the Year ◼️ Better for You CPG Food Brand of the Year.
- 2020 Edition = https://youtu.be/IPnmDWItmF8
- 2019 Edition = https://youtu.be/vJ9fcWno1BM
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Remember all those low barriers of entry that disrupted the functional CPG industry…well let’s just say things are becoming just a tad bit different now. The functional CPG space is incredibly competitive and very low switching costs at the consumer-level. That makes being a success story in the functional CPG market tough enough, but I do have some additional bad news. The way entrepreneurs historically did business pre-pandemic is over. Stop trying to hang on to the past, especially when you consider a scenario that few are talking about and that’s an elongated "COVID-19 Effect" situation. The quicker you learn to adapt/evolve, the more likely you’ll limit your business continuity risk. So, what am I talking about? The often-cited low barriers of entry within the functional CPG industry are starting to disappear, as the cost of starting a brand, growing a brand, and sustaining market share have increased substantially over the last two years.
This episode of the podcast will focus on five major themes of change:
- Customer Acquisition
- Pricing
- Inventory Management
- Capitalization
- Corporate Communications
While these might seem like distinct business concentrations, they are more interconnected than ever in today’s market. The functional CPG industry is entering a new era. One that will likely have higher barriers of entry. For functional CPG brands to prosper in the 2020s, they must embrace this new way of doing business or face higher business continuity risk going forward.
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Most times corporate marketing is extremely boring, but sometimes…it's different! Corporate marketing is a type of marketing that promotes the company as a whole, as opposed to individual products. Ultimately, the main goal of corporate marketing is to improve brand image, while strengthening relationships with your customers so they become brand advocates. When corporate marketing is working correctly, it should keep the flywheel spinning by attracting new customers, while engaging leads, and delighting current customers. For most companies, corporate marketing is performed through some boring tactic or strategy like writing a blog, press releases, posting dull things on social media, or regular investor reports if the company is a publicly-traded entity. What about the companies that do corporate marketing differently? That is what I want to highlight in this latest episode of my podcast. I collected ten examples throughout history that I think will be insightful, entertaining, and hopefully inspiring to all entrepreneurs.
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Around 80% of executives at big CPG companies believe mergers and acquisitions (M&A) deal-making activity will continue increasing after the lows during the pandemic year of 2020. This makes a lot of sense if you think about it in the simplest manner; (1) the CPG industry has had an amazing two-year run (2) CPG companies would have likely been more aggressive in 2020 if it weren't for the high levels of uncertainty across the economic landscape. With 2021 providing more clarity (M&A has seen an uptick), the year has seen big CPG divest unwanted pieces of their portfolios and look to add new upstart brands to spur growth and better reflect current consumer trends. This will continue into 2022 as further economic stimulus, low interest rates, cash stockpiles, and surging equity markets will give more ammo to groups looking to buy. Key food and beverage CPG targets will be within some cross-section of; (1) “Better for you” (2) Functional (3) Plant-based (4) Localization. The inspiration for this podcast episode was that I recently was approached by Business Insider to provide my thoughts for an upcoming prediction article surrounding likely food and beverage CPG brand targets that could get acquired in 2022. As you can imagine, I had a laundry list of thoughts that were either too long for Business Insider to include completely or too “wild” that likely wouldn’t pass the editor sniff test. But since this is the Joshua Schall Audio Experience, I don’t have any gatekeepers telling me what to say…Here is my unedited list of 10 food and beverage CPG brands that could get acquired in 2022.
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There’s this classic rule in business that you shouldn’t talk about your competition, but is that still applicable today? The most typical way that business leaders think about competition can be summed up by business icon Jack Welch that once said, "Number one, cash is king; number two, communicate; number three, buy or bury the competition." For many, competition is a central driver in business that’s usually seen through the “winner takes all” or “zero sum” lens. Most businesses do not talk about their competition publicly, but on the rare occasion that brands do speak a competitor's name, it's usually negative, like an attack ad. Over the last two years, there has been a lot of negative energy bubbling up across America. So, instead of brands adding to the hate and negativity, maybe brands can help to lead us toward a more civil discourse? Furthermore, maybe there’s even a better payoff for being nice. While Jack Welch might be the business spirit animal of many, there’s an alternate way to think about business competition. "There's always competition in the world, but you don't have to be enemies. You can empower each other." You might see that ideology as weak, but consider arguably one of the most competitive businessmen in the world Gary Vaynerchuk who often says “you can build the biggest building in town without having to tear the others down.” If you are a brand, it turns out that praising your competitor, saying nice things about them, can boost your own sales. So, will we see more brands start deploying this BRAND New Friends strategy? I sure hope so because I believe business has a large role to play in our society and we can use some more positivity right now.
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We are coming to the end of 2021, so it’s that time of year again where I create numerous content pieces that either recap some aspect of the current year or put my reputation on the line as a forward-leaning strategist and make predictions about the upcoming year. In this first year-end list podcast episode of the season, I cover the top 5 biggest sports nutrition brand winners of 2021.
- GHOST Lifestyle
- Alani Nu
- MyProtein
- REDCON1
- 1st Phorm
Honorable Mentions - Gorilla Mind, RYSE, Glaxon, Bare Performance Nutrition, and C4 Energy
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TreeHouse Foods, the nation’s leading manufacturer and distributor of private label packaged foods and beverages, is exploring strategic options for its business. Over the past several years, it has closed several plants, reduced SKUs, cut jobs and abandoned business units to become a more focused, nimble company. Despite those efforts, the changes have done little to excite investors with the stock price hovering around the same price as when the CEO change happened in early 2018. With activist investor Jana Partners recently taking a sizable stake, it forced a strategic review that determined TreeHouse Foods should exploring options that could include a complete sale of the company or a divestiture of a large portion of its meal preparation business segment to focus on snacks and beverages. Something that wasn’t talked about (or at least not publicly) was an idea that I’ve tossed around in different iterations. This is the strategy that leverages the contract manufacturer to consumer model, attaching a brand development division, and creating strategic partnerships with celebrity and influencers to create food and beverage CPG brands. Fortune favors the bold and, increasingly, the many celebrities who’ve made the leap into the CPG industry. The success stories are plentiful, so why not add a vertical integration partner and make it much easier for celebrities to monetize themselves in the food and beverage CPG space. Plus, TreeHouse Foods could really use that Hollywood sparkle to put some excitement back into the business.
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If you haven’t looked deeply into Herbalife Nutrition recently, it might give you the “new company who dis” vibes. Almost all businesses were forced to transform themselves to some level after the “COVID-19 Effect” severely interrupted normal business operations. For Herbalife Nutrition (and other MLM companies), it's business model was severely impacted because the MLM operational structure relies a great deal on a distribution strategy that brings value through frequent personal interactions with customers that are hyper-localized and predicated on results-orientated relationships. The “COVID-19 Effect” limited face-to-face interactions, physical shopping and health and fitness goal-orientated behaviors globally and replaced them with digital interactions, ecommerce, and high-stress sedentary behaviors. The astounding thing is that Herbalife Nutrition didn’t just survive this shock to its business, it thrived with consistent quarterly record sales results. Herbalife Nutrition will have revenues just shy of $6 billion in 2021 (up from $4.9 billion in 2019). While only 25 percent of its total sales comes from North America, United States has become an important growth engine for the company contributing to almost half of that total Herbalife Nutrition two-year stacked growth. So, what’s at the heart of this strategic transformation?
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Everyone knows that the supplement industry supply chain is a total mess right now, but crawling into the fetal position and crying yourself to sleep nightly isn’t going to help your supplement brand. I guess I should take a step back and explain what I mean when I talk about supply chain challenges in the CPG industry, what are we trying to solve? At the core, it’s about keeping inventory on shelves (physical or digital). Yes, skyrocketing inflationary costs are also a major problem, but higher costs can be managed more effectively with various strategic levers. In the CPG industry, out of stock products are the cardinal sin and extended out of stock situations leave you out of business in a hurry. This is especially true right now when many consumers aren’t hesitating to shop elsewhere if their favorite products are out of stock. Over 60 percent of consumers have been unable to buy at least one item due to availability over the past three months, with only 13 percent saying they waited for the item to be back in stock. Consumers have tons of substitutes in the market for your supplement CPG products and brand loyalty is at an all-time low. So, what are five short-term fixes and/or long-term planning solutions that can help you combat these supply chain challenges...
Supplement Industry Supply Chain Situation Update = https://youtu.be/gJ95Ox3OVx8
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Why do I feel like the Monster Beverage and Constellation Brands merger reports resembles a famous early 1800s French erotic painting? How’s that for an odd introduction? Stay with me though because it will make more sense by the end of this episode. Last week, reports surfaced from Bloomberg that Monster Beverage Corporation (NASDAQ: MNST), the maker of Monster Energy drinks, is exploring a business merger with beer, wine, and spirits brand portfolio Constellation Brands (NYSE: STZ). This is a pretty wild business combination when you consider that both beverage CPG brand portfolios each have current market capitalizations of more than $40 billion. It’s like the Keurig Green Mountain and Dr Pepper Snapple Group mega beverage merger from 2018, but by a likely multiple of three times larger. While these Monster Beverage Corporation and Constellation Brands talks are not anywhere near finalized (or even official) and may not even end in any full merger or asset deal, I thought it would be fun to dissect its parts and get a deeper understanding of why these two beverage giants would even consider a deal.
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Huel is looking for a huge exit event soon, but should the plant-based meal replacement maker go the initial public offering route or opt to sell the business? Are you familiar with Huel (which stands for Human + Fuel)? You should be if you’re an avid follower of my content because I’ve mentioned the active nutrition brand on a handful of separate occasions over the past year. These Huel mentions spanned M&A target commentary in Glanbia and MyProtein content (which I’ll drive deeper into at the end of the content), but I’ve also highlighted the nutrition brand in my functional beverage trends content this past the summer. This is where I stated the idea of “Convenience Bio-Hacking” would have market share reshuffling power in the near term. Convenience Bio-Hacking is a phrase I coined to better explain the trend concept and current phase of active nutrition (human optimization) personalized nutrition commercialization. This is exactly the cross-section of the market that Huel sits in now and it's been highly lucrative. That's why in the past week it was reported that Huel had hired bankers to advise them on a dual-track exit process through a potential sale of the business or the preferred option to fund future growth by an initial public offering on the London Stock Exchange. In this latest episode, I'll look at both options within the dual-track exit process a bit deeper and explain which direction would I hypothetically take?
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Should active nutrition brands get ready for a “New Year, New Me” pull-forward effect? In the active nutrition industry, the first quarter is generally its version of the Super Bowl. There’s a front-loaded seasonality to the active nutrition industry that usually sets the tone for how well the active nutrition brand’s year is going to shape up. This is because almost half of all adult Americans (~120 million) make some type of weight loss or dietary/exercise regimen New Years Resolution goal each year. It's no secret that Americans struggle with their weight with latest CDC numbers stating 42% of American adults are obese. So, combine these grim health trends and popularity of the New Years Resolution weight loss goal with the fact that interest in supplements never been higher in history, and one might expect this to add up to a sales spike for the weight management market over the last few years. Not quite. In fact, the $2 billion weight management category has struggled over recently (especially in 2020 and 2021). So, will 2022Q1 be any different? Many industry analysts like myself have been talking about 2022Q1 as one of the biggest weight-loss seasons ever (weight loss supercycle). But should active nutrition brands be waiting until January 1st to attract these "New Year, New Me" consumers? The U.S. consumer market has been conditioned over the “COVID-19 Effect” period to buy early and not wait for out-of-stock items to be replenished. Does that mean it will create a strong pull-forward effect in December of 2021 for the 2022Q1 period?
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Will the launch of energy drinks help MusclePharm diversify away from the challenging protein markets that left the "Athletes Company" badly beaten up this quarter? In the third quarter of 2021, MusclePharm (OTCMKTS: MSLP) saw its net sales decline 25.6% YoY. While that declining sales trend is alarming, it's nothing compared to gross margins that declined 3090 basis points YoY to 0.2%. So, why did MusclePharm lose $3.5M operationally (mostly stemming from COGs) this quarter? About half of MusclePharm's quarterly revenue is tied to Costco (key customer risk) merchandising its whey protein SKUs globally. Despite the whey protein costs doubling in 2021, MusclePharm is in a precarious position because they know how much other competitors want those merchandising slots. MusclePharm can’t materially raise pricing or lay off the gas on promotional monies with the wholesale retailer. That is causing massive short-term profitability pressure that likely won't change throughout 2022. Alternatively, changing course with Costco strategy could create long-term business continuity risks if they decide to swap out MusclePharm for another competitor in the Health & Beauty Aids (HABA) merchandising section. This is all going on in the background when MusclePharm is launching into a new (and ultra-competitive) product category. It's important to remember that just because a brand has awareness within another active nutrition category at mainstream retailers like Costco, it doesn’t mean the market instantly gives you the authority to be a platform brand across multiple categories at large physical retailers. MusclePharm is going to need to become a "marketing machine" again. This makes the profitability discussion even more complex.
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Is Post Holdings (NYSE: POST) bailing out its former wholly-owned Active Nutrition brand portfolio? BellRing Brands (NYSE: BRBR) is a portfolio that owns a collection of convenient nutrition brands like Premier Protein, Dymatize Nutrition, Powerbar, and Joint Juice. Consumers are looking to purchase better nutritious products and improve their overall health. The “COVID-19 Effect” created a huge sedentary period that consumers are now trying to fight back against. This has resulted in the increased household penetration of RTD protein shakes that promote active lifestyles. In this latest episode, I'll utilize the recent BellRing Brands earnings report, earnings call, and publicly disclosed news as the backdrop to discuss what it could mean to the overall active nutrition market in the liquids, powders, and bars formats. Bellring Brands had a phenomenal FY21Q4 with net sales reaching $340 million, which was up 20.3% YoY. Premier Protein (83% of BellRing Brands revenue) grew 18.2% YoY off strong demand and pricing increases. Dymatize Nutrition was up strongly at 41.3% YoY stemming from both extremely strong volume and pricing. That being said, is it crazy to think that BellRing Brands could have actually grown quicker this quarter if it wasn't for supply chain shortages? How can BellRing Brands overcome these supply chain challenges and create strong growth above analyst expectations in FY2022?
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As the premium coffee market built by Starbucks matures, consumers are craving “a fresh set of brands.” To stand out, these coffee brands aren’t attempting to take on the coffee giant directly, instead they’re carving out unique niches to speak to certain demographics or geographies. With extremely strong founder market fit, Black Rifle Coffee Company looks to be in the early years of a long-term growth story. Black Rifle Coffee Company is veteran led and veteran controlled, with approximately 50% of its employees also being veterans or veteran’s spouses. The mission of Black Rifle Coffee Company is to have a massive, positive impact in the veteran community and premium coffee and content will be that conduit to making it happen. This is the founding team’s passion, and every decision is aligned to the mission. You can see how successful the coffee brand has been by looking at the top three reasons customers purchase Black Rifle Coffee Company products; (1) the company support for the military and veterans (2) has great tasting coffee (3) brand alignment with their values. Black Rifle Coffee Company has an exciting and growing brand, an early RTD coffee business with lots of wholesale growth runway, and an exciting experiential retail Outpost model. Glue all of that together with a fully aligned purpose-driven business strategy and a leadership team that has a relentless dedication to execution and it’s hard to imagine anything less than positive results long-term to happen at BRCC.
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Is the Glanbia Performance Nutrition brand portfolio still the gold standard in the sports, active, and lifestyle nutrition market? Glanbia Performance Nutrition 2021 Q3 growth was reported net revenues growth of 23.2% YoY on a constant currency basis from both strong pricing and volume increases (at 18% and 4.4% respectively). They also benefitted 0.8% from last quarter's acquisition of LevlUp, a gamer (esports) nutrition brand. Glanbia Performance Nutrition is one of two wholly-owned segments of Glanbia plc (LON:GLB), a multi-billion dollar global nutrition company. The brands in the Glanbia Performance Nutrition portfolio include; Optimum Nutrition, BSN, Think!, Isopure, Amazing Grass, and Slim Fast. I'll use the recent earnings report, earnings call, and presentation slides to update you on how the Glanbia Performance Nutrition portfolio is performing against the complex operating environment. Additionally, I'll dive deeper into the Optimum Nutrition and Slim Fast brands, provide an update on the Glanbia Performance Nutrition strategic transformation project, and explain how Glanbia used it's strengthened balance sheet to make another "bolt on" acquisition within the Glanbia Nutritionals division. Finally, I'll explain why a pending 9-figure transaction could create massive opportunities for $500 million plus M&A deals in the near future.
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Celsius Holdings (NASDAQ: CELH) has reached another inflection point in its business, one which positions the energy drink brand for exponential growth and market share gains. This is above and beyond the recent brand popularity spike that has seen year-over-year quarterly revenue growth expand aggressively. In the last two years, Celsius Holdings have grown from two-tenths of a percent to now amassing a two percent market share in the energy drink category. As the brand hits critical mass with a run rate close to $400 million in revenue, it has sidestepped the challenging current marketplace dynamics that are causing larger cost barriers of entry for smaller scale new entrants that are now paying significantly higher shipping, raw materials, co-packer fees, and not being able to pass costs on and stay competitive due to Monster Energy and Red Bull pricing strategy. With the right level of resource investment across all aspects of the organization, Celsius Holdings will be able to maximize this opportunity of achieving concurrent expansion in ACV across all channels, while also increasing retail velocities.
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Did the MyProtein "gain train" slow to a halt or was The Hut Group (THG) owned sports nutrition brand just slowing down briefly to pick up more supporters at the station? THG expects its THG Nutrition segment to sustain a 20% YoY growth rate in 2021, but the latest quarter only showed MyProtein up 13.4%. I believe this is just a short-term slowing, as the solid performance this quarter was against the highest growth quarter in 2020 for THG Nutrition. With over 80% of revenues coming from repeat customers, THG continues to have high category conviction. THG Nutrition is much better equipped than the competitive landscape to handle the current challenging market dynamics. The is because THG Nutrition controls more of its value chain, so the company has less exposure to the outside environment. THG Nutrition is also vertically integrated with six global production facilities that span traditional supplement formats to food and beverages. This will allow them to keep steady inventory levels heading into the "pulled forward" Q1 demand that should hit earlier this year. Additionally, THG has a massive global fulfilment network that is also going through a complete automation overhaul with the help of fellow SoftBank investment portfolio member AutoStore. The increased logistics automation and ongoing cost improvement program will help them offset the recent inflationary environment to sustain its market positioning. There’s a great deal of positive activity happening at THG Nutrition directly and with THG Ingenuity that supports it. Add that to the elevated global interest/demand for the functional food, beverages, and nutritional supplements and it’s very likely THG Nutrition could possibly reach $1 billion in revenue in 2022.
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I'll utilize the 2021 Q3 Franchise Group (NASDAQ: FRG) earnings report and conference call, along with any relevant publicly disclosed news to provide you with segment-level details on the recent business performance for The Vitamin Shoppe. That will include a range of insights and surrounding how The Vitamin Shoppe is navigating the current supply chain and economic challenges, update on franchising activity, merchandising updates, and possible M&A activity. I will also breakdown why a recent partnership announcement between The Vitamin Shoppe and Hims & Hers has me excited about a potential expansion of services in the future.
- Supplement Industry Supply Chain = https://youtu.be/gJ95Ox3OVx8
- GNC Store of the Future = https://youtu.be/Hm2vPScqLOI
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I’m sorry to be the bearer of bad news, but the supplement industry supply chain situation will get much worse, over at least the next 6 months, before it gets better. I know that’s a bit of an ominous introductory statement, but you don’t consume my content to be fed bullshit positive fake news. It’s been about four to five months since I gave a proper update on the supplement industry supply chain situation. I recently took part in a SupplySide 365 webinar panel discussion with Mark Glazier (CEO/Founder of NutraBio) that surrounded the supply chain situation, outlook for the future, and strategies to manage it in the immediate term. I wanted to use this piece of content to summarize some of that information that was provided in the webinar, but also expand on it with as much up-to-date insights and information as possible. This is an unprecedented moment in recent business history. As Mark Glazier said in the webinar “if you combine all the supply chain problems from my last 25 years of experience owning a supplement brand that manufacturers its entire product line, it wouldn’t even come close to what I’ve faced this year.” Even though my 12 years of experience as a strategist in the supplement industry pales in comparison, I echo Mark’s thoughts 100%. There’s A LOT of information on this topic and I’m going to do my best to keep it organized in a manner that’s part informational and part actionable.
Topics Covered Include:
- What are the ingredients being impacted?
- What's being impacted beyond ingredients (packaging, etc.)?
- What's going on in China?
- How long will the Chinese supply constraints exist?
- What's going on with international ocean freight?
- American logistical bottlenecks
- What can supplement companies do, if anything, to improve the situation?
- Why all the cost increases will hurt the consumer? Explain the possible price limits and category we will see break first?
- Explain if this situation ripens the market for inferior quality and/or adulteration?
- Discuss business death in the industry
At the end of the podcast, I'll explain "ideas to consider going forward" in the supplement industry. These include; more communication between brands and supply side, creation of a decentralized B2B inventory tagging system and marketplace, and why we need to diversify away from China now.
