The Next Brand, Episode #2
Psychedelics, eating meat to save the environment and building a brand without tons of spend
|Justin Mares||Nov 21, 2019|| 10|
Hi there, and welcome to The Next Brand - my take on health, wellness and building the next generation of brands.
(Who are you again?)
In the last 4 years I’ve founded 2 health brands (Kettle & Fire and Perfect Keto), which will do nearly $100mm in revenue in 2019. I’ve raised nearly $20mm to build Kettle & Fire, gotten into 9k+ retail stores, bootstrapped Perfect Keto, launched 80+ SKUs… and have a small portfolio of Shopify apps I’ve bought + operate with my partner Ryan. Before this? I worked in tech and had no experience in CPG, DTC or any other 3 letter acronym industries.
If you missed the last episode, you can catch up here (Episode 01). Otherwise, let’s dive in.
Man am I excited about everything going on in the world of psychedelic 🍄medicine. Not only are psychedelics a fun for hippies and ravers, but they’re good for you too! (see here)
30 years from now we’ll look back at the War on Drugs the same way we look back at Prohibition - with a general sense of “what the f**k were they thinking”!
Side note - psychedelics are bad, but super addicting opioids, alcohol and cigarettes are all cool? Nice work lobbyists 👍
Anyway - why is this news? Because I just booked a (legal!) ketamine therapy experience in NYC next month at Mindbloom (disclosure - I’m an investor) that I’m stoked for. Psychedelic therapy is something I wholeheartedly believe is the next major trend in health and wellness. If you can figure out how to get involved now… well, you probably should. And if you need to convince your parents that this isn’t just your average hippie pill poppin’ movement, well Michael Pollan has a book for you.
What’s going on in health and wellness?
How about not buying fast fashion, which pollutes far more than the meat industry? Or just kill yourself (note: satire + fiction).
There’s a battle going on right now in the world of plant-based “meats” (and vegetables 😂). Even though Beyond Meat’s stock price is down roughly 40% in the last month (✊💪), there’s a big rush into non-meat “meat”. Mostly driven by pro-environmental drivel like the above (“go vegan to save the planet!!”) that is just plain wrong.
Let’s start with a common belief - producing a single patty requires “2500 gallons of water” (according to the World Economic Forum).
Oh, really? A single patty requires 2500 gallons of water? An average cow produces 200lbs of ground beef, which would mean to feed and harvest a cow for burgers would require… 500,000 gallons of water!! At this rate, we’ll run out of water any day now!!
Except not. Why? Because a cow is not a closed system. You don’t give a cow access to 500,000 gallons of water, it drinks it and the water then disappears forever. That’s just stupid.
Animals, plants and people are all part of the water cycle. Cows drink water. Cows get slightly bigger + don’t complain of parched throats. 98% of that water goes back into the earth in the form of urine. You get milk 🥛, cheese 🧀 and a burger 🍔. This cycle then repeats, as it has for millions and millions of years.
But what about 🐄 farts?!
This paper is well worth reading as to the overhyped impact of livestock raising + grazing on the environment. The paper shows that the world cattle population rose by 100 million+ cattle between 1990 and 2005. A time where methane concentration stabilized completely.
Another key quote:
CO2 emitted by human consumption of cereals, meat, and milk, by livestock respiration and forage digestion, does not increase atmospheric CO2 levels, as this is part of the natural carbon cycle. Not a single human- or livestock-born CO2 molecule is additionally released into the atmosphere, as it has previously been captured through photosynthesis.
Effectively, no, cows and meat eaters do not destroy the environment. In fact, I think they may be the single best way to reverse climate change by investing in regenerative agriculture: an approach to agriculture that focuses on regenerating the land, not just extracting nutrients from the soil (as current monocrop agriculture does).
This is why I get so excited when I see companies like Force of Nature launching their line of meat raised regeneratively. Based on studies done by Quantis and others, eating regeneratively-grown meat is actually better for the environment than swearing off meat altogether.
I’m happy to talk more about regenerative agriculture, flaws in the vegan environmental argument, and how I think animals can help reverse climate change. Reply to this and let me know if this is the type of stuff you’d like to see more of!
Thoughts on brand building
Many of you asked about building a DTC brand without raising a ton of money.
