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.

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.

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...

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.

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?

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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