Copy

02/26/19

Past Issues

The business of fitness and wellness.

“Body, Beauty, and Consciousness”

 

In recent months, countless headlines have hit on a common theme: society’s collective anxiety and burnout. Writing for The New York Times, Erin Griffith took on hustle culture. A few weeks before, Buzzfeed ran a piece painting millennials as “the burnout generation”. Incredibly, the Internet’s response was almost unanimous — millennials don’t have a monopoly on burnout, we’re all exhausted. 

"[Hustle culture] is creating the idea that Elon Musk is your high priest. You’re going into your church every day and worshiping at the altar of work. For congregants of the Cathedral of Perpetual Hustle, spending time on anything that’s nonwork-related has become a reason to feel guilty."

Framed through the lens of burnout, the current state of wellness makes perfect sense. From CBD to sleep-tech and wellness tourism to meditation apps, our pursuit of well-being is actually a quest to alleviate anxiety. And because wellness is not a vertical product category, there’s more cross-over than ever. As a result, we’re seeing beauty supplements aimed at improving sleep, beverages promising “inner glow”, and a growing number of products targeting mood elevation and stress reduction.

Perhaps the best example of this trend is Recess, a CBD- and adaptogen-infused sparkling water. While it would be easy to write Recess off as a blip on the CBD-craze map, founder Ben Witte has other ideas. “I saw this bigger opportunity to create a consumer wellness lifestyle brand,” Witte explains. For that reason, the brand doesn’t over-emphasize CBD. As Witte sees it, “CBD is a commodity” that will eventually be in everything. Ultimately, Witte believes the thing that will separate Recess is Recess itself — which is why he teamed up with Gin Lane to create a brand and packaging using a matte, sunset palette and simple packaging to convey its core message: keep calm.

"We’re living in a world in which we’re all increasingly stressed out, anxious, overly stimulated, overwhelmed by technology, by politics, you name it, and are searching for solutions to feel balanced…"  – Ben Witte, Recess founder

Of course, Recess isn’t alone in its pursuit of good vibes. As the luxury counterpart to Recess’s millennial brand, The Nue Co. wants to redefine “the relationship we have with our health” through products claiming to reduce stress, provide restful sleep, and boost energy levels. Although the packaging is different, the sentiment is the same: wellness is your respite.

As a more mystical alternative to Recess and The Nue Co., Moon Juice is the new-agey path “to elevate body, beauty, and consciousness.” Offering adaptogen-based dusts, powders, tonics, and snacks, Moon Juice is proving to be the perfect antidote for our collective anxiety. For founder Amanda Chantal Bacon, who started Moon Juice back in 2011, the inflection point has been a long time coming. Despite criticism, Bacon has launched new products and opened new doors, selling Moon Juice at Barney’s, Sephora, and Nordstrom, while building a holistic lifestyle brand that resonates in an era of exhaustion.

There’s no denying that these brands have hit on something; each of the three mentioned regularly sell out of product or have waitlists for new launches. Still, the elephant in the room remains — do they actually work? When it comes to specific ingredients, dosages, and hard science, the verdict is still out. But as The New York Times concluded in a profile of Recess, “whatever creates this affective experience is invaluable.” Said differently, in an era of exhaustion, the mere sense of wellness just might save us from ourselves.

Headlines & Happenings

💡Wellness Innovators 

Last week, Fast Company dropped the 2019 edition of The World’s Most Innovative Companies. Overall, the list includes some notable trendsetters across fitness, wellness, and healthy foods. Unsurprisingly, major players like Peloton and ClassPass earned a spot. In food, the inclusion of Sweetgreen, Beyond Meat, and Pressed Juicery signify a shift toward health-conscious options. Representing boutique studios, Orangetheory Fitness and Xponential Fitness landed on the list. And, in a nod to the future of fitness, Mirror and Zwift also made an appearance.

More interesting, though, was what didn’t make the list. While wearables have made headlines in years past, companies like WHOOP and Oura didn’t make the cut. Same goes for voice-led and AI-based workout options—think Aaptiv or Freeletics—that make fitness more accessible. Finally, despite Calm’s recent funding round that saw the company become the first mental health unicorn, mindfulness wasn’t present.

