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Ecommerce on Tap is a world where Supply Chain meets storytelling. Join Nathan Resnick and Aaron Alpeter each week as they offer insights into the backend of successful businesses. Brought to you by Sourcify and Izba Consulting!
Nathan [00:00:06]:
Hey, welcome back to E Commerce on Tap brought to you by Sourcify and Izba. I'm your host Nathan Resnick, joined by my co host, Aaron Alpeter. Aaron, how you doing today?
Aaron [00:00:16]:
I'm doing pretty good, Nathan. How are you?
Nathan [00:00:18]:
I'm amazing. I'm excited to dive in today. We've got a brand that I think has touched both of us in some ways personally. We're going to be talking about hair loss, we're going to be talking about Nutrafol, which is just a pretty incredible growth story, exit story. I mean, it kind of has all of those things we look for in a successful E commerce brand. But before we dive in, do you want to give a quick overview for those joining us for the first time on E Commerce on tap?
Aaron [00:00:43]:
Yeah. And first off, thank you so much for joining. We hope you decide to subscribe and listen to all of our episodes. But each episode, Nathan and I take a well known, typically D2C company. We tell their founding story, reverse engineer their supply chain, then talk about their exit potential.
Nathan [00:00:59]:
Yeah, we have a lot of fun doing it. I think my favorite episodes, I mean, there's been so many, but like, athletic greens is one of them. And we've just done a ton of really cool seasons, really cool deep dives. And it's pretty fascinating to see what similarities these successful brands have. So I'm excited to dive into the season in particular nutrafold today. But before we dive in, were there any quick tidbits that caught your eye the past week?
Aaron [00:01:22]:
Yeah, I think there's two that we should talk about. The first one's gotta be this, Shopify and OpenAI integration. What's your take on that?
Nathan [00:01:31]:
Yeah, you know, I wasn't quite sure if it was like all buzz as there's actually something, you know, substantial going on behind it. I have seen more and more brands report that they're getting more traffic from ChatGPT. And so I think, you know, over time this will become substantial, I think like today and, you know, next week. Is it going to make a huge difference? Probably not, but I think over time it's heading in the right direction as we see more and more traffic, you know, come from these AI SEO tools like, you know, ChatGPT and these different, you know, search tools. So that's kind of my take right now. I mean, I think it's a smart move on both companies, but I just wonder, you know, how much traffic is it actually going to drive to these brands?
Aaron [00:02:12]:
Yeah, it certainly is a great strategic move. I mean, they get the headline we're talking about that it's the one thing everybody's going to be looking at and doing, and kudos for them for getting it done before peak season. I'm kind of with you as well. I don't think this is going to have that much of an impact for, you know, peak 2025, but eventually what it could do is depending on how the LLMs want to crawl a website and how they want to allow people to buy through ChatGPT, I could almost see this as bifurcating the Internet a little bit. And you might have one website version that is optimized for LLMs and another website version that's optimized for people and mobile and stuff like that, which sounds like a lot of work, but that might be where we head to in the medium to long term.
Nathan [00:02:56]:
Yeah, it's a really good point. I mean, I've been kind of blown away just by the rise of these kind of AEO tools, right? I mean, with typical SEO, you've got like Semrush, Moz Ahrefs, and now you have this like, really growth of these AEO tools, like profound, that kind of are just basically constantly pinging the APIs of ChatGPT to try to understand what, what kind of traffic is going through based on these, you know, search terms. And it's, I mean, kind of the wild west right now, I think, in terms of aeo. But a lot of people are, you know, trying to obviously have impact there. And, you know, even I also saw this past week that, you know, Reddit kind of went down in the rankings in terms of what ChatGPT is actually, you know, utilizing Reddit for when it comes to search results. So really interesting takes there. I think the other tidbit we've got to mention is the new 100% tariff potentially being added to China. So that's just crazy to hear.
Nathan [00:03:55]:
What's your kind of first reaction there?
Aaron [00:03:57]:
Well, it feels a lot like April, right? Here we are with Liberation Day again. I mean, for all those you who don't know. I mean, it basically all started because China instituted some more export controls on rare earths and rare earth derivatives, so magnets and things like that. And I think what was interesting about this was they went a step further than they have ever gone in the past, and that was that they were basically banning the use of any rare earths to any defense industry. And this was going to impact people that were even outside of China, Right. But they were sourcing from China. And so it's a really interesting large shot across the bow because that is a major aspect of. And so as I've dug into it and read it over the last weekend or so, it's really one of these things where on the one hand people are saying, hey, this is just posturing for the top to top trade talks are going to happen in South Korea in a couple of weeks.
Aaron [00:04:52]:
Other people are saying this is retaliation for kind of the AI chip controls that the US has been putting on China. And it's one of these things where the US Is doing exactly the same thing from a chip perspective as China is doing for rare Earths. And I. Hopefully both these countries can come to an agreement because I think they need each other.
