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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]:
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, for those that are joining us for the first time on E Commerce on Tap, do you want to give a quick overview of what we do?
Aaron [00:00:20]:
Yeah. So we like to take a well known company. Usually they have DTC roots. We tell their founding story, reverse engineer their supply chain and talk about their exit potential.
Nathan [00:00:31]:
And today we're covering Bloom Nutrition. We've been on this kind of supplement kick this season which has just been so fascinating to me because I feel like pretty much every supplement that breaks through becomes a part of your daily routine. And it really reminds me of kind of the cosmetic season that we did where, you know, once you become part of someone's routine when it comes to cosmetics, got this just incredible LTV lifetime value. And it's pretty similar here with supplements. I mean, I feel like there's been a lot of kind of similarities in terms of growth stories and just, you know, how these brands have been able to scale in this, in this category.
Aaron [00:01:07]:
I, I agree. I've really enjoyed it so far. And I think what's stuck out to me is that even though you can say, oh, all supplements are the same, the way that these founders and these brands are coming to market is completely different and we're going to see that play out with, with Bloom Nutrition 100%.
Nathan [00:01:23]:
Well, before we dive in, were there any tidbits that caught your eye the past week?
Aaron [00:01:26]:
Yeah, there were two things so rare. Beauty. So Selena Gomez's beauty company got a $2.7 billion valuation. That's not too shabby. So, you know, I think it's safe to say that Selena Gomez is not known for being an artist or being an actor. She is now known as a cosmetic entrepreneur, at least from a personal wealth point of view. So that's been pretty cool. And then the last one is that Mammoth Brands acquired premium diaper company Coterie for a billion dollars.
Aaron [00:01:59]:
And so I, I did a, a really deep dive on kind of this acquisition on my LinkedIn newsletter. And I think it's really interesting because Mammoth, if you'll recall, this is Harry's that rebranded to, to Mammoth Brands because they couldn't merge with Edgewell. And the FTC basically said we're not going to put two razor companies together. And so now Harry's had this choice of like, what are we going to do? You know, we can't be acquired by another razor company and so they're now trying to become the 21st century P and G. And it's just a really fascinating thing how Coterie, which is, you know, $200 million revenue company itself, is one of the first concrete steps they're taking to proving out if they can actually be the 21st century PNG or if it's something that they're just saying and they're, you know, it's wishful thinking.
Nathan [00:02:51]:
Yeah. I mean, your takeaways and deep dive in your newsletter was really cool. I mean, I think for those that haven't checked it out, definitely go look at Aaron's LinkedIn and subscribe. I mean, it's a great, great newsletter. And you go, you go deep, which I enjoy. So today we're covering Bloom Nutrition. And you know what's funny to me is like, I think when most people think of greens powder, they think of athletic greens, right. AG1, formerly known as Athletic Greens and Bloom Nutrition, kind of had this come up, really.
Nathan [00:03:20]:
I don't want to say out of nowhere, but just by tapping into, I think, an audience that was overlooked by AG1. Right. So Bloom Nutrition kind of their original products were more around pre workout, but they really, you know, kind of got to scale with the greens powder primarily on Amazon. And so it's just a fascinating growth story that we're going to dive into. And you know, I mean, it's pretty just unique in terms of how they were able to get to scale here. When you've kind of got this, you know, seemingly dominant player in the greens powder category completely.
Aaron [00:03:55]:
I mean, they, they basically AG1 had the market, they own the market. They were, you know, the vast majority of the green powders market. Everybody who listened to a podcast in the 2010s had heard of athletic greens. We did podcast episode on them about a year ago. But what we'll see is that there were two very different strategies here. AG1 made some decisions that we'll get to of, you know, were these strategic blunders or were they, you know, thoughtful decisions? But they basically created an opening for a company like a Bloom Nutrition to come in and basically take half the market. And, and so I'm really interested in kind of diving in that. But before we, we go deeper in that, we want to remind everybody, if you're listening to this podcast and this is, you know, more than the first time you listen to us, please make sure you like, subscribe, do all the social things.
Aaron [00:04:45]:
We've, we've really, I don't caught fire recently. I, I go to conferences. I go places and just I'm meeting some of our listeners and I absolutely love meeting you guys and hearing what you like about the episode. So please, like and subscribe, leave comments, let us know where you'd like us to go deeper or what company we should profile next. But we really wouldn't be doing this without you.
Nathan [00:05:06]:
It's been really cool to see just the audience grow. And Aaron and I always appreciate every subscriber and review. And I think in this episode in particular, it's pretty interesting because I think a lot of times people see a category and they're like, oh, it's already so saturated. Right. And I think this episode in particular is going to be really unique for listeners that kind of want to understand how to win and execute well when there's kind of this incumbent there. Right. And I think Bloom Nutrition navigated that so smoothly. And it's kind of this like, key question.
Nathan [00:05:38]:
Do you want to like, just focus on your own DTC channel, which AG1 primarily did, or you want to go multi channel across platform, which Bloom Nutrition did. Right. And I think it's just a fascinating story, but before we dive into their growth and the founders, you want to kind of give a just quick tidbit of the history of green powder, because it's really been like a pretty recent phenomenon.
Aaron [00:06:03]:
Yeah. If you'll listen back to the first category kickoff episode that we did about supplements, you'll know that this was always something that was trying to solve for a deficiency in your diet. And that was where you saw those sorts of early fish oils and things like that. Then you had this creatine pop and it was more performance things. But really these ideas of green powders, what we know them really have their roots in the late 1980s, early 1990s. And this is when people were getting more open to the idea of health food. And so I think the earliest thing you could trace things back to were these green drinks. So think barley grass, wheatgrass powders that raw food advocates and naturopaths were really pushing.