Supplement Industry Supply Chain Situation Update #1 = https://youtu.be/bkFz-iaUDu4
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The Simply Good Foods Company (NASDAQ: SMPL) just became an official member of an elite club of active nutrition CPG brand portfolios. So, which club is that exactly? With the company just finishing up its 2021 fiscal year, The Simply Good Foods Company reached $1 billion combined in total net sales between its Atkins Nutritionals and Quest Nutrition brands. In Q4 of fiscal 2021, both brands had strong retail takeaway growth, with Quest Nutrition specifically had more than 50% greater growth than the segment growth rate. Quest Nutrition also has seen massive success in its Quest Nutrition Protein Chips. It has been the single biggest contributor to the growth in Quest Nutrition household penetration growth and the product has brought in a significant number of new buyers that were incremental to the brand. Even with YoY growth more than doubling, Quest Nutrition has had to throttle it because they couldn’t keep sufficient inventory levels. Moreover, I'll zoom out and talk about the entire supply chain situation for The Simply Good Foods Company and explain why I think its supply chain management has proven to be a competitive advantage in these difficult times. The Simply Good Food Company continues to be uniquely positioned with two large-scale channel-diversified U.S. brand leaders in the attractive nutritional snacking category that’s still underpenetrated. They will continue to seek good balance of innovation and variety across brands and forms. This will show up as the company deleverages from a bars and shakes focused product portfolio. The owner of Atkins Nutritionals and Quest Nutrition continues to do a great job at fulfilling the self-actualization goals of its customers without compromising great taste.
Active Nutrition TV Commercials = https://youtu.be/N0JAdaCDP5E
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As the post-pandemic active nutrition industry starts to normalize, it’s time to discuss what benefitted, rebounded, paused, and was damaged by the “COVID-19 Effect." It's irrefutable that the “COVID-19 Effect” changed almost everything about the active nutrition industry and most professionals are naturally a bit lost. The market is evolving quickly, as consumer interest in the space has never been higher. The active nutrition industry has become a key gateway to the $1.5 trillion global wellness market. I always say where there’s increased growth, there’s increased commercialization activity. This heightened competition means that brands must stay ahead of the curve by identifying specific trends earlier and being more aggressive in their actions to fill demand. My intent for this content is to provide industry professionals with a snapshot of what benefitted, rebounded, paused, and was damaged by the “COVID-19 Effect.” That could surround the following marketplace variables, (1) product categories or attributes, (2) business strategies, and (3) consumer behavior shifts.
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Will market leadership in the $2 billion global coconut and plant waters category be enough to push The Vita Coco Company towards stock market gains? At the end of September, The Vita Coco Company (aka the portfolio previously known as All Market, Inc.) filed its S-1 document with the SEC showing its intention of selling shares through an initial public offering and becoming a publicly-traded company. The IPO date is set for sometime during the week of October 18th and will be traded on the NASDAQ under the stock ticker COCO. While Vita Coco is winning the "Coconut Water Wars”, it didn't always look that way with categorical growth drawing the attention of beverage giants, The Coca-Cola Company and PepsiCo, that entered the category through acquisitions in 2009. It’s no easy task to compete with The Coca-Cola Company and PepsiCo, but the Vita Coco "out-hustled, out-innovated, and out-maneuvered the competition.” Vita Coco is now the coconut water category leader with 46% market share in the United States, a 36% relative market share advantage over the next leading competitor. When Vita Coco launched the U.S. market in 2004, it was only worth an estimated $10 million, but now the coconut water category has grown to $658 million in the United States alone. Though the U.S. coconut water market hit a peak in 2016, sales have rebounded of late with the last 26 weeks showing 15% YoY growth. The coconut water category has a cult-like following with a customer demographic that tends to be younger and more multicultural than other beverage categories. The namesake Vita Coco coconut water makes up about 85% of total sales, but there’s more to The Vita Coco Company. They has been operating inside the “better for you” functional and natural spaces for almost two decades, so they have their ears close to the ground and aren’t scared to internally create or acquire brands. They also own; RUNA (a leading clean plant-based energy drink), Ever & Ever (a purified PH-balanced sustainable water brand), and PWR LIFT (a flavored protein-infused water). They’re consistently innovating the existing portfolio range to drive wider adoption of our brands, increase consumption occasions, and take market share across the natural beverage category. I'll run through the financial data, customer demographics, sales channel strategy, global supply chain, and what's next for The Vita Coco Company (NASDAQ: COCO) in this latest podcast episode.
How I Built This (Michael Kirban - Vita Coco) = https://www.npr.org/2020/07/31/897688708/vita-coco-michael-kirban
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I’ve always believed that Hip Hop and CPG entrepreneurship are linked together. Firstly, Hip Hop is seen as counterculture to other music genres, which is similar to CPG entrepreneurship in today’s “technology” filled founder landscape. Additionally, Hip Hop and CPG entrepreneurship are both centered around salesmanship and the ability to hustle. Moreover, Hip Hop music is rooted in remixing (or sampling) previous music, and this iterative innovation process is also core to the CPG industry. Finally, Hip Hop is more than music, it's a cultural lifestyle...which anyone in the CPG industry knows it functions in the exact same way. This is probably why you see so many hip-hop artists that are involved with CPG entrepreneurship (or investing). If you’ve consumed the first two episodes of this content series, which covered Notorious B.I.G. and NAS, you know that I select a collection of my favorite lyrics from the hip hop artist that provide keen lessons for any CPG entrepreneur. What will make this episode a little different is the fact that Jay Z can speak about CPG entrepreneurship from a place of personal knowledge. For those that aren’t aware, Jay Z recently sold 50% of the champagne brand Armand de Brignac, which is known as "Ace of Spades" after its logo, to Moet Hennessy, the wine and spirits division of luxury giant LVMH. I'll explain the real story behind why Jay Z became an alcoholic beverage CPG owner that eventually made him hundreds of millions in the exit. Jay Z might be one of the most successful musicians of the generation, but he also has the type of CPG entrepreneurship (and investing) resume that should put him in the upper echelon of the space. It’s also my belief that lyrics from his extensive catalog of music spanning more than two and a half decades will provide strong lessons for any CPG entrepreneur. I picked out a handful of my favorite lyrics that I know will bring you value…
- Notorious B.I.G. = https://youtu.be/z4vau3pstNs
- NAS = https://youtu.be/qy-sN6lKzKk
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What does a series of popular children’s books from the 1980s and 1990s have to do with today’s frictionless omnichannel retailing environment? If you’ve consumed enough of my content by now, you know I love to find historical linkages or possible root causes that can explain current trends in consumer behavior. One such major consumer behavior trend, that was strengthened by the “COVID-19 Effect”, is that consumers are increasingly expecting retailers to be omnipresent. Today's consumers have the desire to move seamlessly between different channels and still enjoy a unified shoppers experience. So, what does this have to do with retro children’s books? Millennials have been influenced by “Choose Your Own Adventure” books and it’s now playing out in the consumer market. We are living in an era of “Choose Your Own Adventure” shopping experiences (aka frictionless omnichannel retail) and brands are well advised to take this into account. Just like the Choose Your Own Adventure books, alternate paths to the shopping journey speaks to the elevated desire of control that consumers seek now. Choice will become more important in an age of personalization. The future will be rich with personalized products, endless customer service options, 1-to-1 marketing, and loyalty programs that make us feel like special snowflakes. For all that, I guess we can thank Edward Packard.
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Keurig Dr Pepper (NASDAQ: KDP) expects to have $20 billion in M&A capacity over the next three years, so I thought it would be fun to put on my CEO hat and go shopping! In January 2018, KDP was created when Keurig Green Mountain (owned by JAB Holding Company) agreed to combine with Dr Pepper Snapple Group. At the time of the deal, it was said to “unlock the opportunity to combine hot and cold beverages and create a platform to increase exposure to high-growth formats.” Over the last several years, KDP has proved its merger thesis and is now prepping itself for the next phase by becoming a modern beverage company. To give some additional information that might help you understand some of my M&A predictions, I run through a bit of the extremely intriguing yet secretive heritage of JAB Holding Company. Additionally, I breakdown the current cold beverage and coffee systems segments of the KDP portfolio. With KDP seeking sizable deals that are more complex, resulting in portfolio expansion, distribution scale, geographic expansion, and new capabilities, I focus on five main beverage categories (coffee, non-alcoholic beer and mixers, energy drinks, protein beverages, and water) and provide brands that I believe if acquired by KDP would support its M&A goals.
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Something interesting is happening in the grocery retail industry...there are actually new retailers emerging and it should galvanize every CPG brand. While new grocery retail concepts pop up all the time around the country, more times than not, those grocers stay local/regional and have a non-material impact over the entire CPG industry. The last "new" grocery retail chain created that made a material difference was Sprouts Farmers Market that was founded in 2002. Most market leading grocery banners have been around for 40, 80, even 100+ years. That being said, there’s something different happening right now because these new grocery retailers have the kind of firepower that is extremely rare. Maybe its billions in investor funding or they are backed by trillion dollar market cap companies, but the grocery industry hasn't had this level of material new activity since Walmart focused on groceries in the late 1980s and Target in the early 2000s starting to focus on selling groceries. In this podcast episode, I'll explore this notion through examples like Foxtrot Market, Amazon Fresh, LIDL, GoPuff, and dark grocery stores through DoorDash and Instacart. Why should you care? Depending on the sales channel strategy of your CPG brand, this could mean a great deal in terms of new business opportunities or needing to adjust your models of existing grocery partnerships.
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Have you noticed more functional food and beverage, and supplement brands are advertising on television lately? So, why have so many functional CPG brands jumped into the “grand daddy of them all” advertising format? Well, most of them technically haven’t if we are only categorizing the upper echelon of advertising formats as traditional linear TV only. Most of these supplement and active nutrition CPG companies are riding the connected TV (CTV) advertising wave. CTV advertising investments in the U.S. market grew by 41% YoY in 2020 and growth is expected to accelerate in 2021, as spending will reach ~$13.5 billion. What’s also helping the digital advertising trend is digital media companies like YouTube, Hulu, Amazon, and Roku have made it easier for small- and medium-sized businesses to build, manage and measure their TV advertising campaigns. This is important because a recent survey found that 49% of consumers reported pausing their TV and shopping for a product online after seeing an ad on their TV streaming device. Since I'll be reacting to a collection of seven recent TV commercials from functional foods, beverages, and supplement brands, I run through the four qualities I believe make for great TV commercials. This was will the backbone to how I'll judge the following active nutrition CPG brands: Vital Proteins, Garden of Life, ZOA Energy, Optimum Nutrition, Quest Nutrition, GNC, and Athletic Greens.
Link to YouTube Video = https://youtu.be/N0JAdaCDP5E
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Did you know that the “world's first internet-controlled fitness equipment" was launched more than two decades ago? iFIT Health & Fitness pioneered the technology that drives the trending connected fitness space today. When the pandemic closed gyms across the country last year, millions of Americans purchased billions of new connected fitness equipment pieces and drove headfirst into online home workouts. iFIT Health & Fitness is the market leader in the U.S. market of large fitness equipment, so it's no wonder the company more than doubled over the last year. On 8/31/21, iFIT Health & Fitness filed its S-1 document with the SEC, which is a signal that the company plans to go public. While the exact date of the IPO wasn't set at the time of recording, the company will trade on the Nasdaq under the appropriately chosen symbol IFIT. In this podcast episode, I'll cover the founding story of Weslo Design International (that eventually became ICON Health and Fitness and now iFIT Health and Fitness) and interesting timeline highlights that span the company being owned by fitness business icons Joe and Ben Weider. Additionally, I'll explain how heated competition against newcomer Peloton Interactive is driving iFIT Health and Fitness to new levels of innovation. Fitness has always been about connection, but now digital connectivity has made new experiences and business opportunities possible. We are still in the earliest stages of connected fitness, but the long-term winners will need to be great at four different pillars (hardware, software, content, and community) and I'll explain how iFIT Health and Fitnes stacks out against the connected fitness competitive landscape. Finally, the strength of iFIT's ecosystem (especially the community) can then be highly leverageable into adjacent consumer categories, and you might recognize a major strategy it plans to utilize with iFIT Nutrition.
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Jeff Bezos famously said “your margin is my opportunity” but is there a new opportunistic business model in the CPG industry that’s looking to steal his shine? You’ve heard of B2B, B2C, and C2C, but what about C2M? C2M stands for consumer-to-manufacturer, and it should be obvious that this business model removes various intermediaries (or middlemen) enabling consumers to buy higher quality products at lower prices. Manufacturing companies are peering through the window of opportunity. With margin being squeezed in every direction, something most give to satisfy Americans that have been drunk on low prices for decades. The C2M model is not without risk, as many manufacturers are not properly built with the needed core competencies to build successful brands in the market. That being said, it’s undeniable that C2M will become an important key of the American ecommerce landscape. I'll further explain this notion by presenting how business models have evolved overtime, the eureka moment in the U.S. market with the Amazon Accelerator Program, and how China and Pinduoduo is leading the global shift to C2M.
Will the supplement industry see a resurgence of CrossFit targeted supplement brands, as the fitness regimen evolves under new ownership? Let’s get this out of the way right off the bat...sports nutrition products for bodybuilders and sports nutrition products for CrossFitters are essentially the same thing, the main difference comes down to marketing strategy. With the viability of CrossFit marketed supplements obviously being closely tied to the popularity of the workout regimen (and overall sport) of CrossFit, it’s hard to explain the lifecycle of the first wave of successful CrossFit targeted supplement brands, such as Progenex, Nutri-Force and SFH, without detailing the rise and fall of CrossFit in its first two decades of existence. So, why do I think there might be a new round of CrossFit targeted supplement companies that will emerge? For the first time since 2018, CrossFit has seen increased participation in the sport. With new ownership passing its one-year market, plus new hires, new strategies, and a refocus on the CrossFit community it should mean additional growth in the future. Market growth breeds commercialization activity, so we will see if there’s a second wave of supplement brands targeting Crossfitters or if CrossFit corporate decides to extend its valuable brand IP into creating its own branded supplement line.
Throne HealthTech (Official Supplement of CrossFit Games) Content = https://youtu.be/_rwDlbDDjn0
Pokémon Go was one of the biggest viral phenomena of the latter part of last decade, but maybe it’s biggest positive effect on society was overlooked. Five years ago, something magical happened to the millions of Americans. They took incremental steps to improve their health, while also chasing Charizards and Squirtles (whatever the heck those things are). In 2016, Pokémon Go had 233 million global active users and it was estimated that 19% of those were in the U.S. market. Just to give you a sense of comparison, Pokémon Go had half the monthly active users as Instagram in 2016. Yes, these Americans were addicted to a video game, but they were also subconsciously opting into the newest fitness craze. This potentially makes Pokémon Go the world's most important game for a few reasons that have even bigger potential value today. While Pokémon GO won't suit everyone, the most important outcome is for people to find an activity they enjoy enough to continue doing, so that it improves personal health. Augmented (or virtual) reality location-based smartphone games that infuse fitness still a "huge potential" to be beneficial long-term. If this could be a key in getting Americans in better shape, why haven’t we seen numerous companies harness this unexpected game-meets-fitness and create copycats of Pokémon Go?
Is this the perfect business environment for MyProtein to accelerate its growing share of the global supplement market? I believe the answer is yes. With global supply chain constraints, inflationary cost pressures, and labor shortages, the current business environment is arguably one of the toughest in several decades. While I’m sure THG (like other competitors) would love an easier situation, it’s actually the heightened level of complexity that hurts competitors more than THG. This is because THG has a business model built for the current complex business model and also has vast internal capabilities that are honestly unmatched in the space. To help support my notion, I’ll be utilizing the recently released 21H1 The Hut Group (or simply known as the acronym THG) earnings report, presentation slides, and earnings conference call, along with any associated public news. I’ll also add strategic commentary that will provide additional value and insights to anyone interested in the overall global supplement industry. While my focus will be primarily on the THG Nutrition division that houses MyProtein, I will cover each of the other business segments at various lengths.
- THG & Softbank Investment = https://youtu.be/8WeVspNCqUU
- European Sports and Active Nutrition Summit = https://sportsnutritionsummit-europe.com/live/en/page/home
We live in a non-branded search world, but what does that mean for key active and sports nutrition categories? It’s plain and simple, the rise of non-branded search has disrupted the sports and active nutrition industry. So, what’s going on? I attribute it to a combination of (1) the low barriers of entry causing brand/product proliferation (2) strength of marketplaces like Amazon needing more selection to feed its flywheel (3) consumers realizing quality products exist everywhere and having a willingness to try them out. Meet the brand agnostic consumer that bring a broad and sophisticated range of purchase criteria with them when making decisions. Yes, occasions remain where brand is the prime driver, but it would be exhausting for consumers in today’s market to be passionate about all product categories. That means the sole focus on brands vanish in favor for product attributes as the definer of quality. Consumers today are searching for categories (with or without generic descriptors), rather than brands. 80% of keyword searches on Amazon are generic. That means most consumers are searching for “women’s pre-workout” or “chocolate whey protein” instead of Alani Nu or Optimum Nutrition. Since the bulk of search queries are now unbranded search, active and sports nutrition brands should be redefining their product differentiators. Fact is, almost all active or sports nutrition customers shop on Amazon. It’s basically a default utility in America today, so overlooking the consumer behavior of using non-branded search more frequently would be a mistake regardless of how strong you believe your brand is in the market. With the help of my data partner Stackline, I'll look at how four of the biggest sports and active nutrition product categories are being affected by the rise in non-branded search.
The “COVID-19 Effect” caused a unique shift in the economic landscape, forcing many of today’s CPG brands to pivot. While those lessons will eventually be written about, I wanted to share a list of the greatest CPG industry brand pivots of all-time. Sometimes a CPG entrepreneur has a terrible first idea that doesn’t hit the market. Other times they think they have the perfect product and it flops. While others do have a great product, but it’s marketed wrong or positioned in the wrong sector. I’ve been fascinated with business pivots since I read “Lean Startup” almost a decade ago and have applied many of its lessons throughout my consulting career in the CPG industry. Defined in the book, a pivot is a "structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth." There’s about a dozen or so different types of business pivots in total talked about in the Lean Startup and in this episode I’ll highlight a selection of them by breaking down some of the greatest used by CPG brands. These business pivot stories will include CPG brands such as, Bang Energy, Wrigley Company, Ben & Jerry's, KIND Snacks, and Coca-Cola to name a few.
Have you heard that the trending hard seltzer category is now dying? Everyone that’s been around the block a few times in the alcoholic beverage industry knows that category is notoriously trendy. The problem is that today’s six-second attention span internet gurus and CPG industry pundits seem to write off trends faster than a college kid can shotgun a White Claw. After Molson Coors announced they would discontinue production of Coors Seltzer and Boston Beer Company warned everyone that the demand for the company’s Truly Hard Seltzer was lower than expected, it sparked a flurry of headlines suggesting that hard seltzer’s meteoric rise was over. It was almost like people cheered the impending death of the category. Here’s the problem, the hard seltzer category isn’t “dying.” So, what’s going on and why do I believe you shouldn’t write off the hard seltzer category anytime soon? I'll dive into a handful of insightful areas to explain why hard seltzer has never been more popular than it is right now.
WTF have I been up to lately in my personal life? Over the last year, things have changed a lot and it's long overdue that I provide an update. I guess I’ll start at the trigger of this all, the “COVID-19 Effect.” Everything lately seems to trace back to this event that impacted everyone and everything in different ways. For myself and my then girlfriend and now fiancé Leena, one of the areas that it touched us was in making us think differently about our place of residence. With us both being frequent work travelers, our small downtown Austin apartment never seemed too crammed or not to our functionality standards. Traveling fractions of our normal rate throughout 2020, we found ourselves struggling to balance two extremely busy 24/7 “work from home” lives. We know we had it much easier than most during this challenging time, but it still made us reconsider our near-term plans to continue living in downtown neighborhoods of a major city. That being said, we decided to do what tons of others in our similar position did and started looking to buy a home in the suburbs. So, that’s what we did and ended up signing a contract to build a new home at the end of 2020. With a projected home completion date in August 2021 and an end date of our rental in March 2021, we decided to book a monthly Airbnb rental, buy a plan ticket, and pack up a large suitcase each. Until the new home was built, we would officially be digital nomads. This was an incredible journey with a lot of ups and a lot fewer downs (even though I admittedly had my share of frustrations). One thing is for sure: I’ve learned a shit load of things living this wacky digital nomad lifestyle. Now that I’ve been living two weeks in the new home, I wanted to share some of my reflections and lessons learned that might inspire you to explore the digital nomad life or maybe just get out of your comfort zone.
If you spend enough time in the functional CPG niche communities across the internet, you’ll likely hear members saying, “there’s no innovation anymore in the space.” I disagree. I think there’s actually an oversupply of innovation. Consumers don’t know how to fit all of it into their lives. Whose fault is that though? It’s surely not the consumers. The problem is that brands are using an outdated product development process. Supply Side Innovation, paired with the lower barriers of entry across all business modalities have created an overabundance of innovation in every product category. So, what’s the solution? Demand Side Innovation. Instead of starting at the product, brand or competition level, functional CPG brand owners should be starting at the customer or consumer perspective. If you do not understand the deep, detailed, and real reasons why the customer chose to “hire” your product, you’re operating blindly. Start having deep discussions with a set of your customers. You are looking to get into the small details and look for patterns to emerge that show pain points. With that perspective, you can find ways to rapidly improve your existing products. Additionally, if you listen well, you may find a solution your customer wants but didn’t even ask for. This is ideal result and where those special product development projects emerge from. In my final thoughts, I share a case study on the Target private label brand Good & Gather, which I believe shows a great real world example of demand side innovation success.
The Coca-Cola Company recently did something frankly a bit odd, but could that strange product development be signaling a future strategic shift? Like its "captain obvious" marketing slogan from 1941 “Coca-Cola is Coke”, the the third largest (in terms of revenue) beverage company in the world (at least in the U.S. market) is singularly focused on packaged and foodservice beverages. The Coca-Cola Company is not its hated rival PepsiCo that has extensive food operations under its Frito Lay and Quaker Foods product portfolios. That being said, The Coca-Cola Company did recently launch a product format that’s neither a packaged nor foodservice beverage. Smartwater+ powder has now entered the chat. I'll breakdown this ready-to-mix product innovation into the individual strategies to help you understand why this is important and also how it might signaling future moves at The Coca-Cola Company (including M&A).