Nathan [00:05:12]:
Yeah, I mean, with all this tariff talk, I feel like I always lose hair when that happens. So it's definitely tied into today's episode because one of the leading causes of hair loss is stress and anxiety. And it's just pretty fascinating how our body reacts to stress. Right. So kind of, I guess a little bit of a personal question, but, you know, do you have any experience with hair loss or any of these kind of Nutraceuticals or, you know, supplements to improve your hair?
Aaron [00:05:42]:
You know, it's an interesting question because I, I think I have just gotten used to the idea that my hair is mostly gray. And, you know, I've got no desire to change or anything like that. In some ways, it works to my, my advantage, actually. I, I remember negotiating with a factory and they thought I was much older than I was. And so I think they, they, you know, treat me a little bit better. But I would say I didn't really have any concerns with hair loss up until about six months ago, which, it's funny you mentioned the tariffs and things like that, but both of my grandfathers were eventually bald, so I kind of knew that it was in my family history. My dad isn't bald, but, you know, it's one of those things where over the last couple of months I've just been doing my hair or, you know, combing up. I'm like, oh, there's a, there's a lot of extra hair that's coming out.
Aaron [00:06:25]:
Or I think I can see my scalp because it's sunburn more. And so I've become a little bit more aware of hair loss. And I tell you, after you want to really trip the algorithm, do a bunch of research on Nutrafol and its competitors. Every one of my Instagram ads, every one of my TikTok and Google Ads is about Hair loss or something. So I don't know if I had a natural kind of concern that was rising or if I'm just hypersensitive to all of that because of the algorithm. But that's kind of my story. But what about you?
Nathan [00:06:56]:
Yeah, I mean, I think you hit the nail on the head there. The first time you get sunburnt right. On your scalp, that's when you know you've got a hair loss problem. And I think that happened to me probably a few years ago now. So, you know, I've explored different options and, you know, tried. I think HIMS has a shampoo solution. I've tried. I've tried.
Nathan [00:07:15]:
You know, there's one called Keeps. I haven't tried nutrafold, so I'm excited to dive into this brand today. But, you know, I've also even looked at hair transplants, so we'll see if I eventually do that at some point. But there's definitely a lot of solutions out there. You know, I haven't gone too, too deep yet, but definitely top of mind. Especially probably for my girlfriend wondering, you know, am I going to end up like, like my dad and my, my grandpa with little hair?
Aaron [00:07:41]:
Yeah. Do you find that, like, your concern about hair loss is more driven by you or driven by people around you?
Nathan [00:07:49]:
I mean, probably a little bit of both, Right. I think. I think it's just kind of crazy how over time we lose our hair.
Aaron [00:07:56]:
Right.
Nathan [00:07:56]:
At least I do. And I've always wondered, is it more genetics and hormones? Is it more kind of the stress? Is it immune system malfunctioning? And as I kind of looked into kind of Hair Growth 101, I learned quite a bit. Right. I mean, I didn't even really know how hair grows and comes to be. And there's kind of three main phases, right? There's kind of the growth phase where, you know, if you compare hair to, like a plant in a little flower pot, the hair follicle is the pot and the hair shaft of the stem that grows out of it. And every follicle goes through a natural cycle, the growth phase, the resting phase, and the shedding phase. And so I didn't even know that there was kind of technically three phases of hair. And so typically about 90% of our hairs are in the growth phase, which is, you know, of course, why we get haircuts.
Nathan [00:08:46]:
You know, typically, I don't know, every month or so, I think is about the. The timeline of when I get a haircut and hair loss really happens. I mean, primarily from genetics. And hormones. You know, some follicles are sensitive to a hormone called dht, which is like having soil that gradually turns rocky, basically. And over time, the follicles straight shrink and the hair grows, you know, back thinner and shorter until it stops altogether. So I think that's where my bald spot stems from. Stress, you know, definitely another indicator.
Nathan [00:09:22]:
You know, imagine all your kind of little plants on your head went into hibernation at once. And that is kind of really what happens when, you know, your hair gets stressed or when you get stressed. They push a lot of these follicles into the resting phase. Some more hairs fall out than usual. And the good news about this, if it's stress induced, is that it could be temporary. And the other cause is potentially immune system misfire. And so the body's defense system might mistake these follicles for invaders and attacks them, which is, you know, basically pulling plants out of the soil and leaving patchy bald spots. But there's other factors as well, whether it be thyroid issues or scalp inflammation.
Nathan [00:10:06]:
I'm sure, you know, sunburn on the scalp probably doesn't help either. But it was just kind of interesting to see, you know, what causes hair loss and where it stems from.
Aaron [00:10:15]:
Yeah. And I think that it's like we were talking about, this has been a concern that people have had since they've had hair. Right. And I thought it was really interesting walking through the history of how people treated hair loss. And there, as you look back at it, and you kind of just zoom out for a moment. There's been two major levers that people have pulled historically. The first one is trying to block dht, which is that hormone Talk about. So to use your analogy, this is, you know, something that prevents the soil of your hair from.
