Is future hair loss a thing of the past? Keeps makes doctor-supported, FDA-approved, affordable treatment plans to stop hair loss.
Direct-to-consumer businesses are bringing multiple brands under one umbrella. Why?
Who will be the next Unilever? Consumer brands have challenged our perceptions when it comes to shopping for every day goods, and demonstrated the power that brand, community and storytelling has to turn even the most boring household products into talking points.
On that level, they have been able to cause a number of headaches for execs at the consumer goods giants of this world. Increasingly, a number are to square up to incumbents like P&G and Coca Cola even more firmly, by bringing a portfolio of brands under one roof.
But do these "house of brands" businesses such as Pattern (which owns Equal Parts and Open Spaces) and Arfa (which is behind Hiki and State Of) have a real shot at becoming the next world-dominating conglomerate?
Bringing multiple brands – even if it's just two or three – under one roof can provide economies of scale at the sort of magnitude that might result in a better deal with Shopify or Mailchimp, but not everyone is confident the modern brand holding company model can work. Karen Howland, managing director of investment platform and fund CircleUp, says it's still not clear if the economics add up on this strategy. "To date, I haven't seen how combining multiple brands that are loss making, or multiple brands that have sub-par unit economics, ends up making a whole that's greater than the sum of its parts," she says. "If all of your brands are loss-making, which most early-stage consumer brands are, you've got to make some decisions."
Effectively, Karen says, brands "run into the P&G problem", where portfolio have to choose between marketing their biggest money-making brands (and hopefully increasing their revenues) or spending on R&D (and accepting that the risk might not pay off).
Writing for TechCrunch, Innovation Department co-founder Alex Song argues that it is worth paying attention to the way some companies are using this model to focus on building multiple pockets of customers and increase their lifetime value (the amount of money an individual might spend with a company throughout their lives). Iris Nova is doing this with its distribution and order-by-SMS platform, and it has already onboarded 11 brands in a category where consumers are willing to experiment. Arfa is also seeing how it can create maximum value for its customers, by working directly with them to create new product ranges (and offering them a 5% cut or revenues in return for their time).
Here, we take a closer look at some of the companies that are building their brand portfolios.
In 2018, Thirty Madison launched its first brand in the healthcare space: Keeps, a range of products that provide FDA-approved hair-loss treatment. It has since added a line of indigestion treatments (via Evens) and a solution for migraines (Cove). The company also offers telehealth consultations for the chronic health issues it treats, as well as an urgent care service. In August 2020, the umbrella company raised $47m, which included backing from Johnson & Johnson Innovation.
Creative agency Gin Lane made a name for itself as the brains behind some of the modern brand world's most recognisable aesthetics, including CBD soda company Recess, salad bar Sweetgreen and razor brand Harry's. It was a surprise, then, when in August 2019 the company completely pivoted and said it would no longer be assisting new brands – it would be creating its own instead. Now known as Pattern, the company is focusing on product categories that can make our home lives more enjoyable, and it has raised $14m in VC funding to do so. It currently has two brands in its portfolio: Equal Parts, a cooking brand with a culinary coaching service, and Open Spaces, a line of products to help get your home organised.
Iris Nova is doing things a bit differently – rather than create its own brands (as it did initially with Dirty Lemon), the company is creating its portfolio by onboarding drinks businesses to its distribution platform. Speaking to Digital Commerce 360, the company's CEO Zak Normandin explains that Iris Nova's transition from building a drink's brand to becoming a software-as-a-service platform was largely a result of the order-by-text service it had created for Dirty Lemon. The company has also said it will invest $100m in other early-stage consumer brands over the next few years.
Seltzers for the curious, only made with natural ingredients, low calorie & vegan.
DIRTY LEMON is a direct-to-consumer line of functional beverages to support your beauty and wellness goals sold over text message.
The first Asian-inspired sparkling water, Sanzo uses real fruit + no added sugars to deliver sparkling water with traditional Asian flavors.
GNGR Labs' line of organic ginger shots designed to boost your immunity and improve your overall wellbeing.
Better Booch is premium small craft kombucha that is brewed and canned in Los Angeles. Find Better Booch at 3000+ retailers in the US.
Kind of like tea, kind of like sparkling water. Using only Fair Trade tea, and organic ingredients - with no sugars and no added sweeteners.
British sparkling spring water infused with wonky fruit and vegetables.
Sparkling Botanicals by Rishi elevates sparkling tea with rare and functional exotic ingredients sourced directly from artisan growers.
Back in 2017, Roman was best known as a competitor to erectile-dysfunction telemedicine company Hims. But over time, the business has evolved to add a number of other brands to its portfolio (addressing women's health and smoking cessation, as well as launching an online pharmacy), and created a parent company called Ro. Last year, it gained the capability to offer at-home blood test collections, thanks to the acquisition of healthcare startup Workpath.
In 2019, former Glossier executive Henry Davis co-founded Arfa, a consumer-brand builder that planned to leverage the insights of customers to build its products. This focus group, which Arfa calls "the collective", and who receive 5% of the company's profits as an incentive to participate, has encouraged Arfa to launch two personal care lines so far. Its first brand, Hiki, sells "sweat products" including deodorant, anti-chafe sticks and body powders. It launched in May – just as the pandemic was starting to bite. Three months later, Arfa launched its second brand, State Of, a collection of products to solve personal care problems for women who are experiencing the menopause.
Thingtesting is a database of internet-born brands. We’re building the un-sponsored corner of the internet where consumers can come together to talk honestly about new things. Read more about Thingtesting here.
Create a free account so you can make your own lists, whether that’s because you love them or because you want to try them.
Feedback? Yes, please.