If you haven’t noticed by now, I enjoy deconstructing the core mechanics behind different business models to see what makes them successful or not. It means dissecting how various companies generate revenue, understand their value propositions, identify their target markets, and examine the various strategies they use to deliver products and/or services. But I arguably have the most fun when analyzing companies that are generally outside of (but through some strategic decision is now entering) my deep domain expertise…which is the emerging and intersecting CPG categories of functional foods, functional beverages, and nutritional supplements. And this is exactly what happened when Factor, America’s leading ready-to-eat meal delivery service, recently announced the launch of its new supplements brand, Factor Form. In November 2020, Factor was acquired by the global leader of meal kits (HelloFresh) for $277 million…which was slightly below 3x revenue of Factor that year. And while I’m not sure the exact percentage that Factor contributes to the overall “ready-to-eat” product category revenue at HelloFresh right now (partly because of another categorical acquisition in 2021), it has grown substantially over the last four years…with the last earnings report release stating $1.6 billion in categorical revenue generated in first 9 months of 2024. So, with that type of growth in its core food offering…why even dabble in developing your own nutritional supplements brand extension? But also are meal delivery services developing their own nutritional supplements brand even a completely novel business strategy or simply another remix? And I’ve said it once and I’ll likely need to keep saying it until I’m blue in the face…but everything is a remix of the past (especially within the interesting CPG categories of functional foods, functional beverages, and nutritional supplements). So, I thought it would be fun to explore a few different strategic inspirations that could’ve been integrated into the decision by Factor to create Factor Form supplements. Finally, my latest first principles thinking content will explore my outlook for these business model combinations of offering “meal delivery services” and nutritional supplements.

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