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- [00:00]
A
The guy is working the store every day, opens at 7am, closes at 8pm like he is there all day, every day.
- [00:07]
B
What I got from Sammy was it's now positioned him indirectly as a strong influencer on what is good to have in a, in a gourmet grocery store.
- [00:16]
A
In order to like to close the funnel and to increase purchases in a grocery environment which is very competitive and very difficult for CPG brands, you have to be thinking in social first experiences. And if you're going to something like Expo west to that's giving you this massive opportunity, why are you not thinking in a social first context? McDonald's CEO Chris K posted this painfully awkward video talking about the new burger, the Big arch burger at McDonald's.
- [00:45]
B
I know that there's people who are saying that he took a small bite so he could get scandals. I think more that CEOs and people in power don't participate in the products they sell. The CEO of McDonald's wouldn't, would probably never eat a burger.
- [00:59]
A
Revolve Los Angeles is launching an eponymous brand which is basically a new version of Saks. Like it's all the brands that they house. You can walk into the store and you can effectively like on the app shop at Revolve. Timothy Chalamet made a bit of a faux pas when he's being interviewed by Matthew McConaughey where he basically alluded to not wanting Hollywood movies to turn out like opera and theater and ballet in which nobody goes to.
- [01:27]
B
You have an industry that employs millions of people, thousands of people. You can't go the way of the dinosaur and you can't be worried about pissing off elites who go to their metro operas and don't want to be besmirched because nobody cares about them.
- [01:40]
A
Summer Fridays, they have expanded into the fragrance category and it's actually a very interesting move. Once you've nailed world building, the way to win in the current landscape is to stop controlling the creator and allowing the creator to be creative and to create content that seems more organic in their lives.
- [02:03]
B
I think on social media most people are exhausted by influencers pretending not to be doing ads who are actually doing ads.
- [02:09]
A
What a brand, what a brand, what a brand, what a mighty good brand say it again now. What a brand, what a brand, what a brand, what a mighty good brand. All right, welcome back everybody to another week of Art of the Brand. We are in LA after a busy week in New York. Spoke at Columbia Business School and then at female Founders Day, which was awesome. A sold out event. Got to Meet a lot of awesome women and we got to soft launch the planner which is so exciting. The planner will be officially available beginning of April. So if you'd like to get on the wait list. Basically what it is a two part system and it's everything that I do from building a brand and creating effective socials because the best socials come out of having a very clear understanding of brand. Brand and social go together and you need to have a clear idea of strategy and what you're trying to achieve. So if you'd like to get on the waitlist, go to Camille hyphen moore.com forward/waitlist planner or if you go to Camille hypen moore.com there's a box that you'll see planner. It's yellow and blue and you can get on the wait list and super excited to launch that. But a real highlight of last week was sitting down with Sammy Nussdorff, the founder of Meadowlane, the gentleman who really created the idea of building in public. And I'm really excited to get that episode out because really what he did with Meadowlane, if you, if you're not aware, he basically created the concept of building in public, which was posting every single day and built a large following in Tribe Online. Nitpicking the details, showing the good, the bad and the ugly in launching this gourmet grocery store in Tribeca. And it's such a great reminder of don't wait until your product is ready to launch. Bring people into the journey along the way. I think what was most interesting about going in the grocery store is it's truly tiny. Like it was literally maybe 1100 square feet. I think his total footprint is like 1800, but there's a whole back storage room too. So it's a really tiny space. And it's one of the things that he said to me that was mind blowing. A reason why you should be building in public is that his goal for the first year was just to not lose money. That was no longer a problem. Two weeks in after launching, he had lines for three weeks, the grocery store, all because he posted on TikTok. People flew in from all over the world and there's obviously, there's obviously cons to it. It's not all pros, but it's such a reminder that even when you're in the gourmet space, showing the good, the bad and the ugly brings people along for the journey.
- [04:41]
B
There's a disproportionate upside if you invest in good content. Like he could have spent $10 million on traditional advertising with an agency and he wouldn't have had the same impact. But his small little gourmet grocery store attracted national attention because of the way he set it up from an authentic perspective. That really is a real time example of what a lot of business owners can learn by going away from the traditional agency style approach to, prior to to advertising and opening. Instead, he created an audience long before the doors open. And when they opened, people came in droves to experience it.
- [05:16]
A
Yeah, it was one of my favorite things that, that we both took away. So on my side, the guy is working the store every day, opens at 7am, closes at 8pm like he is there all day every day, like he is doing the work. And the other thing was the food was not priced particularly crazy like a salad to go was $21. But like with all of the accoutrements of like what you see in a gourmet salad. So for 21 bucks it really not saying it's cheap, but I'm saying I feel like that's going market rate for below going market rate for a gourmet salad.
- [05:49]
B
There's something that I think a lot of people miss is that if you're not prepared to put yourself out there and show the process, you can't ask people to be prepared to value your opinion on taste. And what I got from Sammy was he's actually a beautiful arbiter of taste in terms of what products work and what don't. Yeah, but nobody cares about your opinion if you haven't said anything publicly or put yourself out there. And so because he was putting so much attention into how he was building his store, the attention to detail, the challenges, the ups and downs, it indirectly positioned him as somebody who really valued his own shelf space. And so he wasn't going to waste time with what everybody else had. And that it's now positioned him indirectly as, you know, a strong influencer on what is good to have in a gourmet grocery store.
- [06:36]
A
A lot of the products that he stocks, like Mexican Coca Cola. Like I had no idea that Mexican Coca Cola, the largest consumers of Coke in the world are Mexicans. And the formula is different in Mexico, it's cane sugar instead of fructose.
- [06:50]
B
It makes me wonder why the leadership at Coca Cola don't bring Mexican Coke into America if they have the highest percentage of consumption.
- [06:59]
A
But a big takeaway from a lot of the, like the brands he had on his shelves is like they set the prices so he gets kind of nicked for it actually was more interesting, kind of dubbing, dovetailing into the, you know, Expo west and some interesting conversations we had about, you know, the super bowl of food this past weekend. But you brought up a really interesting point when you were talking to Sammy about this, the smoothies. And I think there's a really interesting scaling and business insight in there that you talked about.
- [07:26]
B
I can't remember the phrase you used. Oh, regenerative branding. So it's not about brand. It's. If you create your brand just to maximize profit as soon as possible, you're going to undermine the core values of your brand. Regenerative branding is. Is a move towards, let's protect the brand for 10, 20 years. And when I said, you know, Sammy, chefs and smoothies here, this is a health foods gourmet grocer. I'd love to see a smoothie. He goes, oh, if I had smoothies, smoothies, there'd be long lines. And I don't want that to disrupt the ambiance of the gourmet grocery store that I'm building here. And so he was. He was willing to sacrifice immediate revenue to protect the brand as it grows.
- [08:03]
A
No, I thought that was a really, like. It was a. It was an answer based on taste, you know, like wanting to build something for the long term, which I. I think in a. In a world full focused on quarters, answers like those are the ones that we're searching for on the Art of the Brand show.
- [08:20]
B
I think he also understands the economics of the business because what people like. When you run a restaurant and you sell a dish that's 25 bucks, you have a seating that's an hour. Yeah, right. He's selling meals that are 20 bucks, 30 bucks that people come in, buy, and take out. So you can actually really. If. If you see them as like, seatings, you can move a lot of product. And so he does. But a smoothie takes a lot of work. It's noisy, it gets things crowded. I think he wants to focus, probably from just a purely economic. From an economic perspective, on not getting in the way of the people coming in, feeling good and buying three meals at the back and leaving. It's. They buy three meals and leave after 10 minutes, you've actually made a great margin.
