Celsius Holdings (NASDAQ: CELH) has reached another inflection point in its business, one which positions the energy drink brand for exponential growth and market share gains. This is above and beyond the recent brand popularity spike that has seen year-over-year quarterly revenue growth expand aggressively. In the last two years, Celsius Holdings have grown from two-tenths of a percent to now amassing a two percent market share in the energy drink category. As the brand hits critical mass with a run rate close to $400 million in revenue, it has sidestepped the challenging current marketplace dynamics that are causing larger cost barriers of entry for smaller scale new entrants that are now paying significantly higher shipping, raw materials, co-packer fees, and not being able to pass costs on and stay competitive due to Monster Energy and Red Bull pricing strategy. With the right level of resource investment across all aspects of the organization, Celsius Holdings will be able to maximize this opportunity of achieving concurrent expansion in ACV across all channels, while also increasing retail velocities. 

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Did the MyProtein "gain train" slow to a halt or was The Hut Group (THG) owned sports nutrition brand just slowing down briefly to pick up more supporters at the station? THG expects its THG Nutrition segment to sustain a 20% YoY growth rate in 2021, but the latest quarter only showed MyProtein up 13.4%. I believe this is just a short-term slowing, as the solid performance this quarter was against the highest growth quarter in 2020 for THG Nutrition. With over 80% of revenues coming from repeat customers, THG continues to have high category conviction. THG Nutrition is much better equipped than the competitive landscape to handle the current challenging market dynamics. The is because THG Nutrition controls more of its value chain, so the company has less exposure to the outside environment. THG Nutrition is also vertically integrated with six global production facilities that span traditional supplement formats to food and beverages. This will allow them to keep steady inventory levels heading into the "pulled forward" Q1 demand that should hit earlier this year. Additionally, THG has a massive global fulfilment network that is also going through a complete automation overhaul with the help of fellow SoftBank investment portfolio member AutoStore. The increased logistics automation and ongoing cost improvement program will help them offset the recent inflationary environment to sustain its market positioning. There’s a great deal of positive activity happening at THG Nutrition directly and with THG Ingenuity that supports it. Add that to the elevated global interest/demand for the functional food, beverages, and nutritional supplements and it’s very likely THG Nutrition could possibly reach $1 billion in revenue in 2022.

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I'll utilize the 2021 Q3 Franchise Group (NASDAQ: FRG) earnings report and conference call, along with any relevant publicly disclosed news to provide you with segment-level details on the recent business performance for The Vitamin Shoppe. That will include a range of insights and surrounding how The Vitamin Shoppe is navigating the current supply chain and economic challenges, update on franchising activity, merchandising updates, and possible M&A activity. I will also breakdown why a recent partnership announcement between The Vitamin Shoppe and Hims & Hers has me excited about a potential expansion of services in the future.

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I’m sorry to be the bearer of bad news, but the supplement industry supply chain situation will get much worse, over at least the next 6 months, before it gets better. I know that’s a bit of an ominous introductory statement, but you don’t consume my content to be fed bullshit positive fake news. It’s been about four to five months since I gave a proper update on the supplement industry supply chain situation. I recently took part in a SupplySide 365 webinar panel discussion with Mark Glazier (CEO/Founder of NutraBio) that surrounded the supply chain situation, outlook for the future, and strategies to manage it in the immediate term. I wanted to use this piece of content to summarize some of that information that was provided in the webinar, but also expand on it with as much up-to-date insights and information as possible. This is an unprecedented moment in recent business history. As Mark Glazier said in the webinar “if you combine all the supply chain problems from my last 25 years of experience owning a supplement brand that manufacturers its entire product line, it wouldn’t even come close to what I’ve faced this year.” Even though my 12 years of experience as a strategist in the supplement industry pales in comparison, I echo Mark’s thoughts 100%. There’s A LOT of information on this topic and I’m going to do my best to keep it organized in a manner that’s part informational and part actionable. 

Topics Covered Include:

At the end of the podcast, I'll explain "ideas to consider going forward" in the supplement industry. These include; more communication between brands and supply side, creation of a decentralized B2B inventory tagging system and marketplace, and why we need to diversify away from China now. 

