Low-Calorie Beer and Tobacco-Free Chew: Why 2020 IS The Year for Healthy-Alternative Startups Consumers are more cognizant of what they put into their bodies, and the demand for products that shake up the status quo continues to expand, exponentially.
By Andrew Medal
Opinions expressed by Entrepreneur contributors are their own.
More than any other time in history, consumers have become cognizant of what they put into their bodies, and the demand for products that shake up the status quo continues to expand. People are voting with their dollars in greater numbers than ever, and products marketed as sustainable are gaining momentum.
The expanding interest in improving personal wellness and the environment through health-conscious, eco-friendly and organic purchases is driving consumer markets in a whole new direction, giving rise to companies that provide something completely different for their customers.
Why are healthy alternatives gaining traction?
These days, more consumers are leaning toward a plant-focused lifestyle, and their product choices represent a desire for greener agricultural practices.
Seventy-three percent of consumers say they would be willing to accept higher prices for a brand that is transparent, which presents major challenges for legacy brands and big corporations that already have ingrained processes in place. It is a boon, however, for companies investing in a more socially conscious approach to their marketing.
Unilever, for example, has seen a great deal of company growth in response to its Unilever Sustainable Living Plan, which put its agenda to reduce environmental impact and improve social influence front and center. The 26 brands that are part of the plan contributed 70 percent of the company's revenue growth in 2018.
Data shows that brands providing peace of mind about a product's origins and health benefits inspire loyalty, and that people are more likely to switch labels when they offer greater transparency. Here are a few other brands and trends that underscore the movement.
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Black Buffalo's Tobacco Alternative
Despite the well-established fact that prolonged tobacco use can lead to myriad illnesses, including fatal mouth, throat and respiratory cancers, the global industry is expected to reach $1.08 trillion by 2027. While nicotine alone has not been found to cause cancer, it is highly addictive. That addiction may be the culprit of continued tobacco use in spite of known risks.
I recently enjoyed a conversation on my podcast with the co-founder of Black Buffalo, which is a smokeless tobacco alternative that provides an answer for people who love their dip but don't want to consume the actual plant itself. (My podcast is hosted on the Entrepreneur platform here, where you can catch this episode.) During the chat, I learned about the unique opportunity for a tobacco alternative that isn't just about the nicotine (though the company uses the same amount of pharmaceutical-grade nicotine you would find in a standard tin of chewing tobacco). It's about the taste, the feel and, most importantly, the ritual.
That's why the team spent years developing a dip without tobacco leaf or stem that is so close to the authentic product that even tobacco farmers themselves can't tell the difference. They respect the time-honored traditions of this American ritual, and they have created a smokeless tobacco alternative that their customers love. With the CBD and cannabis spaces reaching peak consumer levels, I envision we're going to start seeing a lot more of these tobaccoless consumer alternatives.
The Rise of 100-Calorie Beer
For some people, there's nothing more enjoyable than cracking open a cold one after a long day in the hot sun or joining a group of friends for a couple of brews on Friday night. But brewers have always struggled with the balance between better flavor and lower calories (hence the famous Miller Lite slogan, "Tastes Great, Less Filling").
Recently, however, innovative brewing techniques have led to an onslaught of new kinds of beers that are taking off, as reported by The Takeout. Out of the top 25 brands that saw growth in 2019, 10 boasted healthier options like fewer calories or lower carbs.
DogFish Head Brewery has begun rolling out its "active lifestyle" brands with huge success, and alcoholic seltzers are on the rise. Independent craft breweries are jumping on the lo-cal wagon as well, with a well-rounded selection of light ales and IPAs that will satisfy beer drinkers of every caliber. I can see this space continuing to heat up, including the rise of low-calorie IPAs.
Glossier's Unicorn Success
We certainly have come a long way since putting lead and arsenic into beauty products on purpose; but unfortunately, lead still makes its way into lipsticks and eyeliners in trace amounts.
The lack of regulation in the cosmetic industry results in the intentional and incidental use of other known toxins and carcinogens like formaldehyde, asbestos and phthalates. Add to this the fact that animal testing is still a widespread practice for many beauty and skincare lines, and it's enough to make any consumer want to stick with brands that are completely transparent.
Glossier's founder, Emily Weiss, wanted to provide just that when she launched the company in 2014 with four products. The company's direct-to-consumer model means that customer relationships are the most important aspect of the business. The company is forthright about its product ingredients, focused on sustainability and certified as cruelty-free.
"Democratizing beauty" has paid off immensely for Glossier. By 2018, the company was valued at more than $1 billion and bringing in $100 million in annual revenue. It is one of the most well-funded privately held businesses in the beauty industry, and Weiss has been hinting at an IPO in the future. The beauty industry is notorious for poor environmental practices, and any product that uses cruelty-free sustainable ingredients will carve out a competitive advantage.
New Business Opportunities on the Horizon
Consumers are making it abundantly clear that they prefer products they know they can trust. They will spend more money on a brand that is transparent with its agricultural and supply chain practices; they are concerned about environmental and social causes, and they want brands that provide pleasurable experiences while keeping health and wellness in mind.
While large companies like Unilever are finding new ways to grow by providing a line of products that take these needs into account, smaller businesses are well-positioned to slide in and start connecting with customers right where they are.
Independent craft brewers are filling that space with beer-drinkers who want to be social and stay healthy. Glossier's direct-to-consumer business model is creating products based on needs identified through direct communication with customers. And Black Buffalo has found a way to help people get all the things they are looking for in their tobacco products, without the tobacco or its cancer-causing chemicals.
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This is an exciting time for consumer marketing. It will be interesting to see how established businesses adapt to an informed generation of consumers, and how new businesses will shape the market when they are designed to serve customers that demand something better.