Aaron [00:10:48]:
From hardening as fast. And so this is where drugs like finasteride come in. You've probably heard about finasteride if you've been in the hair loss space. So that's kind of the first thing. This other thing that they'll do is they'll try to stimulate the hair follicle. And so they try to keep that. That plant from. From continuously sprouting.
Aaron [00:11:05]:
And this is where drugs like minoxidil or even light therapy come into place, where they're trying to. So you've kind of got these. These two areas where they're trying to basically fix the soil or stimulate the plant. And up until about the 1950s, there really wasn't a whole lot that you could do for hair loss treatment. It was really just kind of One of these things that you accepted, you know, and you became old and grandfatherly, and that's. That's what it was. But in the 1950s to the 1970s, you really started to see the beginning of this transplant era. And there were surgeons that discovered you can move hairs from the back of your head, which are naturally just more DHT resistant, probably because of the lack of direct sunlight to your thinning areas.
Aaron [00:11:48]:
And so they actually would take hair follicles from the back of your head and then put it on the top of your head. And these results were pretty pluggy. It was kind of like moving clumps of sod onto bare lawn. And so you can see that there was, you know, new growth there, but it just wouldn't look right. It didn't look natural. And these sorts of hair transplants were very rarely offered to women. In fact, women usually experience diffuse thinning, a diverse general loss of density rather than getting bald spots like men. And that's what made kind of transplants less effective for women.
Aaron [00:12:20]:
It's like trying to patch the entire bare grass when the whole lawn is thinning. And so, you know, this. This kind of plugging thing kind of worked. It was expensive, invasive, and just really cosmetic. Only once you get to the 1980s, you start getting to stimulants. And so I think, as we think about supplements in general, this is where you start to see this. This growth of these sorts of things. Minoxidil was first approved in the 1980s, and it was originally a blood pressure drug, but doctors noticed that it made hair grow, said, hey, let's.
Aaron [00:12:48]:
Let's sell it for this. And this is kind of like giving fertilizer to your plants, to your hair. It didn't fix the soil per se, but it helps the. The sprouts hang on for longer. And eventually minoxidil was approved for both women and for men. So this was really the first real mainstream treatment for female hair loss. But adoption was really lit, was really mixed. You know, you have to do daily application.
Aaron [00:13:12]:
It's messy. The results take. Take months, and the regrowth is really quite modest given the effort you put into. Then we get to the 1990s and 2000s, and this is what we refer to as the hormone blocker area. This is where finastercide was first introduced, which, again, blocks the dht. This is the hormone that shrinks those follicles and genetic hair loss. And it was a breakthrough because it treated the root chemical of hair loss in men. The downside is there's a lot of potential side effects, not least of which is decreased libido.
Aaron [00:13:45]:
And so you kind of have this adoption that was strong but not universal for what people were trying to solve for. And while finastercide works by blocking DHT because it impacts sex hormones, it was never broadly approved for women of childbearing age. And so occasionally doctors might prescribe it off label to postmenopausal women, but it really wasn't a mainstream solution. But, you know, the gold standard of hair loss treatment was really finastercide for men in this area. Then we kind of zoom up to the 2010s. You got this wellness era, which is where consumers start asking about, you know, hey, what about these other things? What about my stress, my diet, my overall health? And this is really where solutions like Nutrafol come into their own. Instead of blocking DHT and stimulating growth, they want to attack the multiple ingredients aimed at the hormones, and they. They kind of reposition from fighting baldness to supporting health, hair wellness.
Nathan [00:14:42]:
Yeah, this is kind of where the story of nutrifold begins. Right. And so there was three founders here that experienced, you know, this pain point in different ways. Right. So Georges was a former model and engineer, and he experienced severe shredding with his hand in his 20s. He had tried kind of the big two supplements that you had mentioned. Right. And saw severe side effects.
Nathan [00:15:06]:
And so he decided that there had to be a better way here. And, you know, he really kind of struggled with his own hair loss and began researching alternatives and met Dr. Sophia Kogan, who was a physician with a background in integrative medicine that brought kind of that clinical and botanical science perspective to the team. And then there was Roland Peralta, who was an entrepreneur as well as cancer survivor who had personal health challenges that made him passionate about this holistic approach. And so each of them really had their own experiences with hair thinning and approached the challenge from different angles here. And that really kind of came to be in 2011, 2012. And they brought different aspects to the team, which I think was super important here. Right.
Nathan [00:15:52]:
Because I think a lot of times, you know, we see e commerce founders with the same experience or same background, and it's oftentimes harder to start when you have the same experience as your co founder and bring the same expertise to your team. So I think that was one really amazing aspect about the nutrifold team as they all kind of had different strengths to bring to the team here.
Aaron [00:16:15]:
Yeah, I think that's absolutely right. And I think the part that was interesting about this is that they recognized that the gap between what was out there in the market was dramatically different than what they themselves needed. There really wasn't a great solution out there for women. Finasteride and monodexel were. They worked, but they had all sorts of other complications. And they really wanted to figure out how do we build this up from kind of first principles? How did they go about vetting out the problem and then ultimately deciding on the approach they have with neutral.