- [08:58]
A
You know what I think is interesting? As an. As a sidebar, the minimum wage has gone up, right? Like, it's anywhere from 15 to $18 an hour. Is it not reasonable to get a healthy meal at the same rate as an hourly rate? If you have to trade off like a lunch hour for what you do in that hour.
- [09:19]
B
Well, it's totally reasonable if you think of it. You got to pay rent in Tribeca, which is expensive. You got to pay insurance, you have to pay utilities tax. Then you have to pay people to make it. Then you got to pay packaging. Then you got to put it on the shelf. You got to like if you want healthy food, you got to pay for healthy food. Otherwise you kind of revert to the mean of what. Wonder bread and cheese slices with fake mayonnaise. Yeah, you can get that for 250 maybe somewhere. But it's not what you need for your body.
- [09:47]
A
But when you think about like when you look at something that's like 6.997-99899, it. It's carb heavy fast food, right? Like if you're looking for vegetable, like I just feel like it's an, it's a relevant trade off if the minimum hourly rate wage has gone up for what makes sense to buy in that hour. Like I think when you look at like a yoga class or like an F45 class for them to be getting to the 45 DOL, that's where people can be more frustrated. But for food, I don't think it's that insane.
- [10:16]
B
Except if you were, you have to just look at your market. If you're somebody who's making 20 bucks an hour, if your lunch is $25, what's your breakfast and what's your supper? Right? Like how many hours a day are you working for food? But in the old days you work for food, but now you gotta pay a mortgage, you gotta pay rent, health insurance. Like it's very tough. I think what we're seeing is a divergence into, you know, a market segment that's making very healthy food that's, that's affordable to people who are well off. And then there's just a food wasteland for people who are trying to get by and can't afford that prestige.
- [10:49]
A
I think when you look at the larger ecosystem of all the things like it's, it's very unaffordable for people to live. But we also feel like necessity. Things that are necessities aren't necessities. Like when you look at buying makeup, like the cost of like a blush being like $65. I feel like it's more of these accoutrements that go around our lives that are killing us more than looking at like the necessity. Like it makes more sense to buy quality food when you look at the cost of anyways I just, I just felt like I was a bit shocked by going into his store, by the message on the kind of the narrative online that it's such a fortune when I actually felt like it was quite reasonable considering where food is being priced. But that also comes with like that in quotation negative territory that people don't want to lean into when it comes to this idea of building in public. But for all the negatives that he does, he does talk about them on the episode. Like he's, he's very much a realist and a pragmatist. But for anything that was negative, it was so far outweighed by having three weeks of lines and overshooting all of the bank's projections and his projections for the success of the business two weeks into operation by doing it well.
- [11:55]
B
If people are interested, they can watch the whole podcast and learn more about Metal Lane. But it. It's worth taking a visit to.
- [12:02]
A
I want to talk about Expo west because this is really a massive event in food cpg. It's considered the super bowl of food. And I've got a few points on this I think is relevant for anyone that's in the CPG space or branding period. And the first is that everything has turned to this idea of being social first. And a lot of people that I talked to that went to expos, we couldn't because of our speaking engagements in New York. But everyone we spoke to, they were. They almost didn't want to do recaps of Expo west because the booths that were the most impressive were the ones owned by the big conglomerates, because they understand this idea of if you're showing up to do a booth, it's not just enough to have samples for the people that are stopping by, because everyone is in this rat race for samples. You need to be thinking of that, that secondary viewer, that tertiary viewer. Like, what is the point of you showing up? It's that this is also a digital billboard that people are going to shoot and post online.
- [13:03]
B
Yeah, I think if all talent is equal, then resources win. So if you're a bigger company, you know, you can just spend more on your experience and do better. But as we've said multiple times, smaller new companies, medium companies, can't compete on the same battlefield as the big guys. But that means you have to have different talent. You have to have people who think out of the box, who can be creative with less. Most innovation comes from people who don't have as much money but have to innovate to succeed. But if you don't have the right people in there. If you're hiring people who are trying to act like the big guys, you're not going to get that. You have to hire dynamic creative thinkers.
- [13:38]
A
But that's like my whole point to this is I'm not minimizing that the big brands have money. That's obvious and that's simple. But if you go second and third order thinking there are going to be 70 to 90,000 people that walk through this space. And if my goal is to get of those 70 to 90,000, at least 30 or 40 to take the opportunity to take a photo of my booth booth and post it. How many things you could do for less? Like off the top of my head, 24 hour live streaming. Like live streaming from the booth, interviewing people getting like interpretive dancers to like it, create interpretive dance to like what protein is happening in your gut. Because like protein was the biggest thing. Like think about things that are cost effective because it's still expensive to get a booth ticket. But like if you, if you go in with the, the intention of actually showing up in a way that's meaningful for your brand. Because the way that my brain started thinking this is when I landed in la, we had a place of an instacart order to like stock the place with some food. And one of our friends, Simple Kitchen has been posting so much about this good culture, this high protein cottage cheese. I mean there's, they just cannot stay in stock. It's created this whole like craze around it. And one of the first things I added to cart was the good culture cottage cheese. Why? Because I've had that marketing rule of seven. I'm seeing it so often. That product is top of mind. In order to like to close the funnel and to increase purchases in a grocery environment which is very competitive and very difficult for CPG brands. You have to be thinking in social first experiences. And if you're going to something like Social West, Expo west that's giving you this massive opportunity, why are you not thinking in a social first context?
- [15:27]
B
My question is why are you going to expo? Like I'm not going to go to Expo where there's 10,000 other products all vying for attention, all in a big resource who are.
- [15:36]
A
Well, there's more.
- [15:36]
B
Like I would take, I would take my products somewhere else.
- [15:39]
A
But they meet retailers, they meet like it's a very important opportunity for people that are in the grocery space. They meet investors.
- [15:46]
B
I've met a lot of people who do the same thing every year. And they don't have the type of thinking to say, you know, is this really the best place I should spend my money? And then people, I'm not saying, like, you tell them they have to go there because that's where everybody goes. But I don't think you do. I think you need people come in and say, why are you there? Like, you're competing in a resource war with people with more resources. You know, how are you going to get in there? What are you doing with your limited resources? You're doing what everybody else is doing.
- [16:10]
A
Well, I was talking to Rebecca Minkoff and I was like, are you going to be at Coachella? And she's like, no. She's like, it's only the huge brands. I can afford to do it now. Like, it's such a. She's like, I'm flying in the weekend before, like, and we're going to do an event so that we're not competing. Like, we've got a client that's doing an event the same weekend as Coachella. Like, why? But I'm like, why are you doing that? Why are you competing with attention, with. When the brands have so much money and they're doing it on purpose?
- [16:35]
B
I would be anti Coachella on Coachella weekend, like, depending on what you're doing and where you are in your business cycle and what resources you have. But you have to think like a guerrilla warrior. You know, you don't compete with the US in a tank battle or a helicopter battle. Yeah, right. You have to. You have to do something that achieves the aim with less resources.
- [16:52]
A
Yeah, you're totally right. I think the other thing that I want to talk about is something we learned that is interesting. I think, for the listener is that how hard it is for these small organic or startup brands that are trying to do like, less ingredients because the grocery stores are such a mafia. And there was such an interesting lesson that we learned. Do you want to break it down, like the explanation of the traditional versus the organic price inflation?
- [17:18]
B
Look, if you're a business owner, you have to think dynamically. You can't think in terms of left right ideologies or this. You have to understand. So if you're in the food industry, you have to understand, understand the food industry. It's a mafia of power players who control distribution channels. And it's actually geared directly against organic and healthy food getting traction because of the way the distribution channels work and because of profitability and buying shelf space. That's why, you know, some of the Make America Healthy Again, agenda is actually trying to deal with this disproportionate power advantage that big companies. And Ashwin did a great video on it this week where he said, why Does Colgate have 50 different versions of its product? Right. It's because there's limited shelf space at a grocery store for toothpaste. And if they make 50 versions of it, they keep competitors away from the shelf space, even ones that might be healthier, more effective.