Aaron [00:06:46]:
And there were brands like Green Magma, which was started in 1969. There was Pure Synergy Superfood in the 1990s. And these companies really sold very highly dense nutrient powders on the health food circuit. And they were typically sold through co ops and GNCs and Miller catalogs, those sorts of things. But they weren't performance supplements. That's really what was, was different here. These were marketed and were promised to be longevity and detox products. And.
Aaron [00:07:15]:
And so that's kind of the foundation that, that you saw. But you get to the early 2000s and you start hearing about these superfoods, right? Avocado, kale, all these sorts of things. And people were really interested in, you know, how can I improve my health by just eating better? And so you saw companies like Amazing Grass, which was started in 2002, started to blend these organic greens into more palatable formats. You know, and this is a common thing, is the reason that these superfoods were super or we didn't were getting enough of them, is people just didn't like taking them. And you start to see these companies try to make it a little bit easier, whether it's a form factor, whether it's taste, things like that. And the messaging was really about alkalizing your body, detoxifying, using natural energy, all of those common early wellness things that you would hear about. And these sorts of products were sold next to the herbal tea and vegan section on Whole Foods. And it was kind of this early crossover between natural and fitness oriented people.
Aaron [00:08:16]:
But really what we think of as the green powder movement started in the 2000 and tens with the ascent of D2C. And with athletic greens, they really created this category. And we encourage you to go back and listen to the athletic greens episode. We go really, really deep into their story and how they came to be. But they launched in 2010 and they started to reframe green powders as a daily optimization tool as opposed to a one time detox. And this was really the key thing you talked about. If I am taking one thing as an event because I feel like I need to solve a particular problem in my life, my market is only going to be so big. I have to find people who have that acute problem who want to solve it, and then once the problem's solved, they do something different.
Aaron [00:08:59]:
But if I can change that paradigm to being something that, hey, you just have to do this so you prevent the big problem, that was really the key thing that athletic greens did. And so they did an enormous amount in this space around standardizing quality, bringing science in the mix, emphasizing nutrient absorption. And they, the flywheel that they found was really tapping into influencers. So think about Tim Ferriss Huberman. You know, literally, like I said, every podcast in the 2010s was sponsored by athletic greens at some point. And they, they really were creating this market. And there were other companies that were coming up that saw their success. I mean, one notable one is Organifi, which was launched in 2014.
Aaron [00:09:43]:
And they tried to lean into These Instagram era aesthetics, this cleanse, reset, glow mantra that they had. But really, you know, when we get to the mid 2010s, green powders had really separated itself from the niche wellness supplements sector into a distinct subcategory, which is dominated by AG1.
Nathan [00:10:01]:
Yeah, I mean, the green powder category really kind of crossed the chasm, as I like to say, in terms of just becoming mainstream. And I think just if you look at kind of the supposedly health benefits of greens powder, you know, it ties into kind of CDC guidelines where, you know, one fact that I was surprised to find out was that fewer than 1 in 10Americans actually meet the CDC guidelines for their daily veggies. And, you know, I think greens powder, they're kind of just this, like, easy psychological fix and that having this daily scoop just like, feels like you're doing something good in the morning. Right. Rather than just, you know, drinking coffee or whatever you have in the morning. Like, hey, let me also have this, you know, green powder that, you know, gives me my. My veggies.
Aaron [00:10:43]:
Maybe it works. Yeah, it's. It's green. I don't have to take broccoli. Like, I feel good about doing it. Sure.
Nathan [00:10:49]:
Yeah. Yeah. And then I think it also kind of tied into like the gut health revolution, where, like, in the 2010s, there was a lot of research into the microbiome that kind of was a new frontier of health. And I think brands reframed digestion from like a clinical topic to more of like a wellness habit in terms of, like, the keywords around like bloat, balance, energy. And this kind of global health supplement market was estimated about 12.4 billion in 2023, and, you know, continues to grow pretty fast at almost 9% per year. And so I think those are kind of some key reasons as to, you know, why this is just such a great market. And then if you think about influencers and accessibility to influencers, you know, it's very shareable content. Right.
Nathan [00:11:37]:
You see, you know, like Bloom Nutrition, if you look at their social media, you know, there's really a kind of stream of influencers just incorporating their green powder and their pre workouts, et cetera, you know, into shareable content. And so I think it's just something that's very accessible when it comes to creating content around. And so it was just this, I think, kind of incredible timing where people didn't feel as healthy if they weren't drinking the green powder in the morning. And I think it's just a really, just amazing market. But Bloom Nutrition was started in 2019. I mean, at this point, what did the kind of green powders market look like then?
Aaron [00:12:18]:
Yeah, that's a great question. And again, for all intents and purposes, AG1 invented the category in 2010. Have a nine year head start on this, right? And we don't have specific numbers for 2019 specifically, but the global greens market was estimated to be in the hundreds of millions of dollars, particularly in the us. That's where it was concentrated. And so the vast majority of that is AG1. You've got lots of other people who are trying to break into these things, but you know, in general, despite a very large incumbent, there's a lot of growth potential, there's a lot of white space from a branding or distribution point of view. And, and so it was something where, yeah, there's a 900 pound gorilla, you know, in the arena, but there's, it's a big arena, you can do a lot of stuff. And you know, I always have to go back and commend AG1 because when they started in 2010 and even till today they have one SKU, right, they don't have like different versions.
Aaron [00:13:16]:
They just continually update and change the formulation. They sell exactly one thing in one channel. And that level of discipline really allowed them to break through. And, you know, it's kind of a question of would they have been able to have created the market in the way that they did had they not been so focused on influencers, podcasts and D2C? You know, I think we'll, we'll debate that here in a couple minutes. But really this strategy had brought legitimacy and this flywheel of growth where the more you heard about it, the more you had it. You know, you had these influences that were compensated by, by people subscribing. So the more people, you know, were starting to talk about AG1 on the podcast and so it was, it was really good. But in general, if you look at this, I think the important piece before we get to bloom is that there were other competitors in the green powder space.