Nathan [00:16:50]:
Yeah, you know, it's a great question. I think they really kind of leaned into their own, their own challenges themselves because they had experienced side effects from the big two. You know, they realized that, you know, hair loss has multiple triggers, right? It could be the hormones, it could be stress, inflammation, nutrition. I mean, there's a lot of different reasons as to why you lose your hair. But I think the big insight, their big insight was really kind of to combine this pharmaceutical grade botanicals plus nutritional building blocks plus clinical testing to really legitimize a supplement in a category where trust was near zero. Right. Because at this time in the market there was kind of like, hey, you go the pharmaceutical route or you go the kind of hair transplant route, or you know, you maybe try these different natural ways that, you know, a lot of times hadn't been actually tested in a clinical environment. And so they conducted, you know, really several years worth of R and D to test a lot before formally founding the company in 2014 and then starting to sell a finished supplement online.
Nathan [00:17:57]:
And so, I mean, I think this was kind of this journey for them of testing a lot before they, you know, went all in because they really had to find a solution that they felt confident in and that passed these clinical trials, which I think was kind of, I mean, not official kind of FDA clinical trials, but, you know, testing environments on themselves and their friends to make sure that, hey, you know, this is something that actually is going to improve your hair. It's not, you know, kind of this woo woo type of supplement. Right?
Aaron [00:18:26]:
Yeah, and I think you bring up a good point because there were supplements that existed prior to Nutrafol and you know, they, they generally were just very generic hair, skin and nails, blends. And you know, as we talked about on the, on the kickoff episode, the supplement industry in general just suffers from this lack of trust, right? People, there's, it's very easy to claim things and to kind of, you know, look at them and say, does it actually mean something? I guess before we, we dive into how Nutrafol turned into this massive success, I think it's probably important to take a step back and look at the science for what they developed. I think the key thing here is that Nutrafol's idea was that hair loss wasn't caused by just one, one thing. And you know, you can't just say it's DHT or it's stress. And so what they hypothesized, but it was really this combination of multiple triggers working together. And so there were four big buckets of root causes that they looked at. It was hormones, stress and cortisol levels, inflammation and free radicals, and the nutritional building blocks. And so let's just go through those in a little bit more detail.
Aaron [00:19:30]:
So for hormones, especially the DHT piece that's being targeted, they use saw palmetto extract, which has been shown in some studies to mildly inhibit the same enzyme that finastercide targets. And so the difference here is if finastercide is a sledgehammer against dht, saw palmetto is a little bit more of a rubber mallet. It's lighter, it's safer, but it still does the same thing. For stress and cortisol, they used ashwagandha, which has been known to help regulate cortisol levels. And they also recognize that chronic stress can push follicles into this resting, shedding phase we talked about. And the stress is kind of like hitting pause on a playlist. And the ashwagandha helps keep the music playing, so just keeps them woken up as opposed to going in that resting phase. For the inflammation piece, they used curcumin and tacorinols, which is a form of vitamin E.
Aaron [00:20:21]:
These antioxidants help calm inflammatory pathways that damage follicles. And so think of this as basically pulling weeds and pests out of the garden so plants can keep growing. And then for the nutrition, they looked at marine collagen, biotin, zinc, etc. Those things that have been well known to, to provide the raw building blocks of, of hair and hair follicles. So again, this is like adding fertilizer and better soil to the quality of the roots. And so this is really the piece that was there that it said, okay, we're not going after one thing, we're going to try to go after this whole holistic view.
Nathan [00:20:52]:
Yeah, and they kind of built a toolkit. Right. I think previously there was kind of this single pathway approach that a lot of people try to take with hair loss. And they kind of took this kind of multi mechanism approach where, you know, traditional treatments just hit one switch, whereas they kind of stacked several modest ingredients into One product that took a better holistic approach to how our whole kind of hair system works. And it, you know, through their evidence led clinical trials. They, you know, had randomized placebo controlled trial showing, hey, there was actually statistical improvements here in hair density both in women and men. Right. And so I think that was kind of a key part of the development here is the clinical trials because very few other of these kind of natural approaching hair loss supplements, you know, actually invested in that.
Nathan [00:21:46]:
And then they of course had the physician on their team, you know, Dr. Sophia Cogan, who built a dermatologist educational program and positioned themselves as the kind of supplement doctors recommended, which is kind of rare in this category that's often dismissed by mds. And so they kind of, you know, in some sense took a page out of skincare companies that we covered on the previous season by using, you know, dermatologist as a community and sales channel, which I think was huge for them. And you know, they kind of had this life stage personalization as well, you know, SKUs for postpartum or male formulations more specific to certain types of age groups. And so they were really addressing these kind of biological nuances instead of just kind of selling this one size fits all. And I mean, I think really, like you had mentioned, they took a really strong approach in terms of the science behind this. And I really think the clinical trials that they invested in help them stand apart from their competition.
