Betting on meal replacements

0:00Welcome back to another episode of The Curious Consumer. I'm Nate. I'm Jenna. And Jenna, you have something to share with us. It's less that I have something to share and more that I have something to open. Let's do it. Which I just got Bloom Pop in the mail. Bloom Pop is, you guessed it, a prebiotic soda. Hell yeah. But their new flavor is root beer float and I love root beer. So we're opening her on camera.

0:32that was good that sounded so good i really held that up to the mic i hope it worked and then i'm annoying and i like need to drink all beverages through a straw so i guess that's good for your wrinkles it's very good right wait that's so good it tastes so it's not it's root beer float flavored but you get the float like it's hate like i taste the creaminess bloom pop is definitely one of the best better few sodas in the market it's really good okay something interesting i noticed though is it's 20 calories per per can three grams of sugar it doesn't have the fiber listed but it's supposed to be a prebiotic fiber drink but like literally the fiber is not even on it doesn't say zero it just doesn't say anything like fiber is Does it say prebiotic on this?

1:19It absolutely does. Prebiotic soda. I have plenty of other ways to get my fiber bases covered. I'm not even a little bit worried about it, truly. Beans primarily. They're my favorite food. Saqqara just sent their new fiber gummy bites. So Saqqara was like a, is still, like a bougie meal subscription service. And now they've started to come out with some CPGs also. and one of the things they just came out with is a fiber supplement gummy like everybody and their mother they're actually really good one and hilariously they sent them with a roll of toilet paper yes i remember opening the box and seeing that roll of toilet paper the first thing that came out of my mouth was oh we're out of toilet paper this is great perfect they knew they knew they knew okay but i also have a drink and i also want to share it it is okay please probably on the opposite end of the spectrum a little bit.

2:14It is a new canned Dunkin' Donuts iced espresso and milk beverage. I wonder why they have to call it that. It's got 31 grams of sugar. It's 180 calories. It's delicious. I love it. That is truly the opposite end of the spectrum. Zero grams of protein, I'm sure. Four grams of protein. Oh, missy. Four grams of protein, 10 milligrams of cholesterol, so not too bad. Not too much sodium. Only 11 % of your daily value. What percent of your daily value of sugar, though? 52. Oh, baby. I also did have a few Twizzlers this morning. So you're maxed out for the day. Oh, I'm sugar maxing. Sugar maxing. Protein maxing, fiber maxing, looks maxing.

2:59Nah, I'm sugar maxing. You're gonna be cavity maxing soon. You're right. That's so true. None of the other trends can say that. No, none of the other trends can say that. Shall we begin though with our first story? Danone announced that it is acquiring Huel for a reported$1.15 billion. The brand makes powders, RTD shakes, hot meal packs, and they have so many SKUs. They have a lot of meal replacements. they started and are still majority of the d2c business so you're getting these protein shakes you're getting these meal replacement powders which are just like the dentist densest thing i've ever eaten but they do fill you up and hewell has been leading the charge in that meal replacement and supplement category they started what around 2014 and just two years ago they surpassed almost$300 million in revenue, tripling its profits year over year.

4:04They are a very successful brand, started in the UK, and now Danone owns them and is going to put them into their portfolio and try to scale them even more. It's not a fully surprising acquisition to happen, but it is a really interesting one, and there is actually a lot at work here. One first thing to note before we get into the rest of this is that$1.15 billion figure is at 4.2 times their current revenue. So this is really like a bet on the growth of the company. And we see that a lot in CPG acquisitions, but that does feel like pretty stark compared to some other recent acquisitions. Some of the recent acquisitions that we've seen have been closer to like one point something to two X, not a four to five X.

4:52Exactly. Yeah. So that's definitely an interesting piece here. But as I said, there's a lot at play. So Huel, everything you mentioned, it is basically Soylent. If you're familiar with Soylent, it came out as this tech bro drink that has everything you need in it to be a full meal replacement. So screw food, you can just drink this thing and you'll optimize your health. It is the most bio-optimized thing imaginable. Very San Francisco tech, bro. Yes. That was the target audience. And it was anti-food, honestly. It was like, we don't have time for food. We don't care about taste. Efficiency is everything.

