Across all product categories, consumers demand to know more about what they are buying—from product formula to manufacturing process and supply chain. This is all the more critical in the wellness market given its potential impact on health—and increasingly so for ingestible and applicable products.

Successful wellness brands aim for maximum transparency about process and effects, but must cultivate trust in the long term if they plan to advance beyond a fleeting health trend. Wellness brands attempt to convince consumers that their product will have its purported healthful effects in a variety of ways: celebrity or influencer endorsement, expert-backed research, independent testing and/or customer reviews.

At the same time that the lack of standardized regulatory practices is something to take advantage of, wellness brands must hold themselves up to high-enough standards so that when regulation inevitably appears, they are able to preserve their integrity.

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The Trust and Transparency Framework

Build transparency and trust

  • Who speaks for your brand and endorses its health benefits? What makes this voice or these voices trustworthy vis-à-vis your customers? Are they ideal voices for building trust with your specific target audience? Do they have the potential to expand your customer base beyond this core audience?
  • How open with your customers are you about your formula, product benefits, manufacturing process, supply chain, long-term vision for growth and scalability, etc.? Where can you embed more useful information about your brand and mission to satisfy knowledge-hungry shoppers?
    • How can you use this information to market your products? What rhetoric is most likely to connect with shoppers? How can you enhance your transparency efforts over time in order to mature your brand and strengthen your relationship with customers?

Establish credibility and accountability

  • Do you outsource research for your products or do you perform this research in house? Is there a way to involve a third-party in order to enhance the integrity of your brand in the absence of standardized testing and comprehensive federal regulation?
  • How can you evolve with accountability at the forefront of your business to shield your brand from vilification down the road if new institutional standards emerge? How can you ensure integrity across research and development, production and supply chain to raise the bar for your company’s overall operations?
  • How can you use the absence of scientific regulation as an opportunity to set rigorous standards within the wellness industry and hold other brands accountable?

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Like medical companies, wellness brands pose as authorities of health, but often lack proper qualifications or transparency, which can backfire in the long run.

While most consumer brands aim to establish trust with consumers, wellness brands operate with higher stakes given their tangential relationship to medicine, an industry historically sullied by corrupt financial relationships between doctors and pharmaceutical companies. Arthur Sackler of the now notorious Purdue Pharma worked as a copywriter at an advertising agency during medical school, later purchasing the agency to market his company’s pharmaceutical products to doctors—his ads sometimes featured fake doctors’ names, helping to normalize drugs like Valium and OxyContin. For years, medical journals have been reprimanded for failing to properly or comprehensively disclose doctors’ financial relationships with the drug companies they feature in their research. WebMD and similar sites have also received criticism for publishing biased reviews based on the pharmaceutical companies that purchase their ads.

While the potential threats of misusing pharmaceuticals are much more threatening, parallel transparency issues exist within the wellness industry and for consumer brands more broadly. After the direct-to-consumer mattress brand Casper noticed that some mattress review sites were publishing advertisements for competing brands on its own company page without proper disclosure, it took action—just not the type you would expect. Casper sued and then provided a loan to another mattress review company to purchase one of its offenders, Sleepopolis, essentially owning the site that is supposed to be its critic. Casper claims that Sleepopolis runs independently, but if the review site were to default on the loan, Casper would take over, skewing reviews in its favor if it isn’t doing so already. As many wellness brands rely on either customer reviews or approval from medical professionals, they should be ready to elucidate the relationships between all parties involved in the company. Otherwise, they jeopardize brand equity in the long run.

The success of dubious ingredients including organics, superfoods and CBD is precariously built on consumer perception, which can damage business if public opinions shift.

The ambiguity of wellness products and their ingredients makes regulation challenging. Take organics, for example. Just as the USDA dances around the term as it relates to food, the FDA has not yet defined “natural” or “organic” as they relate to consumer products, effectively rendering these labels meaningless. (Additionally, it does not wield the authority to test or approve cosmetics aside from color additives, instead laying responsibility on the manufacturer to ensure product safety, as per the directions on the label.)

However, organic and natural products have been a major catalyst of consumers’ pivot to wellness—in a 2017 report by the NPD Group, 40-50% of female U.S. consumers said they seek out organic or natural ingredients when they shop and organics now account for 5% of all food sold. Organic cosmetic sales also rose 24% in the UK in 2017. This growth demonstrates that consumers have an increasingly positive relationship to organic products, despite the lack of institutional credibility. In this way, organic products illustrate the extent to which consumer brands are at the whim of consumer subjectivity. While the stars have aligned for now, these brands may falter as shoppers grow more aware of the meaninglessness behind “organic” as a label and will be forced to move on to a new selling point.

