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October 3, 2019

A Summary of Natural Products Expo East

MHT Partners  | Consumer Investment Bank

MHT’s Consumer Growth team recently attended Expo East in Baltimore, MD, and despite the blistering, humid conditions outside, the interior halls of the Baltimore Convention Center were filled with the always refreshing air of entrepreneurship. We walked the aisles for two days, visiting existing relationships and establishing new relationships. As usual, Expo East was smaller and a bit more manageable than Expo West, both in terms of logistics and the sheer number of exhibitors. Further, the ‘Hemp Pavilion,’ basically a separate venue, served as a helpful micro-enterprise showcase for the rapidly growing and highly fragmented CBD/Hemp consumer product space. Here are a few general themes that MHT noticed from this year’s show, many of which were also abundant at Expo West 2019: . . .

September 19, 2019

The Never-Ending White Claw Summer

MHT Partners  | Consumer Investment Bank

Summer might be coming to an end, but White Claw popularity seems to be heating up for Mark Anthony Brands, the maker of both White Claw and Mike’s Hard Lemonade. White Claw officials confirmed a nation-wide shortage this month. So, what exactly is causing this frenzy? Maybe people do really believe in the slogan that “there ain’t no laws when you’re drinking claws” or maybe it’s the fact that the popular hard-seltzer has 5% ABV (alcohol by volume) and is a mere 100 calories per can, making it an easy choice for increasingly health conscious consumers. Having positioned itself as a more refreshing, low calorie alcoholic beverage, White Claw is a significant new contender to more established alcohol brands.

September 5, 2019

The World’s First Molecular Coffee . . . Coming Soon!

MHT Partners  | Consumer Investment Bank

This weekend I finally gave in and decided to forgo my typical 2% whole milk and instead try the lactose-free brand at Trader Joes. It made me wonder what the next big product of the food tech industry will be? Apparently, the answer is coffee with no coffee beans. Atomo Coffee, if successful, will be the first molecular coffee in the world. The coffee is expected to hit the market as early as next year.

August 29, 2019

My Summary of SuperZoo, the National Show for Pet Retailers

MHT Partners  | Consumer Investment Bank

I attended SuperZoo in Vegas last week and came away with the following notes and thoughts:

  • There seemed to be a slight decrease in traffic from last year’s show. Additionally, there were a few notable absences of larger companies that have traditionally exhibited. The latter is probably symptomatic of the situation facing many consumer tradeshows – retailers are dwindling, certain shows are increasingly less about writing orders and more about efficiently meeting and catching up with valued relationships, and in certain cases, demonstrating to retailers “we’re still here!” The return on investment from buying a booth versus spending a comparable amount on SEO, etc., is increasingly more difficult to calculate.
  • Continued . . .
August 22, 2019

Ghost Kitchens . . . Are Dine-in Restaurants Becoming a Thing of the Past?

MHT Partners  | Consumer Investment Bank

What if I told you that your favorite late-night delivery restaurant didn’t really exist, except for its online presence? With the evolution of food delivery that is currently underway, the $863 billion(1) (2019 U.S. projected sales) restaurant industry is changing so rapidly that the concept of dine-in restaurants might become a thing of the past, largely due to the consumer-driven migration to “Ghost” or “Dark Kitchens” that exist solely to be suppliers to delivery service platforms, such as UberEats.

July 25, 2019

What’s Red, Green, Spicy, and Growing like a Weed? HOT SAUCE!

MHT Partners  | Consumer Investment Bank

My family and I recently visited a beautiful, historic New England resort where I worked during two college summers.  Exactly 20 years after my first summer as a tuxedo-clad server in the main dining room, I was excited to see the subtle changes at the family-owned and -operated resort known for preserving its dining room traditions dating back to 1910.  While the same fine china, beautiful views, celebrated cuisine, and international wait staff were still present… the most noticeable change in the dining room was a respectable assortment of hot sauce bottles at each waiter’s station!  Back in 1999, ketchup, the primary condiment, was only allowed to be served in a ramekin on a doily-clad side plate.  In my mind, if the global hot sauce craze could reach the hallowed grounds of this main dining room, I wouldn’t be surprised if Queen Elizabeth herself kept a bottle of Cholula or Sriracha next to her marmalade at breakfast in Buckingham Palace.

July 11, 2019

DTC Models

MHT Partners  | Consumer Investment Bank

It seems everyone wants to be viewed as a premium direct-to-consumer (“DTC”) model these days. But what exactly does that mean in today’s rapidly evolving landscape.

What passed for “premium” DTC in the past doesn’t necessarily hold up today, as sophisticated investors have refined the lens through which they view opportunities. With the passage of time, investors have come to appreciate what works (and what commands a higher price) and what doesn’t work.

June 27, 2019

Outdoor Retailer Summer Market Summary

MHT Partners  | Consumer Investment Bank

I spent last week at the Outdoor Retailer Summer Market show (“OR”) in Denver.  As usual, it was a good opportunity to connect with many folks and to stay abreast of developments and trends in the space. My perception was that traffic was slightly down from last year. The timing of the show was a bit unusual this year in that Grassroots Outdoor Alliance (“GOA”) was held the week of June 9th (GOA is a less “sexy,” yet highly efficient show; no fancy booths-just pipes and drapes) and several regional trade shows (including the California Outdoor Sports Show in Sacramento, 360 Adventure Collectives in NJ and SC, Western Winter Sports Representatives Association shows in CO and OR (Oregon, not the show) and the Outdoor Reps Association Summer Show in WI) all taking place the week of June 23. While the press and media tend to congregate at OR, specialty retailers likely pick a show or two – but not all. Another strong, but not always verbalized undercurrent, continues to be the dwindling number of retailers themselves.

June 20, 2019

Content to Commerce

MHT Partners  | Consumer Investment Bank

The content-to-commerce revolution has begun. A new breed of enterprising businesspeople have started to “crack the code” on a powerful alternative to both the traditional media content model and the traditional wholesale/retail model. Content to commerce (c2c) is a hybrid model that recognizes the flaws and challenges of the traditional content model (relatively large upfront creative costs, reliant on creating or obtaining distribution) and of the traditional wholesale/retail model (crowded product spaces, concentrated power with certain large brick & mortar players, and the unrelenting inertia of Amazon’s online dominance), and through combination accelerates growth of both “content” and “commerce.”

May 23, 2019

What’s for Dinner? Meal Kit Fatigue!

MHT Partners  | Consumer Investment Bank

The American diner is continually searching for ways to get dinner on the table quickly, as evidenced by the meal kit phenomenon of the last several years. The plethora of meal kit choices is almost overwhelming for the consumer. Need a paleo box? Options abound. You want to eat all organic? No problem. Vegan? There’s a box for that. While the optionality for the consumer is appealing, it highlights the challenges of the meal kit market – it is a crowded space with high customer acquisition costs and significant customer churn (not to mention the difficulty of managing perishable ingredients and challenging distribution dynamics). With numerous competitors in the space competing for consumers’ attention, such as Blue Apron, Hello Fresh, Sun Basket, Gobble, Home Chef, and Plated, just to name a few, it is no wonder that many of these companies are struggling to retain customers and turn a profit. As one data point on the challenges in the meal kit market and investors’ view of the space, Blue Apron’s (NYSE: APRN) stock is currently down more than 90% from its IPO pricing of $10 a share.