Tech Marketers See Opportunity in Fashion Startups

Emma Jacobs reported yesterday at The Financial Times Online that, “Luckily for [Michael Malinsky, co-founder and chief executive of KF Beauty which owns the Wunderbrow product], the perfectly arched brow is a dream pursued by legions of others. Wunderbrow’s Instagram feed is a steady stream of so-called influencers, such as Amadea Dashurie who has 620,000 followers, and CC Clarke with 780,000. Then there are the YouTube stars like GlamLifeGuru, with 2.5m subscribers and Roxxsaurus, with 1.6m. They command the attention of the right demographic, influencing the buying decisions of Wunderbrow’s target audience: teenagers and impeccably made-up young women getting ready for a night out. Many demonstrate the art of the brow groom with enthusiasm, applying the Wunderbrow with a mascara wand.

Big eyebrows as big business is a relatively recent phenomenon, driven by social media. As befits such a market, perhaps,  Mr Malinsky, does not have a background in beauty or fashion but in internet marketing. Pull the curtain aside on this beauty start-up, and what you see is essentially a tech marketing business — albeit one that now sells its products at traditional retailers, such as Boots and CVS. Since 2015 the company has sold 2m brow enhancer kits — eight times more sales in 2016 than the year before. Last year, Mr Malinsky and his 10 employees moved from central London into the Shard skyscraper, just south of the River Thames. Today, there are 35 London employees. There is also a small team in Miami, Florida.”

The FT article explained that, “Charlotte Libby, global colour cosmetics and fragrance analyst at Mintel, the market research company, traces the turning point for brows to 2012. The market was partly fuelled by make-up experts on YouTube and Instagram, bringing professional beauty tips to a wide audience. But perhaps more important were the aesthetic demands of selfies. ‘When you view your face through a lens, then fuller brows frame it,’ she says. This is more than just another fashion trend. ‘It’s about defining a facial feature for Instagram.'”

Ms. Jacobs noted that, “Start-ups like Mr Malinsky’s jostle with large cosmetics companies, such as Estée Lauder and the LVMH-owned Benefit. Legions of high street brow bars offer treatments designed to wax, thread, colour and sculpt the furriest of features. Mr Malinsky is relaxed about the competition, insisting it helps to build the eyebrow category. ‘They’re creating a bigger pie for us to potentially have a bigger piece,’ he says.”

Yesterday’s article added that, “‘When done effectively [online marketing] can yield a very high margin, at very little upfront investment as you do not need to have inventory, support or any equipment,’ [Malinsky] says. ‘The downside is you are ultimately building someone else’s business.'”

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Iowa Bill that Limits Livestock Nuisance Lawsuits, Goes to Governor

James Q. Lynch reported yesterday at the Quad City Times Online that, “Legislation that backers say will protect farmers — large and small — from nuisance lawsuits is on its way to the governor.

“By a 60-39 vote, the Iowa House on Wednesday approved Senate File 447 to allow for an affirmative defense to be raised in certain cases in which an animal feeding operation is claimed to be a public or private nuisance or to otherwise interfere with a person’s comfortable use and enjoyment of life or property, House Judiciary Committee Chairman Chip Baltimore, R-Boone, said.”

Recall that the Iowa Senate passed this measure earlier this month.

Mr. Lynch explained that, “Critics said the bill would reduce local control, provide confined animal livestock operations favorable legal protection and erode the legal rights of rural residents by capping special damages at one-and-a-half times other damages.

“Baltimore argued, however, the bill would encourage livestock operators ‘to act in a responsible manner especially when we are talking about things like water quality.'”

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U.S. Honey Production Up, USDA Report Says

An update this week from the U.S. Department of Agriculture’s National Agricultural Statistics Service (NASS) stated that, “United States honey production in 2016 from producers with five or more colonies totaled 162 million pounds,up 3 percent from 2015. There were 2.78 million colonies from which honey was harvested in 2016, up 4 percent from 2015. Yield of honey harvested per colony averaged 58.3 pounds, down 1 percent from the 58.9 pounds in 2015.”

The NASS update noted that, “Producer honey stocks were 41.3 million pounds on December 15, 2016, down 2 percent from a year earlier. Stocks held by producers exclude those held under the commodity loan program.”

United States honey production in 2016 from producers with less than five colonies totaled 766 thousand pounds, up 6 percent from 2015. There were 24 thousand colonies from which honey was harvested in 2016, up 4 percent from 2015,” the report said.

The NASS report added that, “United States honey prices decreased during 2016 to 207.5 cents per pound, down slightly from 208.3 cents per pound in 2015.”

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Free Seminar Available on Agri-Tourism

A recent update from University of Illinois Extension indicated that, “University of Illinois Extension Unit 18 is hosting a series of free seminars this winter to help local specialty food business owners achieve success. The seminars will be held the second Monday of each month starting in January and ending in May. The seminars are free and the public is invited to attend any or all of the seminars they choose. The classes will be available at both the Christian County and Montgomery County Extension offices.”