Well, I have good and bad news for you. The good - I think this is still possible.
The bad: I don’t think you can do this in next 2-3 years AND achieve hyper-growth without a built-in structural advantage. (By structural advantage, I mean partnering with a celebrity or having access to some other distribution channel outside of Instagram / Facebook).
Here’s my quick history of building a DTC brand:
2010-2012 - Facebook ads are cheap (relative to their reach and other media CPMs), so the whole “DTC is cutting out the middleman!!” wave of stories began. This is also when brands like Dollar Shave Club, Harry’s and Warby Parker launched and gained traction.
2013-2016 - A whole slew of brands launched on the back of relatively low ad costs. This led to crazy revenue growth (see: Casper, Hubble, Blue Apron, etc) and further fed the “DTC is future” wave of stories around building new brands.
2016-present - Facebook ad inventory costs have gone up more than 3x in the last few years, which has made acquiring new customers MUCH more expensive for each new brand. This has essentially killed the growth trajectories of several DTC brands that can no longer acquire customers affordably (ie Blue Apron, whose customer acquisition costs (CAC) went up nearly 5x in the 18 months before going public, or Casper which has been essentially flat since August 2017).
So, as an enterprising young brand-builder… what do you do?
Let’s zoom out. Marketing is effectively figuring out how to get in front of people who aren’t aware of your product. Facebook/Instagram have a ton of user attention, and make it really easy to get in front of people (for a price, of course 🤑).
Your job as a marketer is to figure out how to get in front of potential customers more cheaply than Facebook/Instagram. That’s it.
How? By looking to leverage places where your potential consumer is spending a lot of time + attention, but where costs are low(ish). As a marketer, you’re always looking at how you can get maximum attention at minimum cost.
Today, I’d look at places where you see a lot of attention sink (TikTok or esports, for example) but that don’t yet have super built-out advertising tools. Then, figure out how to get in front of those consumers: by hacking the platform with native ads, leveraging emerging influencers, or even building your own asset on the platforms.
Outside of that, I think you have to go back to the basics:
Is my product solving a real problem?
If yes, what communities have this problem? How can I engage them?
How can I get creative to reach more people with this problem?
You have to go back to first principles of growth and marketing - hard, I know. It’s always first principles thinking that’s the hardest.
To improve, I recommend engaging with other world-class marketers, taking marketing classes (like those at Reforge) and testing a LOT to figure out what works for your brand and audience. Good luck 👊
Dope stuff on the internet
Some of my favorite things since the last newsletter (note: I don’t get paid to recommend anything here):
📰 Article - I’ve struggled with staying asleep for the first time in my life this year, and reading the book Why We Sleep didn’t gave me stress about my lack of sleep (ironic, I know). Well, fortunately for me Alexey Guzey has a pretty great article that uncovers a bunch of factual errors and wrong claims Walker makes in his book. It’s made me feel less stressed about not always sleeping 8 hours a night, and just reinforces that I should probably be more skeptical of all pop science books. That said, the core message still stands: sleep health is important, make sure you’re getting enough, etc etc.
📚Book rec - I just finished reading It Doesn’t Have to be Crazy At Work by the Basecamp crew. Great read with a lot of applicable ideas. Essentially, they argue (and I agree) that most companies are set up to prevent people from doing their best work (unintentionally, but still). They then share a bunch of ideas as to how to reverse this in your workplace. Highly recommend.
⌚Cool product - I can’t get enough of my Suavs shoes 👟. I’ve bought something like 6 pairs for friends at this point and they all love them. In my opinion, they’re faaaar more fashionable than Allbirds, wash easily, look cool and are super comfy. Big fan.
🎵Music - Hot Since 82 with a classic boiler room ripper, and the first set that got me into deep house way back when. For bonus points, note someone doing cocaine later in the video - fun times.
🔗Link - This timelapse of houseplants moving throughout the day is just cool. I am a proud father to 6 houseplants, so to know my little guys are moving and jiving while dad’s at work just makes me happy.
Just one quick favor before I sign off - can you reply to this email and let me know:
What you’d like to see more of
What you’d like to see less of
What sucked, and what didn’t?
I’m trying to make this a super valuable use of your time reading, and want to consistently put out great stuff. Feel free to reply back with questions or comments. Otherwise, enjoy the week 🙏