enthusiast sectors — where consumer investors are putting their dollars
I talked to two Midwest-based consumer investors to hear their takes on consumer. Here's what they're looking at⬇️
It’s FALL Y’ALL🍁 I have a feeling this month is going to be refreshingly crisp. My last few days of unemployment have involved multiple walks during the day with my grandma and drinking seasonal lattes.
Things I’m looking forward to this month:
visiting my besties in NYC
starting my big girl job👩🏻💻
organizing a CPG taste test night with some gals💅🏽
going to UMN’s homecoming game 〽️
celebrating Diwali with my grandma🪔
& halloweekend👹 need I say more.
I’m super pumped about this piece, where I dive into trends two particular Midwest consumer investors are excited about! s/o to Erin Wall at Lunr and Maggie Abeles at Newbound VC for taking the time to chat with me and share your takes!
Today’s breakdown:
health & wellness: clean protein & brain health
beauty: all-in-one products & biotech-formulated skincare
sports & esports: online experiences & building products for women
pet care: pet health & insurance
Health & Wellness
There’s a lot within this realm but Erin’s primarily looking at how various food brands are disrupting the way we think about health.
At a recent expo, Wall noticed how “clean protein” is emerging as a new trend within the protein market. A growing trend towards protein-focused diets is leading consumers to purchase products that help them hit their protein goals. A 2024 Food and Health Survey by the International Food Information Council found that 71% of 3,000 participants said they are trying to get protein — up from 67% in 2023. Some products include protein powders and bars. Now, consumers are paying more attention to the ingredients in these products since it’s common for them to include artificial ingredients that disrupt our gut health and digestion. I used to be an avid protein bar fanatic, or so I thought. Growing up, I went through a phase of Clif Bars, Lara Bars, RxBars only to find that most of these products weren’t actually high protein. As consumers are becoming increasingly strict of which products are suitable for their lifestyle, the macros and ingredients on the products actually matter now.
This is a gap that new brands are trying to fill. David Protein just launched a line of protein bars that are 150 calories with 28g of protein!! I was going to say that their thoughtfully-explained ingredient list reminds me of RxBars, and then I realized that the founders of RxBar created David Protein. Just last month, the brand raised $10M and is ready to compete as the lowest cost / protein bar in the market (only nine cents per gram of protein!). I’m obsessed with some of their data points they’re highlighting on their website.
Wall also mentions some movement towards CPG products for brain health. Some products operating in this space include:
IQBars - plant-based protein bars made with ingredients that increase brain sharpness
The Turmeric Co - turmeric shots to promote brain functionality
Heights - brain health supplement pills
I’m a little skeptical of products centered around “brain health”. Much research supports the relationship between whole food diets and cognitive function, such as Mediterranean, MIND, and DASH diets. Additional supplements to “promote brain health” seem like a scam. Like seriously, turmeric shots? My Indian mom would kill me if I bought this — just buy the turmeric and mix it in water.
Beauty
Again, a vast market but a couple of core themes are emerging from this sector.
makeup + skincare + sunscreen + one bottle = our next obsession
Iris & Romeo, a Newbound VC portfolio company, is a brand that simplifies the multi-step routine of skincare → sunscreen → makeup into one product that does it all. Its main product is an SPF-tinted moisturizer in 12 shades. A perfect example of listening to women!! Sometimes purchasing 10+ different products for skincare and makeup is unnecessary and wasteful, as well as time-intensive.
Currently, three-quarters (74%) of women with a morning skincare routine use at least three products and around 20% use at least five products. That’s just skincare alone. A Reddit thread shows that women use anywhere from 5 to 20 makeup products for daily wear.
Daybird is another brand offering a similar product, a 4-in-1 Serum Skin Tint, with a mission to redefine beauty standards and self-care.
I don’t know about you, but I’m SOLD!!!
skincare formulated with biotech ingredients
Mother Science, backed by NewBound VC and Greycroft, is using biotechnology to address hyperpigmentation. The main ingredient in the products is malassezin, a naturally-occurring molecule found on the skin. It’s 10x more effective than vitamin C, beating out tons of serum products. And the results? insane.
The price is steep, running at around $89 for a 30ml bottle. But this is next-level skincare. Taking existing science from our bodies to create new molecules that can be used to solve the most pressing skincare problems is how skincare will likely continue to grow in the future. With consumers more focused on high-quality, clean ingredients, biotech skincare will be well supported by Gen Z (maybe just not at that price point).
sports & esports
Maggie emphasizes the growth of sports and esports technology. NewBound has invested across a multitude of sports technologies, including e-sports platforms, audience monetization, and event curation. She views sports tech as an essential way of investing in areas capturing the interest of many Americans. Approximately 160 million Americans watched live sports at least once a month in 2023, a slight increase from 158 million in 2022
At Lunr, Erin double clicks on the value of investing in sports, more specifically women’s sports. I’ve talked about how women’s sports is clearly on the rise and more brands are building products specifically for female athletes. One brand that Lunr has invested in is IDA Sports, which sells women’s soccer cleats. IDA started from in-depth research from co-founder Laura Youngsun, where she found that existing cleat brands do not understand what women need.
Women have:
narrower heels
higher arches
broader toe boxes
These factors were not considered, leaving many women with injuries in their feet due to extreme discomfort and cramping. These problems can gradually affect the performance of the rest of their bodies too, such as their hips and back.
So IDA designed a specific outsole to eliminate these problems. Perfect example of to be loved is to be seen. Recognizing the different performance needs of women will lower injuries and prioritize the well-being of professional athletes.
Pet Care
The growth of pet CPG is insane, and this has largely been driven by millennials and Gen Z. A Morgan Stanley report states that 34% of respondents intend to get a pet — up from 28% in 2022.
Pet health and pet nutrition are emerging focus areas for investors.
Regarding pet health, a Market Watch report stated that Gen Z is more than 16 times more likely to get pet insurance than baby boomers, driving an uptick in pet insurance rates. That’s utterly insane, although I remember a co-worker telling me she pays $800 per year for her cat’s health insurance. So maybe this is just a new normal thing?
It is. It is normal.
Ani.VC is a new venture fund dedicated to pet longevity. Its first investment is DOG PPL, an explosively popular dog park-meets-social-club to increase pet social and physical health. I am baffled by how much people are spending for dogs to basically have their own country club. Here’s what the membership costs look like:
This makes me want to be a dog with rich parents.
A few startups that have been in the news:
DIG Labs (acquired by Ollie) - software to help vet clinics and pet parents detect digestive problems in pet stool
NovoNutrients - turn carbon dioxide into protein to use for pet food
Petlibro - automatic food and water dispenser for cats
Thanks for reading,
Sanjana