Supplement Industry Supply Chain Situation Update #1 = https://youtu.be/bkFz-iaUDu4

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The Simply Good Foods Company (NASDAQ: SMPL) just became an official member of an elite club of active nutrition CPG brand portfolios. So, which club is that exactly? With the company just finishing up its 2021 fiscal year, The Simply Good Foods Company reached $1 billion combined in total net sales between its Atkins Nutritionals and Quest Nutrition brands. In Q4 of fiscal 2021, both brands had strong retail takeaway growth, with Quest Nutrition specifically had more than 50% greater growth than the segment growth rate. Quest Nutrition also has seen massive success in its Quest Nutrition Protein Chips. It has been the single biggest contributor to the growth in Quest Nutrition household penetration growth and the product has brought in a significant number of new buyers that were incremental to the brand. Even with YoY growth more than doubling, Quest Nutrition has had to throttle it because they couldn’t keep sufficient inventory levels. Moreover, I'll zoom out and talk about the entire supply chain situation for The Simply Good Foods Company and explain why I think its supply chain management has proven to be a competitive advantage in these difficult times. The Simply Good Food Company continues to be uniquely positioned with two large-scale channel-diversified U.S. brand leaders in the attractive nutritional snacking category that’s still underpenetrated. They will continue to seek good balance of innovation and variety across brands and forms. This will show up as the company deleverages from a bars and shakes focused product portfolio. The owner of Atkins Nutritionals and Quest Nutrition continues to do a great job at fulfilling the self-actualization goals of its customers without compromising great taste.

Active Nutrition TV Commercials = https://youtu.be/N0JAdaCDP5E

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As the post-pandemic active nutrition industry starts to normalize, it’s time to discuss what benefitted, rebounded, paused, and was damaged by the “COVID-19 Effect." It's irrefutable that the “COVID-19 Effect” changed almost everything about the active nutrition industry and most professionals are naturally a bit lost. The market is evolving quickly, as consumer interest in the space has never been higher. The active nutrition industry has become a key gateway to the $1.5 trillion global wellness market. I always say where there’s increased growth, there’s increased commercialization activity. This heightened competition means that brands must stay ahead of the curve by identifying specific trends earlier and being more aggressive in their actions to fill demand. My intent for this content is to provide industry professionals with a snapshot of what benefitted, rebounded, paused, and was damaged by the “COVID-19 Effect.” That could surround the following marketplace variables, (1) product categories or attributes, (2) business strategies, and (3) consumer behavior shifts.

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Will market leadership in the $2 billion global coconut and plant waters category be enough to push The Vita Coco Company towards stock market gains? At the end of September, The Vita Coco Company (aka the portfolio previously known as All Market, Inc.) filed its S-1 document with the SEC showing its intention of selling shares through an initial public offering and becoming a publicly-traded company. The IPO date is set for sometime during the week of October 18th and will be traded on the NASDAQ under the stock ticker COCO. While Vita Coco is winning the "Coconut Water Wars”, it didn't always look that way with categorical growth drawing the attention of beverage giants, The Coca-Cola Company and PepsiCo, that entered the category through acquisitions in 2009. It’s no easy task to compete with The Coca-Cola Company and PepsiCo, but the Vita Coco "out-hustled, out-innovated, and out-maneuvered the competition.” Vita Coco is now the coconut water category leader with 46% market share in the United States, a 36% relative market share advantage over the next leading competitor. When Vita Coco launched the U.S. market in 2004, it was only worth an estimated $10 million, but now the coconut water category has grown to $658 million in the United States alone. Though the U.S. coconut water market hit a peak in 2016, sales have rebounded of late with the last 26 weeks showing 15% YoY growth. The coconut water category has a cult-like following with a customer demographic that tends to be younger and more multicultural than other beverage categories. The namesake Vita Coco coconut water makes up about 85% of total sales, but there’s more to The Vita Coco Company. They has been operating inside the “better for you” functional and natural spaces for almost two decades, so they have their ears close to the ground and aren’t scared to internally create or acquire brands. They also own; RUNA (a leading clean plant-based energy drink), Ever & Ever (a purified PH-balanced sustainable water brand), and PWR LIFT (a flavored protein-infused water). They’re consistently innovating the existing portfolio range to drive wider adoption of our brands, increase consumption occasions, and take market share across the natural beverage category. I'll run through the financial data, customer demographics, sales channel strategy, global supply chain, and what's next for The Vita Coco Company (NASDAQ: COCO) in this latest podcast episode. 