Aaron [00:14:06]:
It wasn't as if it was AG1 and then nothing. So here's just a couple of people that, that were worthwhile to take a look at. Amazing Grass, which again we said, launched in 2002. They have this long standing green blend super greens brand. So in many ways you could consider them the legacy or the incumbent that was being disrupted by AG 1. Garden of Life offered raw organic green powders and superfruit blends. Organifi, which we talked about 2014 was still around there. And then you also had Nest and Naturals Vibrant Health from acrolife Naturals, smaller but, but niche powders that were really starting to, to take hold in the green superfood powder category.
Nathan [00:14:47]:
Yeah, I mean it definitely, you know, there definitely was players in the market before Bloom Nutrition. And you know, I think that's partially why Bloom's story is just such an incredible come up. But they really kind of focused more so around fitness and health. Right. So Bloom Nutrition was founded by what became a husband and wife duo, Mari Llewellyn and Greg Lavaccia. And you know, they actually met in college. So they met when they were younger. And then, you know, Greg had always been into bodybuilding and fitness and still is.
Nathan [00:15:17]:
I mean, Greg is jacked. If you ever meet him in person, he is, he has got an impressive physique. You know, he was in Forbes 30 under 30. Just has a really, you know, impressive track record around scaling product and growth and e commerce. And in college, Ari was going through her own kind of health and mental health challenges and she was sharing that journey on her social media. Like around 2017, she really went through this major fitness and wellness transformation. She lost a ton of weight and she shared that on her social media and kind of went from being one of those girls that oftentimes you hear are scared to go into the gym to really taking up weightlifting and going in and understanding just body mechanics and nutrition and everything to get her through this transformation. And Greg was there kind of by her side, I think, just helping her along her journey.
Nathan [00:16:15]:
And together they really built up Bloom Nutrition from those early roots. And so her Instagram following began to grow quite a bit. Greg first tried to monetize that audience by launching a fitness business, Monterey Fitness, that literally just started by selling PDF workout guides and resistant bands, which later launched Slay, which was a fitness app. And so I think it's just been this kind of journey for both Mari and Greg in terms of having a transformational experience themselves, realizing as a woman that, hey, weightlifting is good for me. Right. I think during that time a lot of females were kind of scared to lift weights in the gym and they were more focused on yoga. Like we covered Lululemon and some of those other Athleisia brands. And so I think it's just been this kind of transformation and mindset shift for them.
Nathan [00:17:11]:
And that's actually why Bloom's first supplement was actually a pre workout. So their first product was not greens powder. And so I think it's just really impressive how they grew bloom from a grassroots approach. Right. And I think it's very rare that you see a couple being able to be business partners here. Right. And to have the success that they've had is really incredible. I mean, are there any kind of couples that come to mind of other stories that have had this level of success?
Aaron [00:17:44]:
Yeah, I mean, I can think of a couple. I mean, Lauren and Pan Pan Wong with the Flex Company, who I know well, our husband, wife, duo that were also co founders. But, you know, I think it's more the exception than the rule. And it is stressful to have a startup. And I just think back with. With my own personal experience, my wife has the quote, unquote stable job. You know, she's got a corporate job. She's.
Aaron [00:18:08]:
Although her job is very stressful, she travels a lot as well. She does amazing work there. But it is, it can be very difficult if you both have relatively unstable jobs or unknown jobs or if, you know, you have all those eggs in one basket. I think part of the element is different if you are, you know, you don't have kids versus you have a family of a mortgage. And so it might just be that, you know, the time where they were in their life, being in their 20s, basically, you know, being able to figure out whatever they wanted to do and to pivot, they probably had a little bit more flexibility than other people. But, you know, you hear of lots of other husband and wife duos that are successful. I mean, I think about, you know, Nick Saban and Ms. Terry, you know, Alabama coach, you know, he's the coach, but, you know, he would tell you and anybody around the program would say, hey, Ms.
Aaron [00:18:55]:
Terry is. Is right there making sure that he's right and that the players are taken care of and those sorts of things. And so I think that, you know, your, your partner is always going to be part of what you're doing. But I think to both be fully invested in a business can be. It's like burning your boats and you're just like, this is gonna work because we don't have an option.
Nathan [00:19:16]:
100%. I agree. And I think that's what makes these type of stories so special, is get to do it with your partner side by side. It's just really, really incredible. And so talking about Mari's kind of transformation and growth journey, as she explained that when she began her wellness journey journey, she wanted supplements that spoke to her right. Products that were approachable, effective, and not intim. And she found that on the market at the time, there was no kind of supplements that really spoke to her as a female going through this transformation, sharing her journey. And so she found that there was a gap for wellness oriented, you know, lifestyle friendly greens powders that were really especially targeting, you know, bloating, digestion and everyday gut wellness rather than, you know, kind of targeting high performance athletes.
Nathan [00:20:06]:
And so as they kind of dug deeper into this market, they realized that though AG1 was of course the kind of gorilla in the room, they were having gaps in their market in terms of what areas they thought they could improve on. Right? They read reviews of AG1 not having the same kind of taste that a lot of people liked. And many kind of early greens powders suffered from poor taste. I mean, we both have had AG1. I mean, what were your kind of first thoughts when you had AG1 before Aaron?
