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The baby care market is expected to reach $66.8 billion in the U.S. by 2017
Maybe it's because I moved to California a few years ago, or because I started shopping at Whole Foods, but I have definitely witnessed a shift in the mindset of how people think about the food they eat, and the products they use. People want things that are organic, and natural, rather than filled with chemicals and things they can't pronounce. A decade ago, organic might have been seen as a fad, now it's a huge part of the market.
That shift has led to a rise of startups catering to the natural-minded crowd, including Healthiest a company that has developed a process for curating natural products for personal care and for relief common and chronic health conditions.
The company, which won our Vator Splash LA competition in 2015, has just made its first acquisition, buying up 21Bundles, a monthly subscription service delivering a box of healthy products to new moms.
No financial terms of the deal are being disclosed, but Crystal Brown, CEO and founder of Healthiest, told me in an interview that the acquisition covers the company's assets. Going forward, 21Bundles will continue to operate under its current name, with the possibility of being rebranded under the Healthiest label at some point in the future.
21Bundles' two employees, including founder Jacqueline Cerone, will remain as advisers to Healthiest, but will not be coming over as part of the deal.
Brown said she first became aware of 21Bundles at Vator Splash, when Naveen Jain, the Chief Marketing Officer and Co-Founder of Immunity Project, who was emceeing the competition, introduced the two companies, seeing the connection between them.
"'They were looking for ways to grow their business, and find new channels, so he said, 'Let me introduce you to Healthiest.' At that time of their life they wanted to be part of something bigger," she said.
The two companies shared a common mission: to give customers access to healthy, natural products, making them a good fit to eventually merge.
"It was very clear that the founders had a similar mission to do the work to curate and healthy products and to make it easy for people to know what's healthy," she said. "The difference between us was that we were running our business in way that wasn't specific to products for new moms. But both businesses were going through the work to find that's truly healthy and scouring all product lines that meet our strict standards."
"Our mission when starting 21Bundles was to help educate pregnant and new moms about the importance of using healthy, toxin-free products and make it easy for them to discover those products. We couldn't be more excited to partner with Healthiest, as they clearly share the same mission but on a broader scale," Cerone told me.
Healthiest has already been providing some products for pregnant women and new moms, so this acquisition doesn't mean that the company is moving into an entirely new category. Rather, Brown sees it as a way to introduce potentially thousands of new customers to what Healthiest has to offer.
Currently, 21Bundles has a recurring subscription-base of around 200 a month, sometimes as as high as 500, and, together, Healthiest and 21Bundles will have at least 350 monthly subscribers this month. More importantly, 21Bundles also has roughly 3,000 subscribers who have "termed out," meaning that they had once purchased from the company, but have since fallen by the wayside’.
Those thousands of one-time users highlight the other big difference between the two companies: subscribers to 21Bundles could only get their products in a bundle, whereas Healthiest subscribers are able to order items individually, as they need them. That could be the big factor in getting those termed out customers to come back, who perhaps don't necessarily want to always have to order other items to get what they need.
"We can offer those subscribers a lifelong relationship, no matter where they are," said Brown. "We found that our customers always need products, whether it be toothpaste, deodorant, something for pain or sleep, they order it continuously, stocking their medicine cabinet monthly. That is especially true of new moms."
There's another reason for Healthiest to buy 21 Bundles: the sheer size of the baby care market, which is expected to increase its total sales to $66.8 billion in the U.S. by 2017. The baby care market was worth $44.7 billion 2011.
"There's a growing trend of interest toward honest and natural products. There are small companies that are billion dollar businesses in the making. We already know that personal care is a $300 billion a year industry, and the more exposure and awareness of harmful chemicals consumer gets, the more they are searching for that answer," Brown said.
"We're seeing huge interest in 21Bundles and Healthiest, and I think the market is ours for the taking. We are going to really start to see the shift in the industry and consumer choice."
Founded in 2015, Healthiest partners with honest vendors to curate the highest quality natural products that support organic, fair-trade, sustainable practices in eco-friendly packaging whenever possible.
"Our vendor partners are particularly excited about this merger. The vendors have product they are dying to get out to market, and they're looking for new audiences. We have 75 vendor partners, and they excited to grow to this market," said Brown.
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Joined Vator on
We all need that friend. You know the one, who always gives great advice, suggests the healthiest products and freshest trends. Don't you wish they were around when you needed them? Like when you're shopping online? Well, now they are. Healthiest Helper is your Amazon friend. Sharing the healthiest options with you while you shop.
Joined Vator onI have spent my career focusing on both for-profit companies and non-profit organizations at the start-up and growth phase in the areas of strategy, management, operations, finance, business development and relationship building.
Joined Vator onNaveen Jain is the Chief Marketing Officer and Co-Founder of Immunity Project, a Y Combinator (W14) backed, non-profit dedicated to developing an HIV vaccine and distributing it worldwide for free.