Past Issues

The business of fitness and wellness.

A Shift in Spending


In 2018, Peloton spent more than $140M on television commercials, up from $108.7M in 2017. This investment puts the company near the top of a growing list of DTC brands who are shifting their spend to TV ads as they continue to scale. More significant than which brands are advertising on television, though, is how many digital-first companies are fleeing Facebook and other social channels in search of lower customer acquisition costs.

According to the Video Advertising Bureau, which used Nielsen data to track ad spend, 120 DTC brands spent some $2B on TV ads between January and November 2018, an increase of over $1.3B in 2017. A number of wellness-related companies like HelloFresh and Thirty Madison—parent company of DTC healthcare brands like Keeps and Cove—are also investing in TV ads. Nielsen data shows that, in all, Keeps has spent $22M on television. 

While Keeps didn’t share specifics of the ROI, they did say that 40–50% of their marketing spend goes to TV. Meanwhile, HelloFresh was more forthcoming — Digiday reported that the company attributes its TV ads to an 88% increase in site and app visits year over year.

Of course, television ads aren’t a magic bullet for marketers. In most cases, they’re cost prohibitive. But the willingness and, in some instances, the necessity to test the TV waters is being motivated by the unpredictable nature of paid search and social platforms. As Daniel Gulati, a partner at Comcast Ventures, told Inc.: "CAC is the new rent."

Instead of DTC brands paying rent to a landlord, they have to pay Google and Facebook to be their storefront. But, as these internet giants begin to act more like greedy mob bosses than harmless landlords, a wide range of brands—from upstart to IPO-bound—are diversifying their marketing mix. 

Circling back to Peloton, we see that retail showrooms have been integral to their success. On their website, the company lists 70 showrooms across North America and the UK. Meanwhile, companies like Dirty Lemon and Glossier are making investments into their tech infrastructure to own a bigger piece of the customer relationship and glean more data in the process. The former doubled down on its text message ordering and customer service platform when it acquired Poncho — a text-based weather app. The latter is said to be developing its own social media-esque shopping platform

But high tech is only one approach. Others are turning to low-tech tactics like direct mail, billboards, and subway ads in hopes of cutting through the noise. And that’s to say nothing of the burgeoning business of podcast ads where DTC brands give away discount codes like candy. 

In the end, it’s proving to be an all-of-the-above approach for DTC brands seeking to make customer acquisition cost translate to lifetime value. And given the unpredictable nature of platforms like Facebook, an omni-channel strategy and willingness to adapt are proving to be requirements for building a breakthrough brand.

Headlines & Happenings

🚴‍♀️ ICYMI

Since we're on the topic, Peloton was trending on Twitter yesterday. Unfortunately, it wasn't a great look. If you missed it, this hilarious thread poking fun at the company's marketing efforts won the Internet. 

🛒 Shop till you drop

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, a new retail format is gaining traction. Say hello to Preview, a SoHo shop curating a rotating selection of men’s fitness, grooming, and lifestyle brands. Concepts like b8ta and Neighborhood Goods are also approaching brick-and-mortar retail with fresh eyes. In an effort to coax consumers out of their homes, these pop-up shops and curated showrooms are utilizing a low-risk brand strategy to grow both awareness and sales while testing the retail waters.

💎 Lap of luxury

According to Facebook’s trending topics report for 2019, wellness has become a luxury good.

"In a time when consumers, especially Millennials, value experiences as much or more than objects, they are replacing materialistic items for wellness experiences that improve their body and mind. Increasingly, success is not defined by people’s ability to purchase the latest handbag, but by their willingness to take the time to achieve the best possible version of themselves." 

This finding helps explain why a growing number of brands are attempting to reposition themself as a wellness company. By tapping into the aspirational or experiential elements of living a healthier lifestyle, companies are hoping to capture their share of the dollars flowing to things like self-care, functional ingredients, and wellness tourism.

🥊 Put ’em up

From Rumble and EverybodyFights to TITLE Boxing Club, Shadowbox, and Mayweather Boxing + Fitness, the boutique-ification of boxing has blown up. In the words of Andy Stenzler, Rumble’s CEO, “you don’t have to hit each other in the head to get a great workout”. The WSJ agrees, pointing to boxing as the hot workout of 2019. And it’s hard to argue with that assessment. 

With three locations in NYC and backing from fitness powerhouse Equinox, Rumble is expanding to LA, San Francisco, DC, and Philly. Then there’s TITLE Boxing. With more than 175 studios, the company is among the fastest-growing fitness franchises in the country. And Mayweather Boxing + Fitness, owned by champion boxer Floyd Mayweather, is coming on strong with plans to open 500 locations in the next five years. Looking ahead: as the buzz around boxing builds, don’t be surprised if Xponential Fitness adds a boxing concept to its portfolio of boutique brands.

💰 Money Moves

Speaking of a boxing boom, Rumble is said to be on the fundraising trail. Bloomberg reported that the company is seeking $200M in funding with a nearly $500M valuation.

Him’s is set to enter the unicorn club as they finalize a $100M round of funding that values the company at more $1B.

Australian leisurewear brand Lorna Jane is up for sale and it’s attracting the attention of investment firm L Catterton Asia and rival lululemon, who are said to be eyeing the deal.

Also in Australia, Quadrant Private Equity is preparing to sell the country's biggest gym chain business, Fitness and Lifestyle Group, in a deal expected to be worth $2B.

SKINS, makers of athletic apparel and compression gear, has filed for bankrupcy. Chairman Jaime Fuller shared the news in an emotional blog post on the company’s websire. 

After raising $26M back in October 2018, powdered food startup Huel shared that the company’s revenue will exceed $50M for 2018.

The Pill Club, an online birth control prescription and delivery service, raised $51M led by VMG Partners, with participation from GV, ACME Capital, and previous investors.

Combe Incorporated (makers of Vagisil) made a strategic investment in Sustain Natural, creator of natural sexual wellness products for women, taking a majority stake in the company.

CUBIQ FOODS, producer of cell-based fats of animal origin, received a $13.7M investment from Moira Capital Partners.

“Smart” beverage dispenser Bevi closed a $35M Series C led by Bessemer Venture Partners.

The Good Crisp Company closed a round of funding from CircleUp Growth Partners. Terms were not disclosed, but the firm typically invests between $1–5M.

Your Super, makers of natural, organic, plant-based superfood mixes, raised $5M in Series A funding from PowerPlant Ventures

FoodMaven, a startup that sources and delivers “lost” food, raised $10M from Tao Capital Partners and members of the Walton family.

Cocoburg closed $500K in a private funding round for its vegan coconut jerky.

Renewal Mill, a food ingredients company providing sustainable solutions to production and manufacturing waste, raised $2.5M in seed funding.

Ample Foods, makers of convenient and nutritious full meal replacements, launched a crowdfunding campaign on Republic, raising more than $160,000 so far.

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