Just when MusclePharm had profitability on its mind, the sports nutrition company gets slammed back down to face its historical reality. In this episode, I'll provide you with various insights pulled from the MusclePharm (OTCMKTS: MSLP) 2021Q2 earnings report, earnings call, and additional publicly-disclosed information released by the company. They will collectively be used to update you on the sales performance and profitability plan of action at MusclePharm. I will also provide an extensive update on the energy drinks project that includes MP Performance Energy and FitMiss. This includes a longer term outlook on segment-level revenue expectation and details of categorical challenges and potential land mines. Finally, I will express my confusion on the MusclePharm energy drink instead of the Combat protein RTD beverage strategy.
Can Celsius Holdings eventually take the energy drinks "game of thrones"? At over $250 million ARR, with 117% YoY and 30% QoQ growth, Celsius Holdings is starting to fire on all cylinders. They just crossed 100K retail locations and showing 333% YoY in distributor revenues from an extensive overhaul of its DSD distribution network over the last few years. Celsius now has a ~1.6% market share in the energy drink category. In this episode, I'll take a deeper dive into four specific sales channels (Digital, Fitness, Vending, and Convenience) that will provide additional color to Celsius Holdings growth story. Finally, I will discuss a potential growth accelerate that Celsius Holdings hasn't touched yet and how they are dealing with the supply chain constraints to keep fill rates high.
I hope you weren’t caught headline reading when the impressive Glanbia Performance Nutrition 21H1 growth was reported because it might not tell you the whole story. Yes, Glanbia Performance Nutrition net revenues increased 28.1% YoY on a constant currency basis from both strong pricing and volume increases (at 22.2% and 5.6% respectively), but what about on a two-year stacked basis? Using the latest Glanbia Plc earnings report, conference, and publicly-disclosed information, I'll update you on how the global nutrition company is performing throughout the first half of this year. Additionally, I'll dive deeper into the Optimum Nutrition and Slim Fast brands, provide an update on the Glanbia Performance Nutrition strategic transformation project, and explain how Glanbia used it's strengthened balance sheet to acquire a gamer nutrition brand named LevlUp. Finally, I concluded with why a question posed during the earnings call irked me big time and shows Glanbia still has a great deal of legacy mechanical thinking that will come back to bite them in the butt’s once again in a few years.
Is it crazy to think that Premier Protein, with its approximately $1 billion in trailing 12-month revenue, might actually be in the early innings of its growth story? Bellring Brands had a phenomenal FY21Q3 with net sales reaching $343 million, which was up 68% YoY and 21% QoQ! Premier Protein (83% of BellRing Brands revenue) grew 65% YoY off strong demand and pricing increases. Dymatize Nutrition was up an astounding 99% YoY stemming from both extremely strong volume and pricing. That being said, why did BellRing Brands have this much quarterly growth?
Does this science-driven wellness company have what it takes to improve your financial health in the public markets? On July 16th, Thorne HealthTech filed its S-1 document to the SEC with the intention of raising up to $100 million from the sale of shares through an initial public offering. While it’s unknown at recording when the IPO date will be, the company plans to list on the Nasdaq under the symbol THRN. Thorne Research (as it was originally known as) was founded in July of 1984 by Al Czap with a singular dietary supplement product. As Thorne Research grew, the company developed a reputation as an industry leader in setting the standards for making nutritional supplements. In 2010, Thorne Research merged with Diversified Natural Products, and current CEO Paul Jacobson took the helm. Then six years later, the company transitioned from a direct-to-practitioner supplement company and began selling direct to consumers. In February 2021, Thorne HealthTech merged with Onegevity to create a science-driven, vertically integrated wellness platform built to deliver best-in-class, end-to-end nutritional solutions and health intelligence. The future of health will be data-driven and wellness-centric with a guiding focus on preventive care that extends the health span of each individual. Thorne HealthTech is at the intersection of those trends and this podcast episode will breakdown what makes them unique, from its omnichannel sales strategy to vertical integration and positioning within large health trends.
Though the “algorithms rule us all” rhetoric is almost always viewed negatively, could machines help Americans overcome the obesity epidemic? News Flash! Americans are fat. I’m not just saying that as someone with an opinion, but because it’s a fact. The most recent CDC data says that 43% of American adults over the age of 20 are obese. If you pull that back a bit, 74% of American adults over the age of 20 are overweight or obese. It makes no sense if you think about…In America, we have highly trained health and wellness professionals, remarkable facilities, and access to newest drug innovations and technologies. So, what’s making us so unhealthy? Poor nutrition is the leading cause of mortality in the U.S. and obesity creates a total economic cost of 1.7 trillion dollars. While living in the Information Age and Endless Aisle Age can be positive factors in the fight against obesity, they can also create negative effects. Too much information. Too many food choices. Marketers have unparalleled access. You get the point…But, how can technology help Americans that are drinking from the firehose of information and drowning in food options?
What could the GNC shopping experience of the future look like? Turn your TV dials to ABC because The Jetsons is about to start. On this episode, George Jetson heads to his local GNC. In October 2020, GNC had an open CEO position. I shared what I would do as the next CEO of the specialty retailer and some of that information covered would obviously be ingrained into the future of GNC. While I’ll certainly touch on the original proposed CEO strategic initiatives like; Defining Exactly Who GNC Is, Redefining the Role GNC Has in Customer Journey, Reimagining the Frictionless Retailing Experience, Putting Yourself Out of Business, I will be focusing on a longer-term vision of this subject matter. Think late-2020s and early-2030s GNC. This predictive futuristic content will revolve around my vision for my ideology around the role stores will play in the future of commerce. In my opinion, the store of the future must become a physical portal into brand and product experiences that are relevant to the target audience. That means it becomes a place where consumers can be inspired, learn, socialize, and experiment with new products. It should be a place that prioritizes service, while also using digital touchpoints that drive in-store traffic and enable physical stores to operate as part of a broader, interconnected ecosystem. This will mean that the store network will become an increasingly vital part of last-mile fulfilment. Taking that into consideration, I will explore those ideas within the GNC Store of the Future perspective.
GNC CEO Application = https://youtu.be/7pyCfzOuSk8
Vitamin Shoppe just reported Texas-sized sales growth, but that isn’t the only Texas news the specialty supplement retailer recently shared! I'll utilize the 2021Q2 Franchise Group (NASDAQ: FRG) earnings report and conference call to provide segment-level financial details for The Vitamin Shoppe. More importantly, I'll supply you with a range of insights and updates surrounding The Vitamin Shoppe key topics such as, Franchising Strategy, International Expansion, Sponsorship Activity, Merchandising Strategy, and M&A Activity. While 27% YoY growth and 45% in-store positive comps will not be sustainable long-term, The Vitamin Shoppe is executing at a high-level within a CPG category that is in high-demand. Maybe the most impressive stat of this quarterly performance was that they grew QoQ sequentially, as the first quarter is usually the strongest quarter in terms of revenue with the New Year’s resolution crowd spending on supplements. At a run rate now at around $1.2B, it would bring them back to the 2014-2016 revenue height of company but achieved with a smaller store fleet. Since The Vitamin Shoppe is shielded in the public markets by the Franchise Group ownership, its turnaround hasn’t been front and center, but overlooking it would be a mistake.
The Vitamin Shoppe Franchising Details = https://youtu.be/BKZW1dwnfUQ
How is Nestle progressing in its pursuit to become a health and nutrition powerhouse? In recent years, CPG giants have scrambled to add more health and nutrition brands into their portfolios, as consumers spend more on these categories. When CEO Mark Schneider joined Nestle in 2016, he brought a unique perspective because of his healthcare industry experience. In my opinion, this changed the long-term trajectory of Nestle. No longer would it be just another CPG portfolio that’s anchored to slower-growing legacy food and beverage products that in-part made Americans a “sick society.” Nestle would instead pivot to become a health and nutrition powerhouse that would be a part of the solution. If you aren’t familiar, Nestle actually has a ~$4 billion segment called Nestle Health Science that contains a number of brands in three categories; Medical Nutrition, Consumer Care, and Pharmaceuticals. This brand portfolio has grown substantially in the last 2-3 years, and it will continue growing once The Bountiful Company acquisition is finalized later this year. In this podcast episode, I'll cover what Nestle's near-term focus is and how it folds into a larger long-term vision.
Have you ever wanted to own an important piece of supplement industry history? How about one that has category creating lineage to the most popular supplement among U.S. adults? If that has you intrigued, then the newest supplement brand portfolio to file its IPO paperwork is right up your alley! So, who is this historically significant supplement brand portfolio? The Better Being Company…huh? Who is that, right? Prior to the recent rebrand, The Better Being Company was known as Nutraceutical International. The functional CPG portfolio was founded in 1993, but its brand holdings started way back to 1932 (KAL Vitamins). Outside of KAL, The Better Being Company owns several other brands within the categories of dietary supplements, beauty, and personal care products. The most notable brands (the core brands) include; Solaray, Zhou Nutrition, Nu U Nutrition, Heritage Store, Zand Immunity, and Life Flo. You might have noticed an increased amount of public market activity with functional CPG brands that include holdings within the dietary supplements category. I'll explain how these categorical businesses are benefitting from durable secular trends tailwinds and what strategic initiatives The Better Being Company will be focusing on as a soon to be publicly-traded company.
The beverage industry is in the beginning of a new era. For the last several years, beverage brands have been “skating on ice” trying to meet the everchanging consumer demands for functional “better for you” packaged beverages that provide convenience. It’s really this “cat and mouse” game where consumers become more selective in their purchases, thus forcing beverage brands to make adjustments. With that said, what are four trends in the beverage industry that could have market share reshuffling power in the near term?
Functional Beverage Trends Covered Include:
- Commercialized Vibes
- Energy without the Plus is Boring
- Convenience Biohacking
- Alcoholic Beverages Want into the Hottest Party Around
- BONUS: CRISPR
In a beverage category controlled firmly by Gatorade for decades, will the massive marketing push of BioSteel be enough to make a material impact? With CBD regulation being stalled for the last few years in the U.S. market, the original strategic plan of Canopy Growth acquiring sports nutrition brand BioSteel to commercialize cannabis-focused supplements was also on the back burner. That being said, the companies decided to pivot and focus on bringing “the best kept secret in professional sports” hydration product to the mainstream consumer by offering it in packaged beverage form. Why a pivot to this magnitude could even have a chance to be successful is because Canopy Growth just so happens to be minority-owned (38.6%) by the $9 billion alcoholic beverage portfolio Constellation Brands. BioSteel has been leveraging Constellation's beer distribution network throughout the last few months to launch its sports drink beverage in the U.S. market. This has helped them quickly capture market share by landing large retail accounts like CVS, Walmart, and QuikTrip. While it's still very early days, BioSteel is already the 7th biggest sports drink brand according to IRI. Though this is hardly clean data, Canopy Growth reported growth of “Other CPG Revenue” (which I assume is mostly BioSteel) had substantially grew in the last quarter to 149%. What’s driving this recent growth? BioSteel has massively increased its partnerships with high-profile sports teams/leagues and star athletes. Question remains though if it's enough to win market share from PepsiCo owned Gatorade or Coca-Cola owned BODYARMOR.
Link to Canopy Growth & BioSteel M&A Content (10/2/19) = https://youtu.be/2UsZDEgCYfE
If the fitness content is good enough for Michelle Obama than the company that owns it should be good enough for the public markets, right? Are you confused? Don’t worry…the connection between the former first lady, her favorite workout program p90x, and the stock market will make sense after you consume this content. In mid-February 2021, Beachbody announced it would go public through a three-way merger agreement with Forest Road Acquisition Corp. (SPAC), which had ties to former NBA star Shaquille O’Neal and former TikTok CEO Kevin Mayer, and at-home connected fitness company MYX Fitness. The goal of the merger is to build a uniquely integrated health and wellness subscription company that directly competes with leading digital fitness brands such as Peloton. It will do this by combining Beachbody’s fast-growing digital subscription business and extensive library of live and on-demand workout classes with MYX Fitness connected fitness equipment capabilities. Just as streaming opened up the media world, I believe that connected fitness will open up the wellness world. Fitness has always been about connection, but now digital connectivity has made new experiences and business opportunities possible. We are still in the earliest stages of connected fitness, but the long-term winners will need to be great at four different pillars; hardware, software, content, and community. That being said, it will be exciting to see if the Beachbody Company can excel at each of those areas and compete with the likes of Peloton.
OpenFit & Ladder Supplements Video = https://youtu.be/eEQDGTzAMaM
Celebrities continue to seek additional ways to monetize their personal brands, so it shouldn’t surprise anyone that they would look at one of the fastest growing sub-categories of the CPG industry, right? Along with the fact that dietary supplements has been one of the most exciting, fast-moving, and highest growth areas within the CPG industry…is that they’re relatable. Around 80% of today’s adult Americans take some form of vitamins, minerals and supplements and that obviously includes tons of celebrities, high-profile entrepreneurs, public personalities, and even a past U.S. President. If this content sounds vaguely familiar, it’s because this is actually Part 2 of a fun video that I uploaded in late-January of 2020 that highlighted a dozen celebrities, high-profile entrepreneurs, and public personalities that you didn’t know owned or still owns some piece of a supplement company. If you haven’t checked out Part 1, you missed names like Beyonce, Oprah Winfrey, and Tony Robbins, which I bet you didn’t know owned supplement companies. Want to check that video out? It can be watched here = https://youtu.be/4g-BcRPBYj0
Now, for Part 2…I found a dozen more famous people that were or still are an entrepreneur/investor in the supplement industry.
Will a passionate and loyal consumer base be enough to push Zevia towards public market gains? On June 25, 2021, Zevia filed its S-1 document to the SEC with the intention of raising up to $100 million from the sale of common stock shares through an initial public offering. For those not aware, Zevia was founded in 2007 by Ian Eisenberg and husband/wife lawyers Derek and Jessica Newman. It was actually two years earlier when the three founders learned about stevia from a California friend who was a "health food nut." At that point, they said “we should start a soda company using this.” They hired a flavor artist to create a formula that eliminates stevia's bitter aftertaste. The product took various iterations to master (especially the cola flavor), but the founders knew there was a growing subset of people that were looking for a natural diet soda that could replace all the artificial sweeteners and sugary sodas. When Zevia was in R&D mode and even initially commercialized, the plant-based natural zero-calorie sweetener stevia wasn’t allowed to be a food additive, so it was sold as a dietary supplement. Will the founding team grew Zevia to four employees and net sales of just under $7 million, it was sold to ex-Kashi executive and SPINS founder Paddy Spence in 2010. Under the control of a seasoned natural/organic industry leader that also authentically lives a sugar-free lifestyle himself, Zevia has blossomed into a powerhouse beverage brand over the last decade. In this podcast episode, I'll run through the current financial snapshot of Zevia, sales/customer breakdowns, product platforms, and it's ESG/B-Corporation values. Finally, I highlight consumer mega-trends that Zevia should benefit from that will also drive continued category growth.
With the massive acceleration in growth from Quest Nutrition and the Atkins Nutritionals brand showing life again, will The Simply Good Foods Company become the next $1 billion active nutrition CPG portfolio? As usual, I’ll start by running through some high-level financial data to update you on how The Simply Good Foods Company (NASDAQ: SMPL) performed recently, but more importantly provide context for expand strategic commentary on trends within the health and fitness snacking space. Instead of my normal focus on Quest Nutrition, I zoomed in on two trends that could help further improve the Atkins Nutritionals growth story (Return to Work and Off-Cycle Resolution Season). Fact is, the Simply Good Food Company continues to be uniquely positioned with two large-scale channel-diversified U.S. brand leaders in the attractive nutritional snacking category that’s still underpenetrated. With well calculated price increases, as well as productivity gains, the company should be able to offset much of the inflation concerns that competitive brands are dealing with now. This will enable them to maintain gross margins and continue to invest in initiatives that drive growth. Additionally, the Simply Good Foods Company is spinning off $90M in quarterly positive cash flows and has an improving debt ratio that will allow it to find an attractive M&A target within the next year. I continue to be impressed by how well the team is operating against the complex environment and I continue to believe SMPL has a bright future.
Before keynoting the IPA World Congress + Probiota Americas 2021 - Digital Summit, I sat down with Danielle Masterson (Senior Correspondent - NutraIngredients-USA) to talk about the growing WalMazon Effect within the supplement retail landscape. Additionally, we talked about how specialty supplement retailer GNC recently teamed up with Walmart and The Vitamin Shoppe started franchising for the first time in the company's history. Finally, I shared my expectations for GNC and The Vitamin Shoppe over the next 12 to 18 months.
The explosion of the NFTs space has been nothing short of remarkable. So, should your CPG brand consider jumping on this trend? While NFTs could represent a huge opportunity to tap into the growth of virtual worlds and connect with consumers, I don’t want CPG brand owners to get too excited and make silly decisions because a lot of the various valuable applications are longer term plays that go beyond digital art and collectibles. Jumping on a bandwagon because it's trending seems to be an often-used strategy today, but you have to ask yourself if NFTs will create any real value for your brand. If not, maybe wait and see how the bleeding edge space evolves over time. That being said, I'll share how some of the highest profile CPG brands are experimenting with NFTs (including Pringles, Dunkaroos, Charmin, and Dream Pops). Some might argue that NFTs are a fad and others might have no idea what NFTs were until this piece of content, but my prediction is CPG brands will find enough utility in the brand building and promotional areas that will create a long enough runway to reach the deeper long-term benefits.
I’ve always believed that Hip Hop and CPG entrepreneurship are linked together. Firstly, Hip Hop is seen as counterculture to other music genres, which is similar to CPG entrepreneurship in today’s “technology” filled founder landscape. Additionally, Hip Hop and CPG entrepreneurship are both centered around being salesmanship and the ability to hustle. Moreover, Hip Hop music is rooted in remixing (or sampling) previous music, and this iterative innovation process is also core to the CPG industry. Finally, Hip Hop is more than music, it's a cultural lifestyle...which anyone in the CPG industry knows it functions in the exact same way. This is probably why you see so many hip-hop artists that are involved with CPG entrepreneurship (or investing).
While NAS has never been a CPG entrepreneur to my knowledge, he has invested in at least one known CPG brand “Walker & Company” in 2015. This was 3 years before the maker of men’s grooming products was acquired by Procter & Gamble. If you think that investment exit was a fluke, think again because NAS is actually a highly regarded investor. His QueensBridge Venture Partners venture capital firm that was started in 2013 and has invested in over 110 startups. One of the first investment NAS made was in the Series B round of Coinbase at around $1/share! Other notable investments have been in Dropbox, Ring (acquired by Amazon), Lyft, SeatGeek, Robinhood, Away, and ClassPass. Though many of NAS investments have been in technology, I believe lyrics from his extensive catalog of music that spans more than two and a half decades will show you that he could be a successful CPG entrepreneur. These lyrics provide keen lessons for any CPG entrepreneur. So, what can you learn from the hip-hop legend NAS?
Remember almost 2 years ago when I said that GNC was trying to pull off this magical feat where it could close 1000+ store locations, but actually grow its physical retail exposure? Well, it’s magician clout just got a major boost after it secured arguably the most important strategic retail partnership. On 6/7/21, GNC announced that it entered into an exclusive agreement with Walmart to sell a selection of its GNC private label product assortment including vitamins, nutritional products, sports nutrition, and weight management products. These will be available through more than 4,000 Walmart stores and online starting this month. It’s also not hard to understand why GNC would want to partner with Walmart; Walmart is the most powerful physical retailer in the U.S and Walmart also sells the most VMS supplements in the U.S. (even more than GNC itself). GNC is a very well-known brand to the collective American consumer, but many of these wellness category consumers might fall into distinct groups that would normally step into a GNC store. Wellness consumers aren’t static, so GNC hopes that when they are ready to take their wellness journeys to the next level, it will be in its stores for the full GNC experience. The ultimate goal of converting Walmart shoppers into GNC loyalty members could drive long-term growth, as the vast majority of GNC revenue comes from loyalty members. The biggest question is...will this strategic retail partnership push the needle for GNC?
The “COVID-19 Effect” has substantially increased the prioritization of wellness among global consumers, but is your own myopic view of the construct leaving opportunity on the table? Wellness is a modern word with ancient roots. As a modern concept, wellness gained popularity in the 1950s, 1960s and 1970s, when subject matter experts largely shaped the way we conceptualize and talk about wellness today. In a 1979 “60 Minutes” segment, Dan Rather stated, “Wellness, there’s a word you don’t hear everyday”, but today most Americans do hear that word every day. That being said, Americans aren’t the only ones paying attention to wellness, as the global wellness market is estimated to be $1.5 trillion and growing mid-to-high single-digits annually. A rise in both consumer interest and purchasing power presents tremendous opportunities for functional CPG brands. At the same time, the wellness market is getting increasingly crowded, creating the need to be strategic about where and how they should compete. So, how do you view wellness? Maybe you said improving your general health or working out more, but that’s only a few ways that today’s consumers view wellness.
They tend to have a much broader and more sophisticated lens that now encompasses six dimensions...
- Better Health
- Better Fitness
- Better Nutrition
- Better Appearance
- Better Sleep
- Better Mindfulness
With that knowledge, I'll share several strategies functional CPG brands could deploy to be best positioned in this growing wellness market.
For those that aren’t too familiar with who the publicly-traded (OTCMKTS: BILZF) Ignite International Brands is and maybe even who Dan Bilzerian is…check out my first piece of content about the subject matter that I published about 6 months ago [https://youtu.be/pqDvxbpeD5w]. My hope for this podcast episode is that it will be both entertaining to casual observers of the CPG industry, but also provide insightful information for those CPG professionals that are curious about how an influencer-led multi-category brand is performing in the current business landscape. I'll breakdown how Ignite International Brands could be profitable from a bottom-line perspective, but not operationally and how those underlying factors might influence its ability to sustain profitable growth and business operations throughout 2021 and beyond.
