Talking Online Groceries – Join Jeremiah McElwee, Thrive Market, on Compass Coffee Talk, September 15, 11:30am EDT

Talking Online Groceries: Hear From Thrive Market On What’s Trending Today

Chief Merchandising Officer Jeremiah McElwee from Thrive Market to Share What's Trending in Online Retail on the Next Compass Coffee Talk™

Wednesday, September 15, 11:30 am – Noon EDT
Zoom, Admission is Free

Jeremiah McElwee

Find out what’s trending in the world of online retail and hear key insights from natural products industry leader Jeremiah McElwee, Thrive Market's Chief Merchandising Officer. Jeremiah has twenty-seven years of experience working on countless sides of retail and business, including tackling supply chain issues and growing brands from seed to shelf.

Thrive Market, Inc. was founded in 2014 with a mission to make healthy living easy and affordable for everyone. As an online, membership-based market, Thrive Market delivers the highest quality, healthy and sustainable products at member-only prices, carrying a curation of organic and non-GMO products, and offers 90+ filters and values, allowing you to shop by diet and lifestyle. As a tenured team member at Thrive Market, Jeremiah curated the company’s first catalog, and developed the quality guidelines that still drive product purchasing today.

About Jeremiah McElwee
A twenty seven year veteran of the Natural Products industry, Jeremiah has been on all sides of the business and supply chain, literally from seed to shelf. Part of the initial startup team at Thrive Market, Jeremiah currently serves as the Chief Merchandising Officer there. In addition to developing hundreds of best selling branded products that currently line natural food store shelves and previously managing the Whole Foods & 365 private label brands, he also helped Dr. Andrew Weil develop his branded product platform. When not working as an eco-superhero, he can be found in the Texas Hill Country practicing hot vinyasa yoga, reading children's books to his daughters, or checking the surf report and planning his next escape to the coast. 

About Compass Coffee Talk™
Take a 30-minute virtual coffee break with Compass Coffee Talk™. Hosted by natural industry veterans Bill Capsalis and Steve Hoffman, Coffee Talk features lively interactive conversations with industry leaders and experts designed to help guide entrepreneurs and businesses of any size succeed in the market for natural, organic, regenerative, hemp-derived and other eco-friendly products.

Compass Coffee Talk™ is produced by Compass Natural Marketing, a leading PR, branding and business development agency serving the natural and organic products industry. Learn more.

VIEW OUR PAST COMPASS COFFEE TALK EPISODES ON YOUTUBE

Zevia Latest in Hot Season of Industry IPOs

This article originally appeared in Presence Marketing’s August 2021 Industry Newsletter

By Steven Hoffman

Zevia the Latest in a Hot Season of Industry IPOs, Private Equity Investment
For decades, the natural products industry has repeated the gospel of the relationship between diet and health.

This year, the Covid-19 pandemic drove that simple truth home, to consumers seeking to boost immunity and health, to businesses seeing opportunity in selling better-for-you products, and to investors, as sales of natural foods and supplements surged in both brick-and-mortar locations and via e-commerce, as shoppers became much more comfortable shopping for groceries from their computers or smartphones at home during lockdown.

Now, as the U.S. healthy food industry emerges from one of the most challenging times in its history, investment in the natural and specialty foods channel is surging, including private equity and public offerings.

This year alone, to date in 2021, more than $10 billion in venture-backed capital has been invested in grocery startups, “vaulting past the $7 billion raised in the sector last year,” reported The Spoon on July 2. According to an April 2021 report by Finistere Ventures and Pitchbook Data, a total of $22.3 billion in private equity was invested in agrifood tech companies, including novel ingredients and alternative proteins, meal kits and food delivery, e-commerce, consumer facing tech, and supply chain, reported Food Dive. 

In the public markets, a number of healthy products companies have completed, announced, or are considering IPOs, as the stock market continues to show signs of strength.

Here are highlights of IPO activity announced over the past few months:

Zevia Rides No Added Sugar Trend to IPO
Zero-calorie beverage maker Zevia began trading on July 22 on the NYSE under the ticker symbol ZVIA, pricing shares of its initial public offering at $14 per share. Net sales of Zevia products increased 29% year over year to $110 million, while increasing gross margins from 43% to 45%, reported Food Navigator-USA. Zevia credited its 2020 growth to a combination of velocity gains, growth in e-commerce (now accounting for 13% of sales), and increased distribution, with product available on Amazon, Zevia.com and more than 25,000 retail locations in the U.S. and Canada.