- [18:09]
A
They can't buy SKUs, they can't buy the real. The real estate in that.
- [18:12]
B
It's like, I can't get traction. And so, like, if you guys are client customers, you have to understand that people are making good, healthy food for you, are putting their money in the research in the food production. They can't put it into paying off the corporations for the shelf space. They can't do it, or the product has to be less good. So how do you advise those small companies to get traction so people can buy and enjoy their product? Like, the grocery stores control price. And we've talked to many producers. They sell their product for X price, and then the grocery store sets the price that it's sold at. Especially when you're small, the bigger people can dictate what their products are sold for. But then the one producer we were talking to, two weeks later, their price went up six bucks from like $18. And they weren't allowed to even ask the. The store why that happened. Like, they have absolute control on the pricing. And it looks like they're pricing it because the. The big companies are raising their prices, the organic and. Or smaller companies aren't, and they want the price point not to be advantageous to the smaller companies.
- [19:16]
A
Yeah, let me break that down. So what they basically said is a lot of these big companies like Quakers, they had to increase their price because of, in quotations, inflation. But when you're in grocery stores, when you get the ability to be in a grocery store, you cannot talk about price. You'll be delisted if you discuss price.
- [19:35]
B
And if you're the producer and you're trying to talk with the. With the buyer about the pricing.
- [19:41]
A
Yeah. And. But because Quakers had to increase their
- [19:45]
B
price or didn't have to, they wanted to, under the inflation rubric, because they
- [19:50]
A
increased their price, the grocers arbitrarily increased organic to sit higher than where Quakers was.
- [19:58]
B
And we're not saying Quaker necessarily. We're saying any kind of company that's big enough to dictate to grocery stores. So Quaker's like inflation. Any company is big conglomerate is like inflation's going up. We can justify a 30% price increase even though it might not be necessarily necessitated by inflation. But once they do that, the smaller producers who are running lean, they're not raising at 30%. So then they say to the, to the big corporation, we've raised it. You got to raise their prices so they're more expensive to us. So they, they, they eliminate the competitive advantage of the smaller, better food because they have power and that's what dictates what goes on in the food industry.
- [20:34]
A
And they could be priced the same and we could all be making the better, the better choice option. But many people don't because of that price differential. And to your point, when you're like, you know, what can these brands do? I mean, a big thing that these brands can do if you have a fantastic product is aggressively gift. Because when I look at the Good culture example, the reason why Good culture blew up at the simple kitchen is because this big influencer, the modern Nona, had been posting about this, this high protein cottage cheese. And because protein is such a craze and it's, people are looking to get more, it created demand because she's educating on the product and it's collapsing the funnel.
- [21:16]
B
But, and if you gift, it creates a buzz that makes me do an impulsive purchase. So it's not cost effective for me to buy one cottage cheese thing and pay for shipping necessarily. But if I love it, maybe I'll buy a carton of 12, you know, and put it in my fridge or freezer so I have two months. You know what I mean? Like that gift, it's not about that.
- [21:35]
A
It's about once you buy something once, if your product is good, the likelihood is you'll buy it again. Right? Like people think that once you're in the grocery store, that's enough. You have to do marketing around driving demand for the product. Especially when people don't necessarily know what makes you better. But the core thing that I learned in that conversation is it's important to support brands that you see that look new, that are trying to do something different on the shelves. Because there's so many secret things that they can't talk about. Like they can't talk about this price inflation. They can't talk about how much money they actually make. So grocery stores arbitrarily will tell them, like if they place, if they sell a million dollars in product, they're lucky if they get, I'm making this up a quarter of a million dollars back because they can do things like chargebacks, returns, everything that retailer has to eat. So if you hear this, try to go and support those newer brands, those newer products you're seeing on the shelves to see if you can find something new that you love. And when you like it, post about it and tag it. Because otherwise we're not. The cycle of getting these new brands into these grocery stores is very hard.
- [22:46]
B
There's a power that's more important than the politics. So Whole Foods bought by Amazon. So when Whole Foods started, it was a great place to discover high quality, super innovative food manufacturers. And so you could go there, but every company wants to migrate towards supreme profitability. And once you get a monopoly on a thing, then you start cutting corners. When Whole Foods is bought by Amazon, it's focus change to profitability over innovation. Right. And so what I've kind of adopted having watched this industry for a while is support not just the small food producers, but the small grocers. Because they're the ones who actually care enough to put the products on the shelf that help you once they grow to that point that they become national chains that are bought, they're not really working in your, in your service anymore. They're just trying to extract as much profit as they can.
- [23:37]
A
I don't think that's a fully accurate statement. What that person said is that Whole Foods no longer innovates because they don't have to because their acquisition partner was Amazon, who's more focused on Amazon prime memberships. There are a ton of like sprouts is aggressively growing. They're very innovative because they're a discount organic grocer. There still are big chains, they focus on innovation. It's not when you're bought by a giant corporation.
- [24:00]
B
When you're bought by a giant corporation, you can now leverage your monopoly to extract the most money from your producers. And that's what ends up happening. I have to spend a fortune to get shelf space. Like, how can you run a company that's focused on providing high quality food if 50% of your budget is going towards buying shelf space? Yeah, right. It changes the dynamics. When I'm talking to our listeners who are interested in being healthy, find the smaller grocers who are putting, you know. And that's what Sammy's doing with Meadow Ale. Right.
- [24:30]
A
But it's only been about smaller grocers. A lot of these smaller brands are getting into these bigger chains and if we're not supporting them, buying them and giving them feedback, like if you see a product you really love, But I guess my point is if this segment inspires you to grab that brand new applesauce that's two from the left from whatever the conglomerate applesauce is, and you buy it based on the segment and you end up really loving it. And you realize that what you love about it is that it's like it's not sweet. And on the packages even say it's not sweet. Send a message to the brand, like let them know, tell them, tag them, like, even create a small discretionary income pile to like buy these new, these brands that are up and coming. Because what we heard is that it's so hard to compete, to market, to make margin and it's impossible for us to find these brands if they're not in grocery stores. And then if you're not incentivized to buy them, there's no incentification for these, these well to do like, I mean well intended people to be creating these products that are better for us.
- [25:35]
B
Just to wrap it up like from like massy chips for me is something that I like. You know, the beef tallow, fried potato. Right. So when they first came out, they were only available in a few places and they did DTC and they were in Whole Foods before Whole Foods was bought. So that was part of the innovation. So now they have shelf space because they're big enough now that they can afford it. What I'm saying is the next Masa chips won't be, won't be found in Whole Foods. It'll be celebrity brands that are throwing stuff in. It'll be people who can buy it. The next version of that type of innovation is going to be found at a smaller grocery.
- [26:10]
A
It's not only small grocers. If anything, small grocers feel a bigger risk for taking on brands that haven't been proven like the biggest.
- [26:17]
B
Agree with you. I think that small grocers pride themselves on finding the brands that are actually amazing but haven't spent the millions of dollars trying to be relevant. That's where you find, that's where the money is put in the product and not in the socials.
- [26:31]
A
I think it's both like there, you're, you're correct in that there are smaller grocers that can do it. I also have found though, even in us working with smaller grocers with bare protein that they, they're constantly strapped for shelf space. So they're looking for a proven proof of concept with socials, with brand build out, which is also very hard to do when you're a New, a new client, a new brand.
- [26:52]
B
Cool. Let's move on.
