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…

FOLLOW ME ON MY SOCIAL MEDIA ACCOUNTS

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.

FOLLOW ME ON MY SOCIAL MEDIA ACCOUNTS

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.  

FOLLOW ME ON MY SOCIAL MEDIA ACCOUNTS

Something interesting is happening in the grocery retail industry...there are actually new retailers emerging and it should galvanize every CPG brand. While new grocery retail concepts pop up all the time around the country, more times than not, those grocers stay local/regional and have a non-material impact over the entire CPG industry. The last "new" grocery retail chain created that made a material difference was Sprouts Farmers Market that was founded in 2002. Most market leading grocery banners have been around for 40, 80, even 100+ years. That being said, there’s something different happening right now because these new grocery retailers have the kind of firepower that is extremely rare. Maybe its billions in investor funding or they are backed by trillion dollar market cap companies, but the grocery industry hasn't had this level of material new activity since Walmart focused on groceries in the late 1980s and Target in the early 2000s starting to focus on selling groceries. In this podcast episode, I'll explore this notion through examples like Foxtrot Market, Amazon Fresh, LIDL, GoPuff, and dark grocery stores through DoorDash and Instacart. Why should you care? Depending on the sales channel strategy of your CPG brand, this could mean a great deal in terms of new business opportunities or needing to adjust your models of existing grocery partnerships.

FOLLOW ME ON MY SOCIAL MEDIA ACCOUNTS

Have you noticed more functional food and beverage, and supplement brands are advertising on television lately? So, why have so many functional CPG brands jumped into the “grand daddy of them all” advertising format? Well, most of them technically haven’t if we are only categorizing the upper echelon of advertising formats as traditional linear TV only. Most of these supplement and active nutrition CPG companies are riding the connected TV (CTV) advertising wave. CTV advertising investments in the U.S. market grew by 41% YoY in 2020 and growth is expected to accelerate in 2021, as spending will reach ~$13.5 billion. What’s also helping the digital advertising trend is digital media companies like YouTube, Hulu, Amazon, and Roku have made it easier for small- and medium-sized businesses to build, manage and measure their TV advertising campaigns. This is important because a recent survey found that 49% of consumers reported pausing their TV and shopping for a product online after seeing an ad on their TV streaming device. Since I'll be reacting to a collection of seven recent TV commercials from functional foods, beverages, and supplement brands, I run through the four qualities I believe make for great TV commercials. This was will the backbone to how I'll judge the following active nutrition CPG brands: Vital Proteins, Garden of Life, ZOA Energy, Optimum Nutrition, Quest Nutrition, GNC, and Athletic Greens.

Link to YouTube Video = https://youtu.be/N0JAdaCDP5E

FOLLOW ME ON MY SOCIAL MEDIA ACCOUNTS

Did you know that the “world's first internet-controlled fitness equipment" was launched more than two decades ago? iFIT Health & Fitness pioneered the technology that drives the trending connected fitness space today. When the pandemic closed gyms across the country last year, millions of Americans purchased billions of new connected fitness equipment pieces and drove headfirst into online home workouts. iFIT Health & Fitness is the market leader in the U.S. market of large fitness equipment, so it's no wonder the company more than doubled over the last year. On 8/31/21, iFIT Health & Fitness filed its S-1 document with the SEC, which is a signal that the company plans to go public. While the exact date of the IPO wasn't set at the time of recording, the company will trade on the Nasdaq under the appropriately chosen symbol IFIT. In this podcast episode, I'll cover the founding story of Weslo Design International (that eventually became ICON Health and Fitness and now iFIT Health and Fitness) and interesting timeline highlights that span the company being owned by fitness business icons Joe and Ben Weider. Additionally, I'll explain how heated competition against newcomer Peloton Interactive is driving iFIT Health and Fitness to new levels of innovation. Fitness has always been about connection, but now digital connectivity has made new experiences and business opportunities possible. We are still in the earliest stages of connected fitness, but the long-term winners will need to be great at four different pillars (hardware, software, content, and community) and I'll explain how iFIT Health and Fitnes stacks out against the connected fitness competitive landscape. Finally, the strength of iFIT's ecosystem (especially the community) can then be highly leverageable into adjacent consumer categories, and you might recognize a major strategy it plans to utilize with iFIT Nutrition. 