Aaron [00:20:36]:
I mean, it's fine. It tastes like healthy, right? Like, you know, it's something where you're like, okay, you know, this isn't the worst thing ever. And I'm doing this because, you know, maybe instead of eating my veggies, I'd rather just suffer a little bit. But you know, it's not something where it's late on Friday night and I got some cravings. I'm like, you know what? Let me go pound some ag1 powder. That's not what that is.
Nathan [00:20:56]:
It tastes, tastes healthy, right? Which, you know, I think is good and bad. But you know, for Mari in general, she said, hey, you know, I want something that's a bit more approachable. And she really leaned into this growth, this gut health trend as well. And there was research coming out at the time that connected your microbiome to your immunity, to your mood, to your skin energy. And she kind of wanted this transition of I need more vegetables to, I need, you know, kind of my gut engine turned on, right? Which I think expanded her audience beyond just kind of women who were starting to lift and going through a transformation. And they also saw this kind of channel and distribution gap right at the time, AG1 was only selling through its own website. You know, obviously there's a ton of, ton of volume and customers on Amazon and you know, mass market retail. And so I think they really kind of just correctly identified that there was a gap in the market and really honed in on the community that, you know, Mari built really just through her, her story of her transformation and growing, this following on social media.
Nathan [00:22:08]:
And so, I mean, it seems just pretty miraculous and incredible that they were able to out execute a well funded incumbent like AG1 here yeah, well, I.
Aaron [00:22:21]:
Think it's one thing to recognize that there's a gap here and there's an opportunity, but it's a whole other thing to be like and we're the ones to take advantage of it. And as you dive into this and as they were evaluating the situation, they looked at this and said, look, we've got as good a shot as anybody, we might as well try. I mean, they already had experience running E commerce stores and building a following, which were just basic building blocks that any founder will tell you you need to be able to be able to do. They knew that the wellness landscape from a branding point of view, like you said, skewed more toward high price male leaning performance brands. And the, the female wellness consumer felt really under targeted. And so they said, okay, we're gonna, we're gonna be able to exploit this in a really meaningful way because that is Mari's whole Persona on, on her socials. And so her community is already primed to want to hear advice from another woman who is, is just like them. And not for nothing, their audience is used to her selling things because they had all these other businesses before, so it's not as if they had this big following and then they were going to launch something and people were going to be like, hey, why are you doing this? Like just, just be funny or you know, just do those other things.
Aaron [00:23:34]:
But her audience was actually primed for this sort of thing. I think the last part is that she was very committed to solving the taste barrier and that that commitment to being more wellness versus performance, being more focused on affordability versus high price and really from day one, emphasizing taste, kind of similar to the ghost episode that we did last episode, really allowed them to say, okay, we've got something here. But then you've got this huge opportunity where AG1 has decided that they're not going to lean into retail or to Amazon, which Amazon accounts for over 50% of all E commerce sales in the US and retail is like 80% of sales. And so they decided they weren't going to do these things and so they said, okay, we're not inventing a new category, we're just going to make it better by focusing on taste. And we think that we're going to be able to execute these guys because they just aren't playing in these other spaces that to the outside observer would say this is a really no brainer.
Nathan [00:24:37]:
Yeah. And I think that's one of the things that we should double click on. Right. Because I'm sure you know, internally at AG1, they must have thought, well, you know, when is the right time to expand into Amazon or other retail channels? Right? I mean, they had been, you know, only direct on their website for quite some time now. And I'm just kind of curious, like, what do you think the rationale was at AG1 to say, hey, we are not going to expand to other channels right now, we're going to solely focus on our own website? Because, I mean, that is a very. I mean, in my opinion, I don't think it was the right decision. But, you know, now they've expanded a little bit off their own website. But, I mean, I'm just curious to get your take on the rationale from, from their standpoint.
Aaron [00:25:21]:
Well, they expanded, you know, 14 years after they launched, so it's kind of like, you know, they got pulled into it. But look, here, here's the case for not doing it. Number one is if you've got something that's growing as well as it is, just keep playing that same note until things stop, right? And so there's just. There's just an element here where it's like, if it ain't broke, don't fix it. And so I can understand that mentality. The other part is like, you know, structurally, you get more control of your experience, of your customers, of the messaging, if you have that direct DTC relationship, than if it's with Amazon. But, you know, as we'll see here in a moment, like, being on Amazon is not mutually exclusive from being on Shopify. The reality was, is that even though AG1 wasn't selling it on Amazon, there were people who were buying lots of stuff and reselling it on Amazon because people wanted it.
Aaron [00:26:15]:
And so, you know, I agree with you. Like, hindsight's 20 20, they probably should have taken the extra $100 million a year that they could have had by, you know, moving things onto Amazon. But. But they didn't. Right? And. And I'm sure it made sense at the time and maybe if given the facts, they would make the same decision. But that's kind of like the big thing here that left this opening for a company like bloom.
Nathan [00:26:39]:
Yeah, 100%. I mean, I don't know. I think in my opinion, AG1 waited too long to expand across channels. I think they've already, you know, so well known through their advertising across, you know, pretty much every podcast and, you know, all over the Internet that, you know, people were searching for them on these other platforms already. And in my opinion, you've got to be where your customers want you to be. And you know, I think they expanded, you know, too slowly on that front, but back to Bloom. I mean, once they kind of recognized that they could make a real run at this, they seemed to really just seize on this opportunity. And there was definitely some key decisions that they made prior to launch, to launching this, you know, greens powder that I think were really key in setting up success for this category when it comes to Bloom nutrition and the greens powder.
Aaron [00:27:27]:
Yeah, absolutely. I mean, again, I think the key thing here is that they had operational, profitable businesses from the beginning. And so they had already, I wouldn't say they were in the minor leagues, but they had gotten some repetition in terms of what it takes to engage and build an audience, what it takes to run these sorts of things. So they, they chose to take the profits from those modestly scaling businesses and invest them into this new venture and try to figure it out. And they did this by keeping their overheads extremely low. They tried not to take on full time staff when they could like afford to. Everything was contractor. They probably didn't pay themselves as much as they possibly could have.