When Chinese businesses shut down last mid-to-late January for their 2020 New Year, it marked the end of “business as usual” for the functional CPG industry. Many shoppers still have a small hint of PTSD from seeing empty retail shelves caused by constant supply shortages of CPG essential goods in the early months of the pandemic. Despite being more than a year from those March and April 2020 pantry loading periods, another group of shoppers unfortunately could be facing an even worse (and potentially longer) period of supply shortages. This time it’s hitting really close to home, in the functional food, functional beverage, and nutritional supplement CPG categories.
The goal for this podcast episode is to:
- Explain major macroeconomic variables that could be causing the current supply chain situation
- Discuss the functional CPG market outlook for the next 6-12 months
- Provide preparation strategies to functional CPG brands
- Touch on how the functional CPG industry can avoid similar future problems
MusclePharm announces it’s re-entering the energy beverage space in conjunction with its latest earnings and I’m still sitting here confused if I’m being completely honest. For those unaware, MusclePharm had energy drinks in the mid-2010s under the Energy Sport and Energy Sport Zero offerings. While I thought the product was decent at the time, it never took off likely due to outside factors that likely surrounded a poor sales/distribution strategy and team execution. This time around, MusclePharm is attempting to circumvent the previous issue by partnering with a energy beverage industry veteran. Assuming the sales/distribution strategy and team execution will be better this time, why am I still bearish on the idea? Additionally, why do I believe a clause in the new CFO's employment contract could mean that MusclePharm is positioning itself to be an acquisition target in the next two years?
Did a recent M&A transaction between a global fitness company and nutritional supplement brand signal more lookalike activity could be ahead? It seems this deal stayed mostly under the radar (at least in America), but F45 Training acquired True Protein for an undisclosed amount. Ten years ago, F45 Training started in Australia and became a 1750+ global fitness studio franchise that combines 45-minutes of high-intensity interval training (HIIT), functional training and circuit training. True Protein is a family-owned Australian nutritional supplements that was founded in 2014. Why did F45 Training make this M&A Move? Were there inspirations in the market already that combined fitness (media or equipment) with supplements? Could this lead to more fitness companies like Peloton, Mirror, or Tonal to make similar M&A moves or even internally create and launch their own supplement brands? How does this discussion fit into our personalized lifestyle future?
What does the two billion dollars plus investment from Japanese tech giant SoftBank in THG (formerly known as The Hut Group) mean to the company and the overall market? Last July, I called "THG a very very special company." I even gave them the highest compliment by comparing THG to the earlier days of Amazon when they built Amazon Web Services (AWS) for internal purposes, which was then turned into a commercialized licensed product that now does $10s of billions in revenue. So, what exactly did Softbank (through its SB Management division) and Masayoshi Son investing in? There’s actually two investments (one in each division); (1) THG Ingenuity received $1.6 billion and (2) THG's owned brands and associated vertical-integration within the CPG categories of Nutrition (MyProtein) and Beauty. In this podcast episode, I'll breakdown why these massive injections of capital will create incredible opportunities for THG.
The largest distributor of nutritional and sports supplements was hit hard by the “COVID-19 Effect” and it could be on the verge of bankruptcy. This might confuse my community a bit because I’ve stated on many occasions (and gave supporting data on) how exceptionally well the overall nutritional supplements and ancillary functional CPG market has performed against the pandemic business environment over the last 12-15 months. So, how can the largest distributor of these various functional CPG product categories be struggling? In this podcast episode, I'll discuss some of my hypotheses on what went wrong at Europa Sports Products and what's could be next for the nutritional and sports supplements distributor.
During the last piece of Celsius Holdings content, I asked “what happens after you get to the moon”, which was a reference to passing the $100 million sales mark that’s elusive for energy drink brands that don't also have a national distribution contract or share a cap table with one of the five large beverage portfolios. At $50 million in 21Q1 net sales ($200 million run rate), I guess they have their sights set on reaching Mars to complete this space exploration analogy. Within the larger retail and distribution performance, I breakout three specific channels for different reasons that show why Celsius Holdings should have a lot of runway left to grow for many years in the energy drinks market. Celsius Holdings has proved over the last 15 months that it can compete on the same level with the big players in the energy drink space. It’s strengthened distribution channels combined and increased market awareness has positioned Celsius to take even more market share away from mainstream competitors. What’s next will be interesting for the brand, as they could grow organically to $250M in revenue over 2021, but still be at a crossroads that could see themselves readying for the sell-side of an M&A deal.
Did Glanbia Performance Nutrition benefit from pent-up global demand or is something else at play here? Glanbia Performance Nutrition 21Q1 net revenues increased 17.6% YoY on a like-for-like basis from both strong pricing and volume increases. While that growth is extremely strong, leadership did note on the earnings call that about one-third of the consumption growth can be attributed to inventory builds with retailers. As part of the Glanbia Performance Nutrition transformation program, the company again adjusted the organizational and reporting structure. Instead of the recently instituted “Lifestyle”, “Sports Nutrition” and "International/DTC", it will now be "Americas" and "International" only. That being said, Glanbia Performance Nutrition hired two new leadership positions; Chief Growth Officer (focuses by brand) and Chief Commercialization Officer (focuses on channels). Additionally, with almost three-fourths of Glanbia Performance Nutrition revenue is now made up of Optimum Nutrition and Slim Fast. Even with increased advertising spend on both brands planned through the entire 2021, I do think these brands have different 5-year trajectories though, and outside of increased CAPEX spending, Glanbia will need to utilize it's strengthened balance sheet to be more aggressive with M&A. We've yet to see any deals yet from Glanbia Performance Nutrition side while competitors have been gobbling up prime targets.
While the “COVID-19 Effect” challenged Glanbia in 2020, the well-timed transformation plan and improving environment around long-term secular trends should make the company stronger for the future. That being said, problems still lie on recalibrating the GPN brand portfolio and one they will have to address head-on in the next year if they want to sustain their market leadership against large CPG portfolios like Nestle.
Positive in-store (and digital) same store comps will attract a larger pool of interested franchisees and the “COVID-19 Effect” lingering further only strengthens the consumer behavioral pattern around prioritizing all things health and wellness. This combination makes The Vitamin Shoppe potentially very attractive for prospective franchisees. With a run rate of almost $1.2 billion, the specialty supplement retailer would be back to the 2014-2016 height of company (from a revenue perspective). This is no small feat and should be getting more attention than it does because they would be achieving it with a smaller store fleet. While it hasn’t been the flashiest turnaround, the Vitamin Shoppe has quietly been putting in the required work in the gym to now be able to flex its bigger muscles in the market.
Bellring Brands (NYSE: BRBR) growth storm has further strengthened from the recent performance of Dymatize Nutrition, but what takes the active nutrition brand portfolio to the next level? BellRing Brands is a portfolio that owns a collection of convenient nutrition brands like Premier Protein, Dymatize Nutrition, Powerbar, Joint Juice, and Supreme Protein (recently shuttered), which was previously wholly-owned by Post Holdings. A fast-paced and busy lifestyle is pushing consumers to switch to quick and healthy meal options. This has resulted in the increased household penetration of RTD protein shakes that promote active lifestyles. In this latest podcast episode, I'll utilize the recent BellRing Brands earnings report, earnings call, and publicly disclosed news as the backdrop to discuss what it could mean to the overall active nutrition market in the liquids, powders, and bars formats. Because Premier Protein makes up 84% of the portfolio’s total revenue, I’ll dive deeper into that brand, but also provide more commentary on the turnaround story that's happening at Dymatize Nutrition. Finally, I run through the four strategic pillars of Bellring Brands that will unlock organic growth. Only time will tell how this plays out, but Bellring Brands will certainly be an interesting name to pay close attention to in the near-term.
Today’s consumers are increasingly wanting more than simple products. The value they are looking for comes from experiencing the use of a product that is tailored to their specific needs and preferences. Delivering such experiences often requires complex and integrated systems that can no longer satisfied by functional CPG brands only offering “off the rack” products without additional value creating ecosystems. That being said, is it time for your functional CPG brand to deploy an ecosystem strategy? Any functional CPG brand undertaking this level of strategic shift must remember that discovering new customer value through ecosystems is a process (not a project). Most successful ecosystems started with a broad idea of where the potential for new value might lie, and only after learning through customer feedback loops and embracing an iterative innovation mindset does a winning combination emerge. Ecosystems that are successful in the long run need to be adaptable and be ready to modify their designs in anticipation of shifts in markets, technologies, regulations, and public sentiment. Designing an ecosystem is a major undertaking, but one that’s well-designed has the potential to create entire new industries or substantially shape and transform existing industries.
To help explain ecosystem strategies better, I'll utilize three diverse case studies from functional CPG brands already deploying them in the market; Proper Sleep, Nestle, and Revive MD.
Increased transparency is great for every supplement industry stakeholder, right? Ask any key leader within the supplement industry and they will mention that there’s a clear connection between increased transparency and consumer trust. As more consumers add supplements into their daily routine, it’s imperative every player within the value-chain embrace a greater level of transparency to ensure that only high-quality supplements enter the market in order to reduce risk to consumers. While transparency is an evolutionary standard, the brand side of the supplement industry has mostly obliged with this consumer demand for more information. That being said, supplement brands will start demanding more from the supplyside (ie. ingredient suppliers, flavor companies, and contract manufacturers) that eventually turns transparency into full blown traceability. Without a doubt, the supplyside will respond and eventually provide “full traceability”, but what happens next might catch them those supplyside companies off guard!
Even before it’s announcement to buy The Bountiful Company, Nestle was quietly becoming one of most important players (if not the most important player) in the supplement industry. If you haven’t heard by now, Nestle agreed to buy a collection of brands from VMS portfolio The Bountiful Company for $5.75 billion. I believe this M&A activity has huge short-term and long-term implications for the entire supplement industry. In the short-term, supplement companies will have to contend with a new powerhouse that will seek to gain pricing power and additional market share. In the long-term, Nestle has the upper-hand right now on a larger portion of the personalization equation that will define the CPG industry of the future. While “scraps” will always fall from the table of giants to feed a group of peasants below, an increasingly competitive market will force many sports/active nutrition and VMS brands to adapt or die.
How can the first fitness influencer in history help us anticipate the future of influencer marketing? What’s happening today is not new, with most being remixed strategies and methods from years, decades, and even sometimes centuries past. Recently, I was reading an Economist article that made me ponder the trend of fitness influencers. If asked when did fitness influencers start, you might say person XYZ from Facebook, Instagram, YouTube, or Web 1.0 Internet forums or blogs. If you’re a bit older you might say Arnold Schwarzenegger, but what if I told you the “first fitness influencer” came to relevance in the late 1890s. For my bodybuilding fans, you will recognize the name as he’s immortalized with being the trophy given to the annual Mr. Olympia. Though other Victorian strongmen faded from memory, Eugen Sandow remains a household name in the fitness industry. Why are these lessons from Eugen Sandow so important now?
After a year-long delay stemming from the “COVID-19 Effect”, The Vitamin Shoppe finally opened itself up to a refranchising process. As many of my followers know, I’ve said The Vitamin Shoppe would move to a franchise model since their acquisition announcement in August of 2019. The franchise disclosure documents should have been ready in 2020, but the “COVID-19 Effect” created an uncertain business environment where it was better to dig in and execute on existing plans without rocking the boat. Now that we have publicly disclosed information and interested parties can apply to be a franchisee, I wanted to provide you with an overview of those details, discuss how they compare to their biggest competitor GNC, explain why this refranchising is happening, and most importantly discuss what’s could be coming next at The Vitamin Shoppe.
I’ve always believed that Hip Hop and CPG entrepreneurship are linked together. Firstly, Hip Hop is seen as counterculture to other music genres, which is similar to CPG entrepreneurship in today’s “technology” filled founder landscape. Additionally, Hip Hop and CPG entrepreneurship are both centered around being salesmanship and the ability to hustle. Moreover, Hip Hop music is rooted in remixing (or sampling) previous music, and this iterative innovation process is also core to the CPG industry. Finally, Hip Hop is more than music, it's a cultural lifestyle...which anyone in the CPG industry knows it functions in the exact same way. This is probably why you see so many hip-hop artists that are involved with CPG entrepreneurship (or investing). Unfortunately, we never got to see if Notorious B.I.G. would have made this list before his untimely death, but he did provide us hints likely would have been a great CPG entrepreneur. So, what can you learn from the hip-hop legend?
Quest Nutrition has unlocked growth from leveraging the strengthening functional confectionery trend, but the question of whether it's enough to offset declines in the Quest Bar and Atkins protein bar SKUs is still uncertain. In this latest podcast episode, I'll utilize the 2021Q2 Simply Good Foods Company (NASDAQ: SMPL) earnings report, earnings call, and supplemental presentations as the backdrop to provide broad health and fitness snacking market insights. Quest Nutrition and Atkins Nutritionals each continued to have a mixed bag of performance at the product category level, including protein bars and nutritional bars performing worse on a YoY basis (though both continue to outperform the category average). Within my last quarterly update on the Simply Good Foods Company, I provided a business case for why the company should transition to a more "snackier" product portfolio regardless of positive macro trends around consumer mobility. It looks like at least the Quest Nutrition brand was already on the same wavelength. After successfully re-releasing their Quest Peanut Butter Cups to rave reviews and strong sales velocity, they decided to build on that momentum by launching their Quest Candy Bites and Quest Candy Bar this week. In an original article that I wrote just over 3 years ago (Read it here), I called for active nutrition companies to look beyond protein bars and into more confectionary categories that they could add a functional twist to. I mentioned in that article that “if you follow the sports nutrition CPG space closely enough, you have seen some launches that would be more associated confectionery-type CPG products. While most active nutrition brands have not innovated in this manner, are these product launches an indicator of the future?” I think the resounding answer in 2021 is yes…
MusclePharm slammed home its first profitable year in company history, as the sports nutrition brand finally sees some fruits of its labor stemming from the extensive multi-year turnaround plan. For this podcast episode, I'll utilize the MusclePharm Corporation (OTCMKTS: MSLP) 2020Q4 earnings report, that was released on 3/30/2021, to breakdown the most important key updates surrounding the maker of Combat protein powder. With profitability now being achieved consistently, where does MusclePharm go from here? While the sports nutrition brand is obviously far from rewriting its history of accumulated operating losses, these results are baby steps in the right direction. It must now focus on; stabilizing falling global sales, building direct-to-consumer (DTC) capabilities, understanding its legacy role in the market, and rebuilding investor relations to build stakeholder support and optionality for the business in the future.
Even the GNC bankruptcy couldn’t take down the transformation plans that are in-process at FitLife Brands (OTCMKTS: FTLF). A national provider of nutritional supplements for health-conscious consumers, FitLife Brands markets under two brand segment names; NDS Products (sold through the GNC network) and iSatori Products (sold through a diversified retail mix of 17,000 locations). I'll utilize the recent 2020Q4 FitLife Brands earnings report and any additional publicly disclosed information to discuss some broader strategic insights regarding the nutritional supplements market. I'll end the podcast by trying to answer the question, "where does the company go from here?"
Looking at its recent performance, GURU Organic Energy is giving off a Celsius Holdings vibe from 2-3 years ago. For those that aren't aware of the brand, GURU Organic Energy launched in 1999 as the world’s first plant-based all-natural energy drink in Quebec, Canada. In the U.S. market, they launched in 2005 with Whole Foods Market. The current CEO Carl Goyette joined in 2014 and is really credited for the recent growth of the clean energy brand. GURU Organic Energy went public in 2020 through an reverse takeover transaction, which is similar to a SPAC in the U.S., and now trades on the Toronto Stock Exchange under the ticker GURU. At a current ARR of about $4M in U.S. market sales (~$21M total), they still have a lot of heavy lifting to do if they want to make any impact in the hyper-competitive beverage category. That being said, their products are aligned with growing trends in the U.S. energy drinks market. If they can maintain the right balance of a clean, natural ingredient profile and mainstream taste and branding, while also riding the momentum of Celsius Holdings, it could allow them an opportunity to grow substantially throughout the next 12 months in the U.S. market.
How did Laird Superfood (NYSE: LSF) do at navigating the big waves of Wall Street in Year 1 as a publicly-traded company? For those unfamiliar, Laird Superfood was co-founded in 2015 by namesake Laird Hamilton, which is most famously known as the greatest big wave surfer of all-time. Laird Superfood is an emerging consumer products platform focused on manufacturing and marketing highly differentiated plant-based functional CPG. Trifecta of CPG trends are benefitting Laird Superfood; Better-For-You, Plant-Based, and Functional. Within the CPG category, there's an ongoing secular shift from highly processed legacy products that demonstrate little nutritional benefit to natural, nutrient-dense, functional and plant-based alternatives. Laird Superfood has three major product platforms, including; SuperFood Creamers, Hydration and Beverage Enhancers, and Coffee, Tea, and Hot Chocolate. These total addressable markets are growing and Laird Superfood will see strong growth in 2021, but great products only get you so far in today’s hyper-competitive CPG industry. The real point of differentiation continues to be the Laird Hamilton lifestyle that appeals to anyone that is trying to fight back Father time and taste a bit of what the aging super athlete has found that’s working for him.
Celsius Holdings went "to the moon”, but what happens next? For those that might not understand that "Reddit or Fintwit reference", it's a phrase used when someone thinks the price of a stock is going to see a huge increase. Celsius Holdings has skyrocketed close to 1000% in the last 12 months, but they also hit the elusive $100 million mark in yearly revenue. This is a sales target that is extremely difficult to reach for energy drink brands that also are not owned by a large beverage portfolio or have a national beverage distribution partnership. I'll further explain the impressive performance by covering information from the Celsius Holdings (Nasdaq: CELH) 2020Q4 earnings report and conference call that was recently released on 3/11/21. Additionally, I'll use that recent financial news as the backdrop to talk about larger functional energy drink categorical and strategic insights. Key points within the content piece include retail and DSD distribution increases, digital sales details with Amazon highlights, and other positive metrics that show you why Celsius Holdings is transforming itself from a niche energy drink brand into a real viable mainstream player. What’s next will be interesting for the brand, as they could grow organically to $250M in 2021 while also diversifying into RTE and other RTD (protein) through its FAST European brand that’s set to hit the U.S. market in Q2 of 2021. I still think Celsius is a bolt-on M&A target, but last year's aggressive stock moves (even with the pullback) has pushed the market cap above $3B making the deal extremely expensive at this current timing.
While the Vitamin Shoppe had arguably the most challenging year of its 44-year history, it ended up coming out of 2020 smelling like roses. How is that possible? To help express this notion, I'll run through The Vitamin Shoppe 2020Q4 earnings report that was released 3/10/2021 under its owner Franchise Group Inc. While the financial information in the report continues to be relatively small, I was able to collect insightful information on the quarterly performance from the Franchise Group conference call, previous corporate press releases, and public interviews from CEO Sharon Leite and other leadership team members at the specialty supplement retailer. Additionally, I'll explain the recent merchandising partnerships with WW (Weight Watchers), CTRL, Martha Stewart CBD, and CBD private label activity. Finally, I talk about my previously predicted operating model change to franchising at The Vitamin Shoppe that was given more formality by Franchise Group CEO Brian Kahn speaking out the "value of the franchise potential" for franchisees and the portfolio.
Other original content mentioned in this podcast:
- Canopy Growth Acquires BioSteel - https://youtu.be/2UsZDEgCYfE
- CTRL & FaZe Clan - https://youtu.be/r0aYQPHD_ks
Read just about any fitness article that mentions the consumption of alcohol and it have you believing it will absolutely destroy any of your physique goals. So, why have more fitness-focused companies aligned themselves with alcoholic beverages? Fact is, negativity towards alcohol within a healthy person's life wasn't always so grim, as advertising in the 1920s said “Guinness is good for you!” Today's "sensationalism drives consumerism mindset" has tried to replace balance, but three shifts in the last 10 years have fitness-focused and alcoholic beverage brands converging and leveraging common ground. The strongest functional CPG lifestyle brands (ie. Alani Nu) will continue to push the boundaries on product development that expands outside of traditional categories. Additionally, the trend of partnering with alcoholic beverages on marketing activations is only getting started as fitness-focused brands embrace the reality that being “hardcore chicken/veggies/rice 24/7/365" is about as valuable as those plastic trophies single-minded fitness competitors ruin their lives for in today's dynamic business environment.
Historically speaking, there were these unwritten rules that children were off limits to functional CPG brands, but do those rules hold weight anymore? That being said, most of us have been drinking ready-to-mix supplement powders from birth with brands like Similac essentially being a watered-down vitamin/mineral-fortified meal replacement shake. As we grew older, we continued to take Flintstones vitamins and Carnation instant breakfast powders. Almost all of those early functional products came from brands within multi-billion-dollar CPG portfolios...so I guess it was OK, right? That "monopoly" on kids' functional CPG products slowly started to erode over the last 5-7 years as Millennial parents grew up with more information on nutrition. In this latest podcast episode, I'll deep dive into how the “COVID-19 Effect” sped up what was happening with the trend and also what could happen in the future with product development and marketing towards the youth market.
How is the American economy doing? According to the Federal Reserve’s latest Beige Book, most businesses remain optimistic regarding the next 6-12 months as economic activity expanded in the first part of 2021, but what about the CPG industry specifically? The Beige Book is a Federal Reserve System publication that collects mostly qualitative information, gathered directly from District sources. This consumer data creates an opportunity to characterize dynamics and identify emerging trends in the economy that may not be readily apparent in the available quantitative economic data. Additionally, most CPG businesses today are offered nationally through e-commerce or large brick and mortar retail chains, so it’s important to understand that America is not a one-size-fits-all economy, especially during the coronavirus. Because of that, the Beige Book can potentially help you with regional insights that can be applied to create advantages in your business. To save you time from reading the whole document that comes out every 45 days, I started a content series that takes five CPG industry related highlights that I found most insightful from the latest Beige Book, such as consumer confidence growing in the Middle Atlantic Region, logistics demand is far exceeding supply across all modalities, and minority- and women-owned business enterprises are struggling in comparison to the national average. On CPG industry Beige Book Vol.6, I also provided some additional bonus quantitative January retail data that came from the U.S. Census Bureau and February jobs data from the U.S. Department of Labor.