FOLLOW ME ON MY SOCIAL MEDIA ACCOUNTS

Jeff Bezos famously said “your margin is my opportunity” but is there a new opportunistic business model in the CPG industry that’s looking to steal his shine? You’ve heard of B2B, B2C, and C2C, but what about C2M? C2M stands for consumer-to-manufacturer, and it should be obvious that this business model removes various intermediaries (or middlemen) enabling consumers to buy higher quality products at lower prices. Manufacturing companies are peering through the window of opportunity. With margin being squeezed in every direction, something most give to satisfy Americans that have been drunk on low prices for decades. The C2M model is not without risk, as many manufacturers are not properly built with the needed core competencies to build successful brands in the market. That being said, it’s undeniable that C2M will become an important key of the American ecommerce landscape. I'll further explain this notion by presenting how business models have evolved overtime, the eureka moment in the U.S. market with the Amazon Accelerator Program, and how China and Pinduoduo is leading the global shift to C2M. 

Will the supplement industry see a resurgence of CrossFit targeted supplement brands, as the fitness regimen evolves under new ownership? Let’s get this out of the way right off the bat...sports nutrition products for bodybuilders and sports nutrition products for CrossFitters are essentially the same thing, the main difference comes down to marketing strategy. With the viability of CrossFit marketed supplements obviously being closely tied to the popularity of the workout regimen (and overall sport) of CrossFit, it’s hard to explain the lifecycle of the first wave of successful CrossFit targeted supplement brands, such as Progenex, Nutri-Force and SFH, without detailing the rise and fall of CrossFit in its first two decades of existence. So, why do I think there might be a new round of CrossFit targeted supplement companies that will emerge? For the first time since 2018, CrossFit has seen increased participation in the sport. With new ownership passing its one-year market, plus new hires, new strategies, and a refocus on the CrossFit community it should mean additional growth in the future. Market growth breeds commercialization activity, so we will see if there’s a second wave of supplement brands targeting Crossfitters or if CrossFit corporate decides to extend its valuable brand IP into creating its own branded supplement line.

Throne HealthTech (Official Supplement of CrossFit Games) Content = https://youtu.be/_rwDlbDDjn0

Pokémon Go was one of the biggest viral phenomena of the latter part of last decade, but maybe it’s biggest positive effect on society was overlooked. Five years ago, something magical happened to the millions of Americans. They took incremental steps to improve their health, while also chasing Charizards and Squirtles (whatever the heck those things are). In 2016, Pokémon Go had 233 million global active users and it was estimated that 19% of those were in the U.S. market. Just to give you a sense of comparison, Pokémon Go had half the monthly active users as Instagram in 2016. Yes, these Americans were addicted to a video game, but they were also subconsciously opting into the newest fitness craze. This potentially makes Pokémon Go the world's most important game for a few reasons that have even bigger potential value today. While Pokémon GO won't suit everyone, the most important outcome is for people to find an activity they enjoy enough to continue doing, so that it improves personal health. Augmented (or virtual) reality location-based smartphone games that infuse fitness still a "huge potential" to be beneficial long-term. If this could be a key in getting Americans in better shape, why haven’t we seen numerous companies harness this unexpected game-meets-fitness and create copycats of Pokémon Go?

Is this the perfect business environment for MyProtein to accelerate its growing share of the global supplement market? I believe the answer is yes. With global supply chain constraints, inflationary cost pressures, and labor shortages, the current business environment is arguably one of the toughest in several decades. While I’m sure THG (like other competitors) would love an easier situation, it’s actually the heightened level of complexity that hurts competitors more than THG. This is because THG has a business model built for the current complex business model and also has vast internal capabilities that are honestly unmatched in the space. To help support my notion, I’ll be utilizing the recently released 21H1 The Hut Group (or simply known as the acronym THG) earnings report, presentation slides, and earnings conference call, along with any associated public news. I’ll also add strategic commentary that will provide additional value and insights to anyone interested in the overall global supplement industry. While my focus will be primarily on the THG Nutrition division that houses MyProtein, I will cover each of the other business segments at various lengths.