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Lucas Krafts friends knew him as the guy who always had an antacid. His recovery from bulimia left him with gastrointestinal damage, which made him reliant on over-the-counter digestive medicines. But they were also filled with chemicals that didnt mesh with his health-conscious SoCal lifestyle. Luckily, his brother Noah had an eye for predicting where consumer interests are headed. He founded Doppler Labs, the buzzy 2010s startup hoping to create an in-ear computer, three years before Apple launched their AirPods. Doppler Labs was too early, but Wonderbellythe brothers digestive health brandhas been right on time with its focus on clean ingredients and opposition to existing giants of OTC medicines. In the late 2010s, clean beauty was already surging. Whole Foods and Erewhon were on the rise, but they were siloed within wealthy communities. But a new and growing swatch of health obsessivesboth within and without Robert F. Kennedy Jr.s Make America Healthy Again movementhas put Wonderbelly in an unusually dominant position. The superstores came knocking: First Target, then CVS, and now Walmart. [Image: courtesy Wonderbelly] Wonderbelly products now feature prominently at 2,500 Walmart stores nationwide via a fleet of endcaps. These offerings include reworked packaging as well as a debut multisymptom product designed to compete with Pepto-Bismol. Noah contrasts Wonderbellywhich is sold as an OTC product with health claims that are regulated by the Food and Drug Administrationwith the $53 billion supplements market. Supplements are the Wild West. They are unregulated, so when you take a supplement, its hard to determine whether it works or is a placebo, he says. As an FDA-regulated OTC medicine . . . credibility is key. Growing the the old-fashioned way Medicine moves slower than Noahs native tech world. The brothers incorporated Wonderbelly in 2021, before spending two years deep in product development. (Noah got antsy in this period, so he made an app to track digestive health.) When the companys clean Tums alternative was ready in April 2023, Target was immediately on board. The retailer asked to place Wonderbelly in 2,000 stores, but the Kraft brothers needed more time, eventually agreeing to 650. Even that pared-back retail presence was important to Wonderbellys vision to build its brand credibility the old-fashioned wayin brick and mortar. People buy medicine as a bottom-of-funnel product, Noah says. You go into your supermarket, youre picking up bananas, and you grab some Tums. It is not the sort of thing where you go to someone’s website like you do with Casper. With more stores, Wonderbelly brought more products. For the company’s CVS launch, it debuted a clean Gas-X alternative. Now, with Wonderbelly’s new placement in Walmart, it’s rolling out a clean Pepto-Bismol challenger. Wonderbelly intentionally positions itself against these name brands; it’s not interested in customers shopping for generics. Even the store placement mattersthe company isn’t interested in selling in Whole Foods or Sprouts, because they dont carry Tums. We dont want to sit next to apple cider vinegar, Noah says. [Image: courtesy Wonderbelly] Wonderbellys bet is that, when given the choice between a chemical-filled name brand and a cleaned up alternative, the premium customer will choose it instead. The strategy has been lucrative. While he declined to disclose specific financials, Noah notes that the company hit profitability in April. As of April 2024, Wonderbelly was valued at about $53 million, according to market insight tool PitchBooka number that Noah confirmed is still roughly accurate. Jeff Behm, Wonderbellys VP of sales, points out that the company will double its sales year over year, having reached 100,000 points of distribution. (It helps that the company is incredibly slim: Wonderbelly has 12 employees, and Noah has no desire to hire more.) The Walmart launch is poised to skyrocket sales by introducing 2,500 colorful endcaps nationwide. Walmart has a different customer, than the deep-pocketed shoppers that frequent the likes of Erewhon and similarly priced boutique grocers that dominate the clean space. So Wonderbelly created a new, cheaper $9.99 version of its antacidwith fewer tabletsto meet Walmarts everyday low prices mandate. It seems to have paid off: Looking at the first-week data from the brands soft launch, Noah says sales are where he expected them be after three months of a concerted marketing push. Customers are familiar with these legacy brands, and they’re going to stay connected to these legacy brands, says Kristin Piper, Walmarts vice president of wellness merchandising. Some customers are looking for innovation, like [what] Wonderbelly is bringing to the space. [Image: courtesy Wonderbelly] Navigating a MAHA minefield The Krafts grew up in Los Angeles, where their mother enforced a clean regime. Lucas describes a house full of alternative brands that always tasted so much worse. That includes drinking imitation milk at age 5. Noah points out that they werent allowed to drink Diet Coke. The brothers have mostly carried this clean ethos to their adult life, leading Lucas to count the ingredients on the back of his medicine bottles. Though Wonderbellys antacid has six ingredients to the average of 20 in Tums, that model of ingredient numbering can be reductive, especially in medicine, where some foreign chemicals are crucial to the products transportation around the body. So Wonderbelly makes its definition even clearer: non-GMO, vegan, free of artificial dyes, sweeteners, talc, titanium dioxide, parabens, and gluten. The siblings timing with Wonderbelly couldnt have been better. The consumer wellness market skyrocketed coming out of the pandemic. Clean beauty, once a miniscule portion of the makeup market, is now valued at more than $8 billion. Consumers are buying Oura Rings and drinking kombucha. Its also not lost on the Krafts that their product appeals to a broad enough consumer base to include those buying into the Make America Healthy Again movement. We strongly believe in science, but we also align heavily with a lot of the things that the MAHA movement is pushing for, Lucas says, adding that he and his brand are still positioned for people eating food that can upset their stomachs. Antacids usually dont come after youve had a big meal of kale salad. MAHAs reach is also broad, and has spurred actions that range from Sweetgreen eliminating seed oils in its food to the state of Utah banning fluoride in drinking water against prevailing medical consensus of the elements public health benefits. As a result, the Krafts have had to be somewhat judicious about who they associate the brand with. There have been several instances where were talking to someone and then we go to their socials, and were like, Thanks for the support. Please dont mention our company name, Noah says.