Aaron [00:22:50]:
Yeah, so I've kind of got a question here because we often talk about supplements as filling in gaps in someone's diet. Just to take the counter here, couldn't I just eat better and get the same benefit as taking Nutrafol?
Nathan [00:23:04]:
Yeah, it's a good question. Right. I mean, to me, I always think about when I take a vitamin C supplement, right. It's different than eating oranges. Right. There's different sources of vitamin C. And a supplement, a high, high dose capsule is going to have a lot more concentration and consistency versus just your standard orange. And so I think that kind of is similar to here in terms of some nutrifold ingredients come from herbs not typically in our diets.
Nathan [00:23:33]:
Right. Like I don't take Ashwagandha much at all. I don't know if you do, but there's just ingredients in this formula that we don't typically take in our diet. And others are found in foods but in lower concentrates. Right. Like collagen for example, is in food, but it's just in a lower concentrate. And so I think what Nutrafold really did that A lot of supplements do is they kind of fill the gaps in our diet in a more concentrated way that I think helps a lot and obviously shows success through their clinical trials.
Aaron [00:24:08]:
Yeah, I guess that makes sense. If you look at the micronutrients that are in something like a Nutrafolia. Yes, you could do that with food, but you'd have to eat a whole bunch of sardines and salmon skin on a regular basis, which most people probably don't want to do.
Nathan [00:24:23]:
Yeah, for sure. I don't think I would like that. But now we're in 2014 here and it's been this three year period where they've been testing, formulating, going through these trials, and now they have a really strong product they're confident in. And so what do they do? Do they have investors to begin with? You know, how did they really go about getting their product out there?
Aaron [00:24:48]:
Yeah, so they basically started completely bootstrapped at the beginning and they began formulating Nutrafol with other dermatologists and integrative MDs really starting in 2015. And they positioned it as physician friendly, physician friendly Nutraceutical rather than a beauty supplement. And in the company's official product launch, which they cite like 2016 as the launch date. So even then we've got a couple years here where they've just been testing it and going through it. But in 2016, when they publicly launched and were mass available, they didn't start with retail. Instead they built demand where trust was the highest for hair loss, which was dermatology offices and salons. And so Giorgio said that he started to sell in doctor's offices and salons because people trust their stylists. Right.
Aaron [00:25:37]:
If you're seeing someone and say, oh, your hair is thinning, you know, what can I do? You're going to buy whatever they tell you to. And they say, oh, actually there's this really great new supplement that has, you know, can statistically improve the density of your hair. People are going to buy it. And so that was really their first flywheel. Again, just like you said, how a lot of skincare companies will launch in these dermatology offices. And so through, through the focus on dermatology and hairstylists, they got immediately legitimized into categories that usually required prescriptions. So think Finastercide and Minoxidil. You had to have a prescription to get it or you had these gimmicky OTCs which maybe work or didn't work, but they became a very cost efficient acquisition channel for them.
Aaron [00:26:20]:
And it was really retention levers. So as you went and saw your stylist, your dermatologist on a regular basis, they could tell you, oh, I can see it's thicker up here. I can see it's working. How do you feel? And with a growing pro channel, they raised a series A from Unilever Ventures, which they use to fund further clinical research and product development. And then they started to lean into medical salon e commerce channels. And by 2018 these clinicals were done and you know, they were peer reviewed, randomized and double blind, placebo controlled studies which, you know, were published in Jade Drugs and Dermatology. And it really just was this massive credibility unlock for them. And as a result of this work, one of their SKUs won Allure's 2018 Best Beauty Breakthrough of the year.
Aaron [00:27:04]:
And this was a massive impact for consumer trust and pr. And it really led to this rapid compounding of growth in 2019. That's when they eventually launched a growth plan personalization flow on the D2C site. And they just, they took off from there. I mean, by 2019 they were, they had 1300 physicians that were recommending them. They had 3x year over year revenue growth and they had over half a million monthly visitors to nutrafol.com and this is just these, these things kind of really pointed them to being set up for a growth stage raise. And so they raised 35 million bucks in a Series B led by El Katertan and Unilever Ventures in 2019.
Nathan [00:27:43]:
Yeah, I mean, pretty incredible, right? To see their growth, their distribution and how they navigated that. And I think kind of a key pivotal moment here as well is that, you know, prior to 2019 they were kind of more of a one off purchase where you buy a bottle and test it and you know, hopefully sell results and buy it again. And I think they realized that they really needed to lean into subscription to show, you know, not only longer term results but also to, you know, improve just the, the margins and financials behind their business. Right. And so kind of initially it was hair loss, you know, fix my problem, you take the product until you see positive results. And they kind of transition their position to be more hair wellness in terms of long term habit and establishing that habit. And I think that's, you know, as I think about kind of, it's just so funny to see how this reflects as well in the cosmetics season that we did because a lot of the successful cosmetics really instilled a habit in their product. Like, hey, you're going to use this, you know, every morning and you're going to use this product every night and that's kind of your bedtime routine.
