Weekly Round Off With HTE ✨

September 11, 2023 • Estimated Reading Time: 10 minutes

🌟 Hey there, dear readers! It's that time of the week again when we gather around to catch up on the latest and greatest in the Direct-to-Consumer (DTC) world. 🚀

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Welcome back to another exciting edition of our DTC (Direct-to-Consumer) Insider newsletter. 📰 Our mission: to serve you the freshest news and insights straight from the heart of the DTC universe. 💡 With every update, we're arming you with the knowledge to be the smartest one in the room. 🤓

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🍫 Nestle goes upmarket with deal for Brazil chocolate maker

👟 Aaron Rodgers Announces Investment and Partnership with New Footwear Brand, Amberjack

🍹 818 Tequila lands in Australia

🛒 Challenges and Growth Prospects: Navigating the Future of Convenience Food Market | Future Market Insights, Inc.

💼 GNC Investing in Omnichannel and Membership Personalization

💰 Goldman Sachs chief economist: US consumer won't break in 2024

Nestle goes upmarket with deal for Brazil chocolate maker

Source: 7 September 2023, Reuters 

Nestle has announced its acquisition of a majority stake in the Brazilian premium chocolate manufacturer Grupo CRM, as part of its strategy to venture into the luxury confectionery market. Grupo CRM, renowned for its Kopenhagen and Brasil Cacau brands, operates over 1,000 chocolate boutiques across Brazil, bolstered by a growing online presence.

Nestle has not disclosed the financial terms of the deal, which is anticipated to conclude in 2024. However, reports suggest that the purchase price may range from 3 billion to 4.5 billion reais ($602.78 million to $904.18 million). Renata Moraes Vichi will continue as CEO of Grupo CRM and retain a minority stake.

This move aligns with Nestle's objective to expand its footprint in the super-premium chocolate segment, an area where its offerings have been limited. In the first half of 2023, Nestle reported a 10.8% increase in confectionery sales on an organic basis and a 70 basis point improvement in the underlying trading operating profit margin, reaching 14.5%.

Laurent Freixe, Nestle's CEO for Latin America, emphasized that this acquisition strengthens its presence in Brazil's confectionery market, enabling it to enter the high-end segment. While initially surprising given Nestle's focus on coffee, pet care, and nutrition, analysts like Jon Cox suggest that integrating production and capitalizing on the premium chocolate category align with a sound business strategy.

Aaron Rodgers Announces Investment and Partnership with New Footwear Brand, Amberjack

Source: 7 September 2023, PR Newswire

Amberjack, the men's dress shoe brand, has announced a partnership with NFL veteran Aaron Rodgers, the New York Jets quarterback. This collaboration, initiated in 2020, sees Rodgers as an investor and dedicated partner, sharing Amberjack's commitment to sustainability and innovation. They have co-created a sustainable product line set to launch in the coming months.

Rodgers was drawn to Amberjack's focus on both product quality and environmental responsibility. The brand, founded in 2021, emphasizes comfort, style, and sustainability. Each shoe features heat-activated arch support, a dual-function outsole, and eco-friendly materials. Amberjack prioritizes sustainable partners, fair-wage factories, and 100% carbon-neutral shipping. This approach has led to significant growth, making it one of the fastest-growing footwear brands.

Rodgers, a proponent of meaningful environmental efforts, aims to inspire others and drive positive change through this partnership. Together, they plan to elevate Amberjack's position in the dress shoe market while championing sustainability.

818 Tequila lands in Australia

Source: 8 September 2023, The Business Spirit

Kendall Jenner's 818 Tequila has expanded its availability to Australia through Liquorland and First Choice liquor retailers. After successful launches in various countries, including the US, China, Canada, Dubai, and the UK, the B Corp-certified 818 Tequila has entered the Australian market to meet the growing demand for Tequila. The brand aims to excite consumers and introduce new drinkers to agave spirits.

818 Tequila has already experienced strong sales in the US, with 136,000 cases sold in the first seven months of operation. In the UK, sales exceeded expectations by 150% within 12 days of launch. The brand's international markets, including China, are contributing significantly to its success. Kendall Jenner and Kris Jenner recently starred in a campaign promoting the versatility of the spirit by demonstrating how to make various cocktails using Tequila.