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E-Commerce
A bipartisan group of President Donald Trump’s critics is launching a new organization, dubbed the Cost Coalition, to highlight Trump’s struggle to control rising costs in the early months of his new presidency.The group expects to be especially active ahead of upcoming elections in Virginia, New Jersey and Pennsylvania, according to preliminary plans shared with The Associated Press this week ahead of a formal announcement. The Cost Coalition will push its message through a combination of paid advertising, social media, press interviews and on-the-ground events with small business leaders, veterans and the faith community.Terry Holt, a former spokesperson to former President George W. Bush and former House Speaker John Boehner, both Republicans, is serving as a senior communications adviser along with Andrew Bates, a former spokesperson for former President Joe Biden, a Democrat.“In 100 days, Donald Trump put the best-performing economy in the world on a crash course toward recession. Trump’s tariffsthe biggest middle class tax hike in modern historyare making everyday prices skyrocket and wreaking havoc for businesses large and small,” Holt and Bates said in a joint statement. “Next up are grossly inflationary tax cuts for the wealthy that will only saddle future generations with staggering debt. Whether you’re a Republican, Democrat, or anything else, Donald Trump’s agenda is an economic crisis threatening your livelihood and standard of living.”The new group enters a political landscape already packed with powerful voices fighting to shape the national conversation little more than 100 days after Trump began his second term. The Republican president vowed to “end inflation” on Day 1, but he has focused more on immigration, culture wars and exacting revenge against his political adversaries while launching a global trade war that has pushed some costs higher and threatens to send the U.S. economy into recession.Trump late last week said on his social media platform that there is “NO INFLATION” and claimed that grocery and egg prices have fallen, and that gasoline has dropped to $1.98 a gallon.That’s not entirely true: Grocery prices have jumped 0.5% in two of the past three months and are up 2.4% from a year ago. Gasoline and oil prices have declinedgas costs are down 10% from a year agocontinuing a longer-running trend that has continued in part because of fears the economy will weaken.Inflation did drop noticeably in March, an encouraging sign, though in the first three months of the year it was 3.6%, according to the Federal Reserve’s preferred gauge, well above its 2% target.The Cost Coalition will be led by a team of veteran operatives who played key roles for Kamala Harris’ unsuccessful presidential campaign: Republican strategist Austin Weatherford, the leader of “Republicans for Harris”; Rev. Jennifer Butler, Harris’ national faith and engagement director; Libby Jamison, the Harris campaign’s national director of veteran and military family engagement; political strategist Leslie Gross, a veteran of the Obama-Biden administration; and George Holman, who served in the Biden administration.A spokesperson declined to say how the new group will be funded, except to say it has “seed contributions” from some large donors in both parties and will also rely on grassroots donations. As a project of the American Values Alliance, the organization will be set up as a nonprofit with a hybrid political action committee. As such, it won’t have to publicly disclose all of its funding sources. Steve Peoples, AP National Politics Writer
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E-Commerce
Beleaguered pharmacy chain Rite Aid has officially filed for Chapter 11 bankruptcy protection after weeks of media reports suggesting that it was on the cusp of doing so. The bankruptcy is Rite Aid’s second in two years, and it leaves a lot of questions for both customers and employees, including whether stores will be closing, if there will be layoffs, and what happens to customers prescriptions. Heres what you need to know about Rite Aids second bankruptcy. Why did Rite Aid file bankruptcy the first time? Rite Aid originally filed for bankruptcy in 2023. It emerged from the process less than a year ago, in 2024, with the hopes of being in a better financial position and on more resilient footing. But with its second bankruptcy filing yesterday, those hopes seem to have been dashed. To understand why Rite Aid is once again filing for bankruptcy, it helps to understand why the company originally filed for bankruptcy in 2023something Rite Aid has laid out in detail in documents it filed with the United States Bankruptcy Court in the District of New Jersey today. Rite Aid cited multiple factors that necessitated its 2023 