- [26:54]
A
But there's two other things that I want to talk about that actually were three other big things that were big trends that were seen at Expo that are worth breaking down. And the first is like the tracking traceability of food. And there's this now this big trend of tracking where the ingredients are from and the entire supply chain so that these brands that are well intended, that are doing something different, can showcase in a way that's proven and trackable. Because there's a lot of brands that might have the pretty packaging, that might have what looks like it's organic and clean, but it's filled with seed oils and like shape shitty ingredients. So the traceability is becoming a big way to really separate the meat from the shaft.
- [27:32]
B
Wouldn't that be on the ingredients level if there were seed oils?
- [27:34]
A
I get what you're saying, like it's, it's apples to oranges, like of tracing. But the point is the brands that are really trying to do something right and well in more, in more things like low ingredients quality, like whole food, they're also adding this traceability component so you can see where it's coming from.
- [27:51]
B
Like if they have tomatoes in their ingredients, they want to say our tomatoes come from X. Yeah.
- [27:55]
A
And they're sourced from here because you can with technology and you should be able to because it's, I think food is also, it's very fragmented because healthy food is no longer a trend. Like people are understanding the quality of food. Maha was a big part of it. There's a lot of brands that aren't healthy, that are creating healthy labels, using visual identities to manipulate the buyer Persona to make it look healthier. And I think this level of tracking and traceability is now kind of this technology arm coming into food to help better empower the consumer.
- [28:31]
B
One thing that I think is interesting in this area is Robert Kennedy Jr. Just mandated that any med school with federal funding has to teach a significantly more amount of time to doctors on nutrition. In the past, they had a 30 minute lecture.
- [28:44]
A
Yeah, how much of the time is it now?
- [28:45]
B
So politics aside, that's amazing. Doctors need to know nutrition because that's how you become healthy. You know, the competing interest is that companies want to make money and so they're going to shock and awe you with branding stuff, new clips, new everything. Everything that's designed to kind of distract you into purchasing. But at the core level, we need to have some safeguards to have good food. And for people who are Launching brands, you need to be right on the cutting edge of how to make your label more interesting so that the buyer can verify your claim. Because I think we need more educated consumers who aren't just, you know, you buy something that says sugar free, but there was never sugar in that product ever. Yeah, like there's all this stuff going on.
- [29:22]
A
Gluten free, whenever high, gluten free.
- [29:23]
B
The protein, brain with cholesterol, all that stuff. So the buyer has to be edgy.
- [29:27]
A
Collagen.
- [29:28]
B
Collagen, whatever.
- [29:29]
A
Collagen is not a complete source of protein. So a lot of products that like taste yummy. Their first ingredient is collagen. And it will say like 14 or 21 grams on the front, but your body metabolizes a quarter of that. So it's.
- [29:42]
B
You're really getting the total, not really
- [29:43]
A
getting that level of for collagen protein.
- [29:46]
B
Of course, as a per, as a consumer to understand if you're. What you're buying is really what you're buying.
- [29:51]
A
So true. And okay, so the second trend to just go through this segment a bit faster, second trend was co branding and food. I thought this was really fascinating where brands are effectively leveraging other brands as ingredients in their package as a way to reinforce the quality of. It comes down to taste making like we have such good taste that we picked the best salt or the best protein or the best chocolate chips. So that instead of it just being a bar that's an amalgamation of ingredients, it's branded ingredients within a product. I think that it makes perfect sense. And it's. I've been seeing it on a ton of packages lately.
- [30:32]
B
There's the big level, but it also exists for the small and medium sized businesses. If you're a coffee shop and you're get your milk from somewhere that you're proud of and promote that collab. Like do things that promote what's good about your product. And so find ways to amplify your voice by working with others that have shared values.
- [30:52]
A
Totally aligned. And then the third trend that I saw was really interesting. Obviously fiber and protein. I saw this meme, it was hilarious. It's like protein filled cigarettes, like 20 grams of protein in cigarettes. Because the whole joke is that things that shouldn't have protein are just now like filled with protein and fiber because of the GLP1 and peptide craze. So often you lack fiber when you're on a GLP1 or peptide and you need protein because without protein you start losing hair and like other bad things happen. But what I think is the most fascinating is how a lot of these brands are leaning into the language of reinforcing how to combat being on GLP1s and peptides, which is such a pendulum swing from where we were of absolute tight lip. Not talking about injections, lasers, like treatments that you were doing to look better.
- [31:51]
B
Well, I think you're just looking at a segment of the consumer. We're all, we're paying too much attention to a few people online who look like they have tons of friends. Right. Who are showcasing what they're doing to get more attention. Like if many people are taking GLPs then it makes sense for influencers to talk about what they're doing to maximize their GLP journey. Right. I don't think it necessarily means that people are less private about how they're getting ahead compared to others. I think it's just them trying to get reach by sharing something that's relevant to a bigger audience.
- [32:24]
A
No, I think you're totally wrong. I mean I've heard a ton of conversations in la. Even yesterday, sitting down at lunch at Earth Cafe, the two girls behind us, the one chick is laundering laundry, listing all of the GLP ones she's on most. When I read Puck or Vogue, they're breaking them down. The language has. And the psychology of the consumer has greatly changed. I've never overheard women saying I got 0.25 syringe in my top lip, I got some 75 units of Botox in my forehead. I'm like, people don't talk like that when it comes to other optimization pieces. It's fascinating that the psychology of the consumer has changed when it comes to peptides and GLP1.
- [33:09]
B
I think the industry has done a bad job, the GLP industry of telling people what they need to do to live a healthy life. Like I think there's a short term look, I'm skinny and they're not understanding the long term consequences. So I think people are, are now experiencing that, are trying to share away to deal with that. So. But I don't think it, I don't think it's a divergence from the past where people didn't talk about their beauty regime. I think people have always talked about it. It's just everything is amplified in today's world because people are on their phone 10 times more than they were in the past.
- [33:36]
A
I disagree. I think that it's, there's a very stark difference and I think that the reason is because Peptides, the science has ex. Has explained it to seem less fake and more real because it's amino acids and it's communicating to amino acids that already exist within your body. It seems like a more scientific advancement than doing something fake. Like putting filler in your lips was seen as like you're fake. Like you wouldn't really talk about your plastic surgery. You wouldn't really talk about those things because you're augmenting yourself and that's not really you. Versus the way that they've communicated the GLP1s and the peptides as very science first and really focusing on educating, it's created a more interesting dialogue that's brought more people in. I mean we saw it at Expo west like half of the floor was everything was talking about combating GLP1s and peptides.
- [34:37]
B
Yeah, that's just a marketing angle. Right. Because more and more people are on GLP1 and peptides. Right. Like it just makes business sense to
- [34:44]
A
do that from a branding and marketing standpoint. I think it's interesting analyzing that that exists and if your brand overlaps in those areas, like if you are selling a CPG product that connects with that or if your product benefits from that, there's a window right now to lean into it because people are primed to want to buy things that augment that part of their life.
- [35:08]
B
You know. And I'm not saying it's not a great strategy. Like I would be promoting GLP snacks like GLP Rest Break like things if a certain percentage of population are on it, it makes sense to give them a solution to what their fears are. People buy off of fears, right? So yeah, that makes total sense.
- [35:24]
A
Let's get into the headlines. So on the topic of food, McDonald's CEO Chris K. Posted this painfully awkward video talking about a the new burger, the Big arch burger at McDonald's and it went super viral because he talks about how big this burger is, how unique it is, how amazing it is, how much he loves it and then takes a GLP one size bite. And the Internet popped off and every other chain reacted to it. All the burger chains. Do you think it was real or do you think it was planted and do you think it was smart?
