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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