Another buzzword wellness-oriented brands rely on is “superfood” or “superfruit”—a concept that emerged in the second half of the 20th century, gaining the (scientifically contested) connotation of “nutrient-rich,” which brands generally use to rationalize upselling. However, brands that use popular and ill-defined jargon are at risk of delegitimization. Because superfood brands often rely heavily on internal company data to support their alleged product benefits, they are susceptible to legal trouble; in 2007, the European Union’s Food Standards Agency deemed the term “superfood” a misleading health claim and banned it from marketing—a fate that CBD products (discussed below) may also meet in the future. Wellness brands market by self-legitimizing, but cannot depend on buzzwords if they want to stay relevant over the long term.

Certain ingredients can also take on a buzzword-like effect—a slippery slope when the ingredients themselves are poorly understood. Cannabidiol, or CBD, blossomed in 2018, finding its way into non-medical products such as gummy bears, vaping oil and even mascara, even though its benefits remain hotly debated. CBD, a cannabis compound found in hemp, lacks the psychoactive effects of marijuana, and brands using it tend to tout CBD’s ability to alleviate anxiety and inflammation. But while the FDA approved the first CBD-containing drug in June 2018, there are no standards for producing, testing or selling non-medical products with CBD oil.

On the one hand, consumer brands using CBD oil in their products are ahead of the curve, gainfully producing items that reflect consumer interest (the market is expected to grow by $2 billion between 2017 and 2020). While some doctors currently studying the compound believe that higher doses (significantly higher than those found in non-medical products) can alleviate the effects of neuropsychiatric diseases, most endorsements for CBD stem from curious consumers—a bottom-up fascination, rather than one led by institutions. At the same time, however, greater activity in the CBD arena will likely spark scientific research, which may ultimately raise concerns about the consumption of cannabidiol and restrict future manufacturing. For this very reason, beverage brand Dirty Lemon (discussed in depth in Part II of Wild, Wild Wellness) proactively discontinued its CBD-infused drink in November 2018 until greater legal clarity is established.

Samantha Czubiak, the CEO of Hora Skin Care, which uses CBD in its products, emphasizes the importance of educating consumers, choosing minimalistic packaging without the marijuana leaf insignia to (correctly) disassociate CBD from its cannabinoid cousin. But is Czubiak really providing her customers a service if CBD has yet to be subjected to rigorous scientific review? Differentiating CBD from marijuana is helpful to consumers, but it doesn’t make the potential effects of ingesting the compound any more safe given the paucity of research—Hora Skin Care is building transparency without trust to capitalize on a trend. Its success may prove to be viral—sweet, but short, as consumers eventually latch onto the next hot ingredient.

To avoid incurring potentially fatal harm to their brands, Juul Labs and Goop must address criticism proactively and hold themselves accountable.

The slow introduction of legal regulation in the wellness category has already wielded deleterious effects on some brands. One of categories to succumb most severely is e-cigarettes. The debate about flavored cigarettes—culminating in then-President Barack Obama’s 2009 ban and ballooning all the way up to the World Trade Organization—has since bled into the e-cigarette space given the rise of vape culture. Though the market has yet to cave entirely, governmental and public aversion to teenage nicotine addiction pushed Juul Labs—a company comprising 75% of the e-cigarette market—to preemptively terminate the sale of most flavored pods in retail stores in November 2018, as well as curtail all social media ads in the U.S. Two days later, the FDA banned the sale of sweetly flavored pods wherever consumers under age 18 are able to shop, from gas stations to convenience stores.

Juul Labs continues to sell its full range of flavors, including mint, cucumber, creme and mango online, but the FDA’s decision dealt a serious blow to the company, which must now wait for FDA authorization if it seeks to return to selling at all locations. Like tobacco companies, Juul Labs faces a problem core to its very identity: How to persevere as a company that sells explicitly harmful products, even if that harm is relative. Halting all social media ads is a step in the right direction as it will likely curb the number of minors turning to e-cigarettes in the first place. Additionally, the company’s site specifically markets the product to “adult smokers” who can turn to vaping in order to reduce their dependence on cigarettes.  

However, in December 2018, Altria, the manufacturer of Marlboro, purchased a 35% stake in Juul Labs. While the investment may improve Altria’s reputation as it embraces alternatives to combustible cigarettes (it also invested in Cronos, a cannabis company, in December 2018), it tarnishes Juul Labs’ image as an adversary of Big Tobacco. The deal gives Juul Labs access to Altria’s distribution and supply chain, top-shelf space next to Marlboro cigarettes and will help the e-cigarette brand deal with regulatory crackdowns, but any company that promotes wellness needs to ensure that all aspects of its business do so as well. Associating with one of the biggest tobacco brands—even visually—poses major risks to Juul Labs’ reputation.

