The Latest Unicorn? – Love Good Fats
Started in Canada in 2017 by a CPG marketing professional and BigCo alum, Love Good Fats is displaying the hallmarks of unicorn market positioning:
- Excellent market timing in the category (there was no nationally distributed keto bar in 2017 in either country), and the keto craze was peaking when it launched.
- Buyers wanted it already – the ‘keto’ fad was at its peak when this launched, allowing the brand to ride the initial hype wave.
- Anomalous levels of funding – the brand has raised $15M to date to ramp up production and purchase shelf access, much like an 18-month long CPG line extension launch.
- It takes about two years max to hit eight figures with this level of funding and highly unusual professional assistance to the founder.
- Premium Pricing allows the brand to scale mostly on distribution gains with very few buyers per store; this expensive model allows one to focus on stable, not growing velocities to scale largely. It is not demand-led exponential growth fueled by growing enthusiasm and word-of-mouth around the brand.
I have not seen velocity trends on the business, nor could I discuss them if I did. However, the brand undoubtedly suffered the same pandemic deceleration that all nutrition bars did due to the COVID-19 pandemic. It would be hard not to have suffered at least a 10-20% deceleration inside the growing river of added distribution underway.
Like we’ve seen with Halo Top recently, the problem with unicorns is that overly fast national, weight management take-overs based on this or that formulation trick do NOT necessarily create ‘brands’ or long-term consumer habits. As Halo Top currently collapses across North America, will Love Good Fats suffer a similar fate from pushing faster than real fan engagement can be authentically created?
Impatient investors love brands like this because everything is structured for a distribution-led surge that taps into existing retail buyer FOMO. The odds your thing has this chance is beyond tiny. Yet, you could still scale quickly.
Lilly’s chocolate is on the market, it appears, after 11 years of business and now $110M in trailing sales. This timeline is MUCH more likely for an innovative business that is launching 5-7 years ahead of retail buyer FOMO. It’s a slog. You have to use the consumer to build the business. AND it is much cheaper to grow exponentially off a small base than to do what Love Good Fats just did. It’s a more accessible model. It’s why I wrote a book about it and grumble when each year’s 1-2 CPG unicorns basically get tons of PR and sell-off. Shiny objects do not lead the way in this industry.