Specialty Grocer The Fresh Market Files for IPO
Specialty grocer The Fresh Market, based in Greensboro, NC, filed for an IPO on July 16. The specialty grocer operates 159 stores in 22 states. In the filing, the company reported comparable store sales growth of 22.3% in FY2020, up from -1.8% the previous year. The company intends to list on the Nasdaq exchange under the symbol TFM. CEO Jason Potter, in a letter to prospective shareholders, said the company made a number of changes after being acquired in 2016 by a private firm, including remerchandising the stores to focus on premium fresh food and offering competitive pricing on staple items, reported Grocery Dive.

Newly Combined Dole plc Announces IPO, Will Trade on NYSE
A newly created company formed from the combination of Total Produce plc and Dole Food Company Inc. announced on July 19 that it is planning an IPO of 26 million shares, priced between $20 and $23 per share. The new Dole plc says it will list shares on the NYSE under the ticker symbol DOLE. The combined businesses each have more than 150 years of history in the fresh produce industry, says the company, which claims it is one of the world’s largest producers of fresh bananas and pineapples, and one of the leaders in value-added salads and fresh-packed vegetables. The company also says it will have a growing presence in categories including berries, avocados and organic produce.

Healthy Snack Company Stryve Foods Begins Public Trading after SPAC Merger
Confident the company can disrupt the meat snack category, Plano, TX-based Stryve Foods, maker of meat snacks, on July 19 announced a merger with Andina Acquisition Corp. III under a shareholder-approved deal. Andina, a specialty purpose acquisition corporation (SPAC), changed its name to Stryve Foods, and began trading on the Nasdaq exchange under the symbol SNAX in late July. Stryve Foods is led by co-founder and co-CEO Joe Oblas, and co-CEO and chief marketing director Jaxie Alt, a veteran of the Dr. Pepper Snapple Group, reported Food Dive. Valued at $170 million, Stryve began by selling air-dried cured meats known as biltong, a tradition originating in South Africa that uses less sugar and additives than traditional meat jerky. Stryve reported sales of $14 million in 2019 and nearly $20 million in 2020, reported the Dallas News.

Instacart IPO Could Be One of the Biggest IPOs of 2021
After a round of fundraising this past spring that valued the company at $39 billion, rumors have abounded about a potential public offering from home delivery service Instacart. That said, Forbes reported in June that if it does go public, Instacart could potentially be one of the biggest IPOs of the year, though it was reported the company could opt for a Direct Listing, an alternative to a public offering in which no new shares are created and only existing, outstanding shares are sold. Currently, there is no information related to an Instacart IPO release date. However, MarketWatch reported that the company replaced its founder Apoorva Mehta as CEO with Facebook veteran Fidji Simo, who will take over leadership of the company in August ahead of an anticipated IPO possibly later this year.

Thrive Market Is Considering $2 Billion IPO Amid Surging eGrocery Sales
Online grocery sales nearly tripled in 2020, according to a July 2021 report by Packaged Facts. Based on this explosive trend, Bloomberg reported on July 8 that online membership-based natural products grocer Thrive Market, headquartered in Los Angeles, is considering an initial public offering at a valuation of more than $2 billion. According to Bloomberg, the company is working with investment bank Goldman Sachs Group. The company was founded by natural products and tech entrepreneurs Nick Green, Gunnar Lovelace, Kate Mulling and Sasha Siddhartha. By 2016, the company raised $141 million across three rounds of funding following its launch in 2014. According to Thrive Market, for every paid membership, Thrive Market donates a free membership to a family in need. 

