PLUS: Reformation's new shoes, Unilever x Drunk Elephant, and Wirecutter ranks Riley above Snowe.
|May 14||Public post|| 5|
👋 Hi. Ramp season has officially ended in New York — not a single vendor was selling them at the Union Square Greenmarket yesterday. What trendy, foraged, former weed should I seek out next? Let me know, and, as always, reply with any questions, comments, or additional thoughts about anything you read here.
The Chips ☄
Reformation launched footwear. According to the brand, the sandals and espadrilles generate 52% less CO₂, 70% less water, and 65% less waste than most shoes purchased in the US.
Versed is a soon-to-launch skincare brand offering solution-oriented products for a range of skin types and concerns.
Unilever is allegedly in talks to acquire Drunk Elephant for a very pretty $1B.
Zola tightened its grip on modern matrimony by launching a wedding shop.
Goop and Buffy teamed up to create a weighted duvet.
This Glossy piece on Lola’s expansion into sexual wellness despite it not being something customers asked for is a strong read. Related: DIP 006 looked at how brands choose to grow their product line.
Bobbie is a just-launched brand of clean baby formula.
The Dip 🌧
On May 9, the internet world woke to news that Edgewell, maker of Schick, would be acquiring Harry’s for $1.37B. It’s a really exciting deal, not just financially but operationally. When everything is finalized, Andy Katz-Mayfield and Jeff Raider won’t just maintain control over Harry’s Inc., they’ll be leading operations across all of Edgewell.
The Edgewell acquisition isn’t what I’m most interested in, though. It’s what Harry’s was setting itself up to do before Edgewell even came into the picture…
On The Cutting Edge
Harry’s raised a $112M Series D in February 2018 with the intent of growing beyond men’s grooming and into "personal care for men and women, household items, and baby products."
Diversification has been key to Harry’s success. Eighty percent of its revenue comes from wholesale channels like Target and Walmart, meaning that a mere 20% of sales occur online. If you follow that thread, it suggests that the subscription model may not actually be Harry’s strength, and that its growth skyrocketed upon entering physical retail channels.
With the launch of Flamingo in October 2018, as well as the development of incubator Harry’s Labs and investment arm Harry’s Ventures, Harry’s Inc. established itself as a holding company.
As the D2C-slash-DNVB space becomes more crowded and more competitive, companies are looking to the holding company model to support growth and expand into peripheral product categories.
Glossier positioned Play as a separate brand, which I found puzzling at first (See: DIP 001, which addressed Glossier’s hype machine), but now think it’s entirely reasonable that it might introduce a brand of natural skincare products, or an anti-aging brand, too. Glossier Inc. is setting itself up for something bigger.
Similarly, Casper might be wise to introduce a brand for babies, with products that coax infants to sleep (See: DIP 006, which explored Casper’s product diversification).
And then there’s Arfa, the so-called “house of brands” founded by former Glossier execs…
Eyes On Arfa
When Henry Davis, now-former president and COO of Glossier, announced via Medium that he was leaving the beauty brand, speculation abounded. A couple of months ago, Davis’ name popped up as the owner on a trademark application (USPTO serial number 88325624) for a company called Arfa, Inc.
The goods and services outlined in the trademark filing range from dental floss and deodorant to dishwashing detergents and all-purpose cleaners. In other words, Arfa is aiming to take over medicine cabinets and setting itself up as a contemporary P&G.
A WSJ article published last week confirmed that Arfa, Inc. would be a holding company for consumer brands. The article also noted that Arfa, Inc. raised a double-take-inducing $7M seed round from big-name firms like Forerunner Ventures and Thrive Capital.
In addition to Davis, Arfa's founding team includes former Glossier CTO Bryan Mahoney, former Glossier Chief of Staff Shabdha Chigurupati, and former Vice Media exec Ariel Wengroff. Based on their respective backgrounds, there’s little doubt that Arfa will ace the user experience, product positioning, and everything in between.
The recent trend toward brand-as-holding-company is an interesting one. When resources are pooled, products and sub-brands can be generated at a faster rate. But it also probably means that the marketing playbook is uniform across the board.
Things look (and are!) similar enough as is. I can’t help but wonder what we’ll think of this era in a decade’s time. Will the rise of D2C holding companies be a turning point? Or do they just perpetuate sameness?
Real Dip 🌶
Put two serrano chiles, a thumb-sized piece of ginger (roughly chopped), a third of a bunch of cilantro (about 1/2 cup), a heaping handful of unsalted peanuts (about 1/2 cup), and juice from one lime in a food processor. Add two three-finger pinches of salt, and blitz away. You may need to add a few splashes of water to get things moving. Taste, and add more salt or lime juice as needed.
Plays well with crudités, toast and eggs, and potatoes prepped any which way.
Thanks for snacking.
— Emily 🍇