Aaron [00:28:05]:
So, you know, I don't know if they were, you know, living in a tent, eating ramen or things like that, but there's certainly a piece here where you decide, do I take money off the table? Do I leave it in the business? And so they decided to leave it there. And that gave them the opportunity to test and iterate. And as they were coming up with this new venture again, they wanted it to be female centric. They wanted it to be more approachable from a price point perspective. They wanted to really focus on wellness. They chose the name Bloom really to signal this idea of transformation or community as opposed to purely performance. And so they looked at this and said, okay, from a brand aesthetic and design perspective, let's make it pastel friendly, let's make it lifestyle oriented, very clean packaging. And so even on their copy, they talked about feeling good or digesting better or bloat relief rather than just optimizing performance, which, if you want to see the difference here, take a look at AG1.
Aaron [00:28:56]:
Take a look at Bloom and just read their copy, read their ads. You can see there's still, even today, a stark contrast there. But Mari was very intentional that the one thing that she thought was going to separate them was to focus on taste. And so they really focused on flavor. And you know, they joked that said, in a market where many products tasted like liquefied lawn clippings, Blooms Masterstroke was Its obsessive focus on flavor. And so they, they decided to launch with a couple flavor variants from the beginning. Things like mango, sweet cherry, tropical, et cetera. And to the extent where they, they faced some early criticism where people were saying hey, there's sugar in this thing.
Aaron [00:29:33]:
You know, should, should something that's supposedly healthy or good for me taste this good? There's a debate there of are people buying any sort of these green powder products because it's actually helping them or they think that it's helping them. But putting that to the side, they, they got all this together. They launched in January 2019 and as you said, their initial product was a fitness oriented pre workout supplement.
Nathan [00:29:55]:
Yeah, kind of similar to Ghost in some sense or you know, there was a lot of pre workout products on the market already. But I think Mari had built up this following through her transformation. She had a very loyal audience and still has a loyal audience to this day. And she, you know, mentioned that she started with Pre workout because that's where she was in her life. And it was kind of, she felt the easiest thing to sell to her existing audience that was consuming her fitness related content at the time. That was kind of a key milestone in creating what became Bloom Nutrition today. And so they leveraged, you know, her audience and they created a influencer and community marketing program that enabled them to reach some scale with their pre workout product. And the content around their packaging was really intentionally designed to be shareable.
Nathan [00:30:43]:
They had Shaker bottles, morning routines aligning with Instagram and TikTok behaviors. They didn't really start this greens powder formulation until like right before COVID This product new product line would really change the trajectory of Bloom Nutrition.
Aaron [00:30:59]:
This, this was a monumental change and a company defining product. I mean I think I, I was surprised when doing the research here. I didn't know that Bloom had a pre workout. Right. I just assumed they were the green powders thing and they, they really did a great job here. What were some of the things that they did differently from AG1 when they decided to create this green powder?
Nathan [00:31:20]:
AG1 kind of positioned itself as the premium daily health drink. It's relatively expensive, it includes 75 plus ingredients. The focus was less on flavor variety and more on comprehensive coverage. They've got third party certification from NSF certified for sport and really just has a higher price and a lots of science based research around it. Instead of kind of taking this clinical trial and science based approach and premium approach. Bloom on the other hand really leaned into taste by making sure that people were able to have multiple flavors that you shouldn't have to suffer to get the nutrients that you need. And this stuck out in the reviews and comments that people found Bloom and their green powder a lot less grainy and chalky than other green powders. And people compared the taste between AG1 and Bloom Nutrition.
Nathan [00:32:09]:
And I think a lot of people like the taste of Bloom Nutrition better. They wanted to view them not just as kind of a super food company, but really kind of more so. This whole lifestyle business that they've created. And Bloom Nutrition has launched a lot more products now.
Aaron [00:32:24]:
Yeah, I think this is a really interesting piece because if you were to look at this objectively and say which of the green powders is better for me, I think the answer is probably AG1. Right? You've got, they've got 75 ingredients versus 30 ingredients of bloom. They are constantly pushing the science and doing this. But you see, that's because AG1 has put a stake in the ground where they are going to be the most science focused, the most performance focused brand out there. And so they have to constantly be pushing the envelope to maintain their huge moat. Whereas Bloom said, look, we're not looking to be the absolute best from a science perspective or from these ingredients perspective. We just want to help you be a little bit better than where you are today. You're better off using Blooom than not using Bloom.
Aaron [00:33:17]:
But we're going to make it easier on your wallet and we're going to make it to be something that you enjoy. And I think this is a really interesting decision. Think about Shopify and Amazon. And five years ago Shopify is like, oh, we're going to be the next Amazon. And so what do they try to do? They spend $2 billion to buy, deliver and they try to build out a fulfillment network. Well, guess what? Amazon has been spending hundreds of billions of dollars last 25 years to build out the network they have. And so unless you're going to spend a trillion dollars, like literally to build all these things right away, get all of that, that infrastructure, like don't play that game by going after and playing, you know, into someone's strength. And so they decided to go in a different way.
Aaron [00:33:58]:
And so I think that this is just a really interesting aspect. And again, Blum focused on things like price. They're roughly half the cost of AG1, you know, half the ingredients, half the cost. Like makes sense. But they wanted it to be more accessible in general because they, they wanted a more broad consumer base. They wanted to be women, they wanted to People to be people who are just kind of wanting to be better in their life versus wanting to be a premium athlete. You know, we've talked about the positioning, we've talked about those things. But I think the most important thing that they did was focus on place and where people could buy this.