- [36:02]
B
It almost seemed like a comedy because he looked like a combination of Mr. Rogers and that actor who is like the incredible doctor or whatever the skinny guy was in a beautiful. Like the CEO just looked like a complete nincompoop. I don't see how it appeal appeals to young guy. He's looking at a burger going, oh, there's sesame seeds on here. Oh, there's lettuce in Here, like, it
- [36:20]
A
looked like is different from McDonald's.
- [36:21]
B
Yeah, but it looked like a comedy sketch. Why do I need the CEO to do that? The guy wasn't engaging. I don't know who did his. Like, he looked awkward, and it was cringy to me. And I know that there's people who are saying that he took a small bite so he could get scandals. I think more that CEOs and people in power don't participate in the products they sell. You know, Zuckerberg does not let his kids on Facebook or social media. Right. The CEO of McDonald's wouldn't. Would probably never eat a burger. And so he took as small a bite as possible to fill the script, and then people noticed it. But I don't like. And even if it was, it doesn't make me want to buy it, that he took a small bite. And then there's a scandal over the fact that he took a small bite. Because it was amazing. I would take a big bite. Like, if I'm hungry and it's amazing, I would take a big bite.
- [37:10]
A
But I don't think it would have been news. I think when I deconstruct. I think he was fed that script. It seemed very much to me. Kris Jenner directing. Kendall Jenner on, like, cutting the cucumber the other way. So that it would create this moment online of dialogue and buzz. Because it just.
- [37:28]
B
He.
- [37:28]
A
He takes so much time. He says he's gonna have a bite, then they go through all of the steps. You wait 35, 40 seconds, you're basically read a commercial for the burger, and then they do something that is controversial enough that gets the Internet online buzzing. And, like, you and I aren't the target consumer. This, like, to get this into national headlines and having all of.
- [37:50]
B
No, but why do you have a CEO doing it then? Because CEOs aren't the target consumer of McDonald's. Right. Like, unless they want to make fun of him. But it's just. It just seems nonsensical. Like, this is the problem in some agencies is they have clever people. But there's a danger of being clever but not being clever enough. Like, that might get buzzed. But will it have impact on sales? That's the data I want to see. Did sales go up because of that? Maybe from people. But did sales go up in that burger at the expense of other burgers? Or did general sales of McDonald's go up? Like, these are the data points that we need to look at to see if it actually really works.
- [38:24]
A
I think you're being too critical of it. When you look at that average, the gen pop consumer, that McDonald's entire strategy is just to stay top of mind. Like they buy an insane amount of out of house marketing. And the marketing is not particularly good. It's not bad. It's just designed to constantly reinforce that rule of seven. And I think for a lot of people seeing that video and hearing him describe this burger, seeing it with poppy seeds and then him doing something somewhat not interesting has created enough buzz in people who eat at McDonald's to want to go and try it. Like, we're not the same.
- [38:59]
B
I think it's accidental because that, that commercial by itself is incredibly boring and cringy. And if the only thing is that he took a small bite and said it was a big bite, okay, it's kind of interesting and it might get some young people to go, but it doesn't, doesn't make it look like it tastes good because he would take a big bite if it tastes good. So, like, why would I go and try something that apparently the guy didn't want to take a big bite of while he's saying it tastes amazing? It seems ridiculous.
- [39:22]
A
I'd love to know what your guys's thoughts are, because I it watch the video.
- [39:26]
B
It's ridiculous.
- [39:27]
A
I just, I struggle with this because I've we heard the, like the agency of record who's in charge of McDonald's at a big event and everything they do is so calculated, it's so focused. And when I look at that video, it seems to me just what could have gotten approved by their team. And the idea was good, but in execution it wasn't as good, but it still got the impact that they were looking for.
- [39:55]
B
Yeah, I would like to see if it did in terms of sales. Like, you can be, you can be in the news and not have sales, and you can have sales and not be in the news, or you can be both. Like, I don't know how it affected the sales of the burger, but I, like, I would have I. To me, to me, it looks like a CEO doesn't want to eat the crap that his company sells.
- [40:13]
A
All right, let's move on to the next topic. So the next topic is Revolve Los Angeles. So Revolve Los Angeles is launching an eponymous brand, which means that it's their own namesake brand. And it's fascinating because this comes after they've launched a physical retail space at the Grove, which is basically a new version of Saks. Like, it's all the brands that they House, you can walk into the store and you can effectively like on the app shop. At Revolve, they're now launching this epist line, which is self titled Revolve Los Angeles, as their own way to leverage their data and sell to the customer direct. So instead of getting whatever margin they get from their brands, 20, 30, 50% from the brands that retail with them, they're maintaining their own margin by utilizing their sell through data that they have for creating what styles sell, what looks they want. A trend forecast like this is effectively the house getting into the business.
- [41:12]
B
Yeah, but it's not different from what was that grocery in New York City that had the green label?
- [41:17]
A
Oh, happier grocers, happier grocery.
- [41:19]
B
Like everybody that sits as a, as a retail site to sell it eventually wants to have their own brand because they have more control over their margins and they've learned a lot of things. So I think it's a brilliant move by Revolve to get into because I find I'd love to see more men's products in there because like I find I know you go there and you dress wonderfully. The word Revolve, what I feel about that brand is that it is a very elevated, elegant source of amazing clothing. Yeah, right. And so if they can turn that into an actual clothing line, like I would, I would believe in it.
- [41:50]
A
The reason why I think it's brilliant, recently I was reading it was actually Lauren Sherman's Puck article about Halsa potentially moving to the greeds and she defined it as kind of a trashier retailer for that kind of 24 to like 35 year old woman. And she's like a lot of the stuff is like kind of cheaper versions of what you're seeing at like the row or these like totem, these kind of like mid tier premium luxury brands recon purposing those styles in a different way. And for them to get into this line, it's gonna be priced anywhere from 200 to 3500. The reason why I think it's brilliant is exactly what you're saying. Like first they have the distribution, they own Revolve, they own forward. So they have two very powerful sites.
- [42:41]
B
Their website is also there.
- [42:44]
A
Their website is amazing.
- [42:46]
B
Like that's, that's an asset that like so what they've done is brought tons of people to the website. Like they have that traction and now they're in a great position, great position.
- [42:54]
A
And then the third is like physical world building. Right. Like they have their retail experience, they have this world that already exists within Revolve the best way to expand that world is to give people something that feels Revolve iconic. And that, that's the thing that I actually kind of like. The best is if Revolve really owns this line utilizing all of their seller data of like what works the best, what are people clicking on, what sells out the fastest. I think that like, in a scary way they could have the best line in house.
- [43:30]
B
And you know, as, as a somebody who loves strategy, often people do it too early. So there's always. We go back to power. There's a power dynamic between the brands that you're selling and what your distribution channel is. Yeah, if Revolve had tried that too early, the brands they were carrying could have pulled out, could have pressured it. But they waited till they got to that point where they had that, that, that audience grip that now they can do it and the brands that they still sell, still need to sell there to maintain their quarterly revenue. So it's a beautiful strategic move from my perspective.
- [44:01]
A
Well, it's also interesting considering Revolve had had expensive things on their site, but they were kind of that premium fast casual where typically things were priced from like the 120 to the 750 range. And they've proven success with lines like Helsa and SRG Sophia Richie grains line that are much more expensive, that sit at that kind of premium, more Veronica Beard totem kind of level. So they now have the data of moving from marketplace to tastemaker by bringing in these influencers, celebrities that have taste, creating these lines that are successful. Camila Coho. Look at me with Mariana Hewitt's line legends. And now they're moving to brand house, which is really the ultimate move with them. They're, they were the pioneers of experiential retail with things like Coachella focusing on earned media value instead of short term KPI. Like they've constantly been ahead of the curve. But the timing for this, to your point is bang on because a lot of the consumers like me are close to graduating out unless they kind of create something that gets us to stay. Because I was talking to Adee and Adi was like, I'm in my chic phase. I mean, she's eight, nine years older than me. She's more going to the row, she's more going to Totem. And I'm on that next stepping stone of I'm still with Revolve. But if they don't keep those kind of more premium houses in line with me, I would graduate out. Because you, you are, you still have the University girls wearing, like, the skimpy crochets, like, what Lauren Sherman was talking about.
