Consumers have already begun re-evaluating their relationship with alcohol, which has me contemplating if another mainstream euphoric is next. Caffeine consumption has deeply integrated into our daily lives. Caffeine is cited as the most widely used psychoactive drug in the world…becoming such a socially accepted ingrained practice that we seldom question its long-term effects on our health. I don’t believe caffeine itself is inherently good or bad…rather a person’s relationship with it determines its impact. But just like any addictive substance, we develop a tolerance to caffeine over time. What starts as a morning cup of coffee or energy drink can easily transform into many to feel the same stimulating effect. The dependence on caffeine creates an ever-increasing cycle of consumption, with justifications ranging from needing it to wake up to increasing concentration at work. But what happens when more people start reconsidering how and why they use caffeine? Right now, consumer surveys seem to signal the marketplace could be in the very early stage of searching to find a healthier relationship with caffeine. This is not unlike what was happening in the early 2010s with alcohol. That first year (2013), Dry January had a few thousand people sign up…but it has now grown into an international cultural phenomenon where millions annually explore temporary alcohol abstinence as a healthy way to start the new year. And the popularity of Dry January is cited as a key contributor to the broader consumer trend of cutting back on alcohol. From what I’ve seen, there has been two broader consumer behaviors that evolved from Dry January; mindful drinking and sober curious. Dry January has also fed into my thesis that “demand breeds commercialization activity," as there's now a huge variety of alcohol-free beverage options to choose from that are great tasting, wellness-focused, and widely available. But in my newest deep dive content...I'll explore if there could be a pattern in consumer behavior emerging that helps us establish a data-informed prediction regarding caffeine. From my understanding, there hasn’t been that “event-based catalyst” like Dry January for caffeine yet. Regardless, I have noticed an uptick in both social media chatter around reduction and self-motivated abstinence challenges around caffeine. Let’s then assume the same types of general consumer behavior trends sprout from it. Instead of mindful drinking…maybe its dubbed mindful stimulation, where it’s about being present and intentional with caffeine consumption. And as a replacement to the sober curious movement, we have decaf curious individuals consciously exploring a life without caffeine consumption. Since this consumer behavior shift hasn’t even crossed the chasm towards early majority adoption yet, this idea of caffeine reduction might seem silly. But reflecting on the history of humanity, we can see how certain practices once normalized are now seen as harmful or strange. I believe the heightened wellness consumer mindset opens a whole caffeine reduction “remixed” world of “energy everything.” Since we live in the “Age of the Endless Aisle,” there will naturally be more options in every CPG category than during any other point in our history...including various caffeine alternatives. And I'll explore both the trending options such as functional mushrooms, nootropics, tea-based energy drinks, usage of caffeine metabolites like Enfinity (branded ingredient known scientifically as paraxanthine).

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What historical significance does Ohio’s 55th-largest city hold within the CPG industry? The small town of Troy was the location where the first UPC was scanned at checkout. But the Final Jeopardy level question surrounds which product was the first to be scanned 50 years ago? Legend has it that Wrigley’s Juicy Fruit chewing gum was selected because nobody had been sure that a bar code could be printed on something that small. But the theorical conceptualization of this grocery technology might be credited to another Ohio company. In a 1966 document, Kroger stated “just dreaming a little, but could an optical scanner read the price and total the sale…thus creating more productive service.” Beyond speeding up checkouts, UPC’s greatest value might be that it has provided hard, statistical evidence for what sells…thus transforming market research.

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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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