Finally. 2021. It’s here. And, we’re all wondering, what’s this year going to be like for everyone? As an in investor in consumer products, I’m constantly thinking about what people need and the next big trend. Here are my 5 predictions for 2021.
Originally published as a Twitter thread on January 2nd.
“Hormone Health” will be the next “Gut Health”, and consumers will seek out brands that actively claim and demonstrate that they don’t disrupt our hormones or endocrine system. I’ve heard about “endocrine disruptors” from new Millennial moms and from GenZ. It’s the next step in “clean” and “natural”.
In the consumer brand world, a celebrity founder or investor has often demonstrated an ability to move the needle at early stages. Even within CircleUp’s equity portfolio, we’ve seen brands benefit from these partnerships/investments — just take a look at Liquid IV, Kosas and Art of Sport.
Despite the investment activity in this segment, there’s very little practical advice available for founders about how to raise capital from talent. On the other hand, influencers are overwhelmed with deal flow, most of which is not a good fit.
It is an incredibly murky marketplace and an unfair one — who you know matters. And, that’s not okay. I strongly believe that we need to bring clarity to the world of celebrity investing, in order for investors, operators and influencers to build better brands and ultimately serve consumers. …
What do Brands Need to Know?
By: Karen Howland, Aditi Dash
We love Costco here at CircleUp. It is legitimately Aditi’s favorite store. Why? It comes down to one word: value. That’s what most Costco shoppers are looking for — whether they are in the market for electronics, food & beverage, wine or even premium jewelry. And, the desire for value is only increasing, a trend we believe will be accelerated by the uncertain economic climate today.
Costco has been gobbling up market share in the grocery space for the past decade, and data suggests that Costco is an especially important partner during and after an economic downturn. Cumulative same store sales growth at Costco over the past 10 years is 70% higher than at Kroger, the largest conventional grocery retailer in the country; and, it is over 40% better than Whole Foods. …
Investors like a story. When talking to founders of early-stage brands, the most compelling ones are those that can communicate their narrative to the rest of the world (customers, retailers and investors). Here, I break it down by topic.
It feels like we’re living in a “wait and see” world. So much of our personal and professional lives are on pause due to the current COVID-19 crisis. …
It has been almost 60 days since most of the nation went into quarantine, and Amazon has been top-of-mind for consumers, brands, CEOs and investors. Last week, CircleUp Growth Partners hosted a webinar with our friends at Cartograph about succeeding on Amazon in a rapidly evolving, post-COVID world (thanks Jonathan, Chris & Ria).
It doesn’t matter how big you are or how small you are — Amazon matters. Even more so post-COVID. Selling on Amazon helps generate cash early in a brand’s lifecycle, and the channel should be profitable from Month 1. …
Brand discovery is getting tougher. Consumers don’t want to browse supermarket aisles for new brands, and supermarkets have been prioritizing incumbents. We can already see this emerging in early data. According to a recent report by Bain, “insurgent brands” captured a much smaller share of growth during COVID compared to previous periods.
Does this mean emerging brands aren’t going to make it? No way. There is always room for innovation. It just needs to be marketed differently. Granted, there’s opportunity online, but it’s small ( 90% of sales still happen in brick & mortar). …
The CircleUp team first met Chris Hunter in 2017, early in his journey in making Koia the leading plant-based beverage company in the United States. His story is an inspiring one — from founding Four Loko at the age of 25 to selling Not Your Father’s Root Beer to Pabst to becoming a spokesperson for a dairy-free lifestyle as the CEO and co-founder of Koia, the maker of functional plant-based beverages.
Today, we’re excited to welcome Chris and the entire Koia family to the CircleUp Growth Partners portfolio.
Our diet is becoming increasingly plant-based
At CircleUp, we are believers in a plant-based future. A diet rich in fruits, vegetables, whole grains, and legumes has been shown to have a significant impact on broader health and wellness. These foods are full of fiber, rich in vitamins and minerals, free of cholesterol, and low in calories and saturated fat. According to the Physicians Committee for Responsible Medicine, people who eat a plant-based diet have a lower risk of heart disease and diabetes. Plant-based diets lower body weight, improve insulin function, and help to regulate blood sugar. …
Two weeks ago, CircleUp hosted a lunch for CPG buyers, brokers, merchandisers, sales/marketing/finance consultants, etc. Bringing together different perspectives (including experts on Amazon, Costco Wholesale, Whole Foods Market, along with emerging ways to shop i.e. Stockwell) was eye-opening. Here are my 5 takeaways (all views are my own).
As a beauty investor, I’m always thinking about the demands that society places on women (and increasingly men) to look good. This week, I attended the Indie Beauty Expo in Los Angeles, California, where beauty & personal care brands show-off to buyers, investors & influencers. Walking through a beauty convention, it’s really hard not to wonder:
Will these products make me beautiful? Am I pretty yet?
I have to force myself to take a step-back from my own experiences and ask myself, does our culture need these products? And, is this beauty business a good investment?
What I do love about beauty & personal care is that with the right founder, products and mission, brands can help individuals feel great about themselves. That’s what I get excited about in beauty & personal care. Whenever I evaluate a brand in this category, I take a step back and ask myself, does this brand build the confidence of its consumers? One tagline that’s trending right now is something along the lines of “Love the Skin You’re In”. If a brand does that, I get excited. …
In early-stage consumer, clean beauty is one of the most commonly discussed topics today. There are a lot of investors, strategics, and consumers interested in clean beauty. The past year has seen some high-profile investments and acquisitions in clean beauty, including CircleUp Growth Partners’ portfolio company, Kosas, which announced a Series B raise led by Stripes Group this January. On the strategic side, Unilever paid $500M to acquire Tatcha, and Shiseido paid $845M for its acquisition of Drunk Elephant.
Investor and strategic activity are ultimately driven by customer interest. With growing awareness of toxic ingredients, yet limited oversight of ingredients in personal care products, consumers are increasingly looking to trusted brands for better-for-you products. …