How I Built This (Michael Kirban - Vita Coco) = https://www.npr.org/2020/07/31/897688708/vita-coco-michael-kirban

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I’ve always believed that Hip Hop and CPG entrepreneurship are linked together. Firstly, Hip Hop is seen as counterculture to other music genres, which is similar to CPG entrepreneurship in today’s “technology” filled founder landscape. Additionally, Hip Hop and CPG entrepreneurship are both centered around salesmanship and the ability to hustle. Moreover, Hip Hop music is rooted in remixing (or sampling) previous music, and this iterative innovation process is also core to the CPG industry. Finally, Hip Hop is more than music, it's a cultural lifestyle...which anyone in the CPG industry knows it functions in the exact same way. This is probably why you see so many hip-hop artists that are involved with CPG entrepreneurship (or investing). If you’ve consumed the first two episodes of this content series, which covered Notorious B.I.G. and NAS, you know that I select a collection of my favorite lyrics from the hip hop artist that provide keen lessons for any CPG entrepreneur. What will make this episode a little different is the fact that Jay Z can speak about CPG entrepreneurship from a place of personal knowledge. For those that aren’t aware, Jay Z recently sold 50% of the champagne brand Armand de Brignac, which is known as "Ace of Spades" after its logo, to Moet Hennessy, the wine and spirits division of luxury giant LVMH. I'll explain the real story behind why Jay Z became an alcoholic beverage CPG owner that eventually made him hundreds of millions in the exit. Jay Z might be one of the most successful musicians of the generation, but he also has the type of CPG entrepreneurship (and investing) resume that should put him in the upper echelon of the space. It’s also my belief that lyrics from his extensive catalog of music spanning more than two and a half decades will provide strong lessons for any CPG entrepreneur. I picked out a handful of my favorite lyrics that I know will bring you value…

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What does a series of popular children’s books from the 1980s and 1990s have to do with today’s frictionless omnichannel retailing environment? If you’ve consumed enough of my content by now, you know I love to find historical linkages or possible root causes that can explain current trends in consumer behavior. One such major consumer behavior trend, that was strengthened by the “COVID-19 Effect”, is that consumers are increasingly expecting retailers to be omnipresent. Today's consumers have the desire to move seamlessly between different channels and still enjoy a unified shoppers experience. So, what does this have to do with retro children’s books? Millennials have been influenced by “Choose Your Own Adventure” books and it’s now playing out in the consumer market. We are living in an era of “Choose Your Own Adventure” shopping experiences (aka frictionless omnichannel retail) and brands are well advised to take this into account. Just like the Choose Your Own Adventure books, alternate paths to the shopping journey speaks to the elevated desire of control that consumers seek now. Choice will become more important in an age of personalization. The future will be rich with personalized products, endless customer service options, 1-to-1 marketing, and loyalty programs that make us feel like special snowflakes. For all that, I guess we can thank Edward Packard.

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Keurig Dr Pepper (NASDAQ: KDP) expects to have $20 billion in M&A capacity over the next three years, so I thought it would be fun to put on my CEO hat and go shopping! In January 2018, KDP was created when Keurig Green Mountain (owned by JAB Holding Company) agreed to combine with Dr Pepper Snapple Group. At the time of the deal, it was said to “unlock the opportunity to combine hot and cold beverages and create a platform to increase exposure to high-growth formats.” Over the last several years, KDP has proved its merger thesis and is now prepping itself for the next phase by becoming a modern beverage company. To give some additional information that might help you understand some of my M&A predictions, I run through a bit of the extremely intriguing yet secretive heritage of JAB Holding Company. Additionally, I breakdown the current cold beverage and coffee systems segments of the KDP portfolio. With KDP seeking sizable deals that are more complex, resulting in portfolio expansion, distribution scale, geographic expansion, and new capabilities, I focus on five main beverage categories (coffee, non-alcoholic beer and mixers, energy drinks, protein beverages, and water) and provide brands that I believe if acquired by KDP would support its M&A goals.  

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