Mergers & Acquisitions: Kellogg’s is buying the Chicago Bar Company, the maker of the popular RXBAR, for $600 million. Some quick thoughts:
-This company is only 5 years old and is worth $600 million. That may not turn any heads in the tech industry but this is a nutrition company. Kellogg’s expects the company to post “net sales of about $120 million in 2017”. That means that Kellogg’s paid a 5X multiple on sales! They must be anticipating a lot of growth in this sector since that is much higher than industry averages. Health & wellness is a growth industry these days.
-Kellogg’s said that “Chicago Bar Co will continue to operate independently after the deal”. I hope this to mean that Kellogg’s won’t repeat the mistakes it made with Kashi, one of which was moving the company to Battle Creek. CEO seems confident that this is the case:
After moving Kashi's operations from Southern California to Kellogg's headquarters in Battle Creek, Mich., executives realized they were hurting Kashi's brand identity and move it back to the West Coast.
"Kellogg learned some lessons with Kashi. We won't compromise our values, " RXBAR co-Founder and Chief Executive Peter Rahal said.
Mr. Rahal said his company will continue running its business as a separate unit out of Chicago, but will benefit from Kellogg's distribution, research and development capabilities. Mr. Rahal said he wants Kellogg to help his brand grow beyond protein bars and sell his products in more schools, hospitals and hotels.
-As a fan of RXBARs, the ideal scenario is that Kellogg’s basically leaves the company alone but allows it to tap into the resources it needs to continue to grow. This seems do-able in the case of RXBAR but as Kellogg’s continues to acquire more health-focused companies, will there come a point where senior leadership feels pressured to get everyone under one roof? Hopefully not.
-Let’s not forget that RXBAR is part of the CrossFit ecosystem. The name is a clear nod to doing WOD’s as RX’ed and its first customer was a box in Chicago. This is a huge success story for that ecosystem. I’m a little surprised that CrossFit Inc. doesn’t make a bigger deal about this stuff.
Teeth, Shoes & Watch: Functional Fitness can do wondrous things for your body. But is it bad for your teeth? From BarBend:
Decked out in “I work at a CrossFit box” gear (think: leggings, lifting tank, and Nano’s) I laid down in the chair and opened up my mouth for the Dentist who, noticing my shirt, said, “I see a lot of [strength] athletes who come in with similar tooth damage.” If the man hadn’t been knuckle-deep in my mouth, I likely would have rolled my eyes, but he continues, “All the gritting and teeth-grinding you guys do while lifting is causing holes like this one.”
I have been wearing a mouth guard in the gym for several years now. I kept breaking some of the bonding on my teeth so my dentist made me a mouth guard. Obviously, I have a tendency to clench my jaw and grind my teeth while I am lifting but I am not an anomaly:
It’s a natural tendency to clench your teeth when you’re lifting weights, explains Coronato. All that pressure can wear down the enamel on your teeth, and even crack them causing tiny holes like the one I had in my tooth. The holes can quickly fill with hard-to-get-out food, which turns the once harmless hole into a full-blown cavity, she adds.
Your fix? “If you bite down and grind on your teeth while you weight lift, consider wearing a mouthguard to keep from getting holes in your teeth,” says Coronato.
Get a mouth guard. It will protect your teeth and I won’t feel like such a weirdo when I talk to people in the gym.
Re-Branding: Bikram Yoga has an image problem. Its founder, Bikram Choudhury, is embroiled in a sexual harassment scandal and has fled the country in order to evade a court order to pay a victim almost $7 million. Mr. Choudhury’s authoritarian style also infused the culture of Bikram Yoga. From the New York Post:
Jo Piazza, co-author of “Fitness Junkie,” a new novel that fictionalizes the city’s wellness-obsessed, says she isn’t surprised by the change.
“To be honest, Bikram feels so 2013,” she tells The Post.
“Bikram became synonymous with an almost militant style of yoga that just isn’t in vogue anymore,” Piazza says. “Today’s fitness junkies, particularly millennials, want their workout to be an authentic ‘experience’ of self-care.”
In response, some franchisees have decided that they would be better off on their own.
When the founders of Bikram Yoga NYC opened the first Bikram studio in the city on Aug. 7, 1999, few New Yorkers had heard of the hot-yoga practice. Eighteen years and four studios later, they know too much.
With its customers turning to new, trendy exercise classes — and the larger-than-life founder of the yoga practice, Bikram Choudhury, on the lam after being charged with sexual harassment — its owners are ditching the Bikram name and offering a new slate of more millennial-friendly class options.
Does the average yogi know about the Bikram Choudhury scandal? Probably not, it hasn’t gotten a ton of press coverage. But would the average yogi care if they found out about it? Yes, I am sure that they would. There is still time for studios to get ahead of this story and that is the smart move here.