Nathan [00:28:45]:
And so this kind of, I mean, nutrivolt kind of instilled this kind of hair wellness routine for a lot of their customers. And so their typical subscription was $79 a month versus a one time bottle being $88. And they also offered quarterly subscriptions which was $224 for three months or $422 for a six month supply. And so those are still the prices today. And I think this kind of change in narrative really sparked a lot of their growth because it led to a reported $175 million in revenue by 2021 with them being profitable. And they didn't really share much data outside of this, but said they were doubling every year over the last several years. So you can just imagine what the growth trajectory looked like here.
Aaron [00:29:36]:
Yeah, I think, you know, I want to go back to something you said where just this, this idea of the subtle shift between hair loss to hair wellness is a really big one. And it kind of, again, not to beat the beauty care analogy to that, but it reminds me a lot of typically the American consumer is all about here's my problem, fix it now, which is more of a hair loss sort mentality, whereas Korean beauty is more about just preventing things from happening. And so I think this hair wellness thing is somewhat in the middle where it's a great business. If you look at from that perspective, to get somebody to say, hey, take this forever and you won't have something happen to you that's a great business that's better than hey, take this thing and it'll have this outcome for you. But it has to work in order for people to keep sticking with it.
Nathan [00:30:25]:
I mean, look, nutrafold's growth was incredible, right? I mean, go from hair loss prevention to hair wellness. And this led to a great acquisition by Unilever in 2022 for about 80% of the business. And they folded Nutrafold into their new kind of health and well being unit alongside Ali Liquid IV Onnit and you know, retained the founders as part of the integration. So Unilever really seems to have done well with the acquisition. I mean, Aaron, what are kind of your first tastes when you saw nutrafold get acquired here?
Aaron [00:31:00]:
Yeah, I remember when it happened. I'd had some interaction with the founders before and I was like, oh, that's interesting. You know, Unilever sells hair care products and mayonnaise and it's just like, what's going on here? But to Unilever's credit, they've done a great job slingshotting this thing forward. So in 2023, just the year after the acquisition, they launched it into Sephora, which really set them up in the prestige retail, which is something I hadn't done. Again, keep in mind that this business started out in a professional channel without a subscription, and now it's in mass retail and their subscription. So it's a huge thing because I think they recognized that this would probably do very well in Asia. And so they began Chinese Cross Border E Commerce to try to grow that market. And it really broadened its appeal into adjacent categories.
Aaron [00:31:48]:
So they launched Nutrafol Skin Clear, which is an ACLI supplement. And now if you look at 2024 through now, Unileve reports that Nutrafol has doubled its turnover since the acquisition. They've crossed over a million consumers in the US and they expanded into Ulta Beauty and to other broader retail places. And again, they won the Allure Breakthrough Award in 2025 for SkinClear, which signals, you know, additional credibility beyond just hair care.
Nathan [00:32:18]:
Yeah, and I mean, I think it's pretty incredible, right, because this was kind of a similar milestone, that slingshot of their growth last time. I'm curious if we're going to see similar results with this Skin Clear product. I mean, I think skincare and acne care is a much more contested market, a lot more competitors, and a lot of people, you know, already have their routines in place. But, you know, we'll see because nutrifold already has this brand equity and trust from their hair wellness products. And so, you know, we'll see how it performs in market. I think it's in general just a really positive thing for them if they can, you know, kind of increase their AOV amongst their existing customers. That's huge. Right, because you think, hey, a Nutrifold customer previously was using a different skincare brand and now they're using, you know, Skin Clear by nutrafold.
Nathan [00:33:02]:
So it makes a lot of sense in terms of this playbook. And I think we've seen that time and time again when an acquisition happens, typically a product is going to expand SKUs to try to increase AOV. And so I think it's a smart play here of, hey, can we utilize this trust that we've built over time with our customers and start developing and expanding into other product categories for us to just continue to grow and expand our lifetime value with our customers?
Aaron [00:33:33]:
Yeah, well, to kind of double down on that too. How often do we read about an acquisition that gets messed up by the acquirer? Right. They like, you know, jack up the prices, they kill the brand, they just do stuff that, you know, within a couple of years causes it to go the other direction. But Unilever doubled down. Right. They expand into new channels. That was something. They expanded new geographies, which is something they hadn't done before.
Aaron [00:33:57]:
And then I think entering this new category, even though it's hotly contested, I think just shows how in this particular instance Unilever has handled this acquisition almost flawlessly, I would say.
Nathan [00:34:08]:
Yeah, for sure. I mean it's really impressive to see how they've implemented and executed here. And you know, I think Nutrifold is going to continue to grow. What did you see on their operations or supply chain? Were there any kind of takeaways from that?