Chobani Files Confidentially for IPO; Company Valuation May Exceed $10 Billion
Chobani, the company that put Greek yogurt on the map, could potentially be valued at more than $10 billion in an IPO, a source told Reuters on July 7. The company on July 6 filed a confidential draft registration statement with the Securities and Exchange Commission (SEC) for a proposed underwritten public offering of common stock, with the number of shared and price range yet to be determined. Chobani, which means shepherd in Turkish, was founded in in 2005 by Turkish immigrant Hamdi Ulukaya, who, with a small business loan, bought a yogurt plant in South Edmeston, NY, that was being closed by Kraft Foods. Chobani, which produces yogurt, oat milk, dairy and plant-based creamers and other products, also is renowned in the natural products industry for its business accelerator program for mission-based food startups, the Chobani Incubator.

Eat Just Is Targeting a $3 Billion Valuation in Considering IPO in Q4 2021
California-based Eat Just, cofounded in 2011 by Josh Balk and CEO Josh Tetrick, has raised a total of $440 million to date, including a recent $200 million placement led by the Qatar Investment Authority, Forbes reported on June 25. According to Forbes, Eat Just’s cultured meat division, GOOD Meat, also secured $170 million in financing in May 2021 as it builds out a large-scale manufacturing facility for cultured meat in Singapore. Eat Just seeks to be one of the first companies to sell meat made from animal cells instead of slaughtered livestock, and according to Forbes. Tetrick feels the positive feedback on cultured meat the company has received in Singapore serves as validation for expansion of cultured meat products in the U.S. in the future. Tetrick confirmed to Forbes that a public offering is “definitely getting closer.”

Naomi Osaka-backed Salad Chain Sweetgreen Confidentially Files for IPO
Fast casual restaurant chain Sweetgreen, specializing in salads and plant-based foods, on June 21 announced it had confidentially filed for an initial public offering, with Reuters reporting that the restaurant chain, which includes tennis star Naomi Osaka as an investor, is hoping for strong investor interest “as demand for plant-based food products surges globally.” The healthy food chain was founded in 2007 with one location in Washington, D.C., by three college roommates at Georgetown University’s business school. Currently, the company operates 122 locations in 12 states across the U.S. To date, the company has raised a total of $478.6 million in funding over 13 rounds, according to Crunchbase. Sweetgreen was named one of Fast Company’s Most Innovative Companies in 2019 and 2020. 

Vita Coco, Runa Parent Company Files for IPO with Company Valued at $2 Billion
All Market Inc., parent company of Vita Coco, Runa energy drinks and the water brand Ever & Ever, may be planning an initial public offering as soon as Q3 2021, according to a June 18 report by The Business Times. According to unidentified sources, All Market could be valued at more than $2 billion. Vita Coco, founded in 2004, produces a variety of coconut-based beverages. According to Statista, sales of Vita Coco products totaled approximately $160 million in 2020. All Market Inc. in 2018 acquired Runa, a popular energy drink made from guayusa, found in the Amazon rainforest. The company’s Ever & Ever brand markets pH balanced water in recyclable aluminum bottles.  

Oatly Raises $1.4 Billion in May 2021 IPO; Shares Rise 18% on First Day of Trading
Swedish oat milk maker Oatly, which reportedly counts such famous investors as Oprah Winfrey, Natalie Portman, Jay-Z and former Starbucks CEO Howard Schultz, raised $1.4 billion in an initial public offering on May 20. Shares were priced at $17, valuing the company at nearly $10 billion, according to CNBC. The company now trades on the Nasdaq exchange under the ticker symbol OTLY. In 2020, the company reported its revenue more than doubled over the previous year to $421.4 million, with food service accounting for 25% of sales and retail accounting for 75% of sales. Oatly reported a net loss of $60.36 million in 2020 as it invested in expanding into new markets, raising brand awareness and manufacturing, CNBC reported. Oatly CEO Toni Petersson in May told Food Navigator-USA “This is about conversion, it’s about converting people who used to drink cow’s milk into Oatly. And the addressable market is just massive … so it’s growth over profit.” Oatly products are currently sold in 60,000 retail locations and more than 30,000 coffee shops, reported VegNews.

