While it’s logical for wellness-oriented brands to capitalize on the vacuum left by the FDA, opportunism does not necessarily entail longevity. How each brand answers questions about growth, scale and supply chain should harmonize with its value system. If a company seeks to become the next million-dollar beverage brand, it will have to reject small-batch production to raise capital and expand operations quickly. Other brands that want to grow thoughtfully and with purpose are better suited to staying small.

Because consumers will respond differently to brands based on their respective value systems—someone who makes their own kombucha will likely favor small-batch production and natural ingredients, as opposed to an early-adopter consumer who is more likely to embrace tech-driven brands—wellness-oriented companies need to fine-tune a manufacturing and growth strategy congruous with brand identity and values.

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The Purposeful Manufacturing and Mission-Guided Scalability Framework

Use mission to guide production

  • How does your mission align with your production process and supply chain? Are there spots in the supply chain where you can further harmonize the two?
  • How can you market this manufacturing technique in a way that speaks to your core customer? How can you use it to market beyond this core customer?
  • What timeline of product drops correlates best with your mission? Do your customers expect thorough research and development, allowing for less frequent releases or is it more important to release a new product every few weeks? Is this sustainable in the long run?
  • How does spurning modernized or mass production affect your value prop? How will this value change over time as your company evolves?
  • How does embracing tech-driven manufacturing and/or distribution affect your value prop? How will this value change over time as your company evolves?

Scale with purpose

  • How does your mission align with your current scale and plans for future growth? How can you use your mission to guide future growth instead of the other way around?
  • Is there a natural cutoff for how large your company can grow while remaining true to your mission? Is maintaining a smaller operation actually a more accurate and effective manifestation of your brand? Are there alternative avenues for growth that will preserve brand identity in the long term?
  • What retail strategy will best preserve your brand identity and purpose?
    • Especially with the inundation of new wellness brands on the market, what mix of wholesale versus owned retail versus direct-to-consumer will be most effective for brand growth, while staying true to your mission?
    • Which wholesale partners will most closely align with your brand identity?
    • How can you work with your retail partners to allow sales associates to speak for your brand most effectively?
    • If you operate owned retail, how can you establish wellness experiences related to your products or value system that allow your staff and/or customers to participate in health-conscious activities and directly interact with your brand?
    • If you are a retailer, how can you hold your wellness brand partners accountable and enact a set of guidelines or standards that help them meet health and transparency expectations?
  • How will raising capital affect your trajectory? How can you limit fundraising in order to ensure that your mission stays in tact as your brand evolves?

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A tale of two philosophies: Soapwalla, a vegan skincare brand, produces small-batch, wholesaling at small retailers, while Dirty Lemon and Juul Labs use high-tech, mass production to enable rapid expansion.

Soapwalla, a vegan skincare brand founded in 2009, bases its process in purity and homeopathy—founder Rachel Winard studied botany, aromatherapy and herbology in India, applying her learnings to produce cosmetics in her own kitchen, without any specialized equipment. Though Soapwalla launched with a full line—one deodorant, one face serum, one body oil, three kinds of bath salts, three kinds of body wash and six soaps, Winard spent seven years perfecting the brand’s deodorant (more than 2,000 iterations). She continues to reject any pre-ordained launch schedule, releasing products only when she is certain they are well-researched, and the brand turns over inventory every 14 days, out of perishability and her commitment to freshness.

Large-scale growth would contradict Winard’s small-batch philosophy. Today, the founder houses production in a dedicated studio, but she remains the sole formulator of Soapwalla’s products. After rejecting a partnership with a big-box retailer early on, Winard found that her desire to remain autonomous as a businesswoman and forge an environmentally-conscious footprint for her company outweighed her desire for profit. She has stayed true to this ideology both in her choice not to raise any external capital and selling wholesale to other small businesses like her own instead of opening a brick-and-mortar store.

As the Soapwallas of the world create brand value out of respect for natural ingredients and unhurried manufacturing, other companies are capitalizing on wellness in more modernized, high-speed forms.

Dirty Lemon, a direct-to-consumer beverage brand that sells products via text message, launched in 2015 with a single product (its Charcoal drink), followed by Collagen and Sleep in 2016, Ginseng in 2017, and Rose Matcha, CBD (now discontinued), a Vogue collab and Turmeric in 2018. The escalating number of product drops will culminate in 2019’s pledge to release a new beverage each month of the year, in addition to launching more brands as it evolves into a holding company (more on this below).

The challenges and opportunities of embracing tech in the wellness market

Whereas Soapwalla’s manufacturing is limited to small batches, each of which will inevitably vary—a feature not a bug—other brands producing ingestible products often adopt streamlined mass production methods, in order to create identical batches every cycle.

Notably, this method not necessarily imply the use of synthetic ingredients, as many of these tech-driven brands are also predicated on long-standing traditions. Vaping, for instance, technically stems from an ancient Egyptian practice—e-cig companies like Juul Labs (discussed at length in Part I of Wild, Wild Wellness) simply offer up a modern vehicle for vapor consumption. Dirty Lemon, on the other hand, modernizes beverage drinking with its text message-based sales and distribution platform, as well as its manufacturing process, HPP pressure pasteurization, which extracts flavors from fresh ingredients into a bottle via high pressurization rather than heat, lengthening the shelf-life of its drinks without additional chemicals. As a standardized procedure, Dirty Lemon can use HPP pressure pasteurization to provide consumers with consistent and fast access to new products without compromising quality. High-tech facilities also enable the brand to scale nationally, or even globally, in the future.