Aaron [00:34:22]:
Yeah, you know, there's, there's not a lot that's available publicly. But like most supplements, it looks like they're sourcing some raw materials from China, but they're using domestic pharma grade contract manufacturers for the actual production. And so in general, I think Nutrafol has a very mature supply chain. Procurement function, as you would expect is typical in the supplement industry. They've got, I think one of the more unique things is that they've got very large networks of dermatologists, plastic surgeons, stylists, salons, all of those other folks that kind of create their, their pro channel that are authorized to carry and dispense Nutrafol. And so that's really been probably the unique thing that they have is you don't see too many other supplement brands that are doing that from a beauty retail expansion. I mean, Sephora started carrying Nutrafol both online and in select physical stores in February of 23. And like I mentioned in 2025, just a couple months ago, in July they expanded into Ulta.
Aaron [00:35:20]:
And so they are expecting to be in about 500 Ulta stores by the end of the year. And their DTC site is still kind of a major revenue channel for them. It was reported in 2024 that the site alone generated about $106 million in revenue, which still suggests that a large portion is coming from, you know, their professional chance it goes through. So, you know, not a whole lot that's unique or different there. But I think that that's not necessarily a bad thing. And it just, if anything it underscores kind of how developed the ecosystem is for supplement brands in the U.S. yeah.
Nathan [00:35:59]:
And I think too part of the Playbook here that Unilever is so good at is retail expansion and how to optimize logistics behind that, ensure distribution is on point. I mean that's really kind of the best team in the world when it comes to distribution and logistics, especially to retail channels like Alta and so forth. Us, I can only imagine the efficiencies as well that they, you know, were able to add on as part of their acquisition. I mean probably just alone from, you know, shipping cost standpoint and logistics cost standpoint, you know, you've got one of the biggest purchasers of logistics and shipping, you know, Unilever now, you know, a majority owner here. So really interesting to see just how this came to be and how this, you know, played out. You know, typically we talk about their exit potential now, but obviously neutral folders that have already been acquired. I mean, what comes to mind when you think about what we should expect next from Nutrifold?
Aaron [00:36:52]:
Yeah, I think you got to look at the macro picture. So hair loss and hair thinning is one of the fastest growing wellness concerns globally. And analysts expect that hair loss treatment market alone would be 15 to 20 billion dollars globally in the next couple of years. And so of that section which this include the hair plugs and the transplants, all this sort of stuff, supplements and Nutraceuticals are the fastest expanding segment within that. And so if you look at other brands that Unilever Wellness has, they've got a pretty good playbook that gives us some expectation of what, what you should expect in the future. So all brands that Unilever has scaled internationally, they've done so through retail distribution and other cross border e commerce piece pieces. Sephora and Ulta is a good step in the US but the much bigger price is going to be expanding into Europe, Asia, Latam where hair loss is a top consumer anxiety and they haven't really tapped that market. Unilever's distribution should be able to get 5 to 10x the reach that Nutrafol will be able to do on their own.
Aaron [00:37:58]:
If you look at other examples from Unilever Wellness, Ollie did what if they can do what they did with Ollie and vitamins or liquid IV did in hydration, I think Nutrafol could be a $1 billion brand in the next five to seven years especially they start stretching into adjacent hair wellness and skin wellness verticals.
Nathan [00:38:21]:
Yeah, I agree. I mean I think the growth is going to continue. I could totally see this becoming a billion dollar revenue brand, especially internationally. I mean I think they've got a playbook that they're implementing here at Unilever. And so I think as you said, you know, expanding internationally is going to be a huge, huge component here. Anything else come to mind with Nutrafold?
Aaron [00:38:42]:
Yeah, I think it's important to take a look at kind of the competitive landscape as well because there are, I mean if they are as successful as we think they're going to be, there's going to be other people who come in there. I think that Minoxidil and Finastercide are still kind of the number one and number two hair loss treatments out there. So this is what you know, D2C telehealth players like hims keeps ro are using. So these are pretty mainstream and cheap and they're competing on price and convenience, not the holistic wellness approach that they're doing. There are other supplement brands out there that you know, just are worth mentioning. So Church and Dwight acquired a brand called Viviscal, which is like a marine protein supplement. It's been around for a while, but it's kind of has a weaker brand cachet among younger consumers. There are some new kind of, if you would call it new age D2C competitors to Nutrafol, Vegamore and hum Nutrition.
Aaron [00:39:40]:
They're, they're really pushing into the same space as Nutrafol with kind of a vegan clean health positioning that we should keep an eye on. But I think the biggest potential threat that's out there for Nutrafol is these generic lookalikes that are coming up in mass retail. So for example, you know, cvs, Walgreens, Target, they already have or are rumored to have a biotin plus saw, palmetto plus collagen blends which is effectively the active ingredients that Nutrifol has for 20 to $40 a bottle compared to an $80 subscription. And so I think that, that the biggest risk is going to be generics. And you know, if I'm looking at this and you know, I understand kind of the science behind Nutrafol, I may be willing to try something that's just as good, that's, that's half as expensive.
Nathan [00:40:26]:
Yeah, and I mean I know SourceFi had a decent sized supplement brand, you know, kind of asked us to quote a. And so, you know, there's not necessarily anything like, you know, fundamentally proprietary that we, that somebody else couldn't put it in their product that Nutrifold has.