Coca-Cola Energy seemed like it was a strong opening poker hand, but after a year in-market, should The Coca-Cola Company hold them or fold them? To be completely honest, when The Coca-Cola Company announced it was launching a branded energy drink in the U.S. market in late 2019, I believed Coca-Cola Energy would do more for the U.S. energy drink market than any other product/brand since Red Bull originally landed on the shores of California in 1997. My logic behind that prediction is still sound, but a combination of bad execution and challenging market dynamics left Coca-Cola Energy short of reaching $100 million in sales during its first year. So, what happened? I'll dig into that and also discuss why The Coca-Cola Company isn't quick to discontinue its Coca-Cola Energy drink.
Is it time for wellness brands to start channeling their inner Silver Fox and Gray Panther spirit animals? As it stands, the 50+ crowd is largely ignored by fitness and wellness brands. That is changing fast, as companies wake up to the huge underserved market that no longer subscribes to the “I’ve fallen, and I can’t get up!” commercials of the late 1980s. While seniors control 70% of the America’s disposable income, they only attract around 10% of marketing budgets and less than 1% of innovation. Everyone from Peloton to Apple to "you name it functional CPG brand" has rushed into focusing on the highly coveted consumer demographic/psychographic known as H.E.N.R.Y. (high earner, not rich yet). That’s slowly starting to change recently, as start-ups realize seniors are an active, vivacious and connected group deserving of the same empowering, aspirational attention lauded on younger consumers. Millennials and baby boomers increasingly mirror one another in adopting healthy lifestyle habits, and you’re seeing this play out with new startups.
Glanbia Performance Nutrition is in the free fall portion of the bungee jump, but will the strategic transformation cord catch it before it’s too late? Glanbia plc (LON:GLB) is a global nutrition company that's comprised of two wholly-owned segments; Glanbia Nutritionals and Glanbia Performance Nutrition. For this podcast episode, I'll mainly focus on the latter, which comprises of various nutritional supplement and sports nutrition brands. By diving into the recent earnings report, earnings conference call, and presentation slides, I'll update you on how the Glanbia Performance Nutrition portfolio is performing against the complex operating environment. Additionally, I will discuss how the Glanbia Performance Nutrition transformation project is progressing against the original goals and timeline. Finally, Glanbia's progressively stronger balance sheet is setting up for them to add another acquisition in the near-term, so I suggest several functional CPG brands to the Glanbia leadership team should consider for M&A activity.
Can you imagine living without frozen pizza, potato chips, ice cream or Tennessee whiskey? Fact is, these CPG food and beverage staples and many more would likely not exist today in their current iteration if it wasn’t for the innovative and inventive minds of Black Americans throughout history. Every year I grow older (and hopefully a bit wiser), I’ve found it increasingly important to study the American history that wasn't taught in traditional school curriculum. History is an academic subject, but the "history of history" is actually rooted deep in marketing strategy. It’s critical that we all realize that before the greatest marketers sold consumer packaged goods, they sold subjective observations that eventually became objective truths. This piece of content was adapted from an article I wrote for my client OneSpace (read here - https://www.onespace.com/blog/2020/09/10-black-americans-who-have-shaped-the-cpg-industry/). It includes additional historically prominent Black Americans that impacted the CPG industry which can further your educational journey.
Once an epicenter of the suburban lifestyle, the purpose and importance of shopping malls have slowly faded way. The “fall of the mall” or more broadly the “retail apocalypse” was happening long before the pandemic started, but things accelerated over the last twelve months as consumers stayed inside. In the coming years, hundreds of America’s roughly 1,100 malls are expected to shutter. The reasons for this include specialty retail bankruptcies making shopping centers boring, anchor department stores fallen out of consumer favor, and e-commerce became increasingly more convenient. This has caused an influx of vacancies that has made the shopping mall's economics increasingly unsustainable. All that being said, these malls still have value, but it just takes property owners to be innovative or history buffs that understand the vision Victor Gruen had for the Southdale Center, as they look for new uses of their dying malls.
Dr. Seuss famously said “why fit in when you were born to stand out”, so it’s only natural consumers would want CPG products as customizable as their individual uniqueness. Mass customization has been the “next big thing” in CPG product strategy for a very long time. Problem is, the CPG industry isn't there yet, but that doesn't mean brands can't creatively find ways to integrate customization elements now. Trends are changing faster than ever before, as consumers share their tastes, preferences and individualism with the world online. That has bled into the functional CPG categories, as personalized nutrition heats up and customized nutrition is growing more mainstream. Those that succeed will be the ones who have laid out their customization strategies clearly and build simple, executable models from manufacturer to customer. To drive home the creative mass customization layers available today, I provide a "case study" on the brand Gainful.
This is the fiftieth anniversary of the very first cereal to be born out of a licensing agreement. The unique-at-the-time agreement between Post Holdings and the Flintstones owner created a cereal brand named after Fred and Wilma Flintstone’s daughter Pebbles. What does this have to do with the legacy sports nutrition brand Dymatize Nutrition? I'll utilize the recent BellRing Brands (BRBR) 2021 fiscal year Q1 financial reports and publicly-disclosed news as the backdrop to discuss what that information could mean to the overall active nutrition market in the liquids, powders, and bars formats. I’ll be again diving deeper into the Premier Protein brand that makes up 84% of the portfolio’s total revenue, but I’ll also provide more commentary than normal on the Dymatize Nutrition brand because of it's recent growth turnaround story. A big driver for this success in large retail channels could be attributed to the “Pebbles Effect”, as the Fruity Pebbles and Cocoa Pebbles Dymatize protein powder has been a major bright spot of the legacy sports nutrition brand. The recent growth of Dymatize allows Bellring Brands leadership to shift M&A focus from “must have” to “nice to have” in the short-term, thus giving them time to find the right targets. Only time will tell how this plays out, but Bellring Brands will certainly be an interesting name to pay close attention to in the near-term.
SPACalicious definition make them CPG investors go crazy…it’s hot, hot! Fergie probably never envisioned a world where her song would be used to describe the insane SPAC trend, but I also never expected to hear a rendition of the national anthem like she did at the 2018 NBA All-Star Game, so I think we are even. On the real, SPACs were all the craze in 2020, and it hasn't slowed down in 2021. For those that are scratching their heads at what a SPAC is, it’s an acronym that stands for "special purpose acquisition company" and it essentially flips the traditional IPO process on its head. SPAC launches quadrupled in 2020, reaching almost 250 total. Now, finally SPACs are starting to heat up in the CPG industry, but you might be surprised to know there's a history that dates back to 2016. Time will tell how disruptive the SPACilious trend ends up being to the CPG industry, but it definitely has the industry on skates right now trying to adjust to this new variable.
Just another celebrity trying to productize his/her name in the CPG industry, right? Old-School CPG pundits are always quick to hate on celebrity founders. Fact is, when these A-List celebrities are authentically engaged in the business-building process, it can be the signal that cuts through the noise, even in the most competitive industries in the world. Dwayne 'The Rock' Johnson was recently named Most Likable Person in the World and has a top-3 most followed Instagram account, but he also has cultivated the image of being a savvy businessman. From VOSS Water to Teremana Tequila, and now ZOA Energy, The Rock has has proven his distribution power to sell beverages is successful.
The Kardashian’s can sell anything, right? What about nutritional supplements? Acknowledge it or not, the Kardashians are disruptive figures in today’s pop culture scene. Googling the “Kardashian Effect” you’ll get a number of different definitions, but maybe the most widely used comes from urban dictionary that states it’s the ability for a public figure who has absolutely no contribution to society to spin his/her fame into an asset and able to cash in. To be fair, I actually disagree with the definition through the lens of today because they have contributed a lot to society. They might have been “famous for being famous” in the 2000s, but in the 2010/20s they became a cultural force to be reckoned with. The main contribution I want to focus on is how the Kardashians utilized social media to further fuel and monetize their growing personal brands. That being said, this piece of content explores my curiosity in just how the “Kardashian Effect” relates to the supplement industry.
You've got to keep reinventing. You'll have new competitors. You'll have new customers all around you. The U.S. energy drinks market is arguably the most competitive beverage sub-category. It reached ~$15B in 2020 and sustained its high-single-digits growth rate, despite the “COVID-19 Effect” basically slowing consumer mobility to a crawl, essentially cutting off the #1 sales channel for energy drinks with fuel and convenience retailing.
Monster Beverage is the #2 brand in the market, behind Red Bull, and has held that position for pretty much all of the 2000s. That being said, complacency is the worst thing you can do within the energy drinks market and brands like Bang Energy showed Monster Beverage exactly what could happen if you are left sleeping at the wheel.
So, why is the 2021 strategy that was unveiled during the annual shareholder’s meeting making me feel blah?
By pure financial metrics, Glanbia would have the “All Valley Karate” championship in the bag, but don’t underestimate the Crane Kick from The Hut Group (THG). In fact, Glanbia and its Glanbia Performance Nutrition division are basically double the size of THG and its Nutrition segment that houses the MyProtein brand. This podcast episode will explore the historical strengths of Glanbia and THG, but more importantly discuss how Glanbia's weaknesses are The Hut Group's strengths. THG also recently acquired two companies that signal an additional strategy that should make Glanbia increasingly nervous. Only time will tell how this battle ends, but don’t let comparative revenue today alone fool you into thinking Glanbia cannot lose in the near future to The Hut Group.
How is the American economy doing? According to the Federal Reserve’s latest Beige Book, prospect of COVID-19 vaccines has bolstered business optimism for 2021 growth, but what about the CPG industry specifically? The Beige Book is a Federal Reserve System publication that collects mostly qualitative information, gathered directly from District sources. This consumer data creates an opportunity to characterize dynamics and identify emerging trends in the economy that may not be readily apparent in the available quantitative economic data. Additionally, most CPG businesses today are offered nationally through e-commerce or large brick and mortar retail chains, so it’s important to understand that America is not a one-size-fits-all economy, especially during the coronavirus. Because of that, the Beige Book can potentially help you with regional insights that can be applied to create advantages in your business. To save you time from reading the whole document that comes out every 45 days, I started a content series that takes five CPG industry related highlights that I found most insightful from the latest Beige Book, such as what the vaccine rollout means to CPG brands, empty shopping malls, ecommerce continuing to grow, and food prices rising that will likely result in increased inflation throughout 2021. On CPG industry Beige Book Vol.5, I also provided some additional bonus quantitative December retail data that came from the U.S. Census Bureau.
After giving it a lot of thought, Lebron James has decided to take his talents to Purchase, NY (PepsiCo Headquarters). Since his rookie year in 2003, Lebron James has had a sponsorship agreement with The Coca-Cola Company. You've seen him on countless Sprite and Powerade commercials throughout their deal together. That contract ended September of last year, effectively making the second highest paid athlete endorser a free agent. While Lebron James could have followed other celebrities, such as Dwayne "The Rock Johnson, into beverage entrepreneurship, he decided to sign an endorsement contract with PepsiCo to be the face of its new Mountain Dew energy drink sub-brand called Rise Energy. This move further sparks a feud between beverage portfolio giants that is now focused on the energy drinks category. What will The Coca-Cola Company do to respond to the recent PepsiCo moves in this beverage sub-category? We will explore that and more in this latest Consumed podcast episode.
GNC and The Vitamin Shoppe had a wild ride in 2020, but did either stay on the bull long enough to get a score?
- GNC and The Vitamin Shoppe are both specialty retailers with an emphasis on brick & mortar locations
- GNC and The Vitamin Shoppe both sell health and wellness products
- GNC and The Vitamin Shoppe both faced challenging COVID-19 business environments
Yet, GNC and The Vitamin Shoppe came out of 2020 with two very different trajectories for their prospective businesses. In this podcast episode, I’ll provide a "Year in Review" for both GNC and The Vitamin Shoppe that should provide an important recap for anyone that is considering either specialty retailer within their sales channel strategies going forward.
This podcast episode breaks down of the 2021Q1 Simply Good Foods Company (NASDAQ: SMPL) earnings report, earnings call, and supplemental presentations that were filed on 1/6/2021. Those public financial documents will be used as the backdrop to provide broad health and fitness snacking market insights that will be valuable to you. Quest Nutrition and Atkins Nutritionals each continued to have a mixed bag of performance at the product category level, including protein bars and nutritional bars performing worse on a YoY basis (though they outperformed the market average). It begs the question if it's time for The Simply Good Foods Company to become more snackier or should they patiently wait for pre-pandemic mega trends to strengthen again? Despite the challenges, Quest Nutrition had its best revenue creating quarter under the new ownership of The Simply Good Foods Company and I believe company history at ~$96 million. Finally, I explain if the Simply Good Foods Company will be acquired by a larger CPG company or they will be the one making an M&A transaction. I also cover five potential names that the Simply Good Foods Company could be looking at closely in the market.
Welcome to the 2nd annual J. Schall Consulting year-end awards show that focuses on the "better for you" CPG product category, along with the grocery, brick and mortar, and internet retailers. This is the pinnacle of award shows that are light on tradition, peppered with randomness, and heavy handed with personal bias. While the awards categories were selected at random, the winners were thoughtfully considered and I provide my accompanying logic to make the content more insightful.
A few of the awards categories include: ◼️ Best Better for You CPG Acquisition by CPG Competitor ◼️ Best Grocery Retailer ◼️ Best Retail CEO ◼️ Best New Better For You CPG Beverage
What happens when a bunch of brotato chips circle around the 5 pound protein powder container and start making sports nutrition industry event predictions? This episode is basically the personification of that imaginary scenario. So, what do I see as 5 outlandish events that I could happen within the sports nutrition industry in 2021?
- The Simply Good Foods Company (NASDAQ: SMPL) Eats or Gets Eaten
- FDA Will Not Finalize Regulatory Framework for CBD to be included in Food, Beverage, or Nutritional Supplements
- Nutrabolt Will Make an Acquisition
- Glanbia (OTCMKTS: GLAPF) will Finally Divest a Performance Nutrition Brand
- Dwayne "The Rock" Johnson Launches or Partners to Launch a Line of Supplements
- Bonus Hail Mary - Alani Nu Gets Acquired
Happy New Years! Now that the celebrating is over and you’ve told everyone on social media how this will be your year…reality is setting in, right? Well don’t fret because I’m here to help you actually make that statement come true. I’ve always been a goal-oriented person and can vividly remember writing up little goals for my lemonade stand or trading card collection when I was a young kid. I never had any formalized method of goal setting until 2009 when I was getting ready to finish up my last semester of graduate school. I remember reading an article where some expert talked about goals, and the systems to achieve them. It seemed logical to an MBA student, so I decided to "steal" its basics and apply it to what I had been already doing informally.
While I don’t particularly think my yearly goal setting is anything fancy and it's not full of technological hacks or mindset tricks, it has worked immensely well for me because it’s rooted in simplicity and focuses on creating impactful results. I will share my simple step by step goal setting process, but also reveal a few of my 2021 goals in each category; Professional, Personal, and Learning.
I'm not one to look back and congratulate myself on any accomplishments, but I figured why not keep with the tradition I started on YouTube in 2018 of being transparent and recapping my performance throughout the year. Firstly, I would like to thank everyone for making this my most impactful year as a professional. The stuff I’ve been barking about publicly the last few years seemed to have come into favor even more than ever, as the world became engulfed in uncertainty and there was elevated risk was at every turn.
For those that trusted me by giving me some of your attention, I’m humbled and I don’t take that for granted, as I know it’s the most valuable thing you own. For those that took it a step further and not only consumed, but also implemented something from my content into your business that worked out positively, where can I send the invoice? Just kidding...but, thank you to those that have messaged me privately saying something from XYZ piece of content helped you in 2020.
For my clients, this was a wild ride that many of us will not forget anytime soon. You trusted me and I left it all out on the playing field for you this year. Finally, along with the performance recap of J. Schall Consulting and my personal brand, I also mention a few things I learned about myself over 2020.
As for my 2021 goals...you'll have to watch sure to listen to next episode where I outline some of those and also walk you through how I've done my yearly goal setting for the last 12 years.
After one of the most transformational years in recent history, I figured I would continue my fool’s game of trying to predict the future. What do I see being the Top 5 Retail Industry Predictions in 2021?
In no particular order;
- Grocery Stores and Farms Converge
- Facebook Acquires Patreon
- Amazon "Other Revenue" Reaches $10 Billion in a Quarter
- Facebook and Uber Form Strategic Partnership
- Costco "Bends the Knee" to Ecommerce
Which is bigger? Dan Bilzerian’s Instagram follower count or Ignite International Brands revenue since its founding in 2017? With dropping YoY revenue and bloated historical operating expenses, I'll explore what's below the surface of the internet personality's premium lifestyle brand. While Dan Bilzerian is a central figure throughout the video (for obvious reasons), I’ll spare you most of the personal details around him because my channel focused on business insights gained from storytelling...and IGNITE International Brands makes for a great story.
I'll bring up key factors, including;
- Operating Model Distractions
- Leadership Turnover
- Blurred Lines of Spending
- Influencer Marketing 101
- Key Man Risk
- "COVID-19 Effect" Fallacy
It’s fairly clear to see Ignite International Brands Ltd. is nearing breaking point without further radical change, but I don’t want this content to be seen as just another negative Dan Bilzerian piece because I honestly wish his company well and hope to see the right changes put in place to make the company successful.
Based on the popularity of this trend prediction video from the last two years, I decided to again put my reputation on the line and try and predict the Top 5 Sports Nutrition Industry Trends in 2021. If you're interested how I did in my 2019 and 2020 predictions, I made a recent Instagram post recapping my performance - https://www.instagram.com/joshua_schall/
In no particular order, here are my prediction for Top 5 Sports Nutrition Industry Trends in 2021;
- Don't Go Chasing Trends
- Commercialized Vibes
- Linear Commerce Explodes
- Athlete Inclusivity
- Convenience Biohacking
On this Pivotal interview-style episode, we talk with Jess Windell, Founder & CEO of Maven Consulting Co., about the real value of strategic public relations in the CPG industry. Jess shares how she pivoted from advertising to public relations early in her academic career and why she's made it her life's work. We also talk about why she chose this year as the perfect time to become a first-time entrepreneur. Additionally, we talked about her 6 years at Perfect Snacks (Perfect Bar) and how public relations and communication strategy helped the functional food company get acquired by Mondelez International in mid-2019. Many people have misconceptions about public relations or earned media and we breakdown some of the dated views. Finally, Jess shared some of her favorite public relations strategies and tactics for emerging CPG brands.
Based on the popularity of this trend prediction video from the last two years, I decided to again put my reputation on the line and try and predict the Top 5 Functional Food and Beverage Product Trends for the upcoming year. If you're interested how I did in my 2019 and 2020 predictions, I made a recent Instagram post recapping my performance.
In no particular order, here are my prediction for Top 5 Functional Food and Beverage Product Trends in 2021;
- Burnout Syndrome
- Kids Off Limits No More
- Mushrooms Have a Magic Year
- Niche Plant-Based Proteins PEAk Out of the Shadows
- Immunity for Everyone
On this episode of the Pivotal interview-style series, we talk with Sean Folkson, Founder & CEO of Nightfood Holdings Inc. (OTCMKTS:NGTF), about how his love for EAS Myoplex bars and following the Body for Life diet by Bill Phillips created curiosity for the "better for you" nighttime snacking category. This is partly why Nightfood initially started with nutritional bars before pivoting to sleep friendly ice cream in 2018. While this shift to the ice cream category of CPG might seem easy on paper, it comes with massive challenges that include cold-chain distribution and expensive limited real estate in food retailers. That being said, Nightfood ice cream seeks to standout in the coolers from major competitors by focusing on functional elements targeted towards sleep and relaxation value propositions. Nightfood also has done a great job at building strategic partnerships with the American Pregnancy Association and Papa John's by leveraging the pickle flavored ice cream Pickles For Two. Finally, Sean and I discuss the sleep and relaxation functional food and beverage trend in greater depths and explain why its still in the early stages of a captivating secular growth story in the CPG industry.
On this episode of the Pivotal interview-style series, we talk with Jared Strain, Co-Founder & Partner of the strategic digital brand agency Super Top Secret (STS), about how his involvement in sub-cultures throughout his life has created a unique perspective for top-level creative and design output. We also talked about how the "COVID-19 Effect" accelerated some creative trends in 2020. Additionally, how CPG packaging has changed as its optimized for ecommerce, but also how the importance of that design hasn't diminished in the overall consumer journey. We leaned forward to talk about design trends in 2021 that place importance on authenticity and having a sound voice, tone, and message to your CPG brand. Finally, we talked about how Gen Z and younger Millennial consumers are considering themselves personal brands and what that means to consumer brands in the future.
We are coming to the end of 2020, which gives us a perfect reason to reflect over the past year. Over the next few weeks, I will be sprinkling in some "Top 5 Lists" of different functional "better for you" CPG and FMCG topics that will be insightful, valuable, and/or just plain entertainment. In this first "Top 5 List" video of the year-end season, I cover my biggest sports nutrition brand winners of 2020.
