2PM - No. 718: Defeating Modern Woes

Defeating Modern Woes / AdWeek: Many beverage brands, being the astute observers of culture that they are, have noticed and are positioning their products as tonics to help people overcome their problems and prevent illness. Whether someone requires a zap of energy to fend off fatigue in the morning or a wave of calmness to quiet the mind at night, the remedy is available in an aluminum can for purchase at the corner store.

As 2PM’s Web Smith wrote on Friday:

As attention matures into its own currency, the industry’s pressures will increase with the requirement of more of it. Mental healthcare should be our foremost concern. Creators and other like-minded technologists work 60 to 80-hour weeks behind screens to build the cache required for monetization. And this will contribute to a rise in the products, services, and forms of care that may begin to address the rising rates of burnout and other mental health concerns.

With attention as currency, opportunities are created for categories to help customers combat the stressors of being always on. Supplements are playing a greater role. A new AdWeek report looks at the beverage industry and the rise of next-gen energy drinks as well as relaxation elixirs and sleep aids, finding that each category is climbing in sales from last year. The brands peddling stress relief, focus and better night’s sleep in the form of a new beverage are proliferating but at the center is Recess, Ben Witte’s beverage brand.

Recess has leaned heavily into the self-care and stress relief brand positioning; a new pop-up now open in New York promises to help people re-enter society post-pandemic with free drinks and a zine. These brands have normalized the term “adaptogens” while giving people an extra boost or sense of calm as they need it. Witte, as he told AdWeek, considers relaxation the “third functional category” of beverages following stimulants and alcohol.

Relaxation beverages for many might be a stepping stone to what Web calls the new “Shroom Boom”. Just like CBD and cannabis before it, psychedelics are on their way to normalization as a CPG category. The need is there – people are stressed out and burnt out, and critically, they’re vocal about it – and brands like Recess, House of Wise, and Field Trip are paving the way.

By Hilary Milnes, 2PM 

Mutiny at Great Jones

DTC Industry / Business Insider: While morale had been deteriorating for a while, this meeting felt like a new low. Tishgart's request to share feelings felt tone-deaf, the six employees said, especially given how much pressure it placed on the team's sole Black employee. In addition to being appalled with Tishgart's failure to read the room, a number of the employees wondered why Moelis, normally the voice of reason, hadn't done more to take charge.

Editor's Note: I nearly didn’t include this one because the tone of its reception borders on unproductive. Listen, the retail business is very difficult. Pile on a once-in-100-years global event, societal unrest, and a resource-intensive eCommerce tipping point. What you have is a recipe that requires great leadership behind the pots and pans. And many companies, young and old, have that leadership. These stories aren't universal. But as someone who has built a company like this, the pressures are unenviable. Nonetheless, there are a few leadership takeaways that we can all take away from this one by Anna Silman. Of them, for founders of limited operational experience, a seasoned expert by your side goes a long way.

As an aside, in a battle against a dozen other cookware brands (including Caraway), they’ve found a way to stick around. Currently, Great Jones sits at No. 170 up from 187. It remains a growing company in spite of its leadership shortcomings and founder turmoil.

Victoria's Secret is reinventing itself. It's a big ask.

Brands / Vogue Business: The structure for the overhaul has been in the works for a year or so, with Victoria’s Secret bringing in new leadership in design, merchandising and creative direction, as well as adding a chief diversity officer and new chief human resources officer. Employees now attend frequent town halls where they hear from and ask questions of chief executive Martin Waters, who will soon be the only male on the board.

2PM Members: VS now understands what has long been the case: it’s no longer enough to project inclusion. America’s team captain, Rapinoe is a verifiable face of that social movement. She’s fought for equal pay, equal rights, and even stood beside a quarterback long before the rest of his own league saw his heroics for what they were. If you need to hire a shield, Rapinoe is the woman. 

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Sponsored: The Dallas Mavericks organization trusts ShipHero for their popular merchandising operation so here is Luka helping out with the warehouse team. 

👉🏽 Learn more about ShipHero 

Hubert Joly on the art of the turnaround at Best Buy

Modern Retail / Retail Dive: Joly, who stepped out of the CEO role in 2019 and left Best Buy's board last year, threw out what for many in the business world is standard turnaround playbook. That being painful cuts to the business to boost the bottom line and shrink the enterprise to bring it in line with declining sales. "The essence of the turnaround was a very human-centric turnaround. Listen to the frontline. They had all the answers. Make sure you have the right team at the top. Don't start with firing people, start with growing the top line."

Netflix is a Wall Street banker’s dream

The Streaming Economy / Bloomberg: All this M&A in the past three years adds up to more than Netflix is worth in market capitalization, and yet it hasn’t broken Netflix’s hold on 200 million-plus subscribers or the many investors that favor its stock. Indeed, the streaming pioneer holds the industry’s most valuable deal currency but hasn’t used it for any deals. It’s noteworthy that new entrants are trying to be so much like Netflix without embracing the guiding principles that made Netflix the favorite: keep things simple, enrich content creators over bankers, ensure technology is tops and offer commercial-free binging.

Coca-Cola and the state of things

Sociology of Brands / The Economist (Unlocked): Coca-Cola, which has its headquarters in Atlanta, Georgia’s capital, had difficulty taking even a minimal stand. When the restrictive bill was being debated, James Quincey, Coke’s laconic, British-born chief executive, could only muster words of general support for voting rights. To be fair, all companies must balance making a profit with sensitivity to the cultural moment. But Coca-Cola has a particularly tricky needle to thread, because nothing is more on-brand for Coke than democracy.

Tractor Supply CEO on inflation and supply chain delays

Supply Chain / CNBC: The company is facing price increases across the board, including the costs of raw materials and the transportation of goods. “There is inflation in the market across almost all facets,” Lawton said. “A big raw material component for us is corn, and we’ve seen corn prices up dramatically over the last three months. Another big raw material component for us is steel. We’ve seen significant increases there — not to mention the freight cost increases and the cost of imports.”

Athletes and sponsors seize the moment at this year's trials

Brands / Outside: It wasn’t only established, legacy companies making their presence felt in Eugene either; top performers were repping brands that either didn’t exist a decade ago, or were still in their infancy. On the same day that Felix made her fifth Olympic team wearing an all black Athleta kit (and spikes from her new shoe company, Saysh), Rudy Winkler set a national record in the hammer throw in Tracksmith.

Scene: New York, New York (June 2021). The travel industry is rarely seen as a leading indicator for the consumer economy. Perhaps it should. The bifurcation of America has long been in the works, the travel industry may explain where it is going - as long as you're willing to listen. In 2019’s The Long Middle, I began:

One reason that many are failing to recognize the bifurcation of wealth in America is simply because they prefer not to.

The pandemic accelerated this trend of separating the haves from the have-nots. It’s made competing for the middle of any spectrum a mostly losing proposition. This “mediocre middle” is where brands, retailers, and other businesses will struggle the most. Industry veteran, author, and consultant Steven P. Dennis wrote: “retail is a category that does not tolerate mediocrity.” The new baseline is simply expectations met. And for some consumers, the new luxury is not luxury at all.

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