🍚 Rice Reimagined

At the grocery store, nothing is what it seems. From dairy-free milk to plant-based meat and egg substitutes to grainless granola, replacement foods made with ingredients claiming to be better for you and the environment are coming for, well... everything.

Now, there’s a full-on coup coming for rice. Thanks to healthy recipe blogs, riced cauliflower has been gaining steam. But the real competition may be most pressing from chickpea-based rice alternatives. popchips co-founder Keith Belling recently introduced RightRice. Made with lentils, chickpeas, peas, and rice, each serving has 10g of protein, 5g of fiber, and 40% less net carbs than white rice. With chickpea pasta maker Banza also announcing a rice alternative, the race to replace rice is on.

😠 Pricing Problem

ClassPass members in Singapore and Hong Kong are voicing frustration with the fitness subscription service for allegedly raising prices without warning. According to reports from the Hong Kong Free Press and Channel NewsAsia, some members were charged double the price they initially committed to.

In response, ClassPass defended the price adjustment saying members were given notice and the increase was a result of introductory pricing coming to an end. Some users, however, speculated the increase was tied to ClassPass’s acquisition of GuavaPass. The company insisted the two were unrelated.

Back in the US, ClassPass is already dealing with a data breach that exposed 1.5M accounts. Plus, a pricing controversy is nothing new. The company has shuffled its business plan and pricing model multiple times while still managing to weather the storm. Now, judging by their mentions from the last month, they’ll have to make right with users in Asia.

💰 Money Moves

Bloomberg reports that Peloton has chosen both Goldman Sachs and JPMorgan Chase to lead its IPO. Peloton could end up going public with a valuation in excess of $8B, the report adds.

JUST, a food-tech startup known for its plant-based egg substitute and egg-free mayonnaise, is seeking to raise $200M in funding, reportedly exploring offers from Chinese investors.

In line with its efforts to appeal to health-minded consumers, PepsiCo acquired CytoSport—makers of Muscle Milk and Evolve Protein—from Hormel Foods for $465M.

TRT Holdings, the majority shareholder of Gold's Gym, canceled plans to sell off the gym chain. In July 2018, the holding company said it was exploring a sale. Now, TRT will retain ownership and reinvest in the Gold’s brand.

NBA stars Kyrie Irving, Chris Paul, and DeAndre Jordan have invested in Beyond Meat—a plant-based meat alternative—joining a growing list of athletes who have invested, including Shaquille O’Neal, Victor Oladipo, Lindsey Vonn, Harrison Barnes, Malcolm Jenkins, Shaun White, and Luke Walton. The company has raised more than $122M to date and has filed to go public in 2019.

InterContinental Hotels Group acquired wellness-focused Six Senses Hotels Resorts Spas from Pegasus Capital Advisors for $300M, adding another luxury brand to its portfolio.

Two health-minded fast-casual brands, Lemonade and Modern Market Eatery, have merged to create Modern Restaurant Concepts — a self-described better-for-you restaurant platform. Terms were not disclosed.

Global nutrition group Glanbia, whose portfolio includes Optimum Nutrition, thinkThin, and SlimFast, will acquire Watson, a non-dairy ingredient solutions business for $89M.

In hopes of tapping the growing CBD food and drink market in the US, Tilray is buying the world’s largest hemp food manufacturer, Manitoba Harvest, in a deal that could be worth up to $317M.

Earlybirds, a plant-based breakfast drink, completed a successful Indiegogo campaign landing around $23K in presale funds for the production of a compostable bottle made from sugar cane.

Neighborhood Goods, the IRL outlet for DTC wellness brands like Hims, secured $8.8M in expanded seed financing, bringing the round’s total to $14.5M.

From Issue No. 13: While big-box stores shutter, everyone from DTC brands to Amazon, Google, and Facebook are opening physical locations, signaling a top-to-bottom reinvention of retail. While brands have long experimented with pop-up shops, concepts like b8ta and Neighborhood Goods are approaching brick-and-mortar retail with fresh eyes.

Spread the Word

 

If you find value in what we put together, please consider forwarding this email to a colleague or peer.

Get in Touch

Want to get in touch? Just reply to this email with tips or feedback. You can also reach me at anthony@fitt.co.