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5 - Outright Bar
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4 - MyProtein
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3 - Redcon1
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2 - Alani Nu
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1 - GHOST Lifestyle
- Honorable Mentions - 1st Phorm, NutraBio, Glaxon, and HUM Nutrition
On this episode of the Pivotal interview-style series, we talk with Ben Hartman, Founder & CEO of Morphogen Nutrition, about how he has been able to double his brand's revenue year after year by always staying true to himself. Ben and I have known each other for around 15 years, as we both went to Kent State University and worked at the rec center together. We also both started out at the ground level in the sports nutrition industry at the same time and would frequently pair up during sampling demos at the same retail stores. Flash forward many years later and Ben Hartman has successfully built Morphogen Nutrition by bootstrapping it at every step of the way and never compromising on that vision of launching premium high-quality products that he knew consumers would appreciate at a price that was always fair. While many might have heard of Ben Hartman in the last 1-2 years and thought he was this overnight success, you'll hear him share stories about how building his business has been a slow process that has been rewarding past his wildest vision.
I consume more content weekly than total varieties of crafts you can create from just utilizing Heineken packaging materials. While not all of the content is good, some are awesomely interesting, so instead of keeping it all in the labyrinth they call my brain, I figured I would start highlighting five of the most interesting things I've read, listened to, or watched during the week.
Within this sixth episode you'll hear about; ◼️ Heineken, Dos Equis, and Tecate Put the Craft in Craft Beer ◼️ Don’t Stress, Pepsi Got Everything You Need to Relax ◼️ Campbell’s Soup Isn’t Letting Cancel Culture Get Snow Days Too ◼️ E.l.f. Cosmetics Enters the Untapped Gaming Streaming Market ◼️ Cellular Meat Gets Its First Approval in Singapore
How is the American economy doing? According to the Federal Reserve’s latest Beige Book, economic expansion has been moderate and optimism is waning, but what about the CPG industry specifically?
The Beige Book is a Federal Reserve System publication that collects mostly qualitative information, gathered directly from District sources. This consumer data creates an opportunity to characterize dynamics and identify emerging trends in the economy that may not be readily apparent in the available quantitative economic data. Additionally, most CPG businesses today are offered nationally through e-commerce or large brick and mortar retail chains, so it’s important to understand that America is not a one-size-fits-all economy, especially during the coronavirus.
Because of that, the Beige Book can potentially help you with regional insights that can be applied to create advantages in your business. To save you time from reading the whole document that comes out every 45 days, I started a content series that takes five CPG industry related highlights that I found most insightful from the latest Beige Book, such as indications of out of stocks in grocery stores again and e-commerce continues to see pressure on the logistics side around holiday shopping, with the goal of sharing it along with some additional commentary on how it could potentially impact you.
On Vol.4 of the CPG industry Beige Book, I also wanted provided some additional bonus quantitative private industry data on the 2020 Thanksgiving, Black Friday, and Cyber Monday Digital Sales performance from Adobe Analytics and Salesforce.
When you have a proven content and commerce mechanism that does $1B+ in revenues, you build an iterative second version, right? What does that have to do with the breaking news that the sports nutrition brand that Lebron James and Arnold Schwarzenegger founded named Ladder was just acquired by Openfit? Openfit is a wholly-owned subsidiary of Beachbody, the multi-level marketing company known for fitness programs like P90x and Insanity. Openfit is Beachbody repositioned within a different segment of the market. Beachbody is the creator and owner of the line of supplements called Shakeology. With the acquisition of Ladder, Openfit seems poised to replicate the workout and supplement combination of Beachbody and Shakeology, which I believe will be highly successful in helping Ladder become the sports nutrition brand it had aspirations to become found it launched in 2018.
In this latest podcast episode, I'll breakdown the most important key quarter-end financial data from the recent MusclePharm Corporation (MSLP) 2020Q1 through 2020Q3 earnings reports that were released on 11/24/2020. I'll explain why the sports nutrition brand filed a clustering of quarterly financial reports again (Note: they are not caught up to SEC disclosure requirements). Additionally, I'll update you on MusclePharm important events through a collection of publicly-disclosed news and cover a variety of risk footnotes that were in the latest set of 10-Q filings. Finally, I'll answer the cliffhanger question from the previous piece of content surrounding if MusclePharm would finally reach its goal of being profitable in 2020.
On this episode of my Pivotal "interview series", I chat with Robert Oliver, Founder & CEO of The Genius Brand, about how he saw early the power of using an Amazon strategy to build up his extremely successful supplement brand. Robert shares about how he got started working on the Amazon platform and why he launched The Genius Brand. Additionally, we talk about how unique The Genius Brand is on the Amazon platform when it launched and how that's now providing some massive value against the onslaught of Amazon private label supplement sellers. Finally, Robert Oliver also breaks down why he's been successful in 2020 with his ability to apply learnings from Nassim Taleb.
Premier Protein is once again ringing the sales bell after it rebounds from its first slip up as a publicly-traded company last quarter. Premier Protein is the key holding of the BellRing Brands (BRBR) portfolio that owns a collection of Active Nutrition businesses that also includes Dymatize Nutrition, Powerbar, Joint Juice, and Supreme Nutrition. A fast-paced and busy lifestyle is pushing consumers to switch to quick and healthy meal options. This has resulted in the increased household penetration of RTD protein shakes that promote active lifestyles. I'll utilize the recent quarterly earnings report and conference call for BellRing Brands to update you on the growth of the portfolio's largest consumer brand Premier Protein. Additionally, I'll breakdown how the RTD protein beverage category, active nutrition powders, and protein bar formats are performing in the challenging retail environment stemming from COVID-19. I'll also share some news surrounding Dymatize Nutrition being consolidated and the closure of the Dallas facility. Finally, I breakdown the BellRing Brands 2021 outlook and explain why I believe M&A activity will be in their near-term future.
I’m excited to hit you with the fifth episode of this new content series, and since the Thanksgiving holiday is fast approaching, I wanted to thank each of those in my community that have consumed any of the previous episodes. This week, I had a number of content pieces make me stop the infinite scroll, including some with a Thanksgiving theme.
On this episode you'll hear about; ◼️ The "Most 2020" Thanksgiving Main Dish ◼️ How you can get Thanksgiving Insurance ◼️ A Metaverse will Become Publicly-Traded Soon ◼️ Bang Energy Fires PepsiCo ◼️ Oreo Takes Inspiration from Nike
How is the largest nutrition company in the world performing against a global pandemic that severely interrupts the value of their distribution strategy? The Herbalife Nutrition multi-level marketing (MLM) structure relies a great deal on a distribution model that brings value through; (1) Frequent Interaction (2) Results Shared To Customers (3) Personal connection with customers (4) Hyper-localization (5) Brick & Mortar community done mostly through what they call nutrition clubs. Theoretically, that should be severely interrupted by the “COVID-19 Effect” where face-to-face interactions, physical shopping and communities are being replaced by digital interactions, ecommerce, and isolation. This is where business theory and actual business results diverge in the anomaly that is Herbalife Nutrition. That’s because they just achieved another record net sales quarter and this growth was broad-based globally, as three of our six regions (including North America), along with 24 countries, set new quarterly net sales records. This is all pretty astounding, which begs the question of how they are doing it?
Today’s social media platforms and digital marketplaces don’t have walls or borders, but how does that affect your functional CPG brand? With a few clicks of your mouse, you can fire up your functional CPG brand’s multinational marketing and retail distribution. It's really crazy how fast and easy things can be done in 2020. Despite uncertain global markets, entrepreneurship is still in the middle of the golden era because of the growing importance of ecommerce and social media.
That all being said, one thing that has been reinforced during the "COVID-19 Effect" is that functional CPG business owners were reminded there isn't and shouldn't be a "one size fits all" approach to business domestically or multi-nationally! Being a multinational functional CPG shouldn’t mean you seek global parity. Instead, functional CPG brands should have a global template, but with local adaptations. The fancy business school jargon for this is Glocalization and it's exactly what successful functional CPG brands must do as the world becomes one, but also more fragmented. It’s a complex strategy to pull off, but if executed properly the rewards are immensely valuable.
I'll use the Celsius Holdings (CELH) 2020Q3 earnings report and conference call (released on 11/12/20), as the backdrop to talk about bigger functional energy drink categorical and strategic insights. Key points within the content includes; retail and DSD distribution increases, digital sales details with Amazon highlights, and other positive insights that show you why Celsius Holdings broke just about every internal record in the company's history this quarter. Celsius energy drinks are heating up in the market, even with resistance within some of its historically strong sales channels. That being said, the company is transforming itself from a niche energy drink brand into a real viable mainstream player that should pick up incremental trialing in the fickle beverage category as it gains ACV across major channels. I still think Celsius is in prime position to be sold in the coming 12-18 months, but current aggressive stock prices have pushed the market cap above $2B making the deal expensive.
Did you miss not having my most interesting list to listen too last week? I decided to not compete with the craziness that is called the American Election Day or I guess week or maybe month, who the heck knows really this year.
Regardless, I’m excited to hit you with another episode because I had a number of content pieces make me stop the infinite scroll this week that I believe you’ll enjoy hearing about. On this episode you'll hear about; ◼️ Mountain Dew is Getting Spicy ◼️ Is Veblen a Species of Allbirds? ◼️ When the McDonald’s “Mc” Prefix Comes Out You Know They Mean Business ◼️ Amazon wants to replace your Office Manager with its new Dash Smart Shelf ◼️ Lululemon is Making Mirror More Competitive
This episode of Pivotal, we talk with Frank Beard, Director of Special Projects at CStore Decisions and Director at Shop Safe, about the huge changes happening within the convenience sales channel. Frank Beard broke onto the convenience and fuel retailing thought leadership scene by traveling across the country and only eating at convenience stores for 30 days. We discuss how COVID-19 has affected convenience and fuel retailing and why those trends are only a dress rehearsal for the future. Finally, we expand on the future of c-stores by discussing third-party delivery start-ups like goPuff, Instacart, and DoorDash, channel consolidation, CPG direct to consumer, and many more insightful topics that you won't want to me.
Frank Beard Articles :
- https://cstoredecisions.com/2020/09/29/is-covid-19-a-dress-rehearsal/
- https://cstoredecisions.com/2020/11/02/preparing-for-post-pandemic-headwinds/
The Vitamin Shoppe 2020Q3 earnings report was released on 11/4/2020 under its owner Franchise Group Inc.. While the financial information in the report continues to be relatively small, I was able to collect insightful information on the quarterly performance from the Franchise Group Inc. conference call, previous corporate press releases, and public interviews from CEO Sharon Leite and other leadership team members at the specialty supplement retailer. Additionally, I shared some sports nutrition category trend data from a presentation that Jack Gayton (head merchandiser of category at The Vitamin Shoppe) provided at the AHPA Virtual Sports Nutrition Congress. I also update you on how much benefit The Vitamin Shoppe is seeing from the GNC Chapter 11 bankruptcy filing. Finally, I talk about my previously predicted operating model change to franchising at The Vitamin Shoppe that was finally formally announced by Franchise Group CEO Brian Kahn.
Pivotal is an interview-style segment that tackles topics in consumer packaged goods (CPG) and fast moving consumer goods (FMCG) from the business leaders that live it EVERY DAY! On this episode, we talk with Leonard Armenta, CEO of SINFIT Nutrition and Secret Javas, about his new leadership role within GenTech Holdings Inc.. Before diving fully into that, we get nostalgic about how we both met and how that eventually led me to move to Denver and work with him at MusclePharm. Now leading the functional CPG brands SINFIT Nutrition and Secret Javas coffee, Leonard explains the progression of the brand strategy and positioning for future growth plans. Finally, Leonard discusses what could be next for the GenTech Holdings Inc. portfolio and why Leonard believes they have an extremely bright future.
Glanbia is a global nutrition company that owns various nutritional supplement and sports nutrition brands. These brands include names like Optimum Nutrition, BSN, Think!, Isopure, Amazing Grass, and Slim Fast. Using the recently filed Glanbia earnings report and supplemental earnings call and presentation slides, I'll update you on how the Glanbia Performance Nutrition portfolio is performing against the complex global operating environment. Additionally, I'll discuss how the Glanbia Performance Nutrition transformation project is progressing against its original goals and timeline. Finally, I'll cover how the progressively stronger Glanbia balance sheet is setting up for the company to likely add another acquisition in the near-term. (Note: I suggest a few functional CPG brands for Glanbia Performance Nutrition leadership at the end of the episode.)
I consume more content weekly than the total creepiness level of the Burger King Mascot. While not all of the content it's good, some are awesomely interesting, so instead of keeping it all in the labyrinth they call my brain, I figured I would start highlighting five of the most interesting things I've read, listened to, or watched during the week.
In the third Weekly MIT episode, I share the following stories;
◼️ Notorious B.I.G. Drops a New Freestyle About Pepsi
◼️ Burger King Pranks Competitors on Halloween
◼️ Nestle Adds Key Piece to Becoming the Personalized Health Leader
◼️ Nielsen Shares Food and Beverage Category Winners and Losers From 31 weeks of the Coronavirus Pandemic
◼️ KIND Keeps the “Battle of the Bars” Going With CLIF
Pivotal is an interview-style segment that tackles topics in consumer packaged goods (CPG) and fast moving consumer goods (FMCG) from the business leaders that live it EVERY DAY! On this episode, we talk to Diana Morgan, Head of Scientific & Regulatory Affairs at Care/Of, about the fascinating world of personalized nutrition. We dive into the current state of personalized nutrition, differences in personalized nutrition companies, and what the future holds for the nascent disruptive force in the supplement industry. While companies selling supplements based on testing and surveying methods is still relatively small, the Nutrition Business Journal (NBJ) predicts it will hit an astonishing $4.3 billion, representing 6.4% of all supplement sales by 2023. This phenomenal growth rate is driven not just by new entrants, but by the fact that the potential of this market has captured the attention of large companies with extensive resources, such as Care/Of (now owned by Bayer) and Persona (now owned by Nestle). Finally, we reminisce to a simpler time when networking in the supplement industry could be done in-person, as Diana has launched a new event called "What's Up With Supps".
With over 50% of The Simply Good Foods Company’s revenue coming from the nutritional/protein bar category, the race is on to further diversify its product mix due to near-term headwinds. On 10/26/2020, The Simply Good Foods Company reported its fiscal fourth quarter earnings for the period ending 8/29/2020. While the company performed well overall, it was a mixed bag with brand-level performance. The biggest bright spot was in the Quest Nutrition brand, that had the best revenue creating quarter under the new ownership of The Simply Good Foods Company. That being said, retail takeaways of both brands could be signaling some tough roads ahead for the overall active nutrition snacking category. I'll finish the episode with covering the five most important areas of focus for The Simply Good Foods Company right now...including bonus commentary on future M&A.
How is the American economy doing? According to the Federal Reserve’s latest Beige Book, optimism and positivity across districts is balanced against degrees of uncertainty, but what about the CPG industry specifically?
The Beige Book is a Federal Reserve System publication that collects mostly qualitative information, gathered directly from District sources. This consumer data creates an opportunity to characterize dynamics and identify emerging trends in the economy that may not be readily apparent in the available quantitative economic data. Additionally, most CPG businesses today are offered nationally through e-commerce or large brick and mortar retail chains, so it’s important to understand that America is not a one-size-fits-all economy, especially during the coronavirus.
Because of that, the Beige Book can potentially help you with regional insights that can be applied to create advantages in your business. To save you time from reading the whole document that comes out every 45 days, I started a content series that takes five CPG industry related highlights that I found most insightful from the latest Beige Book and share it with you guys…along with some additional commentary on how it could potentially impact you.
On this episode, I also wanted to share some additional quantitative government data on September 2020 Retail Sales from the Census Bureau.
I consume more content weekly than Joey Chestnut consumes hot dogs at the annual Nathan's Famous Fourth of July Hot Dog Eating Contest. While not all of it's good, some are awesomely interesting, so instead of keeping it all in the labyrinth they call my brain, I figured I would start highlighting five of the most interesting things I've read, listened to, or watched during the week. In the second Weekly MIT episode, I share the following stories; ◼️ Cryptocurrencies Just Became Besties with PayPal’s 346M Users ◼️ Hormel Foods Solves Your Hot Stinky Mask Breath Problem ◼️ Walmart Crushes Local Smoothie Artists' Dreams ◼️ Danone Tests Old Adage of “If you measure it, it will improve” ◼️ Adidas is Social Distancing Itself from Reebok
Building a great functional CPG company today requires more strategic alignment than strategic vision. While all the strategic variables can easily be found throughout the coffers of the Age of Information, understanding how each is aligned together is what makes the magic happen over a materially long period of time. I could probably make a 12-week course on the importance of strategic alignment in the functional CPG industry today, but for this piece of content I want to focus on one extremely important area...Channel Strategy. This is an area that I see functional CPG entrepreneurs miss on way too much lately and it’s likely because they haven’t considered its increased importance in the last half-decade.
The functional CPG industry of yesteryear generally focused on building their business through specialty retail and they didn’t have to think about any further steps unless they struck gold and a large brick and mortar retailer was interested in carrying a few products. That isn’t the case today with functional CPG brands having endless distribution intensity models, including one strategy that has become extremely viable...Amazon only (or mostly defined as over 80% of business).
Why does it matter that you can build 8-figure functional CPG businesses on Amazon only today? It becomes extremely attractive to lean heavy into Amazon for your channel strategy, but the entrepreneur must make that conscious choice early in the brand development to align all business strategy accordingly. My hope for this piece of content is that it can serve as a sort of guide for functional CPG entrepreneurs considering their channel strategy comparing;
- Amazon only
- Multi-channel
Hi my name is Joshua Schall and I’m here to apply for the GNC’s newly open position for CEO. Wait GNC no longer has a CEO? If you are a bit confused, that’s OK because the news of Ken Martindale not being offered a position with the newly emerged from bankruptcy specialty retailer GNC wasn’t exactly front-page news. Instead, it was actually buried in some SEC reports that probably few people read for fun like me. So, with no current CEO to run the biggest specialty retailer in the VMS category, I figured why not publicly apply for it.
My strategic transformation plan will include; ◼️ Define Exactly Who GNC Is Today ◼️ Redefine Role GNC Has in Customer Journey ◼️ Reimagine the Frictionless Retailing Experience ◼️ Put Yourself Out of Business ◼️ Cut Every Bit of Available Fat.
Many of the things consistently blamed by GNC for its recent failures are external factors that cannot be changed by the retailer alone. They can only be adapted and strategized against to turn them into opportunities. What they can control is the omnichannel shopping experience they provide to customers. So, it comes down to defining "why should consumers unequivocally shop at GNC over the countless substitutes" and relentlessly be reevaluating that question regularly. The same problems that GNC is struggling with are being solved by businesses around them, so it’s time to take personal responsibility and do the hard work internally to make the retailer great again.
If think that is brash, you’ll be surprised to find out that this is actually the third time I’ve publicly applied for the open CEO position at GNC since I started creating regular content on the space 5-6 years ago. If you aren’t familiar with those pieces of content and interested in them, here are the links;
- Part 1 ➡️ https://bit.ly/3dFAn2R
- Part 2 ➡️ https://bit.ly/35dOBEn
I consume a Rocky Mountain 14er level of content weekly...some of it good and some of it bad. Instead of keeping it all in the labyrinth they call my brain, I figured I would start highlighting five of the most interesting things I've read, listened to, or watched during the week. In the first episode, I share the following stories;
◼️ Goya Foods Uppercuts Cancel Culture ◼️ Hipsters Rejoice Over Ability To Drink Weed and Keep Street Cred ◼️ Amazon breaks $10B in 48 Hours ◼️ Kraft Sends Noods and It Didn’t Go As Planned ◼️ Amazon Makes Me 15% Right on a Prediction
Walmart feels like the retail version of Rocky Balboa because every time you think they can’t overcome the odds, they seem to miraculously fight their way back. So, I guess if I’m going suggest Walmart is Rocky Balboa, I better define which retailer gets to be Ivan Drago is in the fourth edition of the epic movie series. I think the only logical choice would be Amazon (and they are enhanced with the “COVID-19” Effect” steroid). Amazon has been crushing its competition in arguably one of the most complex retailing environments in recent history, but as Rocky always says “life's not about how hard of a hit you can give... it's about how many you can take, and still keep moving forward.”
What you’ll notice when I’m breaking down some of their aggressive strategic moves is that Walmart took another piece of Rocky Balboa’s advice in “stop thinking the way other people think. You gotta think like you think” to be successful today. If Walmart can extend its brand promise to help people to save money and to live better in a way that means so much more than Amazon, it might just have a chance against its biggest rival.
What kind of milk to you drink? Whole, 2%, Skim, or do you not consume any traditional cow’s milk anymore? It wasn’t too long ago that this question would seem odd to ask. That's because Americans have historically drank a lot of fluid cow’s milk, but that’s not really the case anymore. Here lies the root of the problem for Dean Foods, the largest milk company in the United States, that filed for Chapter 11 bankruptcy in November 2019. It’s easy to spot consumption or sales data declines, but it’s a lot more difficult to understand the reasons why and ensure similar patterns become learning lessons for your business. The grocery stores are changing because consumers are changing, which creates this virtuous cycle that will only amplify over the coming years. Brands need to be constantly adapting within this market or they face becoming the next Dean Foods tragedy.
The “COVID-19 Effect” created health concerns to the highest levels I can remember in my lifetime and created economic hardships to the highest levels since the Great Depression. These will no doubt have major impacts on every aspect of the supplement industry for years to come. Fact is, this isn't a socioeconomic set-up that looks very appealing to most entrepreneurs, unless you operate within the supplement industry. These market dynamics created a defining moment for the supplement industry and I believe a meaningful sub-section of consumers realized the importance of preventive health, with many beginning or expanding their supplement regimens. Could it be that all this “bad” is actually “good” for the supplement industry?
Race to the bottom this, race to the bottom that. Listen to a group of active nutrition CPG industry professionals long enough and eventually they will blame the race to the bottom as a main reason causing their assessment of the deterioration within the industry. But, is it really as bad as everyone seems to think it is?