Aaron [00:34:34]:
And they intentionally and specifically went after Amazon. How did they growth hack their way onto Amazon? Was this something that everybody else was doing and they were the first ones doing it? Lots of people doing, like, how did this happen?
Nathan [00:34:49]:
This kind of goes to the fact that choosing your main growth channel as a e commerce company is really such a key. And Bloom invested in Amazon and their presence on Amazon in the early days. Basically from day one when they launched their Green Powder, they leaned into an optimized listing. They had just incredible a content, early reviews. They were part of Amazon's viral programs. And they also did something that I think a lot of brands overlook is that they ran external traffic to Amazon that pushed the algorithm to favor Bloom. So Mari leveraged her social media influence to know, really push their presence on Amazon and get, you know, people to say, hey, instead of, you know, buying directly on our website, we're also available on Amazon. And so they created this kind of social buzz that enabled them to come in favor of the Amazon algorithm.
Nathan [00:35:41]:
To rank when someone's searching for green powder on Amazon, you've got to be where your customers are searching for you. And if people are searching for, you know, green powder, where I'm sure there's at this point probably hundreds of thousands of people searching for that per month, like you've got to be there, right? And AG1 was not. And so I think they took advantage of that opportunity and whether it be strategically or not, they really were able to become the best selling greens powder on Amazon as a small startup brand competing with one, which is just pretty incredible to think.
Aaron [00:36:15]:
So just to dig in a little bit more, did they just ignore their D2C site from the beginning and just say, oh, yep, we see that there's an opportunity on Amazon, we're going to go do that? Or was it just something that they tried and then they backed into Amazon being a major channel for them.
Nathan [00:36:30]:
So their initial story definitely focused on the traditional DTC brand playbook. Like in 2019 and even before that they were selling workout guides, workout PDF guides, just, you know, through Mari's audience on Instagram. They definitely used this audience to leverage their Shopify site with organic influencers and content to drive traffic. After they launched their greens powder in 2020 and 2021, three things kind of really happened that changed their trajectory. And so number one, consumer search behavior shifted quite a bit. You started seeing blooom way more on TikTok or Instagram and didn't just go from Google to Shopify, they went straight to Amazon. And so I think this kind of search environment changed a bit during COVID and you know, Mari's own words from a 2023 podcast that she was on, she said, we didn't expect Amazon to be so big for us, but that's where people shop. We wanted to meet them where they are.
Nathan [00:37:26]:
They realized like, hey, we've got to be where people want us to be. And for whatever reason, AG1 kind of overlooked that for that time period. The other thing is that I've seen a lot of brands kind of struggle with, but also get excited by, is that TikTok virality does create unpredictable traffic spikes. Their DTC site could, couldn't easily absorb all these surges or maintain fast shipping, whereas Amazon Prime Logistics could. That was the key of utilizing their FBA network to meet kind of this frictionless shopping experience where when they went viral on TikTok for new flavor or whatever it may be that Amazon traffic was able to take in that growth. And that traffic surgeon Bloom saw data Amazon gives that Shopify doesn't always share. Through Amazon ads, they could see the search term lifts around not only brand intent keywords, but also more general keywords. For example, they saw it was a 285% lift in ad impressions and an 89% lift in ad sales in their Amazon advertiser accelerator program in 2022.
Nathan [00:38:31]:
So they were very, very early to advertising on Amazon, which was, you know, awesome for them. And I think the difference is that, you know, on Shopify, obviously Shopify doesn't have its own ads platform. So you're, you know, running traffic from meta or Google or wherever it may be to Shopify. And it's just a different dynamic, I think when you're able to almost, you know, target that search intent on Amazon, when someone's either having that brand search intent or a keyword that's relevant to you, like, you know, greens powder or whatever it may be.
Aaron [00:38:59]:
I heard something this last week that shocked me. Amazon is projecting within like the next year or two that the number one profit driver for all of Amazon is not going to be aws. It's going to be the ad business. And just it shows you kind of what they've done and like something that's at the scale of Amazon, like these ad things are really here to stay. AG1 was spending millions of dollars a year on podcasts, educating the market and the value of green powders. And yet they refused to go on and sell where half of all E commerce purchases are made. And I think that when someone goes and whether they see a TikTok ad or maybe they listen to a podcast, if they type in athletic greens, it's not there. They type in green powders.
Aaron [00:39:43]:
Guess what? Bloom nutrition pops up. It kind of poses this question in terms of was Bloom Lucky that AG1 was willing to seed the market and was kind of maybe asleep at the wheel at least when it comes to Amazon, or were they just a more focused competitor? Did they earn the right to out compete everyone? Or were they just right place, right time?
Nathan [00:40:06]:
You know, Greg is a very smart operator and he saw the opportunity on Amazon. They didn't realize how big Amazon could get as a channel. I think very few brands realized how big Amazon would get for them. But they were there at the right place and right time and able to seize that opportunity. And I think for a lot of E commerce brands, especially through Covid, Amazon equated for, you know, half of E commerce sales, you know, during that time, sometimes even more. And so I think it just became this huge opportunity for them that they were able to capitalize on, especially being early in their ads accelerator program and Amazon's ad accelerator program. It was there at the right time, but also, you know, having that ability to seize that opportunity that, you know, other brands and in this case AG1 overlooked. AG1 was spending so much on podcasts and other media platforms to drive this education around greens powder and their brand, but they weren't there where the shoppers were searching for greens powder.