- [45:42]
B
How did you discover. My issue is always like, how do you. How does somebody discover that that's the place to go? How did you discover that Revolve was the place to buy these types of clothes?
- [45:51]
A
They got the coolest girls online to go to these events. So they did, like Revolve Ski and like Revolve Coachella, and they did these Revolve vacations where they would bring together all of the who's who at one place to create this, like, sign of fomo. And like, what made Revolve so cool is they would give these models these clothing budgets or influencers, these clothing budgets so that they could be constantly wearing all these things from Revolve and.
- [46:19]
B
But isn't that promoting the brand that they're wearing? Like, so Revolve didn't have a brand then. So if they're giving them clothes, I've
- [46:25]
A
got a better answer to your question. So first it was who the girls were and what they were wearing. And by virtue of getting the two of those. And everything was anchored around the word and the world. Revolve. Revolve had no competition by being this, like, single site retailer of where I can get my vacation outfits, to my workout outfits, to work outfits, to going out outfits. And like Saks and like Net a Porter. They hit older, right? And like Shop Bop and like, these ones were like, they had too big of a range.
- [46:59]
B
So when I watched you shop on Revolve, those rare occasions when you're shopping so rare. And then I compare it to shopping on Saks when I'm looking at clothes. What Revolve seemed to have to me was a lot of very attractive models showing the clothes looking amazing.
- [47:15]
A
They did that white one, right? Yeah. It's a cool girl spot.
- [47:18]
B
But it actually made the clothes look way look amazing than if I was shopping at another department store.
- [47:24]
A
Tiny, right? It's all the things they had the best app. But it really was taste making. Like, I'm guaranteed to find a bunch of things I want. Like, at any given time, I have 10 to 12 things sitting in a Revolve cart ready to go. They made the return so easy. They did everything through express shipping. It was so easy, but it was really the curation of product.
- [47:47]
B
Yeah, that's what's. That's what those other stores were missing is there's so much choice. Right. But the taste making of the person who's putting out what's there. You were able to find the best of these brands.
- [47:57]
A
And it had everything like it had for me. The brands like S and D Y as I think is Sandy's, which is like kind of cheaper or like major L. That is like kind of cheaper. Again, not cheap, but like cheaper to like the Zimmerman's and the Alexis. Right. Of like when I'm going on the Skinny Confidential and I want to get like a showpiece. It just was. Everything was in one place. So that's why. And that's why I think the retail experience is so intelligent. Because I've got a big event on Tuesday, might be the Revolve opening. And I was like, where? Like, I want to get an outfit. And because we just got to a new place, the shipping of product was any. Wasn't easy because if I'm out, if I'm out, look, I don't want to get, you know, porch pirated. And I was. I loved the idea that I could go to the Revolve store because that's the only place that I really want to like.
- [48:48]
B
Well, you don't want to go on 16 different.
- [48:51]
A
That was my text to Katya. Like, I was texting Katya and I'm like, I don't have the time to waste to just like aimlessly stroll down Melrose anymore. I just want to go to one place that has all. And that's what Revolve is. So I think this is a genius move.
- [49:06]
B
I don't know what Sammy was doing. It's what other businesses are doing. They're curing things. That's me.
- [49:11]
A
But the thing that's fascinating is they partnered with Bella Hadid, which shows that this model of like Elsa Husk and Sophia Richie Grange, like, bringing in these cool girls is really their anchor strategy. Because by partnering with Bella Hadid, it gets you into that like mid tier premium where you expect that 200 to 3500 price range. Like you're not expecting designer. The 3500 would probably be for like a gorgeous suede trench or like something that's like a really high quality material. But for the most part, the prices are going to sit in that Elsa Haas or SRG range, which has been insanely successful because there's just a gap in the market that's tied to that cool girl esthetic and creating that like premium. Like, I would love to wear totem in a row, but like, I'm not spending fourteen hundred dollars on a T shirt. And I like that this Elsa Hosk, who's a Runway model who has taste, can create these Products that again, aren't
- [50:11]
B
cheap, but because you don't need to spend 1400.
- [50:13]
A
Because we don't need to spend 1400 dollars.
- [50:15]
B
And I like, that's insane.
- [50:16]
A
It's insane. It's insane. And it's frustrating because I feel like Club Monaco used to be great and it's gone. Like, it's like not cheap, but shit product. Like at least the Elsa Haas stuff is good. But it also shows you too that I think what Revolve is also realizing is that it's difficult for someone like an Elsa Hosk to see a forever future if. If Revolve is constantly straddling these cheaper, younger brands. Because Elsa Hosk wants to be seen as a legit designer. Like she's proven that her business doing over 35 million a year and it's like a two year old business. So like she wants to be. She wants to be with people that if it have that more of that halo effect than like she's at the top end.
- [50:58]
B
People are hungry. The word influencer has been corrupted. People are hungry for sites, businesses, and people who can positively influence their life through curated good decisions. Yeah, right. And so whatever your business is, become somebody who is a tastemaker who can help people make their lives better because you're doing the work for them. Yeah, I think that's the lesson learned from the Revolve business mind.
- [51:21]
A
When I really think about it, Revolve is trying to move from that festival girl slash influencer retailer to being this like American luxury light. This idea of luxury light is really attractive because there's a white space in the market of women who are 27 to 37, who are making money, who want to dress well, but can't justify.
- [51:46]
B
I wouldn't even say can't justify. I would say it's attractive to not waste money for stupid things.
- [51:52]
A
So true.
- [51:52]
B
Right? So the attractive professional who's building like you're just not going to waste money trying to be that next level coolness you're just executing well, yeah, you nailed it.
- [52:03]
A
I want to talk about Timothy Chalamet. I was coached at lunch. Camille, you cannot keep doing the Chamberlay. So we're Chalamet it today.
- [52:12]
B
You know, Chamois, Chalamet, whatever. Let's go like the guy. The guy wants his name to be in the paper. It doesn't matter how it's spelled, so who cares?
- [52:19]
A
I feel like rage bait kind of works sometimes, so maybe I'll just say it wrong a few times just so we can get that clip for the edit being Funny. But this week, Timothy Chalamet made a bit of a faux pas when he's being Interviewed by Matthew McConaughey In a town hall style interview where he basically alluded to not wanting Hollywood movies to turn out like opera and theater and ballet, in which nobody goes to. And he wants to keep the cinema alive.
- [52:49]
B
To say exactly what any business or industry would want is not to go the way of the dinosaur enjoyed by 0.01% of the population.
- [53:00]
A
I mean, that's a hot take. Yeah, like, the creative arts community is outraged because who is Sorry.
- [53:07]
B
Just let me raise my pinky as I. Oh, sorry. I'm sorry for your outrage.
- [53:10]
A
Well, I feel like you can be
- [53:12]
B
outraged all you like. I don't care. You have an industry that employs millions of people, thousands of people. You can't go the way of the dinosaur. And you can't be worried about pissing off elites who go to their metro operas and don't want to be besmirched because nobody cares about them.
- [53:27]
A
Okay, well, the point of this. The point of this segment was.
- [53:32]
B
I digress.
- [53:34]
A
Do you think PR wins Oscars? Because the question here is, do these headlines contribute to the winning or I guess the losing of an Oscar? Because he has been on this crazy press tour. They're in a massive Oscar run.
- [53:52]
B
And look, can I jump in?