5:33Huel came out a year later and it is that, but it's a lot softer brand positioning, I would say. So it was focused more on having better ingredients, really honed in on their sustainability story, and just a broader target audience generally. So it was more trying to reach busy individuals generally, as opposed to just like this tech bro vibe. But it's still the same core proposition of sitting down for a meal is something that is wasting our time, is not efficient for our health, and it needs to be solved. When it first came out, And then the first few years that it started doing really well, hit like$50 million in revenue in 2019.

6:15The conversation around its success was largely around sustainability. So it was like, this is doing well because it's plant-based and it's sustainable. And at the time, 2019 was peak alt milk and Oatly and all of these brands were doing super well. So that made sense. But what's really adaptable about this company is that it naturally ticks a lot of boxes. I saw this quote actually from one of the founders that says, it's a nutritionally complete food, convenience, affordability, and minimal impact on animals and the environment, blah, blah, blah. So basically it can change with the changing values of society.

6:53So yeah, we don't necessarily care about that fourth thing anymore as a society as much, which makes me really sad, but it's true. But those earlier ones of nutritionally complete food, convenience, and affordability, I would say are stronger than they've ever been. oh yeah so in this same article is actually an article from 2019 by wired the title of the article was how fuel keeps growing despite its questionable taste and the founder also came out and said we're creating a new category in which we're asking people to think about food as nutrition first and taste second so this went against a lot of what we think of when we think of food and beverage CPG as being successful, but it's ended up scaling really well with just the changing preferences of society and biohacking.

7:44So I found that to be really interesting. And then there's the whole Danone side of things and like why they bet on the company, specifically Danone. Yeah. Danone has been taking a lot of bets, but they've specifically been leaning really hard into I think the GLP-1 and the functional nutrition side of the CPG world that has been growing so much over the past few years and and this fits really nicely into that portfolio they came out with an Oikos line that is supposed to be like complete nutrition with some more macro and micronutrients and more protein and all that stuff so this fits really nicely into what they've been doing but it's it's interesting because I feel like the taste side of this is still kind of missing.

8:31I think if they want to scale even more and reach an even broader audience, they will have to tackle taste. And I'm sure also we'll start seeing from them different formats. We'll see Frozen. I'm very confident we'll see Frozen from them. I'm sure we'll see bars. I'm sure we'll see a variety of different ways to food max, I guess is a good way to put it. It's not just about the convenience, but it is about getting the most out of your food in the most convenient way possible. It's efficiency. It's efficiency. And the way that they branded and marketed themselves, I think, was welcoming to somebody who might be put off by just a strict efficiency marketing, like with Soylent.

9:15Soylent was very tech. I mean, they even called themselves like a tech company, and it was very unappealing. It didn't seem like food. It didn't seem like something you can eat. I think Huel did a really good job at, even though they are promoting themselves more as like the function before the food, they do still market themselves as edible and food and approachable. I think they have leaned really nicely into the broader fitness category rather than just somebody who's chasing macros. Yeah, and I think you are a specific consumer in this that taste still matters. But if we're Danone and we're a company that's clearly really interested in appealing to consumers who are on GLP-1 medications, taste is secondary.

10:06Because your taste buds quite literally change when you're on a GLP-1. Taste is not nearly as important as just making sure if you're only eating a few calories a day, you need to make sure you're getting protein and your micronutrients and whatever you end up eating. And taste is secondary. And so it's really interesting that this thing that the founder said in 2019 that probably was so controversial at the time of like taste comes second was able to mold itself so well into consumer preferences today in a way that I can't assume he would have predicted at least GLP-1 medications would be as rampant as they are now.

10:45And that thesis was able to stay and actually become even more meaningful now. So I think it's a really smart bet on Danone's part. And they actually do have bars already in the UK. I think they have a lot more SKUs in Europe because they are based in Europe. So it'll be interesting to see what translates over to the US. I feel like our bar set is probably a lot more competitive than it is there. So I don't know what products will make it. But at the very least, we're seeing these ready-to-drink, complete meals and powders will probably be like some hero SKUs for them and for Danone. And it'll be interesting to see how this massive company scales Huell even more and makes that large Forex investment worth it.

11:33I think a lot of the trends that Huell's betting on is they're not going away anytime soon. And Danone's power and distribution arm and their muscle will be able to scale this thing up a lot more. I hope we see a lot more of the Huell greens drinks. The greens drinks great. So good. And I can get behind that a little bit more because people just are lacking greens for sure. But, I mean, we ended up calling the title of this newsletter, Who Needs Real Meals Anyway? And I didn't go on as much of a soapbox about this as I could have. But I am a little sad that there's such a cultural shift to food being so purely functional when there's so much social joy that comes from sitting around a table.