bankruptcy filing, including: suboptimal lease portfolio of underperforming stores elevated labor costs increased costs from “shrink” (theft) lower credit limits more restrictive payment terms from vendors reduced demand for its non-medication front end products The lack of such inventory, Rite Aid said, gave rise to a vicious cycle: high-margin front-end sales declined due to insufficient inventory, and lagging sales depleted liquidity and caused vendors to tighten trade terms even further. The companys 2023 bankruptcy was meant to help the struggling pharmacy chain address the financial issues caused by these problems. But thats not the way things have played out since, which has led to the company filing its second bankruptcy this week. Why is Rite Aid filing for bankruptcy again? In a court document, Rite Aid said that its post-emergence business plan was based on data-driven projections (and extensive discussions with vendors) that Rite Aids front-end vendors would return to their less restrictive prepetition payment terms as well as assurances from select capital providers that the company would be provided with the needed letter of credit facilitiesall of which the company said was crucial to Rite Aids recovery. But the filing goes on to say that Those assurances were broken. Rite Aid said that the letters of credit it did obtain were materially less than expected and that many vendors didnt end up relaxing the more restrictive payment terms to the anticipated levels. Pile on macroeconomic pressures to this and Rite Aid said that The combined effect of lower-than-expected liquidity from the letter of credit facilities, inventory challenges, strained vendor relations, lower consumer spending, and competitive pressures has ultimately left the Company with insufficient liquidity to operate its business and service its debt obligations in the ordinary course. Thus, its second bankruptcy filing this month. Whats happening with Rite Aid prescriptions? Of course, many customers will be concerned about what will happen to their prescriptions during the bankruptcy process. In a letter to customers dated May 5, Rite Aid said that one of its paramount priorities during the bankruptcy process is to ensure that customers pharmacy needs are not interrupted. Rite Aid says that a majority of its stores will remain open for the next few months and that during that time pharmacy services including prescriptions and immunizations will remain available. In other words, for a few months at least, most customers should be able to still get their prescriptions filled at their local Rite Aid store. However, the company also stated that it’s working to facilitate a smooth transfer of customer prescriptions to other pharmacies. This is most likely in preparation for inevitable Rite Aid store closures or sales. Are Rite Aid stores closing? Some already have, and more closures in the months ahead are almost a certainty. According to documents Rite Aid that filed with the court, these 11 locations have already closed or will close soon: Poughkeepsie, NY Redmond, WA Sunnyside, WA Craigsville, VA Costa Mesa, CA Harrisburg, PA Keene, NH Ridgewood, NY Kutztown, PA Neptune, NJ Halifax, PA Rite Aid also says that customers can keep an eye on which stores are open using its online store locator tool. The locator currently states that Rite Aid has 1,240 locations in the United States across 15 states. Whats happening to Rite Aid employees? It is thought that Rite Aids bankruptcy will see some store locations closed, while other stores will be sold to other entities that may seek to keep the stores running in some fashion. Indeed, in a press release confirming its bankruptcy plans, Rite Aid CEO Matt Schroeder said that he was encouraged by meaningful interest from a number of potential national and regional strategic acquirors. But inevitably, layoffs are to be expected, as Schroeder said that one of the companys priorities was preserving jobs for as many associates as possible. Yesterday, Bloomberg reported that an internal letter was sent by Schroeder to employees that the company will begin cutting jobs at its corporate offices in Pennsylvania. What will shopping at Rite Aid be like while this is happening? Although the company says most stores will remain open for the next few months, expect to notice changes before then. In a letter to vendors, the pharmacy chain said, “At this time, Rite Aid has generally stopped purchasing goods and services, except for those that it believes are essential to supporting this process.” Customers should also be aware that Rite Aid has posted a banner on its website stating that as of June 5, the company will no longer honor Rite Aid gift cards and wll no longer accept returns or exchanges.
Category:
E-Commerce
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