Differences in Juul Labs and Dirty Lemon’s products, however, illuminate the unique challenges and opportunities of selling their respective tech-driven products. First-time Juul customers can purchase a starter kit including a device, USB charger, and four flavored pods—when these pods are depleted, shoppers buy replacements in packs of two or four. While Juul Labs may eventually build its sales model around an Apple-like planned obsolescence, the company has thus far released four models differing only in charge port size, instead centering its sales on the pods—a replenishment product. A similar disposability and replenishment is seen with Dirty Lemon, whose customers purchase a selection of beverages in packs of six, until they run out and must buy again. But while both brands operate on replenishment models, shipping costs are significantly higher for the beverage brand—in fact, the company is forced to sell drinks in six packs in order to reduce these costs.

The challenge of shipping liquids has also pushed Dirty Lemon to grow its offline footprint. The company is already beginning to scale its New York-based store concept, The Drug Store, to Miami and Chicago, where it will act as a testing ground for new brands under one parent company, Iris Nova. In December 2018, Iris Nova received a $15 million investment from Coca Cola, and the parent company plans to launch two new non-alcoholic brands in 2019, enabling “millions of customers” to purchase different beverage products from one, centralized location—it has also pledged $1 million to invest in other beverage brands it finds promising, perhaps for future acquisitions. Despite such sweeping growth, the company’s strategy is far from haphazard; after finding that it was wasting resources on social media advertising, its new storefronts will serve as shoppable billboards for the digitally-native brand with the hope that they will convert into more sales than a Facebook ad.

It’s still too early to tell how Dirty Lemon’s grand vision will affect its image as a wellness brand—not to mention how much additional funding may ultimately push Iris Nova to either create new brands of its own or invest in others. As for Soapwalla, the company has maintained incremental growth and consistently prioritized research and development for about nine years, selling wholesale at a number of retailers, but rejecting owned retail; evading digital marketing (it has zero active Facebook or Instagram ads, according to the Loose Threads Megaphone Report Q1 2019); and spurning fundraising. Even if more consumers have heard of Dirty Lemon than Soapwalla, time will tell which will stand the test of time.

As more retailers such as Target pivot to wellness, brands can utilize wholesale to engage in a high-touch, multi-channel strategy.

The Global Wellness Economy Monitor points out that in the past ten years, the wellness market has evolved “from a personal aspiration to an emerging value system that recognizes our connection to the collective.” In an economy increasingly predicated on high-touch experiences between brands and customers, stores, events, and even gatherings like the Goop summit (referenced in Part I of Wild, Wild Wellness) will remain important spaces for discussion and discovery—something that’s all the more important in the poorly understood wellness industry. Women’s apparel brand Eileen Fisher now offers its mindfulness workshops to shoppers in addition to employees, while drugstores are broadening their product assortments to feature skincare-focused K-beauty brands and aromatherapy.

In addition to the wholesale partnerships fostered by Soapwalla, bigger-name retailers such as Target are also vying for a spot in the wellness boom. Target currently lacks a dedicated wellness space, but the mass retailer’s growing affinity for natural beauty brands suggests imminent expansion into the category, much like Anthropologie did in June 2018. An attractive location for brands to bolster their wholesale strategy, Pacifica, a natural beauty brand, chose Target for the debut of its first ingestible beauty powders in December 2018—the retailer also served as a launchpad for Olly, a vitamin brand, in April 2015, as well as Vital Proteins, a dietary supplements brand, in January 2018. Olly has since released experimental SKUs at Target first, in order to gauge consumer interest before a broader product drop. Health-conscious beauty brands like these will be highlighted in the “Target Wellness Beacon” at the end of beauty aisles in 2019. Similar to Credo Beauty (discussed in Part I of Wild, Wild Wellness), Target also toughened its policies on transparency in 2017, requiring its brands to disclose all ingredients—including chemicals—used in production and product formulas. (It also pledged to invest up to $5 million in green chemistry innovation by 2022.)

As it deepens its interest in wellness, Target will become an increasingly appealing avenue for brands in the category—especially for younger, digitally-native ones that may lack the funds to open their own storefronts, but nevertheless want to broaden their reach at an accessible, mid-priced retailer. (Though Dirty Lemon is currently expanding its offline presence via Iris Nova and has largely opted-out of third-party retail, larger retailers could offer it a number of benefits that will help achieve its desire to scale.) Joining Target allows these brands to maintain a financially feasible brick-and-mortar presence while community their values directly to shoppers instead of relying on the already inundated social media marketing space. The retailer is also facilitating greater dialogue between sales associates and consumers, which is all the more crucial in the poorly understood wellness market. In 2018, the company overhauled its beauty section, making more room for employees who can serve as brand representatives, expounding on product formula, benefits and manufacturing process to shoppers.