Gwyneth Paltrow’s wellness brand Goop has also had to curb somewhat reckless behavior after facing institutional backlash. With mounting criticism from medical professionals against claims that bra users may be more prone to breast cancer, and that its $66 jade eggs can regulate hormone levels, Goop received a $145,000 fine in September 2016 from California prosecutors for marketing baseless benefits. The company has since hired a lawyer, a fact-checker, a director of science and research from Stanford, and a PhD in nutritional science, though it continues to sell jade eggs on its site (however, the product is unsearchable on Goop.com).

Like Juul Labs, Goop took advantage of the regulatory vacuum and felt the repercussions. Its new hires show that the company is interested in bolstering greater scientific credibility, positioning its business as proactive rather than reactive. But thus far, when it comes to Goop’s merchandise, these changes have only reflected in response to criticism—a more thoughtful approach would be to provide a word from a specialist within each product description. Wellness brands should learn from Goop and Juul Labs’ mistakes to increase their chances at longevity, especially if standardized testing and new rules appear down the road. Other brands will do well to launch with scientific findings at the forefront, increasing their chances of a long life.

Already, some companies are beginning to put stricter standards of their own into place. Clean cosmetics retailer Credo Beauty established new rules in 2018 on transparency of supply chain and ingredients, later holding a summit to educate its brand partners, which have until October to implement the changes. The company is also establishing a weekly conference call during which experts expound on points of confusion within the clean beauty and wellness categories (i.e. the difference between a drug and a cosmetic). But while setting standards is admirable, each company—from Credo to Sephora to The Detox Market—is acting as its own supervisor, which not only means that standards vary between businesses, but also that each company answers only to itself.

Celebrity-driven wellness brands establish famous faces as gurus, but fail to take advantage of the consumer-driven self-care movement.

Though Goop has received a good deal of flack for disseminating unfounded scientific claims, it relies on its founder Gwyneth Paltrow’s celebrity to cushion the fall. The company has mastered a faux-scientific language to discuss its product benefits—a mix of medical jargon and consumer-friendly copy meant to legitimize various claims (one pine pollen supplement’s blend of “medicinal plants, adaptogenic mushrooms, algae, as well as other superfoods […] may support immunity, metabolism, sexual energy, creativity, and hormone balance”). This deceitfully inspires confidence in Goop’s customers that their purchases are actually backed by science.

But since many products are not nearly as effective as the brand claims, Paltrow’s high profile as an actress and entrepreneur plays an important role placating such criticism. In admitting her ignorance about certain products and practices (see “earthing”) and projecting an aspirational lifestyle, the founder grants Goop greater transparency, which consumers easily conflate with trustworthiness. This enables Goop to cover up when things go wrong—a prime example of a company that can be transparent without being scientifically sound, and proof that medical rhetoric does not guarantee medical cause and effect.

Though self-care is largely about taking responsibility over one’s own health, empowering consumers to become their own gurus, Goop defies this bottom-up approach. Its brand ethos and products, especially the Goop wellness summit—essentially a branded medical conference—uphold Paltrow as the ultimate sage, commodifying wellness rather than encouraging self-discovery. By in trying to establish itself as a scientific authority as well as a salesperson, Goop has prioritized short-term gains over long-term sustainability—reckless behavior given the quickly shifting regulatory landscape.

However, one recently minted company called Ladder shows that it’s possible to cultivate trust with the help of the right mix of voices, even if they are celebrities. Ladder is a wellness brand collaboration between Cindy Crawford, LeBron James, Arnold Schwarzenegger and Lindsey Vonn, which launched in late 2018 with an energy powder, a greens powder and two protein powders, in addition to publishing media about healthy living. Based on the premise that “there is no magic pill,” the four co-founders are nevertheless seeking to create health-conscious products certified by NSF International, an independent tester that uses standardized procedures to confirm the safety of ingredients in dietary supplements for consumers. Aside from turning to regulation that fills in the gap left by the FDA, Ladder’s four co-founders provide a reliability absent in Goop given their performance-driven careers (most as athletes). Together, their backgrounds assume a higher standard for endorsements and drug testing, establishing greater integrity for the brand. Ladder’s gospel strengthens with this united front, enhancing the brand’s trustworthiness to consumers.

Consumer opinion aside, a celebrity brand is a risky business model. Both Ladder and more so Goop are gambling with longevity, given that both brands depend on celebrity faces. Paltrow has already mentioned that she wants to step away from the brand at some point, which would, at least as things exist now, unravel Goop’s growth premise. Her absence would certainly erode the trust built on her cult of personality, stripping away Goop’s main protective layer, which could spell potentially fatal brand destabilization. Ladder is less at risk given its team of founders and clan of advisors, from LeBron’s personal trainer, Mike Mancias, to Abbie Smith-Ryan, an associate professor of human performance. This opens a portal for Ladder to grow beyond its founders without razing the brand if they retreat—a luxury Goop doesn’t have.