12:16and I just know there's going to be a study that comes out soon saying that the value of eating dinner with your family or eating lunch with your colleagues is so much more impactful on your health than what you eat. I don't know how they'll study that but I believe in that firmly and if this is something that helps people complete their nutritional gaps, sure. Yeah, please still eat real food and eat with your friends and family. I called my mom after we put out the newsletter and She was like, that made me so sad, that newsletter. And I was like, no, no, no, it's fine. People are still going to eat.

12:50Look, it's like the Brian Johnson of it all. It's like you're removing all of the joy and fun and value and cultural relevance of all these things that at the end of the day, you're just unhappy eating mush. Unhappy eating mush. Sorry, lowercase m, not the brand mush. We love the brand mush. Oh, true. I could go on this actually forever. The socialization of food is so important to me and we're losing it. But on social or perhaps more parasocial than social. Oh, that's good. I like this transition. Keep it going. Thank you. Alex Earl. Our girl. Who is, sure. Alex Earl, who is a massive social media personality and now podcast hosts with 14 million followers across her platforms.

13:40This 25-year-old who has made a name for herself in the social space and media space and beyond is now also a CPG founder. Woo! We love it. So she's been teasing this brand for a bit. Apparently she's, I mean, she's been working on it for over two years and apparently has actually been teasing it for those two years. Has been sneaking it into her content. But the real, more provocative teasing has been over the past, say, month. People were assuming she's launching a skincare line. They didn't really know what it was going to be. But she launched it this week. It's called Real Actives. The brand was born out of her struggles with acne.

14:22It was built with real dermatologists and is led by CEO. Her name's Andrea Bleeden. She's an e-com and beauty vet. She spent time at Kiehl's and some other big companies. And this brand is all focused on acne products, products that are designed for somebody with acne. And she started her career with this get ready with me style of content and then got really, really big very quickly. But she's also no stranger to the CPG world. She is involved with a few brands, both from obviously just promoting them like A Hero cosmetics. But she also has recently gone deeper and has become an investor and strategic partner in a couple other brands.

15:09She was an early investor in Poppy. She recently became a strategic investor and partner in Sip Margs, which is a canned margarita company, and also Gorgie, which is a energy drink brand. She's also a strategic investor and partner in that brand and helping to guide those brands in some capacity. But we're starting to see more influencers, both start brands that are relevant to them and are aligned with their personality and their personal brand, but also start to invest more in brands. I mean, I still think there are a lot of brands that, there are a lot of influencers that have silly brands that are more glorified merch.

15:49But I think both in the influencer and in the celebrity space as well, where these brands that they're launching start to feel a little bit more aligned with their personal brand. And it actually is like from their own brain and doesn't seem like it's from a team behind it. Yeah, I have a feeling there was a team behind this. Yeah, of course. But it feels organic to her. It does. It does. And it's interesting on so many levels. I mean, the marketing that they did in the past few weeks to launch it was really interesting. It was very Easter eggy, as you said. Alex started posting a lot of content with her bare skin, talking more about her acne journey than she has in the past.

16:36And then there was this account that was at WTF is Alex doing that was on Instagram and TikTok, posting some content, trying to figure out what she was doing. Obviously, that was planted. So much money went into this. The marketing itself is so influencer-coded, for lack of a better term. One of our friends, Ochuco, who has a newsletter herself, the subject line of her newsletter yesterday was, a friend of mine wanted to know what a nude, mid-submerged Alex Earl had to do with beading acne. And it doesn't actually have anything to with beading acne. So it's this interesting thing where like, as you said, this makes total sense for her.

17:16She's been speaking openly about her skin for years and years. She does get ready with me videos where she uses skincare products, but then the marketing itself is just like her in water and in bikinis. And it actually like is not about her face. So it's like very influencer-y, which is fine, but it's just this interesting dichotomy of it being this perfect fit and like feeling authentic in that way but then some of the marketing feeling like a little more detached i would say and leaning more into her image than her vulnerable vulnerability around acne a hundred percent i agree i think the brand itself makes sense i think the marketing and the positioning is a bit off like i don't think it needs to be like cetaphil positioning where it's like just or like an icky like teenager acne aisle where it's like you don't really want to touch that space but at the same time it's like it's too sexy and it feels it it kind of this this might be a reach but it kind of reminds me of the sydney sweeney launching lingerie it's like who who is this for like yeah exactly i don't know if you're gonna capture the right audience in the long run.