Aaron [00:40:41]:
Right.
Nathan [00:40:41]:
Obviously you have to kind of reverse engineer the formulation. But there is definitely the kind of challenges when it comes to generic and you know, how that might take on some of the Nutrifold market here, I think especially, you know, in these convenience stores, generic typically catches my eye a lot of times. Right. Because I, you know, look on the back, look at the label and kind of the ingredients look very similar, but obviously it's a lot less when you go the generic route in terms of cost. And so that's something that I think is always top of mind for these brands. And I think that's where nutrifolger has to really invest in customer trust and loyalty. And I think that's what they're really doing as they expand. But I think as they invest in these different peer reviewed studies, there's definitely improvements that show in hair density and quality.
Nathan [00:41:30]:
I mean, as I researched nutrafold, I was like, huh, you know, maybe I think I might go buy some Nutrifold myself and give it a whirl. So we will see.
Aaron [00:41:39]:
Yeah, I think you're absolutely right. And you know, with the generics in general, usually what happens is, let's suppose, you know, you pick Nutrifol, pick anybody else. They may list out 12 key hero ingredients that are, that are helping out, but a generic will probably pick one or two of those and hit those. And it may not be a guarantee to be at the right concentration to have a meaningful effect. And so, you know, for example, If I need 100 milligrams of something to have an impact on my hair, I could put 1 milligram in a capsule, still be able to claim the same thing on the, on the label. And I may think that it's actually helping, but it's, it's not. So I think those are some of those difficulties there and it kind of underscores the difficulty in supplements. Right.
Aaron [00:42:26]:
There is this lack of trust. And so I think one of the key things is that Nutrafol's biggest moat is not necessarily the capsule. It's not the formulation, it's the clinical evidence. It's this physician halo. You know, I was talking with an expert in the, in the supplement space who's been around for 25 years, launched a bunch of brands, consulted for a bunch, and I asked him like, what do you think about here? He's like, well, you know, all I know is that every, all of the dermatologist clients that I have, they recommend Nutrafol when I ask about what's out there. And so that is a huge advantage that's out there. And so I agree with you. I mean, staying clinical first is going to be kind of a key thing for them.
Nathan [00:43:02]:
Yeah, I Agree. And I think that's what nutrafold needs to continue to do going forward to maintain its edge. I think, you know, investing in its dermatology network that recommend its product is huge. I think that's kind of a key to the story here in terms of how nutrafold was able to grow in an efficient manner and in a profitable manner. So to the scale that it got, right, they didn't just rely on paid ads, they actually relied on experts recommending their product to customers that face hair loss issues. And so I think kind of the key points that I take away are staying clinical first. And I think if you think about any E Commerce brand as a whole, are there any trials that you can do with your product, are there any tests that you can do with your product to showcase why your product is better versus competitors or how your product is going to get your customer to the desired result? You know, in a very scientific way. I mean, I always remember some of those kind of old school ads that show the before and after and you know, it's eye catching.
Nathan [00:44:01]:
Right. And so I think if you can do that in an ethical way, it's a great approach, you know, from a marketing standpoint as well as from a kind of competitive edge standpoint. And I think, you know, the other takeaway here for any E Commerce brand as you get some scale is think about how do I increase the lifetime value of my customers is that, you know, continue to sell them the same product or is it to expand in another category that I can utilize my brand trust for and trust with? And you know, nutrafold has done this with skincare. Right. And so I think that's another takeaway that I've had from this episode in terms of once you've got some scale, what do you strategically do to increase your lifetime value with your customers? You know, maybe that's not a different category. Maybe it's a kind of upsell or cross sell or whatever it may be. And they even did that as they got to scale going from one off to subscription to quarterly. And I think especially in today's world with the cost of paid acquisition, you know, if you can get someone on a quarterly subscription or quarterly bundle, that's a huge, huge upside in terms of, you know, acquisition costs to have a better, you know, roas directly and set up a longer payback period with, with a monthly subscription.
Nathan [00:45:09]:
So I think a lot of really strong takeaways here from the nutrifold story. I mean, I could continue to talk about them for another hour. But I mean, any key takeaways that you want to mention here, I would.
Aaron [00:45:20]:
Just echo what you had and maybe just add the power of positioning again. I think that going from hair loss to hair wellness is a pretty big coup. I mean, to get people to go from hey, I'm going to take this until my problem goes away to I'm going to take this so I don't have a problem is a big shift. And so I know that that probably wasn't an easy thing, but being able to show the impact and being able to get people to come along for that journey just had a huge impact to their trajectory of their business.
Nathan [00:45:51]:
Definitely, definitely. What an outcome they had. I mean, go check out nutrafold at your local convenience store on their website. It's a pretty really strong brand and product. So highly recommend you check them out and hey, maybe it will help you with your hair loss journey. Right? Or hair wellness journey, I should say. Thanks again for listening to Ecommerce on tap. Brought to you by Sourcefi and Isba.
Nathan [00:46:13]:
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