The update noted that an Agri-Tourism seminar will be held on  Monday, April 10, 2017 (1-3 pm).

“April’s topic will be a panel discussion, representatives from Illinois South Tourism will be part of the discussion,” the update said.

The Extension item added that, “There is no cost to attend the seminars, however advanced registration is required. Participants may register on-line by clickign the ‘Register Here‘ links under each topic or by calling either the Christian County Extension office in Taylorville at 217-287-7246 or the Montgomery County Extension office in Hillsboro at 217-532-3941.”

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University of Nebraska Extension: “A Checklist for Farm/Ranch Debt Workout”

A recent update from University of Nebraska Extension by J. David Aiken indicated that, “Some Nebraska producers may be feeling a financial crunch and considering some unfamiliar options to manage their debt. For those negotiating a workout agreement with their creditor or creditors to restructure debt under challenging financial circumstances, consider the points to consider and recommendations.”

The extension update pointed to the following suggestions (full details here):

  • Get Outside Financial Advice
  • Consider a Debt-Restructuring Option (“If one objective of your workout agreement is to continue receiving operating credit, the agreement should specify how much annual debt reduction is required in order to qualify for continued operating financing. And you need to be able to reasonably generate sufficient income to meet the annual debt reduction requirements.”)
  • If Adding a Cosigner, There Are Steps To Consider

The update also noted that, “If the workout agreement includes the sale of property or turning property over to creditors, you need to consult with your tax advisor regarding capital gains tax, and debt forgiveness income. Also, if you voluntarily turn property over to the creditor, negotiate for a deficiency judgment waiver so if any unpaid debt remains, that loan deficiency is forgiven.

Negotiating a debt workout agreement is challenging. This checklist can help you work with your financial advisors to assess your options. If you do negotiate a workout agreement, get it in writing and have it reviewed by an attorney before you sign it.”

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Commercial Real Estate Expensive, But Some Investors See Opportunity

Bloomberg writer Wes Goodman reported on Monday that, “Federal Reserve officials say U.S. commercial real estate is expensive. That isn’t stopping the world’s biggest money manager from saying it’s time to buy.

“BlackRock Inc. says property can deliver average yields of 3.5 percent, compared with 3.4 percent for U.S. investment-grade bonds and the S&P 500 Index’s dividend yield of 2 percent. Demand is spreading as far as Asia, where Mirae Asset Securities Co. is buying U.S. real estate, including some of the Seattle buildings that house Inc.”

The Bloomberg article noted that, “Property prices have risen enough that Fed Chair Janet Yellen is taking note. Commercial real estate is ‘high,’ she said in January.”

Mr. Goodman added that, “Fed rate hikes are a sign of improving economic growth that will support property prices, said Park Sungjin, the head of principal investment in Seoul at Mirae Asset Securities, which oversees $8 billion. Last year, his company also bought the buildings that house State Farm Life Insurance Co. in Texas, Park said.”

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Startups Fail to Beat the Car Salesman; Now Catering to Them

Bloomberg writer Gabrielle Coppola reported yesterday that, “The auto dealer — around for more than a century and viewed almost as negatively as members of Congress — looked like a ripe target for disruption when retailing moved online. Now that startups have tried and failed to beat the car salesman, many are taking a different route: catering to them.

“After watching predecessors like TrueCar Inc. and Ford Motor Co. stumble in their attempts to bring more Amazon-like e-commerce to car shopping, a new wave of auto finance upstarts has emerged. Rather than fight a dispersed and politically-connected dealer industry, they’re bringing the country’s 17,000 new-car dealers into the digital age, meaning consumers aren’t going to be bypassing the dealership to buy new rides anytime soon.”

The article noted that, “‘The market is so big that there’s nothing preventing someone from creating a new dealership model, but I want to go after the biggest part of the pie, which is how consumers buy cars today,’ said Kevin Singerman, founder of AutoFi, a two-year-old San Francisco-based startup that began piloting its financing software with Ford dealerships this winter. ‘That’s a much more attractive opportunity.’

“Almost 20 years after the internet brought price transparency to the U.S.’s almost $1 trillion-a-year new car sales market, several steps of the shopping process have migrated online. But as buyers turn to Kelley Blue Book and for price comparisons and Consumer Reports for model reviews, they remain unable to finish the car-buying process without a visit to the dealer. The average consumer visited about 2.8 dealerships before buying a car in 2016, compared to 3.5 in 2012, according to JD Power & Associates.”

Ms. Coppola explained that, “AutoGravity makes a ‘white label’ version of its app that dealers can roll out with their own branding. It allows shoppers to pick a car, find a dealer and apply for credit approval all from their couch. AutoFi’s software — which it sells to dealers — also lets shoppers apply for financing from their phone before going into a dealership to sign the paperwork. Both make money by charging dealers and lenders a fee once a sale goes through.