18:31I think the hype in the beginning is great. She's getting a lot of eyeballs. Her posts get so much really quality engagement. But the product itself seems much more high end than it probably should be. And also the before and after pictures make me giggle a little because she's been on Accutane three times. So I fear this is not the actual before and after of her skin using these products. But no, I totally, I totally agree with you. It's like, there's just this interesting mismatch. I will say something that's interesting to me is, has to do with what we've been talking about a lot recently with this dichotomy of clean versus science in skincare.

19:14And we wrote a report with Farrah about it. I will link it below. But basically we've been seeing a lot of like quote unquote clean ingredients being touted in beauty at the same time as these like very science-backed, more chemical-sounding ingredients. And this is called Real Actives. It is really leaning into that science-backed side. In a similar vein, there was another official launch this week that I thought was done very well across the board from the positioning, from the marketing. And I actually think that's Cardi B's new hair care line. She has been known for these DIY hair care situations that she's been doing for years.

19:55And she basically bottled those up and launched a very affordable and very, I would say, on-brand hair care line called Grow Good. It felt like she built a brand around her world, around her personal brand, that all aligned. And the pre-sale sold out in minutes. People really wanted these products. People really wanted these products. This is actually truly, truly an example of like a very well aligned celebrity brand. And it's also part of this growing trend that we've been seeing. We've also been seeing a lot of meaningful growth in hair care products. And I love that like she does her own DIY hair treatments and like the actual feeling of the brand.

20:41It looks kind of DIY. I don't know how else to explain that. Like the packaging looks like your mom made this in her basement. It's a very cool brand. I'm excited to see how this one goes. Like even on the website, this is another great example of sort of a blending between clean and science-backed. There's science-backed ingredients, but there's also, if you go on the website, green banana, moringa seed, aloe vera, avocado. And then right below it says breakthrough science and some proprietary complex that is designed to like hydrate the hair. So it's a very interesting merging of these worlds that we talked about in the FAIR report as well.

21:18Yes, yes. It feels both like you made this at home and it will be efficacious. And that's a very hard combination to achieve. There were some other hair news this week. So one was that Henkel announced an acquisition of Olaplex for$1.4 billion. What's interesting about this is that Olaplex was a public company and they haven't been doing well since their IPO. no they have not they've been in some trouble over the past few years there were some claims back in 2023 and it sort of has kept going throughout that olaplex was making people's hair fall out um and there were some scalp irritation claims and some other claims around that and that is just obviously olaplex is a hair care line but they were known as this science-backed, better hair care line.

22:18That was their whole shtick. They came up in that D2C era where all these sexy brands were coming out. But then they got hit. They got hit. I mean, they still had a decent acquisition, but it is down from what they probably could have gone if they didn't have that situation. They lost 95 % of their market cap since their IPO. so that's not a great look um and it means that this is an opportunistic buy our next story is a bubbly one uh i'm a pro at these you know so the buy founder by the uh the famous antioxidant i don't know is that what they call it b-a-i you know it when you see it It's got Stevia in it, the founder of Buy.

23:13He just started another company. He sold Buy for$2 billion to Kirk Dr. Pepper in 2017. And he's back with a hard soda brand called Crooked Pop. It looks very fun. It feels like very European, like UK branding for some reason to me. I don't know. It just doesn't feel like something I've seen in the U.S. But the interesting thing about it is he's trying to get away from the malt-based beverage and is using ancient grains as the alcohol source. Yeah. I mean, you can ferment anything, right? And it will basically be alcohol. So this drink is made with fermented quinoa, amaranth, millet, and cassava.

23:58So ancient Koreans, as you said, and he's calling this category organic, super dry alcohol. I don't know what the hell that means. I don't know if that's going to catch on. The only thing that I caught in that was organic. Super dry is a clothing brand. The rest, alcohol, I know what that means. I'm so confused. I don't, that, whatever. But point being, it's this new category, or so he hopes, that's not beer. It's not a vodka or tequila-based ready-to-drink. And it's also not a malt-based beverage, so like White Claw or Truly. White Claw started the category, I would say, Truly followed. Those people then realized were malt-based, and they were like, I don't even know what is the alcohol in this.