- [53:55]
A
I think that Oscars have become more commercialized. Who's winning? So, like, both Sinners and Chalamet are more commercial projects. Yes. I'm ready to hear what you've got to say. I just.
- [54:03]
B
I don't want to be accused of interrupting you, but. Oh, my God, like the level. We have to think second and third order thinking, yes, Oscars can be lost by headlines, bad headlines. Who even knows how they're picked, really,
- [54:15]
A
or when they're picked?
- [54:16]
B
There's like this secret Knights of Templar group, like, where it comes out of the. You know what I mean? Like, some of them are trying to follow the. The DEI initiatives to get an Oscar. Others were trying to get headlines. What I think is going on with Timothy, if I'm on Team shamwow, I probably think that I'm not getting an Oscar now I'm nominated. Right, but you can make money by being nominated. This is just a business venture. He seems like a really smart business guy, so coming out and saying something controversial will just sell more movies. I don't think he's winning an Oscar when he got Frankenstein and some of the other ones out there. So he's. He's owning the headlines by Stepping out of the lines. Nobody gets angry if you piss off a few elites, you know what I mean? Like, it's better.
- [55:05]
A
It's like a really calculated.
- [55:06]
B
Yeah, it's better to sell 500 million in sales and win an Oscar and have 75 million and you bump up to 100 million because you won the Oscars. This just seems one. He seems to be talking real because the movies are dying. Nobody's going to the theaters, and they went and saw him. So he's actually saying out there, look, all these people behind closed doors who are, you know, you know, clinking their champagne glasses are just watching the industry die. And so he's trying to shake it up and say, we got to fix this industry by doing things differently. And if I piss off a couple Oscar snobs, I don't care.
- [55:36]
A
I mean, that's a really fresh take. And you know what? The thing that. What I like about what he said is it made me think, because on one hand, he's not wrong, right? When I. We've. We've taught at, like, the top classical musical schools, and, like, they're opera singers and they're the musicians for the opera, and they're amazing. No, but they're also kind of in this weird place of, like, the people who go are kind of like established families or like older people, and it's not. There isn't that kind of demand of like that next gen really falling in love. And so, on one hand, he's not wrong. On the other hand, it's. You know, I believe. I don't know this for certain, but I believe that he comes from more of a traditional theater background. Like, he seems like someone who's been in acting for quite a long time, probably has, like, art school training. It's quite shocking to hear that from someone who's so immersed in that world.
- [56:32]
B
Yeah, I don't necessarily agree because I don't think he thinks Broadway is dead because as we're. Luxury is moving back to Experian, going through a great Broadway show where the actors are spectacular, where the writing is spectacular, the dancing, like, probably one of my favorite shows ever.
- [56:46]
A
The choreography. As a choreographer snob, it was through the roof.
- [56:52]
B
Beautiful music. Made me actually lament for Cuba because Cuba was such a collaboration of cultures that was vibrant with the Tropicana and all that stuff. And because we let a couple of crazy socialists slash communists take over that country. Nothing has come out of that country in 30 years. Just a word of warning to New York City.
- [57:10]
A
Oh, gosh, there we Go. So I did a little chatgptn and usually the Oscar winners are officially decided about 10 days before the ceremony, but the public does not know the results until the envelopes are open. So decisions could be changed?
- [57:25]
B
No, but I don't think they can because once it's. Or can it, like 10 days after somebody else I'll say comes out and is on the wrong list.
- [57:31]
A
Are officially decided about 10 days before the ceremony.
- [57:35]
B
Okay, got you. But what if four days before the ceremony, somebody comes out on an email list? Who's the director?
- [57:41]
A
Like Epstein?
- [57:42]
B
I didn't say that. I'm just saying what if they did?
- [57:43]
A
Oh, my God, I can't believe you said Epstein. I've never said in my life Epstein. It's.
- [57:47]
B
I'm just saying what, like, would they go back in and reconvene and. And do it? Well, that's what we don't know.
- [57:52]
A
Maybe.
- [57:53]
B
But if they couldn't and it was like stamped in stone, then from nine days onwards, they would be there.
- [57:58]
A
That would be it. I mean, that would probably get some views up.
- [58:00]
B
Yeah.
- [58:01]
A
And the Oscars. So maybe something to consider. Okay, so I want to talk about Summer Fridays. They have extended expanded into the fragrance category and we've talked about Summer Fridays before. It is a cult favorite brand. And they recently launched their new sunlit vanilla Eau de ber perfume. And.
- [58:22]
B
Sorry, somebody say nascar over here.
- [58:25]
A
The reason why I wanted to talk about this is it's actually a very interesting move once you've nailed world building, because it's kind of one of those last pieces to really cement that you have a world that people can buy a passport into. Why? Because what's really fascinating about this is one, it obviously increases average order value. You're not competing with your other skus. It becomes complicated when you're in skincare to just keep launching, like more lip balms or more face creams because you end up start kind of cannibalizing your other products. Fragrance is really interesting because one, it has like, the craziest margin. You make an insane amount of money on perfume. But two, people will buy perfume like they buy lip gloss. Like, you can have 7, 8, 9 perfumes. People will kind of stack them and, like, we'll kind of take it as like a picture of pride.
- [59:25]
B
Took my margin point. Like, I'm the business guy. But yes, it's. So it makes perfect sense to get into fragrance because it's so profitable. And if you have raving fans who are just going to do whatever you want to be like you. That makes sense. So it's not surprising to me. What's surprising to me is how, how kind of naive the consumer is to not understand how fragrance works with your body chemistry. Yeah, right. That if you put the same fragrance on two different men and let it sit there for two hours and then go smell their neck, it's going to smell very different.
- [59:55]
A
Yeah.
- [59:56]
B
And people should have personalized fragrance that amplifies their body chemistry. That's what, you know, the perfumeries in Paris used to focus on and, and all that stuff. But now if you're just buying fragrance because you're excited by social media point, you might as well just burn cash to feel like you're this person, but you're not actually smelling like that person.
- [60:15]
A
Well, listen to this. I've got some crazy stats here. So. Okay, first, there's three reasons why fragrance is brilliant. One, it raises aov. So it increases your average order value because your product is no longer competing with your other SKUs. The second is that it deepens your emotional attachment because you can wear the brand. That's why a lot of celebrities get into fragrance is it's such an easy way for fans to feel a connection with that person. Because if you're wearing like the JLO perfume, it did something like $75 million in sales of Walmart because JLO has such a massive gen pop fan base that they will buy the perfume because it signals an association with their love for JLo. The third is that it turns a product brand into more of a world. Right. Like that idea of like deepening that emotional attachment makes it. It's like more of 360. You're fully immersed. But what's interesting from a stat standpoint is that Circana says prestige beauty in the US reached $36 billion in 2025 and that fragrance was the fastest growing prestige category in 2024. And the reason why this is relevant is the summer of Friday's Lip Butter Bomb was the number one beauty product for majority of 2025. It might still be now. I just, I don't know for certain. But it was like top of the charts, number one beauty product. Like of all the beauty products, that one is number one. And it's up 12%, representing a total of 28% of total prestige beauty sales is fragrance. Now what's also interesting is the reason why fragrance is so attractive is that in the US in 2025, it has generated already $1.489 billion. Like fragrance is massive. When we were in Bon March in Paris and we went to like the beauty floor. Every single beauty brand had a fragrance. Victoria Beckham, Charlotte Tilbury, Sisley, they all have fragrances because it's such an easy product for people to add to buy.
- [62:20]
B
Like, Sisulate is a little different. They spend a lot of time on their formulations. Right.
- [62:24]
A
I think, I think like Troy Beckham probably did too. They're all based on her memories. They all look really good.
- [62:31]
B
They go to a generic white label production house. They. They sample some things.