Challenges and Growth Prospects: Navigating the Future of Convenience Food Market | Future Market Insights, Inc.

Source: 11 September 2023, Yahoo Finance 

The convenience food market is set to grow at a 7.2% CAGR between 2023 and 2033 due to the fast-paced lifestyle and urbanization, increasing demand for quick and hassle-free meals. Rising disposable incomes, especially in emerging nations, drive the adoption of pre-packaged meals. Producers are creating healthier and customized convenience food options to cater to changing consumer preferences.

Key Takeaways:

  • The United States dominates with a 17.2% market share, reflecting a solid preference for quick meals.

  • Germany (6.2%) and China (10.2%) show growing demand due to busy lifestyles and urbanization.

  • Japan (4.6%) also favors convenience foods.

  • Australia (1.8%) and the United Kingdom (3.9%) offer expansion opportunities.

  • Major players include Nestle, Unilever, Tyson Foods, and Conagra Brands.

Key Developments:

  • Online sales and meal kits are boosting convenience food demand.

  • Meal kits simplify home cooking by providing pre-portioned ingredients and instructions.

Segments Profiled:

  • Types: Frozen, Canned, Chilled, Ready-To-Eat Snacks, Meals

  • Distribution Channels: Supermarkets, Departmental Stores, Mom & Pop Shops, Convenience Stores

  • Regions: North America, Latin America, Asia Pacific, Middle East and Africa, Europe.

GNC Investing in Omnichannel and Membership Personalization

Source: 11 September 2023, Consumer Good

Health and wellness company GNC is renewing its partnership to enhance its omnichannel and membership strategies. This partnership provides access to data-driven insights and predictive analytics, enabling GNC to offer personalized experiences to subscribers and members through tailored product recommendations and subscriber management via Alexa and SMS. GNC has extended its partnership with Ordergroove for four years to strengthen its tech capabilities.

According to Yong Kai Wong, GNC's executive vice chairman, their subscription and membership efforts contribute to customer well-being through consistent adherence, both online and in retail stores. Since introducing the technology in 2015, GNC notes that customers enrolled in their subscription model have a three-fold increase in lifetime value compared to transactional shoppers.

Forrester's data suggests that personalization, particularly post-purchase personalization, significantly impacts business success, with 47% of consumers favoring personalized experiences after making a purchase. This highlights the importance of tailoring customer experiences beyond the initial discovery and purchase phases.

Goldman Sachs chief economist: US consumer won't break in 2024

Source: 6 September 2023, Yahoo Finance 

US consumers are expected to remain resilient in 2024 despite signs of stress, according to Goldman Sachs chief economist Jan Hatzius. Hatzius highlighted the significance of real disposable household income, which saw a 4% growth rate in 2023 and is projected to continue expanding at approximately 3% in 2024. This income growth is expected to be supported by ongoing job creation and higher yields on interest-bearing assets like CDs and savings accounts.

Hatzius also anticipates that the unemployment rate will remain stable at around 3.5% in 2024, with an average of 100,000 jobs being created each month. He believes that recent evidence aligns with the notion of a soft economic landing.

Despite this optimism, it's worth noting that consumer spending in 2024 may be driven more by higher-income individuals, while lower-income consumers could experience greater financial pressure. Additionally, the return of student loan repayments in the fall may exert a modest drag on growth in the fourth quarter of 2023 or the first quarter of 2024, reducing the increase in real consumer spending by a few tenths. This highlights potential challenges amid the overall positive outlook for consumers.

Stay Ahead of the Curve with HTC!

As we wrap up this edition of our newsletter, we hope you found the blend of news and insights as invigorating as we did. The world of DTC and beyond continues to evolve, and staying informed is the key to success. Keep those entrepreneurial spirits high, and remember, we're here to keep you ahead of the game. 

Until next time, stay sharp, stay savvy, and keep conquering the DTC frontier! 🚀🌟📰