While the “race to the bottom” has several meanings depending on its socio-economic context, the active nutrition CPG industry usually refers to this as the competitive situation stemming from the lowering of various barriers of entry causing brand proliferation that caused negative pricing pressure and product quality.
While I acknowledge the race to the bottom can have some negative effects on stakeholders, it also provides massive opportunities for those that can understand it. As functional CPG categories naturally bifurcate towards either end of the spectrum, it will leave anything in the middle being washed out in the market. As a brand, you need to pick a side and stay close to those extreme ends. Being positioned as an economical and commoditized brand can be extremely advantageous…when there is consumer demand and retail merchandising support.
So, what am I talking about, where is this all heading? Dollar Stores!
What does Spotify have to do with Kraft-Heinz? Before you guess, I’ll give you a hint, it has nothing to do with new remix of Nigerian dancehall recording artist Ketchup by DJ Mustard.
Odds are when you think about the music streaming and podcasting company Spotify, you don’t easily connect it with the almost 150-year-old CPG conglomerate The Kraft Heinz Company, the owner of iconic food and beverage CPG brands, including namesakes Kraft & Heinz, Oscar Meyer, Kool-Aid, Jell-O, Lunchables, Planters, and Maxwell House Coffee. In all, they own around 100 global brands that sell in more than 50 individual fragmented CPG product categories.
The problem lies in the fact that in recent years, CPG products have become increasingly harder to fit into a categorical silo. Within massive companies like The Kraft Heinz Company that creates problems when you are trying to allocate resources to manage each separate product category in the most effective and efficient way. So, what does this have to do with Spotify exactly? While Spotify likely doesn’t know the first thing about categorical differences in shelf-stable dressings and their refrigerated counterparts, they have faced a similar issue in their own business. Spotify brilliantly attacked this problem by taking the original content-based category approach, which are grouped by genres or language or geographical boundaries and changed it to context-based groupings. Will this also work for The Kraft Heinz Company?
Can you imagine running a company that’s so massive that you have a segment called “other” on your financial statements that will do more than $20 billion in revenue this year? For those wondering, that would make the “other company” aka Amazon’s Advertising business segment around the 150th biggest American company. At that size, its bigger than all of Kohl's, two Ebays, or three Simon Property Groups (the biggest mall retailer). It also makes them the third biggest digital advertising company behind Alphabet’s Google and Facebook. I don't know Jeff Bezos personally, but my assumption is he doesn’t wake up each morning and congratulate myself on being the third most powerful digital advertiser, so as funny as it might seem to ask a $20 billion segment that is growing 45% YoY…what’s could be next for Amazon’s Advertising Segment?
A common question I get asked by supplement brand owners is if third-party certifications are worth the investment? While my answer differs depending on the brand’s nuisance, I always mention one prediction that has marketing bending potential. What is this market bending potential and how likely will it happen? The answer to the latter part of that question might surprise you just how far along it already is...
Every industry has its behemoths. In packaged non-alcoholic beverages, it’s really a head to head battle between The Coca-Cola Company and PepsiCo, but this isn’t a piece of content about the war between Red & Blue. It’s a piece of content about when any of the CPG industry behemoths enter a nascent functional category through internal product development of new offerings. Should this be seen as a net-positive or net-negative?
The inspiration of this content came from the recent announcement that PepsiCo was launching a functional packaged beverage called Driftwell. This functional beverage would specifically be considered a relaxation beverage, which is a small segment in the overall functional water beverage category worth $2.97 billion in the U.S., that is anticipated to grow 5% this year. That small market size is what makes this launch so intriguing because it could have lasting implications on the nascent functional beverage category for years to come.
In today’s dynamic interconnected economy, it only takes playing the business version of the game six degrees of Kevin Bacon to know that huge shifts in one area, can result in huge (mostly unintended) countereffects to just about any other sector of the economy. In the case of restaurant food delivery, COVID-19 accelerated an already in-motion trend. I believe that trend is, has been, and will continue to be secular, which will have major long-term implications to a number of stakeholders in the grocery CPG industry.
If you would've asked me what’s one of the hottest functional CPG brands that the general mainstream market probably hasn’t been paying attention to yet, I would have said Laird Superfood. Fact is, that's all about to change because Laird Superfood recently filed their S-1 paperwork with the SEC for a projected $40 million IPO. Laird Superfood is an emerging consumer products platform focused on manufacturing and marketing highly differentiated plant-based functional CPG. This places them right into the middle of the trifecta intersection of CPG trends (1) Better-For-You (2) Plant-Based (3) Functional. Question remains though if this alone will be enough for Laird Superfood to be successful on Wall Street.
Who cares that an 85-year-old American vitamin retail business is going to be acquired through bankruptcy by a Chinese company, right? Well it seems a few powerful and loud voices have stepped up to share their thoughts on the GNC bankruptcy sale. One such voice is Marco Rubio, who has requested a full review of this transaction by the Committee on Foreign Investment in the United States (CFIUS). The heart of the concern comes from three main areas; (1) Customer Data (2) Military Base GNC locations (3) United States and China Trade Tensions. If Marco Rubio is successful in his national security concerns, GNC will need to move into Plan B or C with their bankruptcy auction that officially ended for bidders on 9/11/2020.
Cash rules everything around me (or in this case CPG brands)…C.R.E.A.M.…get the money…dollar dollar bill y’all! Confused? That's likely because you aren't a classic hip-hop fan or ever heard the 1994 record C.R.E.A.M. by the Wu-Tang Clan. What I'm talking about from a CPG business strategy perspective is that cash conversion cycle, which is a measure of how many days it takes for a business to turn invested cash (usually purchased inventory) back into cash in its bank account.
Why is this so important? Cash rules everything around CPG brands! If you are a growing business cash is king and the better cash position you have gives you an incredible amount of optionality. Anyone running a CPG business knows what rapid growth can do to your cash balance. As you pay down suppliers and order more inventory, in a blink of an eye, your cash can drain to zero. Optimizing your cash conversion cycle can be the difference in your business continuity.
In this podcast episode, I'll go through the cash conversion cycle, provide some application to a few well-known businesses, and also give you some practical advice on how to improve your cash conversion cycle in your business.
Interested in watching the YouTube video with accompanying slides that show the calculations and equations? Click ➡️ https://youtu.be/vmTmUY55HqY
How is the American economy doing? According to the Federal Reserve September 2, 2020 Beige Book, the outlook remains uncertain and volatile, but what about specifically for the CPG industry?
You might be asking yourself WTF is the Beige Book and why should I care about what it says about the economy?
The Beige Book is a Federal Reserve System publication about current economic conditions across all 12 Federal Reserve Districts. It characterizes regional economic conditions and prospects based on a variety of mostly qualitative information, gathered directly from District sources.
Why you should care is that the qualitative nature of the Beige Book creates an opportunity to characterize dynamics and identify emerging trends in the economy that may not be readily apparent in the available macroeconomic data.
Because of that, the Beige Book can potentially help you with regional insights that can be applied to create advantages in your business. To save you time from reading the whole document, I thought it would be valuable if I started a video series where I take five highlights relating to the CPG industry that I found most insightful from the Beige Book, that's released every 45 days, and share it with you guys…along with some additional commentary on how it could potentially impact you.
After more than 18 months "in the dark", MusclePharm Corporation (MSLP) filed a collection of late earnings reports on 8/25/2020. On this podcast episode, I'll breakdown the most important key year-end financial data and explain why the sports nutrition brand hasn't filed any financial reports to the SEC in more than 18 months. Additionally, I catch you up through a collection of publicly-disclosed news from those last 18 months. Finally, I cover a variety of risk footnotes that were in the latest 10-K, but leave the shareholders and stakeholders with some positive hope at the end of the video.
The four largest pure-play specialty retailers in the active nutrition category have struggled immensely to retain market relevancy at the least and business continuity at the most. With the active nutrition product categories consistently reaching high single-digits CAGR over the last decade, what is happening? Where is all that buying power going? This is what is dubbed the Wal-Mazon Effect. Walmart, Target and Amazon have seen the largest gains over the past decade in category buyer count. So, what's changed now that is extremely important to the active nutrition industry?
FitLife Brands fought one of those perfect storm level quarters that they likely wouldn’t have survived a few years ago. Why are things different now? It starts so casually. You land a large customer, your products hit the shelves and it starts to pull off shelf well. You break out the champagne. Soon, that customer is 30% of your business. Then 50%. Then 70%. No one can say no to them anymore. But why would you?
This is what happened to FitLife Brands, the owner of a collection of sports nutrition products that are sold to mostly GNC franchises. What’s the solution to overexposure in both customer/channel/market? "Diversify...Diversify...Diversify.” So, how are they doing on that quest for independence from the bankrupt supplement retailer GNC?
What does Linens n Things, Dressbarn, Pier 1 Imports and Modell's Sporting Goods have in common beyond their retail downfall? They have all been acquisitions by a little-known investment firm called Retail Ecommerce Ventures (REV) that was founded last year. Maybe that doesn’t seem too odd, but what if I told you REV was run by a former NASA scientist that founded a successful dating app and Tai Lopez or “here in my garage” guy that Vice News called the Internet’s Most Hated Self-Help Guru in 2015.
In this podcast episode, I'll explain what is going on with REV and why this could be important in the retail industry.
Any press is good press, right? I guess not when you consider a bankrupt specialty retailer in the midst of one of the most challenging periods in American business history. In this podcast episode, I want to tackle 3 areas; (1) top-level financial data from GNC Holdings 2020Q2 earnings report that was released last week (2) cover any updates on Chapter 11 bankruptcy news since the last podcast episode about the subject on 7/12/2020 (3) cover “what ifs” around missing deadlines or requirements within the GNC bankruptcy
Is it time for Glanbia Performance Nutrition to go “over the top” in its strategy as it continues to slip in importance of the overall Glanbia portfolio? Glanbia is a global nutrition company that owns various nutritional supplement and sports nutrition brands. These brands include names like Optimum Nutrition, BSN, ThinkThin, Isopure, Amazing Grass, ABB, and Slim Fast. I'll use the recent earnings report and earnings call notes to update you on how the massive consumer behavior event COVID-19 has affected Glanbia Performance Nutrition and Glanbia Nutritionals. Finally, I'll explain why Glanbia Performance Nutrition is expanding its transformation project that they announced in late 2019.
Interested in seeing the presentation visuals of this episode, check out my YouTube video - https://youtu.be/7LRjcMJA44k
A fast-paced and busy lifestyle is pushing consumers to switch to quick and healthy meal options. This has resulted in the penetration of RTD protein shakes that promote active lifestyles. In this podcast episode, I'll utilize the recent quarterly earnings report and conference call for BellRing Brands to update you on the growth of the portfolio's consumer brand Premier Protein. Additionally, I'll breakdown how the RTD protein beverage category is performing in the challenging retail environment stemming from COVID-19. Finally, I'll share insights around minor adjustments that I'd make to ensure growth will sustain through the back-half of the calendar year.
If interested in watching the YouTube video that includes financial graphs & charts, watch here - https://youtu.be/YP_HXkeUkJs
Even with a cloudy forecast, it’s liftoff time for Celsius Energy Drinks in 3…2…1! Can Celsius become more than just an impulse purchase and become a key part of a health-minded consumer’s daily lifestyle? I will use the recent Celsius Holdings earnings report and conference call as the backdrop to talk about broader functional energy beverage categorical and strategic insights. Additionally, since we are still in the midst of COVID-19, I will be providing some additional thoughts on how that uncertainty is causing pressure in the retailing environment.
Are greener pastures ahead for The Vitamin Shoppe now that their main competitor filed for Chapter 11 bankruptcy?
The Vitamin Shoppe 2020Q2 earnings report that was released 8/6/2020 under its owner Franchise Group Inc. While the financial information in the report continues to be relatively small, I was able to collect insightful information on the quarterly performance from the Franchise Group conference call, previous corporate press releases, and public interviews from CEO Sharon Leite. Additionally, I provided both brick and mortar and digital sales updates, along with digital marketing tactics and merchandising that is helping The Vitamin Shoppe become an authoritative voice by educating consumers during the health pandemic. Finally, I update you on how much benefit is already being seen from the GNC chapter 11 bankruptcy filing.
Should the sports nutrition industry finally embrace its more mainstream active nutrition future?
When I started in the industry more than a decade ago, the only acceptable term used to describe brands like MusclePharm, Cellucor, Optimum Nutrition, or even today’s hottest brand Redcon1 would be sports nutrition...but, that isn’t the case anymore!
While the terms sports nutrition and active nutrition seem to be thrown around interchangeably by professionals, they are stuffed full of nuisances that make them very different. Active Nutrition is an evolution of sports nutrition. Active nutrition is the real golden ticket to building a large-scale functional CPG business because it moves the products away from being one-dimensional, but are the previous generations of sports nutrition entrepreneurs (gatekeepers) ready to leave the comfortable sub-culture niche for a much larger greener pasture?
In the first half of 2020, a huge tectonic shift occurred within the energy drink space, one that will have lasting implications for years to come, and no I’m not talking about COVID-19! Up until last year, the top 3 energy drink brands in the U.S. had gone unchanged since 2004. That was until Bang Energy blasted past Rockstar Energy in the summer of 2019 to become the #3 energy drink brand in the U.S. and reached sales of around $1.2 billion in that calendar year. This created earthquakes in the beverage space at a level that made the biggest beverage portfolios in the world realize they needed to get aggressive in their strategic plans for energy beverages.
It makes sense that an organization founded on first-person shooter video game content would embrace the saying “You can be the hunter, or you can be the hunted.” At a time when investment in the gaming category by sports nutrition brands is growing, what happens when the script is flipped and an esports team invests in a sports nutrition startup? That is exactly what happened when the most popular professional gaming and esports organization FaZe Clan invested an undisclosed amount in the startup sports nutrition brand CTRL (Catered For Real Life). I'll explain why I believe this could be potentially important tipping point for the convergence of the esports and functional CPG industries.
From buying a sewing machine and screen printer for just over $1000, to having your business be valued at over $1 billion and a potential exit in 8 years is just plain wild. The business that I’m talking about is Britain’s fastest-growing fashion brand Gymshark. In this podcast episode, I will share a bit about the inspiring founding story, current financials, and areas I believe Gymshark knocked it out of the park to grow into a athletic apparel behemoth. Finally, I will talk about the projected minority investment that will allow them to better compete with Lululemon, Under Armour, Adidas, and Nike in the future.
Monster Beverage Corporation is finally considering a portfolio strategy that doesn’t solely focus on energy drinks, but is that the right move?
In June 2019, Monster Energy CEO Rodney Sacks said the beverage company had an appetite to look at alternative brands and to develop more beverages in the nonalcoholic…as well as the alcoholic market. With the non-compete just ending, will we see Monster Hard Seltzer, Monster CBD, or a ton of other beverage innovations in the next 12 months? That is if something else doesn't happen first...
How is the American economy doing? According to the Federal Reserve July 15, 2020 Beige Book, the outlook remains highly uncertain...
You might be asking yourself WTF is the Beige Book and why should I care about what it says about the economy?
The Beige Book is a Federal Reserve System publication about current economic conditions across all 12 Federal Reserve Districts. It characterizes regional economic conditions and prospects based on a variety of mostly qualitative information, gathered directly from District sources.
Why you should care is that the qualitative nature of the Beige Book creates an opportunity to characterize dynamics and identify emerging trends in the economy that may not be readily apparent in the available macroeconomic data. Because of that, the Beige Book can potentially help you with regional insights that can be applied to create advantages in your business. To save you time from reading the whole document, I thought it would be valuable if I started a video series where I take five highlights that I found most insightful from the Beige Books and share it with you guys…along with some additional commentary on how it could potentially impact you.
It looks like even Quest Nutrition couldn’t overcome this abominably complex retailing environment from 3/1 to 5/30.
This podcast episode will breakdown the FY20Q3 earnings report for The Simply Good Foods Company (SMPL) filed on 7/8/2020. This is the second full quarter of sales data from the late 2019 acquisition of Quest Nutrition. This episode breaks down the financial performance of The Simply Good Foods Company brand portfolio, covering how Quest Nutrition and Atkins Nutritionals performed against the COVID-19 retailing environment. Finally, I discuss some strategic themes in the report and future thoughts on how the protein snacking brands will do in the back-half of 2020.
If you are interested in the visuals from this episode, please watch this YouTube video - https://youtu.be/5sZVk-wXnrk
This episode of the podcast highlights a wellness (or wellbeing) CPG portfolio, that now has over $500 million in annual revenue (over $1.4 billion in consolidated revenue), yet very few supplement industry stakeholders in the United States speak about them. The company I'm speaking about is The Hut Group, which is a digital-first, global, consumer brand and technology group, powered by a unique and proprietary end-to-end e-commerce technology and operating ecosystem called Ingenuity.
What you'll notice is that The Hut Group is a billion-dollar business that is built to be a future mini-Amazon. Ingenuity reminds me of AWS because it was built for internal usage, but has been recently white-labeled to be sold and deployed by mega brands like Nestle, Walgreens, and Procter & Gamble.
If you are looking for accompanying graphics in video format, please watch my YouTube video here - https://youtu.be/5-kXqg4O_5c
Every one of the 3 biggest American stock exchanges just had their best quarterly performance in more than two decades. So, why does the Wall Street establishment have their proverbial panties in a bunch over a rookie day trader that never bought or sold stocks until pandemic started?
Let's just say he is proving out a model for the future and that should make a lot of people on Wall Street nervous...
The rookie day trader of reference would be Dave Portnoy, better known as the founder of the media company Barstool Sports. The same Barstool Sports that was sold to Penn National Gaming for $450 million right before COVID-19 started making a huge impact in the United States, but that amount of wealth has nothing to do with why the Wall Street establishment hates him.
If you aren’t familiar with this story, a few questions are likely popping up in your mind;
- What does Barstool Sports have to do with stock trading?
- Why does the Wall Street elite care about a rookie stock trader?
After 2-3 years of making content about the nutritional supplement specialty retailer GNC, that referenced a future that most-likely ended in bankruptcy, it finally happened...
GNC filed for Chapter 11 bankruptcy and I’m happy for them!
Within this podcast episode, I will cover;
- Brief recap of what led GNC to file Chapter 11 bankruptcy
- Chapter 11 filing details (and restructuring support agreement), including what’s in the filing, who’s included, who’s excluded, who potentially will get burned
- What’s life after Chapter 11 bankruptcy look like for GNC, which speaks on both details provided from them and my predictions
Is it time for American supplement brands to start allocating resources towards Alibaba?
As egocentric Americans, we tend to get caught up with our own lives, own business, own market, and our own economy. We can tell you many facts and opinions on Amazon, but know little about the Chinese equivalent Alibaba. I've honestly kept this content idea on the back-burner for quite some time, but decided to finally create it after I saw an announcement in the latest Alibaba Group earnings report last month that stated they would be hosting a series of virtual Trade Shows aimed at getting small-to-mid-sized U.S. businesses to buy and sell products on its e-commerce platform.
…and it just so happened that the first category-specific B2B event would be supplements and nutrition.
Link to Alibaba U.S. Trade Shows - https://bit.ly/3hS3UYW
Do you remember in Game of Thrones when Jon Snow died in the Season 5 finale, but was brought back to life in the next season by the Red Woman? Did that just happen with Ultimate Nutrition?
For my sports nutrition industry followers, you might remember the saga that happened on August 17th, 2019 with Ultimate Nutrition abruptly closing their doors and leaving over 150 employees without a job. The 41 year-old legacy sports nutrition brand went silent, but it actually never fully went away and now it has resurrected itself. In this podcast, I will cover...
- Where they are today
- What's the potential
- Where do they go from here
Slow and steady wins the race, right? While the overconfident GNC is sleeping mid-race, The Vitamin Shoppe continues to push ahead one slow step at a time.
The Vitamin Shoppe’s parent company Franchise Group finally released its 2020Q1 earnings on 6/18/20 and the CEO gave us some additional Q2 insights on the conference call that should prove valuable to functional CPG stakeholders.
Check out my breakdown on this podcast episode.
What does a 102-year-old rental car company have to do with an 85-year-old nutritional supplement retailer? Nothing much yet, but that could quickly change because a decision Friday by the U.S. Bankruptcy Court for the District of Delaware gave Hertz permission to sell as up to 246.8 million unissued shares...marking an unprecedented move! A move that might be copied by GNC as it continues to extend the runway further for the possible Chapter 11 bankruptcy.
How much are large consumer packaged goods portfolios willing to pay when developing direct-to-consumer (D2C) capabilities? How about $700 million? You might be gawking at that price tag, but what if I told you that was cheap compared to the reported $1 billion that Unilever paid for Dollar Shave Club...
In March of 2018, The Clorox Company announced it was acquiring Nutranext for $700 million. In this podcast, I will explain why that decision was more about gaining knowledge for the digital channel, then it was to buy a collection of nutritional supplement companies that did $200 million in revenue the calendar year prior to acquisition.
Walmart has accelerated its growth to reach more customers by showing newfound agility that the retailer didn't have several years ago. Truth is, when America needed it the most, the most American of all retailers stood up to help the country through one of its most trying times. But...is any of this newfound agility actually new? The founder of Walmart Sam Walton once famously remarked that “If we work together, we'll lower the cost of living for everyone...we'll give the world an opportunity to see what it's like to save and have a better life.”
What does that have to be with Walmart’s impressive COVID-19 performance, everything…
Let’s breakdown that Walton quote into workable parts that prove Walmart might actually be reintroducing its legacy to today's consumers;
◼️ Working Together - aka Community
◼️ Saving Money
◼️ Improving Lives
Have you ever been to a fitness expo and thought how much fun it would be to work for a supplement company? Maybe you haven't been lucky enough to attend a Arnold Sports Festival or Mr. Olympia weekend, but you think "gym is life" and love talking fitness, health, and supplements with your buddies. Currently, with so many Americans looking for new work, I thought it would be valuable to hear personal stories from industry professionals that all "started from the bottom" and grew into industry leaders.
