The CQ: A Banner Growth Year for Glossier, Dutch's Series B, the Debut of Fora X
Plus the Forerunner Team's Must-Reads of the Week
The CQ is Forerunner’s weekly newsletter rounding up the most pressing consumer news and analysis, plus some bonus musings from our investment team. Subscribe now to get the latest edition in your inbox every Saturday.
It’s been an extra busy fall for our portfolio between product launches, new partnerships, new funding rounds, and continued growth. Supporting our portfolio’s momentum is always one of the best parts of our jobs, but these milestones feel all the more significant in 2023 in the thick of heightened scrutiny on growth, spend, and investment.
A recap of some of these noteworthy companies and their milestones:
Glossier shared in a cover story with WWD that it’s on track to clock in $100 million in its year-one sales at Sephora after entering the retailer in February, exceeding the launch forecast by more than 100% and prompting a need to look into a new level of inventory to meet both in-store and online client demand. Also: Glossier You is now Sephora’s #1 selling perfume. For the overall sales for the brand, including direct channels, Glossier stores and Sephora, Glossier is up 73% year-over-year, following a consecutive growth year. In the words of Glossier CEO Kyle Leahy: “what a team, what a year of transformation.”
Dutch is a telehealth platform for pets. Founded by a former Hims&Hers Cofounder, Dutch translates the clinical excellence and sophistication of recent digital health advancements to the pet market, which has yet to see meaningful change in veterinary care despite growing veterinary bottlenecks stemming from a provider shortage. Dutch just raised a $18M series B, which comes on the heels of the State of California approving new legislature that permits greater telehealth services for animals.
Fora is reinventing the composition of the travel agency, which is still a $40B industry despite being dated and failing to inspire younger consumers. Fora modernizes this model by enabling anyone with a passion for travel to become a travel advisor through flexible, entrepreneurial work, and in turn, caters to millennials and Gen Z’ers who crave unique, thoughtful travel experiences that feel like they were curated by an expert friend. Last week, Fora launched Fora X, a new boutique, luxury agency within the company for its highest-earning, luxury-focused advisors.
Faire is the online wholesale marketplace built on the belief that the future is local, with independent retailers around the globe doing more revenue than Walmart and Amazon combined. After announcing an official partnership with Shopify to become the platform’s default wholesale provider for global merchants around the world, Faire recently released its Gen Z shopping trend report, specifically focusing on the upcoming holiday season and including Forerunner research.
DUOS connects Medicare beneficiaries and their caregivers to the resources needed to attain the highest level of health support, aggregating historically siloed data and resources to break down barriers to health literacy and access to care. DUOS recently announced the launch of DUOS+AI, a platform featuring a conversational interface that uses a large language model to recommend services based on the unique social determinants of health (SDOH) and care needs of the older adult or caregiver.
Last but not least, Catch and Stan make The Information 50, The Information’s list of the most promising startups of 2023!
For more on Forerunner portfolio companies, see here.
What We’re Talking About on Slack:
Longer commutes, shorter lives: the costs of not investing in America. The New York Times makes the case that dwindling federal investment in the future infrastructure of our nation has brought about the Great American Stagnation in key areas like education, technology, and social engagement. The first nonstop transcontinental flight occurred over 60 years ago, and there’s been no progress as notable since. In fact, today, a NY-to-LA flight takes about 30 minutes longer. The same is true for train, subway, and car trips. In recent years, the country has continually bolstered programs focused on the present at the expense of R&D for future matters, even though these pose a greater good for the nation as a whole. “A well-functioning capitalist economy depends on large investments in research that the free market, on its own, usually will not make.”
If the economy is so strong, why are consumer stocks tanking? More than two dozen stocks in the consumer staples and discretionary sectors of the S&P 500 — including Dollar General, Kraft-Heinz, Conagra Brands, and Clorax — have set new 52-week lows in October. In addition to struggling with increasing theft and shrink, companies are saying consumers are buying fewer discretionary items as inflation and gas prices continue to rise. Investors “have pulled money from consumer-goods sector funds in 10 of the past 12 weeks. The outflows in each of the past three weeks topped $1 billion, a threshold not crossed since March 2022. U.S. equity fund managers, meanwhile, have been reducing their exposure to the sector since April.” Another theory: Ozempic is tanking junk food related stocks.
Amazon Prime Day flashes warning for retailers. While the retail giant claimed its Prime Day sales beat last year’s, independent data reveals there was only a 2% increase. As for the retailers who ran competing sales, sales decreased 1% from last year. Big companies like Amazon and Walmart can afford to offer discounts, but it’s much harder on smaller ones. Still, they “have no choice but to continue offering deals to vie for shoppers who increasingly put price ahead of brand loyalty.”