Jessica Alba’s Honest Co. May 2021 IPO Raised $412.8 Million
Honest Co., the cruelty free personal care, household products and baby products brand co-founded by actor Jessica Alba, raised $412.8 million in an initial public offering held on May 4, CNBC reported. Trading under the ticker symbol HNST on the Nasdaq exchange, the company sold 25.8 million shares at $16 per share in its first day of trading, valuing it at $1.44 billion. The Honest Co. had revenue of $250 million in 2016, but has yet to turn a profit, reported LiveKindly. Alba, who started the company in 2011 three years after having her first child, said she founded the brand because she noticed a lack of natural baby products made without harsh chemicals in the marketplace. “When you look at this business, it feels like this is the direction in which the world wants to head,” said Motley Fool analyst Jason Moser on June 28. “A company that's very focused on ESG and sustainability. I think a big question for a business like this, it really boils down to pricing oftentimes. It's a little bit more expensive to make this stuff right now in the near term… As time goes on, those costs will come down, and I think a company like the Honest Co. has some brand equity that could play out in its favor.”

Impossible Foods In Talks to Go Public with a $10 Billion Valuation
Based on an April 8 report in MarketWatch, plant-based foods maker Impossible Foods is preparing for an initial public offering that could value the company at about $10 billion. Founded in 2011 and based in Redwood City, CA, Impossible Foods was recently valued at $4 billion in a private funding round in 2020, MarketWatch reported. The company’s signature product, the Impossible Burger, debuted in 2016. Sources told Reuters in April that Impossible Foods is exploring an IPO within the next year or a merger with a special purpose acquisition company (SPAC). Merging with a SPAC – a shell company that raises funds in an IPO with the goal of acquiring a private company – is becoming a popular alternative for companies seeking to go public “with less regulatory scrutiny and more certainty over the valuation that will be attained and funds that will be raised,” Reuters reported. Reuters also disclosed that Impossible Foods has raised $1.5 billion in the private investments, to date, with backers including Khosla Ventures, Horizons Ventures, and celebrities including tennis star Serena Williams and rapper and music entrepreneur Jay-Z. According to Food Dive, rumors of an IPO for Impossible Foods have circulated since competitor Beyond Meat went public in 2019.

Thrive Market Wants to Be the First Climate Positive Grocer

This article originally appeared in Presence Marketing’s June 2021 Newsletter

Thrive Market, the online natural products retail marketplace founded in 2014 by Nick Green, Gunnar Lovelace, Kate Mulling and Sasha Siddhartha, has set a new goal to become the nation’s first “climate-positive grocer.” The company saw sales skyrocket in 2020 during the pandemic and now CEO Nick Green says it wants to take those profits – and momentum – to pursue how it can reduce plastic packaging and overall waste, among other objectives.

“We are committing to not only minimize our negative environmental impact, but have a net positive effect on the climate specifically,” Green told Forbes Magazine. “The big message that we’re trying to send, which we hope other companies will embrace as well, is that doing less harm isn’t enough. We should all be thinking about what we can do to actually make things better to help heal the planet after a century in which we’ve done more harm than all prior centuries combined. Specifically, at Thrive Market that means committing to going carbon negative as a company by 2025 (right now we are carbon neutral), making our zero waste practices official with a TRUE Zero Waste certification in 2022, and going fully plastic neutral, as well, by 2023. We’re already proud to be the largest grocer ever to receive B Corp certification and looking forward to recertifying in October 2023 with even stronger commitments to both social impact, environmental stewardship and investment in our people,” Green told Forbes.

Said Thrive Market’s Chief Merchandising Officer Jeremiah McElwee, “The biggest inherent challenge is balancing out high quality, value and values-driven products being packaged in truly environmentally responsible formats. At present, those options can still cost five to 10 times what the more conventional options cost. So you can have a product that retails for $1.99 and the package itself costs $1. That means the customer would have to pay that premium when just affording healthy, organic food can be a challenge for many on a limited budget. Our approach is to create step functions so that we start with reduction always, then we move toward innovation and, ultimately, end of life solutions. Right now we have multiple pilots exploring both compostability and upcycling solutions for our shipping materials and product packaging,” he told Forbes.

As part of its Climate Positive initiative, the company identified three key areas of focus: carbon footprint, zero waste, and excess plastic. For more information on Thrive Market’s commitment to becoming the world’s first climate positive grocery store, visit here.