Aaron [00:41:07]:
Yeah, and really Amazon for Bloom evolved from this secondary experiment into this dominant acquisition engine that they had and they, they pivoted their business so that their DTC site became a retention and branding layer. So basically the DTC site emphasizes community and subscriptions and things like that and they can nurture that one on one relationship. But by 23, 24 they were running these dual funnels where ads and influencers are pushing all of the new people to Amazon. Right? You can get fast delivery, you get scale, you get, you know, all these reviews is retail proof. And then they get this post purchase retargeting where they're now going after people who purchase their stuff on Amazon or you know, engage with the ads on Instagram, TikTok and now they're pulling them into into their own DTC network. And they have loyalty programs and subscription things like that. And so I think there's a lot here that people can learn where you understand your category. Supplements are more of a search product as opposed to a browse product sort of place.
Aaron [00:42:09]:
And so Amazon really owns the search product place. And what I mean by that is when I go to Amazon, I say, I need tissues. I don't search like, show me off brand Kroger type tissues. Like it's going to pop up as Kleenex or whatever. The other part is that Amazon is a momentum business. Their sales rank, their review counts really becomes social cred and social validation. And it makes it very easy to convert. Would be skeptics.
Aaron [00:42:32]:
And so you have this flywheel where someone hears about the virtues of green powders from a podcast. They go to Amazon and search, hey, these green powders seem really good. Let me go find them. Or maybe they go to AG1, like, ooh, I don't know if I want to spend a hundred bucks a month. They find something else, you know, on Amazon that is just as good. Quote, unquote, Bloom's the top one. They, they go into it, they try it, it's not too bad. And then they start getting ads and other information.
Aaron [00:42:58]:
Maybe there's stuff in the packaging. It says, hey, once you sign for a subscription, it's $30 a month. Like it's, you know, you feel pretty good because taking some green powder is better than no green powder. So you're feeling those instant improvements and then you basically just get them tied in and so you bring them in that way. So it's so interesting how they, they inverted what you normally think about, where they said, let's bring them in on Amazon and let's keep them on Shopify.
Nathan [00:43:21]:
Yeah. When I see a brand growing this fast, I always wonder, how does their supply chain keep up? They partner with Shipbob to handle all their D2C and Amazon prep and leverage Shipbob's large network. I mean, they're a great partner of sourceify. Shipbob's been there for a lot of the brands that we work with and shout out Casey, their cmo, he's just great, great person. The other thing you got to think about is if you run out of inventory on Amazon, they will ding you. Right. And they will kind of penalize you for running out of inventory when you have a fast, fast growing SKU like that. The other thing is that a lot of founders really invest in their own website and kind of fear Amazon will dilute their brand, especially because you're not getting the same customer from Amazon as you are from your Shopify site.
Nathan [00:44:05]:
And Bloom did the opposite here. They utilized Amazon as a marketing department and their kind of customer acquisition lab and then realized, hey, we've got such a big audience here. They positioned themselves to then expand into the next logical shelf here, which would be, you know, retail, right, Target, Walmart, et cetera. I mean, how did they kind of growth hack their way into retail?
Aaron [00:44:27]:
Yeah, another channel that AG1 was not in. But the short answer is they didn't have to convince Target or Walmart. They just became so obvious that these buyers could not ignore them. And you know, as opposed to most brands that, you know, may, you know, spend a lot of time putting that deck together and really trying to make sure the stars align so that the buyer maybe takes them there. There really wasn't that dynamic in 2020. Green powders were everywhere on TikTok and hashtags like Bloom Greens had hundreds of millions of views. And so that was creating all this organic demand pull. And you add that in with consumers starting to search for Bloom Greens on Amazon and Google without any sort of paid placement and you have these buyers who see this category demand already popping up.
Aaron [00:45:10]:
And so, you know, it's the, the retailers are seeing that their consumers are asking for this, not retail brokers. They, they basically said, okay, Bloom, we'll take a, you know, we'd love to have a meeting with you. And Bloom comes in and says, okay, well here's our Amazon search and here's our review section. And you know, here's why, you know, everybody wants our stuff. And so it became a very interesting place where they were the ones that were being sold to the idea that they had this Amazon platform as almost their media showcase, allowed them to get in there. It was very approachable. Something was very useful for them. Being able to show on as the number one Greens powder on Amazon is a, is a huge feather in their hat.
Aaron [00:45:55]:
And it just legitimizes the buyer's decision to take people in on Walmart or Target. And so all of this stuff was, was really culminated in the partnership with Target be announced in October of 2022. Within a couple of months, they're in 600 stores nationwide. And the press release that, that talked about this from Target said that Amazon and Target channels combined had grown 20x year over year between August 21st and August 2022. And so you just think about that trajectory and of course Target, you know, wants to be there. And of course, if Target has it, Walmart wants it. So in early 2023, they expanded to Walmart, 1700 stores, lots of very strong omnichannel performance per Walmart. And Walmart basically said, like, look, they have this amazing social media momentum.
Aaron [00:46:43]:
They have category leadership, which I thought was really interesting because they didn't say AG1 had category leadership. They defined the category. But now they're pointing to Bloom Nutrition as being the category leader. And so this, you know, all comes to 2024, estimated $200 million in revenue, 1.6 million followers on Instagram, 5.2 million on TikTok. And they get to a point where they sell a 20% minority stake to Nutribull for roughly $90 million or $450 million valuation.
Nathan [00:47:13]:
There's a lot of rationale that makes sense, right? You know, nutribullt kind of knows how to scale up these brands from few hundred to billion plus in revenue. And I think it just made a lot of sense in my mind from a strategic standpoint as to why nutribullt would be interested in Bloom and vice versa. They've helped move Bloom from the wellness space and green space to more of this platform for nutrition. They've launched like creatine products. They've launched now kind of a Kombucha drink. They've launched an energy drink. They've launched a lot of other products under this Bloom brand. Bloom brings this expertise to the table with nutribull around being a social first brand with their, you know, rapid growth.
