🤑 Sean Frank reveals what to do when demand is your issue
📊 Connor MacDonald shares a holiday pacing Sheet + Loom
🗞️ Top five headlines from this week in consumer (DTC) news
Oh, and are you waiting for the masterclass recordings + resources? Good news …
They’re coming tomorrow!
Be Cracked at Ads or Find a Fat, Lazy Competitor
A lot of people ask me for help.
I spend most of my time with bigger brands, but frankly there are a lot more smaller brands, and they need more help.
So this one is for the 7-figure brands out there.
If it is helpful, I'll do a series.
Here's the question…
What do I do if DEMAND is my issue?
Sales are down, sales are flat, or growth just isn't there.
Well, why should you be growing?
Ecom as an industry is growing single digits a year. That's your natural growth just for selling in ecom.
No new households are joining Amazon Prime. Amazon sales are growing as a GDP business - like milk or haircuts.
Shopify is growing by adding stores.
They aren't growing same store sales.
Every sale is a zero sum game.
Are you in a fast growing category?
Some are flat, some are up, some are negative.
Hydration is having a moment. The category is putting up 20-30% growth per year.
Just being in hydration should be a boost.
Same with creatine.
Water bottles this year are shrinking.
People are buying less water bottles YOY because Stanley had a fire 2 year run.
But wallets aren't a naturally growing category.
So you either need to create demand or steal demand.
At Ridge -
We generate net new demand through advertising.
Getting people into a wallet who wouldn't buy one normally.
This is hard. I do not recommend building in your category if this is your plan.
More people search for Ridge wallet than mens wallet.
That is category dominance.
Every dollar we spend isn't to create demand for wallets.
It is to generate demand for OUR wallet.
Huge difference most marketers can't grasp.
6 years ago, me and Connor had the realization that we could grow overall profit while reducing MER targets.
MER = Total revenue ÷ total ad spend
We went from a 5x MER to a 2x MER.
Revenue is up 10x in that period.
Profit is up even more.
If that is you, be ready to…
- Spend 50% of revenue on ads
- Knife fight every single sale
- Be a Meta expert
How?
Wallets are small, lightweight products.
They ship cheap.
They don't spoil.
No temperature control needed.
No expiration dates.
We can hold inventory without carrying costs killing us.
And the product margins are great.
Our unit economics worked even at aggressive spend levels.
If you have to create your own CATEGORY demand - not just your own brand demand, you need to be a 1% marketer.
You are a marketing org, not a brand.
But if you are selling peptides -
You can suck at marketing.
People will go to your website and put up with bugs to get it.
It's why Ticketmaster can make you click 4 times you don't want to protect your purchase.
Demand is high.
If you're selling couches or frozen foods, you cannot afford to play this game.
You should try stealing growth from someone else.
You want to be in a big category that is either naturally growing or you want to be able to draft off someone else.
But that someone else needs to be big, fat, lazy, and not at the wheel.
This is why we saw 3 separate $100m rug companies.
Someone did the research...
Hey people are buying rugs online and no one is doing it well.
They could come in and win non branded searches on Google vs IKEA, because IKEA doesn't really care about selling rugs.
They want to sell living rooms.
BAM
Generational wealth built off drafting in a big, stupid category.
Here are the tips
Understand natural growth rates
Understand your category growth
Then, understand if you have to make your own demand.
Just be honest with what type of brand you are.
At any given time there are
10 hot categories.
20 DEAD categories to avoid.
And 9000 meh...
If you are in meh, like me, you need to either be able to slay a dragon or be the best marketer alive.
Steal IKEA's demand or be cracked at ad arbitrage.
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Connor MacDonald
CMO, Ridge
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How to Pace Uneven Holiday Revenue
One common question we’ve got over the last few weeks is how to set targets for your business through periods where revenue is unevenly distributed.
Day-to-day projections are much harder when Black Friday can be >20% of monthly revenue.
We talked about pacing in last week’s podcast. Of course, talking about numbers only gets you so far.
So to help, I updated the Sheet I shared for 2024 → 2025. It shows you how we look at previous year’s performance — the 30 days prior to Cyber Monday — to better contextualize our performance + set daily projections and expectations.
Is it well formatted? Not really.
Could it potentially be helpful to your business? Yes!
Curated by the editor of CPG Wire, this week’s biggest headlines in consumer news.
1. Private Equity Firm Buys Stake in Justin’s: Food Dive
Hormel Foods (NYSE: HRL) is selling a majority stake in Justin’s to Forward Consumer Partners, a private equity firm with $425M under management. Hormel acquired the peanut butter brand in 2016 for $286M and believes Forward Consumer Partners has the focus and resources to help the brand reach its full potential. The founder of Justins’s, Justin Gold, and former CEO Peter Burns will return to the company.
2. Recess Grabs $30M from CAVU: Business Wire
Recess, a leader in the relaxation beverage space, secured $30M in Series B funding from CAVU Consumer Partners, Rocana, Midnight Ventures, and others. Ben Witte launched the brand in 2018, which now offers a variety of mood-enhancing beverages and drink mixes. In addition to the raise, Recess appointed former Nutrabolt CRO Kyle Thomas as President & Co-CEO. Recess has an interesting thesis.
The energy drink category is worth more than $25B, while the relaxation beverage space is wildly underserved.
3. Chomps Announces Second Manufacturing Facility: GlobeNewswire
Chomps, one of the fastest-growing snack brands in the U.S., is building its second manufacturing facility. The 160,000-square-foot facility is expected to create 150 jobs and boost annual production capacity by 15%.
The site is being developed with Landmark Snacks and will be centrally located in Beatrice, Nebraska. Earlier this year, Chomps opened a 300,000-square-foot manufacturing facility in Missouri with Western Smokehouse Partners.
4. Vita Coco Delivers in Q3: Vita Coco
Coconut water brand Vita Coco had a massive Q3 with net sales rising 37% to just over $182M. The company also delivered $24M of net income in the period, bringing its YTD net income total to $66M. Vita Coco, which now has a market cap of roughly $2.4B, has lifted its full-year guidance and expects net sales north of $580M.
5. Fruitist Raises $150M as Sales Surpass $400M: CNBC
Fruitist, a Los Angeles-based producer of jumbo blueberries, secured $150M in fresh equity funding from J.P. Morgan Asset Management, Aliment Capital, Ray Dalio, and Steve Kaplan.
The company, formerly known as Agrovision, has evolved from an agricultural startup into a global consumer brand with $400M in annual sales and over 12,000 doors. To date, Fruitist has raised a total of $443M in funding.
TOMORROW!
As long as you signed up for the Operators Masterclass on Channel Expansion …
The recordings and resources will arrive tomorrow!
Two keynotes. All the lightning panelists. Plus, the Operators Hotline with channel-growth checklists by Cody Plofker, Connor MacDonald, and Connor Rolain.
After that, we’ll be rolling out the step-by-step playbook.
With thanks and anticipation,
Aaron Orendorff 🤓
Chief Content Officer