Hemp Harassment: Leading Online Retailer Thrive Market Forced to Cease Sales of All Hemp and CBD Products in Banking Backlash

Originally Appeared in Let’s Talk Hemp Newsletter, June 2019
By Steven Hoffman

In a seeming backlash to the burgeoning hemp economy, hemp and CBD retailers, industry associations and other hemp-centric businesses are being denied or threatened with denial of banking, credit card processing and other key business services, including a national newswire service that announced this past month it will no longer accept press releases from hemp companies, and is, in fact, deleting all existing and previously issued press releases related to hemp and CBD from its online archives. It is a disturbing trend in an industry that was made legal across the U.S. as a result of the 2018 Farm Bill and is projected to grow to $26.6 billion by 2025.

It has forced such retailers as leading online natural products grocer Thrive Market to cease sales of all hemp and CBD products, a best-selling category over the past 18 months on its nationally recognized ecommerce site. The member-based online retailer boasts more than 500,000 members. “In early June, we received a notice from our merchant processor demanding that we cease the sale of all hemp and CBD products on Thrive Market. We unfortunately have no choice but to comply, and we’ll begin removing our assortment as early as Thursday, June 20,” wrote Thrive Market’s cofounder and CEO Nick Green in his blog on June 17. As of this writing, clicking on that assortment link takes you to a blank product page on Thrive Market’s website.

Meanwhile, the U.S. Hemp Authority, a not-for-profit trade group developing certification standards for the industry, lost payment processing services in June after being dropped by its vendor, Stripe, based in San Francisco, reported Hemp Today on June 20. According a report in CNN Business, Stripe said it dropped the U.S. Hemp Authority’s account because of liability concerns, despite the fact that the trade organization is not a seller of any hemp products. “We’re being told we’re high risk. We’re actually trying to minimize human risk,” Hemp Authority president Marielle Weintraub told CNN.

Abrupt Notice
Since a leading credit card processor, Elavon, a subsidiary of U.S. Bank, abruptly notified its hemp and CBD clients in March 2019 that it had recategorized hemp and CBD merchants as a “prohibited business type” and was backing out within 45 days of handling payment processing for such companies, a number of hemp businesses have been scrambling to establish secure and durable payment processing relationships. According to one estimate by Philippa Burgess, cofounder of MMJ FinSol, a Denver-based financial services solutions company for hemp, cannabis and other “high-risk” businesses, Elavon’s policy changes affected up to 40,000 CBD companies.

Another merchant processor, Fortress Payment Technologies, in May 2019 notified all its ecommerce customers selling CBD products that they would no longer be able to process Visa credit card payments through the bank. Some sellers received less than eight hours’ notice of these changes, reported Folium Biosciences, a vertically integrated hemp-derived phytocannabinoid producer based in Colorado Springs. The company recently launched a CBD/hemp friendly financial services platform for its customers to help remove the financial hurdles faced by the CBD industry, it said.

Kyle Rapoza, cofounder of Vermont-based Mansfield Provisions, which distributes CBD products online and through brick and mortar retail partnerships, lost credit card processing services for his company in late May 2019, when Elavon stopped doing business with the hemp industry. He explained to Ganjapreneur Magazine that, in the wake of Elavon’s action, many of the industry operators he knows and does business with are moving back to high risk (and high fee) accounts. Rapoza has since been able to access more traditional business accounts through a state credit union, Ganjapreneur reported.

Biggest Challenge Facing the Hemp Industry
It’s a “difficult time” for the industry as it related to financial services, which he called “the biggest challenge in the industry right now,” Jonathan Miller, general counsel for Kentucky-based industry association Hemp Roundtable, told Ganjapreneur. “The law, we believe, is clear that since the [2018 Farm Bill], hemp and CBD are no longer controlled substances. There should be no concern whatsoever that there would be violations of federal law to engage in commerce. …Unfortunately, there is a lot of misinformation – it’s banks, it’s credit card companies, it’s merchant services that have been refusing to do business with these hemp and CBD companies.”

Because banks have been so hesitant to serve hemp and CBD businesses despite the legalization of hemp in the Farm Bill, U.S. Senators Mitch McConnell (R-KY) and Ron Wyden (R-OR) – chief proponents of legalizing hemp – in April 2019 sent individualized letters to four federal banking and financial regulatory institutions, imploring them to prevent banking discrimination of the hemp industry, reported Cannalaw Blog.