“‘It feels nice being able to go through the loan process without having to dress up and go down to either a bank or heaven forbid the dealership,’ one AutoGravity user, Justin Turpin, wrote in a review on the Google Play app store. ‘Of course once you do get the loan you have to put your pants on to get the car.'”

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Skim Milk is “Skim Milk,” Not “Imitation” Skim Milk- Court Says

Associated Press writer Brendan Farrington reported yesterday that, “A small, all-natural diary isn’t being deceptive when it calls it’s skim milk ‘skim milk,’ a federal appeals court ruled Monday in a victory for the creamery that’s fighting the state’s demand to label the product ‘imitation’ because vitamins aren’t added to it.

“The ruling overturns a decision last March when a federal judge sided with the Florida Department of Agriculture, which said the Ocheesee Creamery couldn’t label it’s skim milk ‘skim milk’ because the state defines the product as skim milk with Vitamin A added. The state instead said if the creamery wanted to sell the product, it should label it as ‘imitation’ skim milk.

“But that didn’t sit well with a dairy whose whole philosophy is to not add ingredients to natural products. So instead of complying, the creamery has dumped thousands of gallons of skim milk down the drain rather than label it as an imitation milk product.”

The AP article noted that, “The court said the state disregarded far less restrictive and more precise ways of labeling the product, ‘for example, allowing skim milk to be called what it is and merely requiring a disclosure that it lacks vitamin A.'”

The dictionary definition of skim milk is simply milk with the cream removed. But the Department of Agriculture says under state and federal law, skim milk can’t be sold as skim milk unless vitamins in the milk fat are replaced so it has the same nutritional value as whole milk,” the article said.

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Reforms Saved Craft Alcohol Industry $15M, New York Governor Says

An Associated Press article from earlier this month reported that, “New York’s craft beer, wine, cider and liquor manufactures have saved nearly $15 million since a series of regulatory reforms and incentives were put in place in an effort to boost the industry.

“Democratic Gov. Andrew Cuomo announced the results on [March 8th].

“He says the savings followed the state’s decision to expand a production tax credit and cut a labeling fee. The reforms started in 2012.”

More specifically, a news release from Gov. Cuomo’s office indicated that, “Reforms to the Beer Production Tax Credit to include the wine, spirits and cider industries, have saved producers $12 million since 2012, and legislation exempting small beer, cider, and spirits manufacturers from brand label registration fees has resulted in more than $2.2 million in savings for small producers since enactment in 2013.

“In addition, at New York State’s first Wine, Beer and Spirits Summit in 2012, Governor Cuomo directed the State Liquor Authority to cut the fees for marketing permits in half, from $250 to $125, resulting in more than $154,000 in savings since 2012. Marketing permits allow craft manufacturers to conduct tastings and sales at off-site locations, including fairs, street festivals, and farmers markets.”

The release added that, “Acting Commissioner of Taxation and Finance Nonie Manion said, ‘The tax incentives put in place by Governor Cuomo have helped the craft beverage industry thrive statewide, promoting economic vitality and creating new jobs.'”

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Startup Creates World’s First Chicken Strips From Self-Reproducing Cells

Wall Street Journal writer Jacob Bunge reported last week that, “A Bay Area food-technology startup says it has created the world’s first chicken strips grown from self-reproducing cells without so much as ruffling a feather.

“And the product pretty much tastes like chicken, according to people who were offered samples Tuesday in San Francisco, before Memphis Meats Inc.’s formal unveiling on Wednesday.

“Scientists, startups and animal-welfare activists believe the new product could help to revolutionize the roughly $200 billion U.S. meat industry. Their goal: Replace billions of cattle, hogs and chickens with animal meat they say can be grown more efficiently and humanely in stainless-steel bioreactor tanks.”

Graph from The Wall Street Journal.

The Journal article explained that, “Startups including Memphis Meats and Mosa Meat, based in the Netherlands, have been pursuing the concept. They call it ‘clean meat,’ a spin on ‘clean energy,’ and they argue the technique would help the food industry avoid the costs of grain, water and waste-disposal associated with livestock. Scientists from those companies have already produced beef, grown from bovine cells and made into a burger and a meatball. Until now, chicken hasn’t been produced using the method.

Big meat companies have taken notice. Tyson Foods Inc., the largest U.S. meat company by sales, launched a venture-capital fund in December that it says could invest in meat grown cell-by-cell. Kevin Myers, head of product development for Hormel Foods Corp., last fall called the startups’ research into the cultured-meat technology ‘a good long-term proposition.'”

Mr. Bunge added that, “Some who sampled the strip—breaded, deep-fried and spongier than a whole chicken breast—said it nearly nailed the flavor of the traditional variety. Their verdict: They would eat it again.”

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