Startup Spotlight: Eat Counter

Welcome to The Modern Day Renaissance Man newsletter. I, Trey Layton, write about the things that interest me, often covering topics such as startups, sports, and entertainment. If you'd like to receive these newsletters directly in your email a few times a week, go ahead and subscribe to never miss an email!

Happy Wednesday, folks.

In case being the "I only listen to productivity podcasts" guy wasn't enough, now your least favorite colleague can inform you that they "only listen to productivity audiobooks on Spotify." The audio company rolled out a catalogue of 300K titles which can be purchased a la carte from the website (sticking it to Apple). No more excuses not to hit your reading goals.

In the market, participants have been taking the old "Patience is a virtue" adage to heart. Markets were 😐 prior to this morning's .75% Fed rate hike decision. Following?😿

The malaise extends to the private market, too. Apart from the massive check Adobe plans to write to acquire Figma (unless anyone wants to pitch in to up the $20B price tag?), the startup world has been slow. A crazy stat to illustrate? It has been a dry 240 days since the last "big" tech IPO (big = >$50M) in the US, the longest such cleanse since the dotcom bubble.

Despite the lack of headlines, founders are still working away on some really neat projects.

For instance, apart form Zuck, we all need to eat. He just has to recharge. Most of us want to do so in a healthier way. Unfortunately, it can be tough to do so. To start, it's time consuming. The last thing that anyone wants to do after a day of managing personal, familial, and professional responsibilities is go to the store to hand pick ingredients (and forget the one thing you really need) and then spend another 20 minutes preparing some baked chicken and rabbit food.

A variety of companies like Hello Fresh and EveryPlate offer meal prep delivery services so consumers can avoid the self checkout and deal with minimal prep time. The downside? The price tag.

More often, people turn to the affordable, convenient, yet notoriously processed and unhealthy alternatives in the frozen foods aisle of the local supermarket. From Kids Cuisines to Jimmy Deans, most of these are about as fake as the plastic wrapping they come in, and the nutritional profiles are less impressive than Rodrick Heffley's report card.

A few companies like Evol Foods, Tattooed Chef, and Sweet Earth have popped up in aisles offering healthier alternatives, the latter two focusing on plant-based foods, and consumers have validated their theses en route to each of these companies achieving $100M annual revenues in just a few years.

However, many consumers, particularly those in the fitness community, realize that while superior to prior options, these products are still not great from a macronutritional lens. 13G of protein is not enough for a brother in gainz shooting for 180G daily. Plus, most people aren't attempting to live plant-based lifestyles, and in reality, most plant-based meat alternatives are highly processed and less healthy than natural meat options.

Enter Counter, the macro-focused frozen food startup that fills the gap left unfilled in the convenient, affordable healthy meal market.

Counter checks all of the boxes that macro-conscious, active people are looking for:

• Great nutritional profiles (most at least 30G of protein with low fat)

• Convenient (unless you're too sore to press start on the microwave)

• Cheap (8.3% inflation is a bitch)

Counter has yet to stair master to stores, but the startup is already putting on quite a bit of mass in its online brand presence. Its Instagram account has already racked up 9 thousand followers, and it has influencers with 130K+ promoting its products before the goods have even launched. These ambassadors also fit the profile of Counter's ideal customer, so their large preexisting audiences are likely to be interested those interested in the same products. Establishing this strong network of customers that are passionate about fitness and nutrition and items helping them to pursue this before even rolling out to stores will likely set the company up for a strong head start in an industry which has already proven to be promising.

The team is hard at work and committed to perfecting the product (as opposed to the pure chalk that is eating most protein bars). In a chat with the founders, they mentioned that in addition to boasting a wide variety of foods across beloved categories (think pizza and burritos), they are also committed to improving the products they already have. Even after testing recipes for their pizza crust with dozens of pie experts, the team was unhappy with the taste, so they went back to the kitchen where they're continuing to experiment to provide all of that herby goodness with none of the spikes in blood sugar. Stuffed crust or we don't want it.

The team is also strong and experienced. Both cofounders have years of experience in the frozen foods industry in a well-respected company and made the decision to leave after recognizing the promise in this niche. Their expertise goes beyond Hot Pockets and Sausage Biscuits, folks.

The two biggest potential challenges to a company in this space are the number of competitors and the management of distribution channels. Take a journey down Aisle 11, and you'll see dozens of brands. Even in the "healthy" category, there are options like the brands I already mentioned and incumbent brands like Green Giant moving into the category. I believe that Counter differentiates itself enough from these competitors with its superior ingredient and macronutrient profiles in addition to its non-plant-based focus. It's proud claims to being "100% Not Vegan" help it to appeal to consumers who aren't vegetarian and are a bit tired of the "plant-based lifestyles are healthier" claims which truthfully aren't necessarily true.

Even if it can't differentiate itself (despite having arguably a bigger potential base AND a devoted existing community), the rapid growth and success of recent competitors, most experiencing 50%+ growth rates, suggests that the market can support more players. Even if it were just to match the numbers of these comparable companies, this is a sustainable business with massive potential in as few as five years.

Distribution channels pose a challenge for all consumer products, but the challenge grows even more impactful when dealing with the logistical issues associated with frozen foods. Shipping these meals directly to consumers would be expensive. The unit economics don't add up, and there would be almost no profit on this route. However, Counter is foregoing this route in favor of the higher margin retail and wholesale approach. They're actively in negotiations to get their product on shelves in the top chains in grocery where it will be easy for their existing customers to find their brand, and for new consumers to discover it.

Finally, I come back to the strength of the community. The term has been used to the point of obsolesce, but that's only because most brands don't actually have one. Think Peloton (pre-meltdown), Tesla, or Lululemon. These customers flaunt these brands like personality traits. I get the same vibes from the influencers posting healthy recipes and creating content for the brand before it has even launched. The ambassadors are responding to every comment and engaging actively with their audiences in a way that actually feels genuine. Those are the brands where community actually does provide that intangible boost rather than just being another square to mark off on the press BINGO card.

The industry is promising. The team is experienced. The community is strong (literally💪).

Bullish on Counter.

Cheers to another day,

Trey