- [62:36]
A
It's all give it on. There's only two. There's three. There's three. Olive flavor and fragrance are owned by three companies in the entire world. And give it on is the main one. And it's out of France. And that's who she worked with. Victoria, Big no, Sisley, even everyone. Givaudan is like the flavor and fragrance. They have the best noses, but you
- [63:00]
B
can just get a formulation, chuck it out, throw it out there. Like, to me, it's. To me, people need to be much more discerning about these types of purchases, especially in a time where money matters. Like spending money on this. Like, I don't know, like, what I would. Smell is such a powerful element in terms of memory, in terms of connection, in terms of taste, like actual taste smell. I wonder if, like clothing brands put a little hint of it when they send it to you to kind of get you ready. You know what I mean? Like, that's how I might do that.
- [63:30]
A
When you were packing up your clothes, you would spritz us spray up their
- [63:34]
B
cologne and that would, that would keep the feeling that would make sense.
- [63:36]
A
You know what's interesting is that fragrance, like perfume is so close to that idea of the lipstick effect, right? It's such a low cost if you're buying an average perfume. It's such a low cost product that makes you feel beautiful and giving you that dopamine hit because it instantly transforms the way that you smell and how people experience you. And it's interesting that Summer Fridays nailed having the top lip product that completely transformed their business. It created a new entryway point because again, it's very hard to just have more face creams, especially when people are more loyal to face creams. Is such a smart entryway point to get because it's their signature vanilla scent that so many of their fans were so obsessed with in their vanilla lip butter bomb. So to create a fragrance out of it transforms that world. From a brand and case study, I just wanted to kind of break down why this is a brilliant extension For a few reasons for you as your brand to to consider. So first it's like behaviorally very smart. Someone who really enjoys your skin care product can easily make the buying decision to move into that vertical. The second is that it's obviously financially smart. So someone who might buy a lower ticket product might also upgrade to the $50 or $82 perfume because it has more value in their mind. Perfum lasts longer and it's different than a face cream. People can actually experience it and compliment it. And then the third is that it's brand building smart because it creates me that feels more collectible, more giftable and more culturally sticky. Right. Like it's a great product to give to someone as a gift. Like you don't really give someone face creams.
- [65:24]
B
Fragrance is a great gift because you can experience it if like a, a beauty skincare product takes a month to work. Right. So all you're, all you're doing is making it feel good. So giving a fragrance is, makes great sense.
- [65:37]
A
I want to just got one more segment to wrap up with. And so Business of Fashion had a great headline this week and it was the long slow death of sponsored content. And effectively the article breaks down how consumers have reached ultimate fatigue for creating ad focused content and that the way to win in the current landscape is to stop controlling the creator and allowing the creator to be creative and to create content that seems more organic in their lives. And on the face this makes simple sense. But I wanted to break it down a bit further from like a what, why and what can you learn from this and how can you leverage this with your brand? Because there's actually some psychological pieces to this and with where AI is going that is worth talking about. So the first is when you have the issue is bigger than people are tired of ads. What really is happening is that the language and the structure of sponsored content has become too recognizable. So it's like when you hear someone go warning, warning, warning, warning. The idea of, the idea of warning, it's starts to lose its impact because it's been repeated so many times. So it's like when you hear this show is sponsored or brought to you by and then it goes into an ad read. You're just trained to fast forward and tune out because you've just heard it so many times, it loses impact.
- [67:06]
B
Yeah, I don't know if I follow you on that. Like when I'm watch. When I'm watching a podcast I respect and they say this podcast is brought to you by like I sometimes I'LL I'll, I'll move forward, but at least I know that I'm getting it. I have a product that's trying to sell me on why it's good and it's very authentic because it is an ad. I think what people are getting tired of are these fake influencers pretending to like things and create and like tricking people into thinking it's authentic. Right. So, you know, I think on social media, most people are exhausted by influencers pretending not to be doing ads who are actually doing ads.
- [67:41]
A
True. I mean, that's obviously a big, a big piece of this. But on another hand, a lot of creators do select, like at the higher level, they do tend to select the brands that they do align with on a brand level. Like they still are creators and they still want to connect with their community. But the issue often is the legal teams have watered down the approach and the concept to a point where it's so safe and it loses the edge of the creator being able to be creative so that it just comes across as something so paid opposed to it being authentic. And that's where it becomes like wallpaper. Stephen Bartlett talks about this quite a bit of like, it's why his ads are so different and they're so engaging and they probably drive a lot of sales because he completely transformed the script of how he does his ad roll reads throughout his episode and it's a big reason why they.
- [68:37]
B
But he said this podcast is sponsored by.
- [68:40]
A
No, he goes, let me. He'll. He says something different. He'll be like, let's take a stop here. I want, like ketones are like performance means a lot to me.
- [68:46]
B
Yeah, he owns, he owns that company.
- [68:48]
A
But what's interesting though is no, he doesn't own it. He's an investor and he says that, but he turned down a hundred million dollar deal for his podcast. The format of handing a creator the exact same thing as everybody else that's doing it has become exhausting for the consumer and we're sick of it.
- [69:08]
B
You know, I think that businesses need to look at how they allocate resources. And what we're finding is that successful creators on social media are very good at making interesting things. And in the past, companies went to agencies that had people who are in creative in agencies, but they haven't had, they haven't been forced to have to create their own audiences in the, in the battle for attention. You know, they're paid, they have big media buys and they could get metrics because they had money and power behind them. And I think moving away from the ad agencies and going and harnessing the creative powers of these creators who are out there fighting every day to be relevant in a very saturated market, you get more bang for your buck using those people to talk about your products.
- [69:55]
A
It's not a complicated conversation, but I think what's interesting about it is in a world of where AI is going, it becomes more dangerous. When you're having marketing employees controlling the relationship with your influencers and your creators and they're giving the exact same script and the same approach and you're getting a product that it's just fatiguing because it's the same over and over and over again.
- [70:21]
B
It has a military application where when you have a top down hierarchical military organization, it's slow moving, it's not imaginative, it's not dynamic. If you decentralize decision making to the people on the ground to respond to what's going on real time with their content, you will get much more effective campaigns and higher impact on the ground.
- [70:39]
A
Totally.
- [70:39]
B
Here's a business tip. In your marketing world, managers are risk adverse. They don't want to get fired. So if there's a mistake and you're and your marketing message is going through managers to creative agents to creators, it's not going to be dynamic. Right. There's a thing called intent based leadership, which means make your people understand what your intent is, what do I want to achieve by the creators? And then give them the license to do it. What I think CEOs should be doing is they should be meeting with the creator without five levels between them and saying the intent that I want to achieve in my company through your creatives is to evoke this feeling, this thing. Have the CEO or the founder talk to the creatives and share the intent and say, now you guys go out and do what you're amazing out and get rid of the five committees, the 16 meetings and the CMOs in the way that are just complicating it and burning your money.
- [71:29]
A
You bring up a great point because you should have an agreement to get a piece of content from your influencer. Because without that level of agreement, they receive so much free product that it is likely you will not get a post. And that is a real reality because if they're being sent free stuff every single day, like even in the last week and a half, like how much free product that we got, it's impossible for me to post and tag every single brand. So you should have an agreement, but you need to, you need to the most important thing is for you to have someone that's strategic, creative, or empowering the creator that you've chose for them to find a way that's going to increase the most reach and engagement and. And have the trust in that creator because they know their audience, they know their data.
- [72:16]
B
They have to develop the situation from the eyes on the ground, not from the boardroom where people are just shuffling stuff around in. In a corporate world.
- [72:25]
A
So true. That takes us to the end of this episode. I hope you guys had an awesome week. We're happy to be here in sunny California.
- [72:30]
B
Like, follow and share.
- [72:32]
A
We'll see you next week. Bye, guys.