Lebron James and Arnold Schwarzenegger Launched a Nutritional Supplement Brand!
If you haven’t heard by now, Ladder (a nutritional supplement company) was just launched by Arnold Schwarzenegger, LeBron James, Lindsey Vonn, and Cindy Crawford.
The A-List Athletes and Celebrities, each share a personal reason for starting Ladder:
- Lebron — after 2014 NBA Finals, he experienced cramping and wanted to find products that would help him in the off-season to get better. Lebron and his trainer couldn’t find anything suitable because quality, formulation, and safety was a concern
- Arnold — left MusclePharm deal in 2016 and wanted to start a new supplement line after the less than stellar experience partnering with another brand
- Vonn — she had the same issues as Lebron with professional athletes and constant concerns with safety and needing to adhere to strict drug testing
- Crawford — though not constrained with drug tests, she helps round out the edge of “athletes only” and into a more “inclusive” appeal that you will see in the brand positioning and target marketing
The goal of Ladder is to empower you to reach your lifestyle goals and the company understands that “one-size-fits-all” is not an effective solution for any functional CPG product. Because of that, they are focusing on:
- Content — Content is king and this group of founders has access to the most creative and brightest creators in the world (regardless of what the focus is…). The website already had a very well composed and digestible fitness, health, and wellness Blog. The social media isn’t fired up past the launch assets, but I assume more to come on that very soon.
- Community — people fail in getting healthier, not from lack of information (the Internet has endless great information at fingertips), but lack of accountability and support. The website notes having access to expert information, tracking reports, and various media rich content options.
- Product — they currently have both a “personalized” approach for newer entrants into the nutritional supplement market or self-selection option for those that know what they want/need.
The business model of Ladder is DTC. No need to have middlemen like GNC or Walmart when you have the distribution leverage of the founders. This DTC model has some bolt-ons of:
- Data Capture (Quiz) that leads to an implied “personalization” of product choice. This is simply a quick decision database that leads you to a “Stack” and I am going to assume eventually a specific SKU variant family in later product launches
- Subscription Model — nutritional supplements are a great CPG category for autopilot consumption
BRANDING
Keep in mind, this is all personal feeling as branding is more an art and less a science. The market wins on what is “great” and not one thought leader like myself.
Brand Name — I think Ladder has a good aspirational breadth of tag lines and pivots in the market…this is good for their marketers (or creative agency)
Packaging — I am not going to lie and say that I didn’t like it at all. The all black is too male-centric, the design feels dated, and the logo is too financial services for me. I do like the sachets for convenience and this strategy fits with the customer base (MLM brands all do individual servings).
Additionally, I think the use of athletes give the market validation of quality and effectiveness (This isn’t new but it usually works for mainstream consumers). The website was built very well with ease of navigation and perfect blend of functional content and ease of purchasing.
PRODUCT
They started with four products:
- Whey Protein
- Plant Protein
- Energy
- Greens
All of the products have natural flavors and sweeteners and no artificial colors. They are also all NSF for Sport Certified.
Though Lebron and Arnold started with four products, the trademark application for Ladder has BIG ambitions in the future. They applied for the following classes of IP protection:
005 — nutritional supplements and functional foods
029 — nut and seed and/or fruit-based bars
030 — cereal/grain-based energy bars or mixes
032 — sports drinks
The interesting thing in the future about sports drinks is that Lebron James is currently an endorser of Coca-Cola (Sprite), that owns Powerade and minority share (with option to buy) of BodyArmor (Note: BodyArmor early investor was Kobe Bryant). If they would go the route of beverage, I am sure Coca-Cola will play a key role in distribution, product development, and providing working capital.
ECONOMICS
I won’t get into specifics but my 10 years in nutritional supplement experience, combined with getting these formulas quoted by leading contract manufacturer, leads to be believe they have very strong margins for a DTC business model.
What are My Thoughts?
- This is version 1.0 and regardless of athlete or celebrity firepower, they aren’t consumer product experts and I think it shows in some areas
- The star power alone and network effects with boost this company to strong 2019. I mean Kylie Jenner can build a $1B beauty empire on the backs of social capital, Lebron is good for 8-figures in 2019
- The initial products are far from the worst and they are formulated with the intent to market to a specific consumer group and maintain pricing economics that are fair for direct to consumer model
- I expect some adjustments to branding and additional products in late 2019
- I am curious what the customer acquisition strategy will be; media blitz strategy (keeps/hims), digital only (care/of), or something new that is focused on social influence