Nathan [00:47:58]:
And nutribull kind of brings this distribution arm and probably the international arm as well, that I think Bloom can tap into to really grow to the next level. This is a great partnership that makes a lot of sense. What came to your mind when you saw the Nutribullet and Bloom deal?
Aaron [00:48:15]:
My initial thought was, whereas AG1 could be faulted for not doing new stuff fast enough, I almost wondered if Bloom was doing new stuff too fast. Right, because here they are, they've got this great greens business, but then they, they want to get into drinks and beverages as I think about a little bit more like, well, you kind of make sense. And I'm hearing echoes of the ghost episode from, from last time. They wanted to have additional consumption occasions. They, they didn't necessarily want to be tied to powders, which is typically a morning shake routine. But breaking into beverage allows it to be a snack, allows it to be consumed with a meal. It allows it to kind of be with them all the time. So they're thinking about, okay, how do we.
Aaron [00:48:59]:
How do we get in front of our consumer and own that completely? Most recently, they've launched these. These probiotic drinks. And so there's a lot of interest in the. In the space with. With Ollie and Poppy and some acquisitions that are going there. And so they've kind of went into that face as well, again saying, yeah, why not us? We can. We can disrupt these incumbents as well. As I think back about bootstrapping, finding white space, charging straight ahead into it, and really not being afraid to expand your company in a really disciplined way, I guess.
Aaron [00:49:29]:
As we start to wrap up here on E Commerce and Tap, what are the biggest lessons that you've taken away from Bloom Nutrition?
Nathan [00:49:34]:
Yeah, number one. Just starting niche and starting with something that catches people's eyes. This story, to me, really starts with Mari's transformation on her sharing that story and not being afraid to share that story and build an audience around her story. And Greg probably saw that and said, wow, there's a really loyal audience here. There's people that want to learn how Mari had this transformation. Let's create products around that story. So first workout PDFs, then pre workout, and then really kind of their breakout product was their greens powder. They just kind of continued along that theme and thought process of what does our audience want? But they started with the audience, right? They didn't start with the product.
Nathan [00:50:17]:
They started with the audience. I think a lot of times you see entrepreneurs create products that are cool and great products, but they don't have an audience for them. The key takeaway for me with Blooom was that they started with the audience and have always thought about the audience and then thought about, where is our audience shopping, Amazon retail, et cetera. And then they realize, hey, at this stage, they realize with the partnership with nutribull that, hey, at this stage, an audience is also buying creatine, they're buying probiotic drinks, and they've expanded their product line, I think, at a strategic way to understand and be in product lines that their audience is already shopping for.
Aaron [00:51:03]:
Yeah, some of the other lessons I take from it was when you're entering in and thinking about a launching a business, you don't have to invent a new category. Product can. Your product has to be good, but it doesn't have to be brand new. You just have to be able to execute better. And like you were saying, the white space that they found was really in. In the audience and who this was for. And so they wanted to focus on how the, how the product made people feel, how the brand made people feel, as opposed to just this performance piece there. The other big takeaway is that Amazon can be an accelerator to your brand, not a cannibal.
Aaron [00:51:38]:
I know a lot of D2C founders that fear Amazon because of margins or brand dilutions or, you know, fearing that they're going to lose control. But Bloom really should serve as a case study of how to do it right. They use it as this mass discovery engine that fed, you know, TikTok into Amazon and it became their investor deck. It's what they showed. People say, do you want to give us money? We're number one on Amazon. Do you want to give us Money? We have 10,000 five star reviews. Do you want to give us money? Like we're the number one search jam here. And so like those are the things that were really interesting there.
Aaron [00:52:11]:
What do you think is next for bloom?
Nathan [00:52:15]:
So Nutribull right now owns 80% of the business. They wrote, I want to say it was like $200 million check or so.
Aaron [00:52:20]:
For 26, it was 90 million. There have been rumors that they've already put up to 200 million.
Nathan [00:52:27]:
So they've already wrote probably a nine figure check into Blooom, which is awesome. They might have an option to acquire the remaining at some later date. Bloom's going to continue to grow with their product expansion here. I think there's opportunity for them to go international as well. Right. I think Mari's audience and I think just Bloom's audience is already international on social media. And so I'm sure they're going to tap into some international distribution and continue to grow. And you know, I foresee a full acquisition by nutribull, but there are other options.
Nathan [00:52:57]:
It could be another strategic sale to a different DPG major, whether it be, you know, Nestle or potentially even Unilever. Or they could go public. If they maintain revenues of over 400 million, there's definitely an option for them to go public. But we've seen CPG brands general struggle in the public markets. So there's definitely some optionality here. But I think Bloom is going to continue to grow here.
Aaron [00:53:20]:
Yeah, if there's anything from this episode, it has to be. You can't rest in your laurels. If they don't continue to innovate and push and do these sorts of things. They could find themselves in a similar position as AG1, which for the record, I know we're knocking on them quite a bit in this episode. They're a fantastic company, fantastic product, but they've made some decisions that allowed for openings, that if they had been a little bit more aggressive and said, hey, like, let's just be on Amazon, like let's, let's own this, they would have squashed, or at least it would have made Bloom's story much more difficult. So I think they've got to be vigilant. They've got to find what that next thing is going to be, probably agentic commerce. And, you know, how do they, how do they growth hack that? So I think that's the next frontier that people are looking at.
Nathan [00:54:01]:
Totally. I agree. Well, this was a super fun episode of E Commerce on Tap, brought to you by Sourceify and Isba. Thank you for listening in. Leave us a review. Share this with a friend and we'll see you next time on Ecommerce on Tap.