In this video, you'll hear my story of how I broke into the sports nutrition industry, but also from;
◼️ Ryan Bucki - Founder of Fitness Informant & FIt Butters
◼️ Eric Schwartz - VP of Marketing at Nutrabio
◼️ Daniel Pierce - Nutraceutical Industry Consultant
On this Pivotal interview, we have an extensive chat with Mark Glazier, CEO of NutraBio. He shares his perspective on the evolution of the sports nutrition industry. With over two decades of entrepreneurship in the space, Mark tells stories that help you understand why NutraBio has consistently grown every year for over 20 years. Additionally, we discuss areas, such as product transparency not being a customer acquisition tool, influencer created sports nutrition brands, Amazon, and a number of other entrepreneurial insights from someone that has been at the top for many years.
In this episode, we cover the breaking news that Bodybuilding.com was just sold by Expedia Group, after the travel company had the supplement internet retailer for less than a year. The new owner of Bodybuilding.com is The Najafi Companies, a Phoenix-based Private Equity Firm, with the owner having ties to Phoenix Suns ownership. I will share an update on where Bodybuilding.com is today, what The Najafi Companies focuses on with their investments and their assumed plan of action. Additionally, I give details on why I believe this could end up to be a strong investment.
Can you pick a game that is more fun than guessing Amazon’s next acquisitions? I’ll wait…
With recent news of Amazon looking to buy several what I like to call “splashy” companies during and after this Great Lockdown recessionary period, it got me thinking about what exactly the internet retailer could potentially be up too.
This podcast will focus on 5 (non-technology) categories of likely interest to Amazon and the name(s) I believe would be the best fit for them.
- Fashion Heavy General Merchandise Retailer
- Grocery Distributor
- Athletic Apparel Manufacturer
- Pharmacy Benefit Manager
- Industrial Distributor
Is it just me or does the momentum around Celsius Energy Drinks remind you of what happened 3-4 years ago with Bang Energy?
How does the saying go? Longtime listener, first time caller? If you follow me on LinkedIn, you know I have been sharing quarterly updates on Celsius Holdings for the last several years. That being said, this is my first standalone video with Celsius being the focal point. I think it will be interesting for my community to take a deeper dive into how this emerging energy beverage company is attacking the competitive energy drinks market.
Since this is the first one, I need to establish a bit of a rubric. I will borrow my flow from other publicly-traded companies and will use the recent quarterly earnings as the backdrop to talk about bigger categorical and strategic insights. Additionally, since we are still in the midst of COVID-19, I will be providing some additional thoughts on how that uncertainty is causing retailing environment.
On this podcast episode, I use the BellRing Brands 2020 FYQ2 earnings report as the backdrop to explain is Premier Protein is perfectly positioned to take advantage of the uncertain COVID-19 retailing environment. BellRing Brands is a portfolio that owns a collection of convenient nutrition businesses, such as Premier Protein, Powerbar, Joint Juice, Supreme Protein, and Dymatize Nutrition and was previously wholly-owned by Post Holdings.
I will further update you on the growth of Premier Protein RTD beverages in the face of the COVID-19 retailing environment. Alternatively, I cover how this reliance of protein RTD beverages could be a huge risk for BellRing Brands. I provide details on different sales metrics that and how new products are performing in the market. Additionally, I comment on their surge in digital sales. Finally, I chat about the Premier Protein positioning and if I think that growth will continue into the back-half of the fiscal year.
On this episode, we will use the recent 2020Q1 GNC earnings report, that was released on 5/11/2020, as the backdrop to discuss its upcoming bankruptcy "This is Sparta Kick" moment. I will breakdown the key quarterly financial data, but more importantly cover what is happening with GNC and the COVID-19 retailing environment. I also cover some details around human capital cost reduction, store optimization plans, COVID-19 store closures, and cost cutting or delaying measures with rent and vendors. Finally, I share the updated financial picture that GNC is looking at and the judgement day of 5/16/20.
This podcast episode will introduce six consumer trends that were caused or accelerated by the coronavirus pandemic, as it continues to reshape every part of our lives. There has likely never been a more volatile period for consumer behavior shifts in our lifetime and that creates massive winners and losers. As an entrepreneur (or aspiring one), you should LOVE this time period.
In this video, I am going to highlight a collection of accelerated trends that are happening right now, explain the underlying drivers, give some examples of impacted categories, and what the viability of their future is within the consumer market.
Trends include;
- DIY FMCG
- At-Home Medical
- Burnout Syndrome
- Virtual Experiences
- Work From Home
- At-Home Fitness
Is the "COVID-19 Effect" slowing down the fastest growing CPG category in the U.S.? In this episode, I consider several assumptions on if packaged CBD products are following the COVID-19 market activity of general CPG products, vices like alcohol CPG, or nutritional supplements. Additionally, I give updates on the shifting sales channel activity, supply-chain, and pricing reactions within the CBD market in 2020.
Pivotal is an interview-style segment that tackles topics in consumer packaged goods (CPG) and fast moving consumer goods (FMCG) from the business leaders that live it EVERY DAY! This episode, we have a candid discussion with Stephanie Leffler, CEO of OneSpace, which provides a suite of tools to help CPG brands win top position on the digital shelf. OneSpace believes that “eye level is buy level” is just as important online as it is offline by providing on-demand services for centralizing, optimizing and publishing content that wins top position on multiple online retailers.
In this episode we talk about:
- How "COVID-19 Effect" has actually benefited the OneSpace team and with its relationships with CPG brand clients
- How sticky the growth in online grocery will be in the near future after COVID-19
- Instacart's coming out party
- Why CPG brands need to be using this time to really invest in the digital channel
...and many more insightful topics!
If you want to get in contact with OneSpace - https://www.onespace.com/
This episode of the "Consumed" series covers the breakdown of the 2019Q4 earnings release and current report of the Franchise Group, which acquired The Vitamin Shoppe officially on 12/16/2019. I use the recent financial reports as the backdrop to explain my perspective on if The Vitamin Shoppe is in a better position to take on the coronavirus pandemic than their main competitor GNC.
This episode of the "Consumed" series covers the breakdown of the 2020Q1 Glanbia preliminary financial report. Glanbia is a global nutrition company that owns various nutritional supplement and sports nutrition brands. These brands include names like...
- Optimum Nutrition
- BSN
- ThinkThin (now called Think!)
- Isopure
- Amazing Grass
- Slim Fast.
I use the recent earnings report as the backdrop to explain my perspective on if Glanbia Performance Nutrition can use its strong balance sheet to grow their market leadership during the coronavirus pandemic.
The economic effects of the coronavirus pandemic continue to wipe out jobs at a record pace. For the week ended April 18, another 4.4 million workers filed for new unemployment benefits, bringing the total number of job losses to about 26 million in the last five weeks. That amounts to about one in six working Americans.
While I am not some career coach, recruiter, resume writer, or have much content that usually resembles personal development, I do believe I can help your unemployment situation by using my 10+ years of corporate strategy consulting. I will dive into 5 concepts to ensure you come out of the "Great Lockdown" in a better position professionally than you came into it.
On this special "COVID-19 Effect" edition of the Pivotal interview series that tackles topics in consumer packaged goods (CPG) and fast moving consumer goods (FMCG) from the business leaders that live it EVERY DAY...we have a candid discussion with Jeremy Smith, President of LaunchPad Group USA, which is the only full service business strategy, branding and representation group intensely focused on emerging food brands highly specialized in Costco Representation and Strategy.
In this episode we talk about:
- How emerging food brands are dealing with "COVID-19 Effect" at Costco
- The current appetite for new merchandising at Costco during COVID-19
- Why Costco is growing both in-store and digitally through the coronavirus pandemic
- Jeremy's best advice for food CPG brands on how to use this time best
- ...and many more insightful conversations!
If you want to follow Jeremy, check out - https://www.linkedin.com/in/jeremy-smith-8aa3281/
On the latest episode of the special edition "COVID-19 Effect" Pivotal interviews, we have a candid discussion with Chris Walton, Co-Founder/Co-CEO of several businesses including the fast-growing retail blog OmniTalk. He is also a senior contributor to Forbes and admittedly my favorite business writer because we share a commonality in our style and thoughts. Prior to starting his entrepreneurial ventures, Chris worked for Target, where he was the VP of the retailer’s Store of the Future project and also a VP of Merchandising on Target.com.
In this episode we talk about:
- How "COVID-19 Effect" is accelerating several macro retail trends
- Walmart's community building storytelling emergence
- How Amazon gets stronger during this period of time
- How post-purchase touch-points in retail will be integral right no
- ...and many more insightful conversations!
If you want to follow Chris, check out - https://omnitalk.blog/
If you'd like to subscribe and watch this episode on YouTube, check out - https://youtu.be/2pKtoSA4ERg
On this special "COVID-19 Effect" edition of our Pivotal interview series, we have a candid discussion with Chris Wagner, Founder/CEO of several business including Raze Energy, NutraKey, and G POP Foods. Because of the diversity of the portfolio of businesses, it gives Chris a unique perspective across many different food, beverage, and nutritional supplement CPG product categories that all sell in diverse sales channels.
In this episode we talk about:
- How "COVID-19 Effect" has created changes within the four walls of his businesses
- Process of stress testing his multiple businesses
- Unlikely supply chain challenge at Raze Energy
- Small supplement retail landscape
Would you like to watch the YouTube video version, click here - https://youtu.be/TfkTPVftdz4
Pivotal is an interview-style segment that tackles topics in consumer packaged goods (CPG) and fast moving consumer goods (FMCG) from the business leaders that live it EVERY DAY! This episode, we have a candid discussion with Adam Brown, Founder/CEO of Sircle Media, a leading social media strategy and content creation agency that has a deep client roster of "better for you" CPG brands.
In this episode we talk about:
- How "COVID-19 Effect" has created changes at Sircle Media
- How CPG brands are turning to community reinforcement
- How CPG brands are pivoting their assets to stay relevant
- Increase in "Live" usage on social media platforms
If you want to watch the YouTube version, click here - https://youtu.be/iZs_qC98bN4
Simply Good Foods Company, which owns "health and fitness snacking" brands Quest Nutrition, Atkins Nutritionals, and Simply Protein recently reported its earnings on 4/6/2020. If you are interested in the financial performance breakdown, check out the linked YouTube channel that includes presentation slides. Alternatively, this podcast episode will focus on how Quest Nutrition and Atkins Nutritionals are positioned in the COVID-19 retailing environment.
- Product Mix Fit
- Channel Strategy Fit
- Supply-Chain & Balance Sheet Check
Link to Full YouTube Video - https://youtu.be/vHf5pLk5mP8
On this "COVID-19 Effect" special Pivotal interview, we have a candid discussion with my longtime friend and personal high performance coach Colby Knepp.
In this episode we talk about:
- How "COVID-19 Effect" has created changes in his high performance coaching business
- How no one is coming to save us except ourselves, so it's time to own this situation
- How to rebuild positive routines
- Common mindset challenges his successful entrepreneurs have been dealing with and how he has been correcting those behaviors
- How to get unstuck and stay on the offense in the face of uncertainty
If you want to connect with Colby, click here - https://bit.ly/34sHk2I
The struggling supplement retailer GNC recently released its delayed 2019Q4 earnings report. In this podcast, I breakdown the top-level financial data, but more importantly I cover an additional COVID-19 business update press release that GNC submitted on 4/6/2020. I will add commentary to what is happening in the COVID-19 retailing environment and around differing interpretations of the definition of essential or non-essential retail operations. Finally, I share my opinions on several POVs, including vendors (consignment and wholesale), supplement industry, and GNC.
Pivotal is an interview-style segment that tackles topics in consumer packaged goods (CPG) and fast moving consumer goods (FMCG) from the business leaders that live it EVERY DAY! This episode, we have a candid talk with Rich White, Founder and CEO of Sportika Export, the leading sports nutrition exporter in the U.S. On this special "COVID-19 Effect" episode, Rich shares about...
- COVID-19 Effect on Sportika Export (and the adaptations his company is making)
- Silver Linings at Sportika Export from this event
- Overall International Supplement Market Sentiment from COVID-19, but also compounding from FOREX/Tariff/Import issues
- Winners (or lightest hit) regions/countries
- Losers (or hardest hit) regions/countries
- How do U.S. supplement brands doing business internationally come out stronger after this?
Pivotal is an interview-style segment that tackles topics in consumer packaged goods (CPG) and fast moving consumer goods (FMCG) from the business leaders that live it EVERY DAY! This episode, we have a candid talk with Aaron Hinde, President & Co-Founder of LifeAid Beverage Co., about how the uncertainty surrounding the coronavirus pandemic has affected his multiple INC. 5000 List member beverage company. LifeAID products represent a far superior alternative to sodas, energy drinks, sports drinks, and even traditional health drinks. Each beverage boasts 2-3 grams of targeted supplements with under 50 calories per can. In addition, they contain no artificial colors, flavors, or sweeteners. LifeAID products are sold nationwide in over 30,000 retail locations.
In this episode we talk about:
- How LifeAid is pivoting away from the gym channel that is down over 80%, but still supporting them with LifeAid Lift Program
- Aaron transparent communication style during uncertainty
- Aaron ability to see opportunity in even the most challenging environments
- Why CrossFit gyms will get through this shutdown
- Awesome closing remarks about growth mindset
Is COVID-19 affecting a high-growth e-commerce business that serves the college student community? I set out to answer that question.
I had a candid conversation with Russell Saks, CEO & Co-Founder of Campus Protein, about how the uncertainty surrounding the coronavirus pandemic has affected his business, which is located in New York City. We also discuss how the "extended college summer break" constraint has given the Campus Protein team an opportunity to realign and strengthen their business. Finally, we share about a new project that launched called BEAM and the founding story behind that supplement brand.
On 3/28/2020, I interviewed Aaron Singerman (CEO of Redcon1) about how his sports nutrition company had partnered with on-demand delivery apps, such as Grubhub, Postmates, and Uber Eats to provide another fulfillment option for customers. While their HQ and Redcon1 gym are "pick-up points" as well., the strategy really has legs when you consider that 1000s of Redcon1 retailers can add themselves as additional locations. While this is creative in the face of COVID-19, it's also long-term on-trend with the evolution of expected shopping experience.
Pivotal is an interview-style segment that tackles topics in consumer packaged goods (CPG) and fast moving consumer goods (FMCG) from the business leaders that live it EVERY DAY! This episode, we talk to Michael Noe, the owner of 406 Nutrition and Invictus Marketing, about what he is doing to help give value to brick and mortar supplement stores during this time of uncertainty with the coronavirus pandemic.
If you are interested in checking out his content on COVID-19, check out his...
- Facebook Page - https://bit.ly/2UsqUE5
- Instagram - https://www.instagram.com/mr.406nutrition/
Is COVID-19 affecting even the fastest growing businesses in the world? I set out to answer that question.
I had a candid conversation with Aaron Singerman, CEO of Redcon1, about how his company was performing against the challenging business environment of COVID-19. Being that Redcon1 will likely be at the top 1% of INC Magazine's fastest growing private company list for 2020, I thought Aaron would have a great perspective to share with my community. Aaron and I talked about...
- March 2020 Sales Growth and April Sales Projections
- Which Redcon1 products are performing well
- Economic pandemic brewing
- Why we need to get back to work
Formula For, is a podcast that unpacks the early stories of CPG entrepreneurs, to reveal the list of ingredients that ultimately led them to the revered products they built. On this never before launched episode that was taped on 7/18/2018, we talk to Brendan Ahern, which is currently CEO and Co-Founder of Ronnie Coleman Signature Series (RCSS). RCSS is a privately held, born global, premium sports nutrition company. The company was founded in 2011 and initial capital was generated through prepaid international sales orders. Their first three years of business generated over 2000% growth and they were named #208 on INC. Magazine’s 500 Fastest Growing Companies List. RCSS products are available in over 120 countries.
Prior to co-founding RCSS with Ronnie Coleman, he played a major role in brand development of Bio-Engineered Supplements & Nutrition (BSN), which was acquired by Glanbia in 2011 for $155MM.
Ronnie Coleman: The King Documentary - https://www.netflix.com/title/81018183
On 3/16/2020, the nutrition supplement retailer GNC submitted a "Notice of Late Filing" to the SEC. For those that aren't aware of what these notices mean, they are requested by publicly-traded to have the SEC grant them longer to submit audited financial statements. When they are filed, it is rarely for a good reason.
In this podcast, I breakdown how certain clauses in the debt load of GNC might create issues for them in 2020. The most important clause being that they cannot have a "going concern" footnote in their audited financial statements. Additionally, I talk about options GNC has to further avoid bankruptcy and how the current coronavirus COVID-19 pandemic could help them stay in business through 2020. Finally, I leave with commentary around how brands, partners, and vendors should now be thinking about their relationship with GNC.
Pivotal is an interview-style segment that tackles topics in consumer packaged goods (CPG) and fast moving consumer goods (FMCG) from the business leaders that live it EVERY DAY! This episode, we talk to Tyler Parsons, Director of Sales at Defyned Brands, about what he is doing to help give value directly to brick and mortar supplement retail stores during this time of uncertainty with the coronavirus pandemic. If you are interested in checking out his content on supplement retail preparedness surrounding COVID-19, check out his Facebook Page at https://www.facebook.com/wolfofsupplements/ or Instagram at https://www.instagram.com/wolfofsupplements/
Watch Video Here 👉🏼 https://youtu.be/CMIUghGmFTY
Formula For, is a podcast that unpacks the early stories of CPG entrepreneurs, to reveal the list of ingredients that ultimately led them to the revered products they built. On this never before launched episode, that was taped on 6/25/2018, we talk to Marc Lobliner, which is currently Chief Marketing Officer of TigerFitness.com, a multiple INC. 500/5000 company, as well as Owner/CEO of one of the fastest growing supplement companies, MTS Nutrition and protein bar companies, Outright Bar. Additionally, Marc is Partner in several other nutritional supplement businesses. Before his current list of achievements, Marc was the leader of Scivation, a multi-million dollar, globally distributed sport nutrition company. During his seven years at Scivation, he launched and developed Team Scivation, an online personal training and diet program, into the largest of its kind in Sport Nutrition history with over 70,000 concurrent members. Prior to starting Scivation, Marc was a co-founder of, and served as Chief Marketing Officer for the Sylvester Stallone sports nutrition company, INSTONE, LLC. Marc also spent over four years working for Weider Publications’ Muscle & Fitness, FLEX, Men’s Fitness and Muscle & Fitness Hers magazines.
Is the grass really greener on the other side? Mandatory in-office workers are about to find out during the COVID-19 pandemic.
Be honest, you’ve had a tinge of jealously towards the estimated under 5% of us “work from home” professionals, right?
I mean we get to work from the pool, coffee shops, and even travel the world without the constraints of micro-managers wanting us to use those big brother time tracking programs and be present every Monday to Friday from 9-5 sitting in our office or cubicle...even when you’ve completed your meaningful work!
Remote workers have the life! You’ve dreamt of this moment, until you realized this week (or will be realizing it very soon) that it isn’t as glorious and easy as you thought...
Don’t believe the hype from someone that has worked from home since late 2012. Working from home is fucking hard. Its hard because there is no structured routine that society has built over centuries. I believe great people thrive in crisis, so this is your time to shine! To help, I thought I would try and share some basic tips and tricks that has allowed me to grow multiple businesses in a non-routine work environment.
Can you imagine spending almost $4 billion to gain access to the hottest beverage club in the U.S.? That is what essentially PepsiCo did when they acquired Rockstar Energy.
One of the lead PepsiCo strategy executives said on Linkedin, “This is one of the largest and most transformational deals PepsiCo ever made and it will dramatically accelerate our growth trajectory for years to come.” Why are they making such a big deal about this purchase?
I dig into those reasons and more in this episode of The Joshua Schall Audio Experience...
"A Rising Tide Lifts All Boats..."
When I started making consistent business content about four and a half years ago, I wanted to give "legs" to the valuable insights that were being shared between myself and others in conference rooms. I felt that non-NDA information was being held too close to the chest, especially in functional CPG categories like sports nutrition. Because of that, I have made it my mission to bring positive light to the space...
While working on some projects in Denver, I decided to stop in to see my good friend Stephen Adele. This "insight heavy" conversation is exactly the type of thing that would normally be locked up between two people...yet it's extremely value to any professional that is looking for unique perspectives on the following;
▪️ Sports Nutrition Market in 2020
▪️ Direct to Consumer Business
▪️ Sales Strategy & Techniques
▪️ Why Strategy is King
▪️ What Skills Are Paramount for Entrepreneurs Today
Watch Video Here 👉🏼 https://youtu.be/tfCTQG6PVhI
Coldstone Creamery ice cream flavored whey protein, Warheads flavored pre-workout, Swedish Fish flavored BCAAs, and the list continues to grow with sports nutrition brands using authentically licensed flavors in their products, but is that differentiation strategy about to get tougher soon?Recently, Post Holdings and Dymatize Nutrition (which Post Holdings owns through BellRing Brands) launched a Pebbles Cereal flavored protein that I believe changed the market dynamics of sports nutrition brands attempting to acquire licensing from other food/beverage IP owners. Find out why in this audio version of a recent episode of my popular Deep Dish CPG YouTube series.
I would like to welcome you to the Joshua Schall Audio Experience. The first official upload will focus around what this podcast is about, why I decided to launch it, and when will I launch new episodes of this podcast. Additionally, I will share a bit about myself at the end for those that aren't familiar with me or my story.
Truth is, this podcast has been hyped up since I started creating YouTube videos in July 2018, but now it feels amazing to finally move this project from "boy who cried wolf status" to now a new living breathing representation of my passion to share my thoughts, opinions, and insights.
Thank you for supporting me on this journey...we are only getting started!