In addition, when pressed by U.S. Senator Jon Tester (D-MT) at a hearing in June 2019, Marijuana Moment reported that Federal Reserve board member Michelle Bowman pledged to inform banks that they can service hemp businesses. When Tester asked specifically how the Fed is advising institutions when it comes to hemp, Bowman responded, “We have not told them that they cannot bank them.” Tester countered that while he and Bowman might be on the same page, it is possible that banks were hearing a different message—hence why hemp businesses have said that they’re still experiencing difficulties accessing credit. Tester said clarification is especially important at this stage because of fallout from trade wars with China and Mexico, as hemp represents a potentially lucrative crop for American farmers. “I would agree with you. We would not discourage banks from banking these types of customers,” Bowman said. “We’ll try to clarify that. Hemp is not an illegal crop.”

What, No Press Releases?
While certain merchant banks seek to stifle hemp industry growth through the denial of critical financial services, another service provider in the media newswire business seeks to silence its voice.

One leading hemp industry media and event production company, Colorado Hemp Company, based in Loveland, CO – producer of the NoCo Hemp Expo, Southern Hemp Expo, and the Let’s Talk Hemp weekly newsletter and podcast – was recently informed by its newswire service, ReleaseWire, that it will not post or distribute any new press releases that mention hemp, and in addition, it was deleting all existing and previous press releases mentioning hemp that Colorado Hemp Company had posted in the past. In a policy update issued on May 8, 2019, ReleaseWire, one of the nation’s leading online national newswire services, issued the following statement, after which it began informing hemp-centric businesses that not only were they not accepting new press releases for distribution, they were deleting all existing press releases and archives related to cannabis, hemp or CBD:

“ReleaseWire was recently contacted by our credit card processor and informed that they have a policy in place that restricts merchants, including ReleaseWire, from linking to, or providing information about, marijuana, cannabis, CBD, hemp and related products. As such, we have been instructed by our credit card processor that we must not only stop taking press release submissions on these topics, but we must remove any existing press releases and related content from our site. They have provided us with a small window of time to complete this process or risk losing the ability to process credit cards.”

Meanwhile, other newswire services including Cision, owner of PR Newswire and PRWeb, continue to accept and publish hemp, CBD and cannabis related press releases on behalf of clients.

Hemp Friendly Payment Processors
So which payment processors are willing to serve hemp and CBD companies? One such processor, Adept Payments, says on its website that it helps high risk businesses, including vape, CBD, adult, casinos and more.

While financial services group, Edward Jones, has no official policy about outreach to the hemp industry, a broker in Bend, OR, contacted Hemp Industry Daily to say he was offering a “full spectrum of banking, investment, insurance and financial planning services to hemp farmers.” Officially, Edward Jones is “looking at the provision in the Farm Bill that addresses hemp growing,” John Boul, manager of global media relations for the St. Louis-based Edward Jones told Hemp Industry Daily in April 2019.

Square, a leading online payment processor, recently soft-launched credit card processing for CBD companies, but the program is still in beta testing phase and is by invitation only. Former credit card processing professional and current blogger Phillip Parker, who describes his site, CardPaymentOptions.com, as a credit card processing watchdog group, posted a guide to the Best Merchant Accounts for Hemp Products in June 2019. Also, Merchant Maverick, a self-described comparison website that reviews and rates credit card processors, mobile payment services and other small business software, published a guide to the Best CBD Oil Merchant Account Providers in April 2019.

For CBD sellers on Shopify and other major ecommerce platforms, a recently launched processor, Organic Payment Gateways, advertises that its mission is to help people in the CBD business process payments online, and that its payment gateways work smoothly with Shopify, WooCommerce and others. Leap Payments, Instabill and other services promote that they are dedicated to ensuring CBD businesses “can accept debit and credit card payments just like any other business can.”

So, for now, you won’t find any hemp or CBD products at Thrive Market, however, the ecommerce retailer says it won’t give up without a fight. “We believe that ethical and sustainable hemp is another cause worth fighting for, so rest assured that we will be working behind the scenes in the coming weeks to get hemp products back on Thrive Market,” Nick Green wrote in his blog. “In fact, we’re already in conversations with a new processing partner to try to make that happen.”