CPG Curator: Wellness Boom-CPG Opportunities

Welcome to this edition of the CPG Curator!

We’ve got some exciting highlights to share with you. First, the global wellness industry is booming, projected to hit $8.5 trillion by 2027. This offers incredible opportunities in the personal care, beauty, and healthy eating sectors.?

Next, the surge in GLP-1 prescriptions is boosting beauty and wellness sales, opening up avenues for specialized products and education.

We also dive into how kids' brands are targeting millennial and Gen Z parents through influencer collaborations, and lastly, why TikTok -viral brands like Halara are embracing brick-and-mortar stores to build trust and expand their customer base.

At Compass Rose Ventures , we’re here to help you navigate these changes and implement effective strategies. Reach out to us to see how we can support your brand's growth and innovation.?

Let's get started! ??

The Global Wellness Industry Is Now Worth $5.6 Trillion

Newsworthy:?

The global wellness industry generated $5.6 trillion in revenue in 2022, up from $3.4 trillion in 2013. It is projected to grow to $8.5 trillion by 2027, indicating a 57% increase. The industry showed significant resilience, bouncing back quickly from the pandemic.

Impact on CPG Brands:?

Brands will see the biggest opportunity in personal care and beauty, the largest subsector, valued at $1.08 trillion, including skin care and salons. The next largest opportunity is in healthy eating, nutrition, and weight loss, valued at $1.07 trillion, excluding prescription weight loss drugs. Overall, North Americans spend the most on wellness, with per capita spending at $5,108 annually, compared to $1,596 in Europe. Two growing sectors for brands to monitor: 1) Wellness tourism is a growing sector, with hospitality companies like Kerzner International and Equinox expanding offerings focused on physical fitness, mental health, and nutrition.? 2) High-end hotels are integrating wellness into their offerings, with Aman New York featuring a wellness wing with spa and medical services. Wellness has become a critical component for luxury hotels, often prioritizing it over traditional restaurant concepts.

Actions for Today:?

1)? Capitalize on the largest subsector by developing innovative skincare, beauty products, and salon services. Emphasize natural and clean ingredients to align with consumer preferences.

2) Expand product lines to include nutrition-focused items, weight management solutions, and healthy food options. Highlight the benefits of balanced diets and preventive health measures.

3) Consider partnering with hospitality and travel companies to create wellness-focused experiences. Offer packages that include fitness, mental health, and nutrition services to attract health-conscious travelers.

4) Enhance high-end product lines with wellness features. Collaborate with luxury hotels to provide premium wellness experiences, such as spa treatments and personalized health services, ensuring your brand stands out in the premium market.

Send us a message to learn how Compass Rose Ventures can help you with your product marketing, messaging, and pricing strategies. ??

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How GLP-1 drug use is boosting beauty and wellness sales

Newsworthy:?

There has been a massive increase in GLP-1 prescriptions.? By the end of 2022, U.S. health providers have written 9 million prescriptions for GLP-1 drugs like Ozempic and Wegovy, a 300% growth over three years, with about 7% of U.S. adults now using these medications.?

Impact on CPG Brands:?

The rise in GLP-1 usage has led supplement and skincare companies to develop products boosting GLP-1 results and/or addressing side effects, such as appetite suppression and the resulting nutrient deficiencies, as well as cosmetic concerns like "Ozempic face."

Actions for Today:?

1) Create specialized product lines that boost the effectiveness or address the side effects of GLP-1 drugs.

2) Launch marketing campaigns that target the growing number of GLP-1 users. Highlight your products' benefits in either boosting the results of GLP-1 drugs, mitigating side effects, or improving overall wellness.?

3) Develop and promote alternative products like iHerb, LLC ’s Berberine Advanced, which offer metabolic health and weight management benefits with fewer side effects. Position these alternatives as safer and equally effective options for consumers seeking similar results to GLP-1 drugs.

4) Provide comprehensive education on how your products can support GLP-1 users. Update product labels with clear information on how they address specific side effects. Offer detailed guides, blog posts, and webinars to educate consumers on the benefits of GLP-1 medications with your products.

Send us a message to learn how Compass Rose Ventures can help you with your product marketing, messaging, and pricing strategies. ??

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Kids brands are targeting young parents with collaborations and influencer campaigns

Newsworthy:?

Brands are focusing on millennial and Gen Z parents, who have increasing buying power in the children's category. Approximately 40% of U.S. millennials are parents, and 10% of parents are Gen Z, many of whom use TikTok to discover products. To appeal to these digitally native parents, brands like Coterie , PatPat , and Little Spoon utilize influencer marketing and brand collaborations. They aim to stand out in a crowded market by leveraging the influence of celebrities and popular online personalities.

Impact on CPG Brands:?

Millennial and Gen Z parents prioritize brand values such as clean ingredients and sustainability. They spend considerable time researching products, driving brands to focus on high-quality offerings and trustworthy resources.

Actions for Today:?

1. Expand your product lines based on customer feedback and popular demand. Coterie , for example, launched a new swim diaper and partnered with Hunza G on a mommy-and-me swimwear collection, reflecting the modern aesthetic and preferences of young parents.

2) Employ a "pyramid of influence" model, using celebrity and mommy-and-kid influencers to reach a broad audience.?

3) Focuses on localized content to build market authority and, if possible, use licensed characters like 华特迪士尼公司 and Paw Patrol to attract families.?

4) Creative and non-intrusive marketing strategies are crucial to stand out amid the digital noise.

Contact us to learn how Compass Rose Ventures can help your band implement customer segmentation and positioning strategies to help you effectively reach new demographic opportunities. ??

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Why TikTok-viral brands are embracing brick-and-mortar retail

Newsworthy:?

Originally successful online through TikTok , Halara opened its first pop-up store in New York City in June, with plans for at least four more U.S. pop-ups by year-end, aiming to attract non-online shoppers and build credibility.

Impact on CPG Brands:?

Halara’s move to physical stores aims to alleviate trust issues among potential customers who are skeptical of social media brands, as revealed through customer surveys and focus groups. This shift represents a new generation of brands building initial awareness via social media before expanding into physical retail.?

Unlike earlier DTC brands like Allbirds and Outdoor Voices , which expanded rapidly and faced financial difficulties, social-first brands like Halara are growing more cautiously, potentially benefiting from early financial discipline due to a more constrained market. These social-first brands aim to appeal to a broader demographic beyond its initial Gen Z following, including mothers, pet owners, and millennials, by opening physical stores to enhance brand identity, awareness, and trust globally.

Actions for Today:?

1. DTC-based CPG brands can follow Halara's example and open pop-up stores to help attract non-online shoppers, build brand credibility, and create a tangible presence that complements their online success.

2. DTC-based brands should consider using customer surveys or audits and listening labs to understand and alleviate concerns, offering a seamless integration of online and offline shopping experiences.

3. Brands should learn from the cautious expansion approach of social-first brands like Halara . Avoid the financial pitfalls faced by earlier DTC brands by scaling at a measured pace, focusing on financial discipline and market demand to ensure sustainable growth.

Contact us to learn how Compass Rose Ventures can help your band implement customer segmentation and positioning strategies to help you effectively reach new demographic opportunities. ??

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