Get ready for the super-aging era. About 50% of 5-year-olds alive right now will live to be 100 years old, says Stanford University’s Center on Longevity. And by 2050, their researchers predict there will be 3.7 million centenarians, and living to 100 will become the norm for all newborns. While TIME points out that our society faces a number of challenges in the face of this “longevity revolution” — from expensive health care, loneliness, and ageism to inadequate retirement funds and racial and ethnic gaps — there is a reassuring signal from a study of 340 Dutch centenarians living independently who showed little decline in brain function. “Cognitive impairment is not inevitable at extreme ages.”
Netflix’s next move: physical locations. Upcoming venues, called Netflix House, will be a mix of retail, dining, and live experiences, offering consumers an opportunity to immerse themselves in Stranger Things, Squid Game, and other fan-favorite shows. The streaming service has experimented with pop-up experiences before, but they are now planning to open two permanent U.S. locations in 2025 and then expand globally — not necessarily as a revenue source, but a means to further promote its titles and build fan communities.
Gen Z is doing some serious belt tightening. A new Bank of America survey found that nearly 75% of young people ages 18 to 26 say they’ve made lifestyle changes in the past year due to inflation: 43% are cooking at home more, 40% are spending less on clothes, and 33% are limiting grocery shopping to just the essentials. According to the bank’s credit and debit card data, Gen Z’s spending decreased by over 2% between May 2022 and May 2023, while spending increased by 2.5% for Boomers and 5% for Traditionalists.
Consumers have never had it so good. That’s why they’re stuck. “Low interest rates, high salaries and membership discounts scored before and during the pandemic often can’t be matched today, binding people in golden handcuffs. Many feel comfortable, but stuck.” Even though many may feel ready to take on a new job, a new house, or even a new car, they’re reluctant to make a move out of fear of losing what they have. What will people pay and risk to potentially be happier or upgrade?
But also: It's getting too expensive to have fun. The Wall Street Journal reports that the staggering cost of tickets for concerts, sporting events, and theme parks has become out of reach for many consumers, with 60% saying they’ve cut back on live entertainment. This “funflation” has increased faster than the prices of food and gas in 2022 and has continued to rise this year. But, as evidenced by the slew of performers from Taylor Swift to Bruce Springsteen who recently sold out stadiums, some fans are still willing to pony up to see their favorite act despite astronomical costs — the average concert ticket price saw a 7.4% increase over last year and is up 27% from 2019.
Burned-out parents are seeking help from ChatGPT, according to Axios. Moms and dads are turning to the chatbot to create chore lists, find kid-friendly answers to “why is the sky blue?” and even to draft a script of “the talk” to have with their teenager. Though one psychologist cautions parents against using AI to manufacture meaningful communication: "It's this stilted, artificial thing. All of the things that would make it special are not going to be there."
Interest rates and inflation are still high and pandemic savings are dwindling, yet Americans’ summer spending spree has continued into fall. Consumer spending at stores, online and at restaurants unexpectedly increased 0.7% in September from a month earlier. Meanwhile the 10-year yield settled at 4.846%, its highest closing level since July 2007. This is causing some economists to worry: “That’s only going to drive mortgage rates higher, personal loan rates higher, car loan rates higher, credit card borrowing rates higher.”
Portfolio Highlights:
Longevity Technology covers the launch of Tally Health’s new supplement.
Travel Weekly covers the launch of Fora X, Fora’s boutique agency within the company for top-producing advisors, with quotes from co-founder Henley Vazquez.
At Bloomberg’s Media Conference, Kris Jenner says she wears an Oura ring to measure her sleep quality and competes with her daughter Kim Kardashian on their stats, saying it’s become “this little obsession.”
Stan and Catch made The Information's list of the 50 Most Promising Startups of 2023.
Work at a Portfolio Company:
Director of Logistics | Ritual: Ritual is a personal health brand building the future of daily essentials. This role will manage the transportation, Third Party Logistics Warehouses, and fulfillment elements of the business, performing fulfillment network analyses and design, driving carrier negotiations, and ensuring carrier performance and service level agreements.
Senior Account Executive | Pavilion: Pavilion builds technology that empowers public servants to deliver better, faster public services from a wider and more diverse group of businesses. This role will help create the company’s first revenue generation business, closing new business with “Suppliers” and defining the scalable playbook to 100x the marketplace overall.
Machine Learning Engineer | Kale: Kale is on a mission is to empower anyone to translate their social value into economic value by reinventing word-of-mouth marketing for the online, social world. This role will develop and deploy machine learning models that improve the platform's user experience and drive business value.
There are ~478 other openings on our jobs site. Check ‘em out.