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What's driving the proliferation of nutrition startups?
Google search trends for topics around healthy eating and improving personal nutrition have a very distinct cycle, generally skyrocketing in January with the setting of new years resolutions and sliding linearly to a low by the end of the year (see Google trends chart below). But peak public interest in nutrition — at least as quantified by search query volume — reached an all-time high earlier this year, having increased much more sharply than ever before. And just as middle men were being displaced in other industries like healthcare and personal hygiene, the current wave of direct-to-consumerization is finally hitting nutrition as well.
Social media influence
The role of social media and the rise of influencers has helped mint many DTC nutrition startups. Rather than focus on moving inventory at grocery stores or increasing sales through a third-party site like Amazon, nutrition startups have figured out how to engage consumers directly through social media. Since influencers play such an outsized role in both beauty and personal nutrition, it’s a prerequisite for DTC nutrition startups to have a strong social media game. Social media has allowed DTC brands to emerge from nothing and amass loyal followings across the globe in months, rather than years.
A wave of personalization
The one-size-fits-all model has been officially dispelled from nutrition. Modern science has shown repeatedly that best practice for one human’s diet is unlikely to be applicable to another. Food charts seem old-fashioned now and all nutritional advice is heavily caveated and qualified based on personal needs. A number of direct to consumer companies focus on personalized nutrition explicitly — think of the example mentioned before, like Ritual and Noom — while others essentially tap into the demand for more convenience, which is a more personally-catered approach in general. A side effect of (or perhaps a direct response to?) the increased demand for personalized nutrition has been the growth of DTC nutrition startups.
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How are nutrition startups growing so quickly?
Beyond the growing demand for convenience and lower prices, there are several key factors driving the rapid growth of direct to consumer telemedicine startups. Here are three:
The majority of online nutrition startups have merely repackaged common concepts into more convenient and accessible offerings. As an example, all healthy meal prep delivery companies simply make home cooking a couple steps simpler, while online organic markets like Thrive or Grove Collaborative simply remove a bit of guess work around shopping sustainably online. Neither offers a radically transformative service or product that’s changing what people eat.
Similarly, a lot of D2C nutrition startups have rejiggered existing supply chains to improve customer experience for existing goods. Misfits Market, for instance, saves food from the trash by delivering it directly to your door, while alcohol delivery firms Drizly and Saucey sell all the traditional hooch brands you’ve come to love, merely saving you a buzzed jaunt to the corner store.
Overall, startups are growing a ton despite a lack of technological breakthroughs in nutrition. Many claim their products are well supported by science and academic research, but direct to consumerism in nutrition has been – in our humble opinion – mostly driven by innovations in the customer experience than anything else.
Heavy investment in marketing
What’s proved true for new direct to consumer brands in general is also true of D2C nutrition startups: heavy investment in paid media is an effective way to grow brand awareness and acquire new customers. These startups are deploying large ad budgets to stay ahead of the competition, and show a high willingness to pay to acquire new customers. Investor’s dollars are shelled out for social ads, search engine optimization and SEM, as well as robust affiliate programs, and offline channels such as radio and TV.
Attractive introductory offers
Whether it’s a first free month from Noom, free shipping for life, or a week of free meals from Blue Apron, D2C startups in the nutrition space are using eye-catching intro offers to entice consumers. The idea is that once you try their product or service, it’ll be too convenient to give up, kind of like Uber or Lyft. For many in the ecosystem, it’s unclear how sticky their offerings really are, and whether the economics of heavily subsidizing early adoption will pan out in the long-run. But for those in ultra-competitive niches like meal delivery or online vitamin subscriptions, offering health-conscious consumers something for free may be the only way to get noticed.
What markets are top nutrition brands disrupting?
While nutrition is a broad term and encompasses a lot of product categories from food to vitamins to weight-loss and more. Here are a few of the hottest markets that modern nutrition startups are disrupting:
….And that’s really just the tip of the iceberg. Like most industries, nutrition startups are going direct to consumer, and it’s an incredibly exciting time to be following the space. There’s so much changing that we couldn’t have possibly covered it all — what did we miss?