24:45And so then we came out with these tequila-based and vodka-based and whatever different spirit-based ready-to-drinks. And he's like, I think it's time for a new ready to drink that does have a health spin to it. I mean, this, we're using ancient grains, definitely feels like it's catering more towards like the health conscious crowd. The main focus here, I think he needs to back out of the organic super dry alcohol messaging and lean more into what he, the hard soda side of this, because there absolutely is space for that. There are a lot of hard soda brands launching right now. And as you said, Poppy and Olipop really set the scene there for, as we know, the modern soda category.

25:28And that is now translating into the alcohol category. So the founder mentioned that when he was thinking about this was exactly that. He was like, okay, the people that are turning 21 are growing up on Olipop and Poppy. And so when they go to drink for the first time, they are going to be looking for that trust factor that they found in these Better For You sodas in the alcohol aisle. So it's really smart, like predictive product development of thinking about who will be drinking in the next few years, like who will be legal and catering a new product specifically to them. Yeah. I'm curious. One, I'm curious how these are going to taste.

26:09Two, I'm curious if people will be curious to try them, if they'll move over from a hard iced tea or the malt-based beverages or the spirit-based beverages. but you know i think one benefit to this is i'm sure that these are still going to be distributed and sold alongside beer these are probably still in that malt-based beverage category so it gives them a more a bigger variety of where they can be sold and they can actually be sold alongside sodas unless this concoction of ancient grains ends up being like a vodka but i i'm assuming this will be sold in like the beer category distributed with beer but yeah as you said they're also not the only ones doing a spiked soda owls brew which is was known for their like hard tea uh hard tan canned teas they also announced spiked pop hard soda but they have some more they have two flavors that are a lot more soda flavors a dark cherry one and they have a cream soda flavor.

27:15I'm very curious to see the adoption of these products. I am sure we'll see a lot more hard sodas that are not just rum and Coke because there are canned rum and Cokes, but that's not a hard soda. That is a rum and Coke. That is a cocktail. But I think we'll see a lot more come out, especially if these two do well. I'm assuming the Crooked Pop might get a little bit more of an uptick. founder of buy that's that's kind of a nice a nice backing to have for your brand um but yeah i you know i i think what the better for you soda space has done has converted consumer understanding of what soda is so now that there's this hard one they might also think it's healthier or at least better for you in some way absolutely yeah it'll be very interesting to see consumer response and I'm excited to try it as well.

28:08On the other end of this, I guess, predictive product development is a very different generation and very different product, which is Lucille. So Lucille is a brand that launched this week. This is the first brand launch that I have seen that is specifically focusing on the older population. It is a line of high protein, high calorie, whole food based shakes for older adults. So it's basically like a modern day, better for you insure or boost, I think is the other competitor. It's launched by Jess Higani, who is amazing. We actually had her on our Instagram in a grocery run series that we're kicking off.

28:52But Jess's grandmother's name is Lucille and she's very close with her grandma and learned a lot about how the aging population is just not catered to at all. And yet there's a$6.2 billion senior nutrition market. And I read that number and I was like, what's so sad about this is that number, that market literally represents like our collective future as consumers. Like we all, it feels so detached from us right now. And there are a lot of markets that we look at that represent who we once were, but we will all be buying in this category and no one cares about it. And it makes me so upset. It's always an afterthought.

29:32These products that have existed in the market are overly processed. They are given to you at a hospital, and they make you sad. And Lucille is not just bringing cleaner products, but cuter branding and overall this sense of dignity to this forgotten category of consumers who we will all be. We always talk about how there should be more fun CPG brands for younger folks, for babies and toddlers and kids. it's the same for people above the age of 65 70 everybody deserves these kinds of products and the other it's it's positioned of course as a senior nutrition company but also in theory this is just a drink that could be used again instead of ensure boost which people end up drinking at all ages when they're hospitalized for a variety of different reasons and that's another place where it's like of course no none of us ever want to plan for being in those situations or want to think about our loved ones being in those situations.

30:28But wouldn't you love to have something that feels closer to a product that you would buy in the outside world when you are in a hospital? So I just love this more mission oriented product and brand existing, and you should check it out and buy it for your loved ones as well. Or buy it for yourself. You know, maybe it's, maybe this is the next fuel. Oh my God. In a way it kind of is like, it is a meal replacement shake, but in like a much nicer and more meaningful way. Anyway. People deserve that. Anyway, thanks everyone for listening. There's, as always, a lot more news and context and analysis that we did not cover in this episode that is in the newsletter.