Retail’s Recent Interest in Healthcare Insurance Tie-Ups
We’ve Come A Long Way Baby
Parents are continually searching for products that will make life with an infant a little bit easier, which these days include a wide variety of tech-enabled products and services meant to help babies sleep longer, eat better, and stay safer. As the juvenile products’ industry has increasingly embraced advancements in technology, new parents are faced with a litany of new product choices, including cradles that rock themselves, wearable devices that monitor sleep patterns, temperature, oxygen levels, and heart rates, and highly engineered baby monitors controlled by smart phones. While the dizzying array of evolving product options may be overwhelming for new parents, it continues to fuel growth in the U.S. durable juvenile products’ market, which grew to $6.4 billion in retail sales in 2016, according to The NPD Group.
General Mills Acquires Blue Buffalo
With their recently announced acquisition of Blue Buffalo, General Mills recently got back into the pet food game (after 50 years) in a big way, in order to cater to the newest members of the American family – pets.
Authenticity in the Outdoor Space
Poser – /ˈpōzər/ noun: a person who acts in an affected manner in order to impress others. We can’t think of anyone who would enjoy being labeled with that moniker. Given enthusiasts’ hyper vigilance when it comes to proper bona fides in the outdoor industry, you’re much more likely to hear it, or a related term, tossed around on ski slopes rather than a sidewalk. While there are many attributes that outdoor and enthusiast brands want associated with their products – durability, fashion, sustainability, social impact . . . arguably the most important is authenticity. Without being deemed authentic, brands risk being lumped into the “also-ran” category of copycat gear – perhaps attractive to folks buying based on price, but unlikely to garner the attention of the most serious practitioners of the outdoor arts.
Fancy Food Show – Same Same but Different
The first major food/beverage trade show of the year, The Winter Fancy Food Show, rolled through Moscone Center in San Francisco a couple of weeks ago, attracting over 1,400 exhibitors and 25,000 visitors. After eating our way through the show and talking to countless entrepreneurs and a few large players, we are pleased to report that the mood on the floor concerning the food and beverage industry and its consumers was extremely positive and optimistic. MHT Partners hasattended the show for years, and every year it seems to grow both in terms of exhibitors and attendees. The general vibe was similar and the major trends were also familiar – same same but different – from recent years. A few trends that struck us:
The Sparkling Water Revolution
Sparkling water is one of the hottest consumer products in years. Among changing consumer preferences, new market entrants, private equity investments, and strategic acquisitions, sparkling water has the makings of a craft beer-type revolution. Americans, once heavy soda drinkers, have been looking to reduce sugar, calorie, and artificial sweetener intake. Enter a sugar free, calorie free, flavored sparkling water, which when consumed, has many of the desired taste features of a traditional soda. According to Nielsen, the sparkling water category has doubled over the past 4 years, growing from $961 million in the 52 weeks ending June 1, 2013 to $1.8 billion in the 52 weeks ending May 27, 2017.
Private Label Wine: More Than Just Two Buck Chuck
Private label consumer goods are usually easy to spot on the shelf and on our favorite ecommerce sites. Whether its Kirkland Signature® toilet paper, Safeway Select® ice cream, or AmazonBasics® batteries, the retailer name is front and center on the package and products are sold at a discount to national brands. Private label has long been a lucrative component of retailers’ strategies, primarily due to the needs of value-driven consumers and higher profit margins for retailers generated by private label sales. In the beer, wine, and spirits categories, however, only a few retailers have been emboldened enough to use their private label or “house brand” on the label. Costco, the largest domestic wine retailer, is the clear outlier in all three categories. The leading club retailer relies on a network of well-known wineries, breweries, and distillers to produce premium beverages sold at competitive (yet not rock bottom) prices, and loyal Costco consumers don’t seem to care that each label proudly displays the Kirkland logo. Trader Joe’s takes a similar tact in beer and spirits, albeit with craftier, whimsical labels such as Trader Jose Mexican Style Lager. In the wine aisle, Trader Joe’s largely relies on a different strategy, whereby consumers shop dozens of brands across varietals and price segments that appear to be national brands but actually represent the 474-store chain’s “retail exclusive” wine assortment.
Pills for Pooches
Like other facets of the pet industry, the pet pharmacy space has mimicked its human counterpart, the human pharmacy space. More specifically, the pet pharmacy space is a large, dynamic and evolving industry.
The Shifting Terrain for Outdoor & Enthusiast Retail
Walking the floor of the Outdoor Retailer (“OR”) conference in Salt Lake City this summer, we were struck by an odd mixture of moods. On one hand, demand for outdoor products remains strong, feeding the growing $120 billion U.S. market. On the other hand, a pallor seemed to hang over the event. These are good times, but an air of uncertainty crept into many of our conversations at the show. Consumers want these goods, are willing to pay for quality, and the show’s participants are happy to supply them, but the issue of how products get from OEMs into end-users’ hands remains very much in question.
Two Worlds Collide (in a good way)!
A theme we like a lot, and have had good experience with, is the intersection of healthcare services and consumer. Why?