Who wants a $875 gym bag?: Greg Glassman likes to brag that the mainstream business world doesn’t get him or that it would never build a company in the manner that he built CrossFit. I can’t argue with him there but that doesn’t mean that every unconventional move is a great idea either. Case in point: CrossFit is partnering with SaddleBack Bags to release a line of CrossFit-branded merchandise. What is SaddleBack Bags? They manufacture high-end leather bags and other fine leather goods. What does that have to with fitness? As far as I can tell, nothing at all.
The risk of a move like this is that you’re over-extending your brand. People expect CrossFit to be an authority on fitness, wellness, and nutrition. People don’t expect CrossFit to be an authority on fine leather goods. The Reebok deal makes perfect sense. This deal can feel like a money grab and hurt your brand’s credibility. The thing is that I don’t think that this is a money grab. I think that CrossFit’s senior leadership just really likes SaddleBack Bags. The problem is that they don’t know where they end and the CrossFit brand begins. Kind of like how Dave Castro awarded handguns to the winners of the 2016 CrossFit Games. It was a strange move because it was unnecessarily controversial and had nothing to do with fitness. It only makes sense when you consider that Dave Castro, the Director of the Games, is a former Navy SEAL and firearms enthusiast whose personal logo consists of a barbell, a dumbbell, and a gun. Dave Castro likes guns so therefore the CrossFit Games likes guns.
At least, high-end leather bags are not at the center of one of the most contentious political battles in our nation’s history. If you want to see the kind of partnerships that CrossFit should be involved in: some of the top Games athletes paid a visit to Trek HQ in Madison.
Environment Matters: The Evening Standard published an article on the “extreme conditions” that many fitness studios are employing to make workouts more challenging. First up, hot yoga:
“We wanted to provide a yoga experience that provided the workout quality of a cardio class,” explains Jamal Kurdi, the trainer who devised the concept and leads my class. “One that would make you sweat, really work your muscles and give you a good workout.” That it does. Unlike regular yoga classes, this one is, as Kurdi emphasises, “perfect for cardio junkies who love a high-energy, result-driven workout”.
And the reasoning for the heat, which is provided by infrared sensors in the studios? To “provide a better cardiovascular exercise and deliver a high-calorie burn, while maximising flexibility”. Certainly, I am exhausted afterwards, and I sink two 500ml bottles of water before I can make it to the showers.
Turning up the heat doesn’t make for a better cardio workout or burn more calories. It makes you sweat more which makes people think that they worked harder. Next up: blindfolds:
Meanwhile, Gymbox’s hero offering for autumn is Blackout: participants put blindfolds on before they start performing functional training moves (such as squat thrusts holding medicine balls). It’s a leap of faith going to an exercise class in the first place, let alone closing your eyes and trusting someone won’t drop a dumbbell on your toe.
“Research has shown that blindfolding does not disrupt motor activities,” assures Nima Jam, an instructor at Gymbox. “On the contrary, it has been found that exercises are performed with greater precision and stability when the eyes are closed or in darkness. We remember body position, joint angles, the degree of muscular tension, the amplitude of movement and movement patterns best with our eyes closed.
This is great. It’s the opposite of lifting in front of the mirror. Last but not least: simulated altitude training:
And throughout September, Third Space Soho invited members to enter its hypoxic chamber — a low-oxygen room that mimics the conditions of altitude — and climb 800ft on a VersaClimber, cycle 1.5km on a watt bike, complete a 50m Skillmill sled push and run 1km on a treadmill set at a two per cent incline. You’d be gasping for breath even if it didn’t all take place at high altitude.
Please don’t waste your time with this. Living at sea-level and training in altitude conditions is the opposite of what you want to do. Your workout is already strenuous. Reducing the oxygen available to breathe only means that you do less work. It doesn’t make you any fitter. Elite endurance athletes figured this out years ago. The maxim is “Train Low, Live High”. The benefits of altitude come from living at altitude. That way your body has to learn to become more efficient at oxygen consumption when you’re at rest. That’s why you see runners who live in Big Bear and drive down to Riverside to do their track workouts. Or they live at sea-level and sleep in hypoxia tents. Nike even created an “altitude house” for some Olympic hopefuls.
Going Digital: Gold’s Gym is launching a fitness app called Amp:
The service, which costs $9.99 monthly, offers members and non-members of the gym hundreds of trainer-led workouts. These workouts are spread across 10 different exercise modalities, and range from six to 60 minutes long.
According to Gold’s Gym, Amp is the first and only digital coaching platform launched by a brick-and-mortar health club brand.
It may be the first but it won’t be the last. I’ll be interested to see how this turns out. The skills needed to run a brick and mortar gym business are very different from the skills needed to run an online content business. But a large chain like Gold’s has a lot of experience that it can call upon. The smartest thing that Gold’s can do is run Amp completely separate from its core business. Treat it like a startup. And never, ever worry that Amp is cannibalizing the brick and mortar gyms. The CIO seems like he wants to go down that path:
Gold’s Gym’s decision to expand beyond its physical locations reflects a shifting focus in the industry, Zeitsiff explained, as there are no shortage of convenient digital fitness services — such as the virtual fitness network app ClassPass, which received $70 million in June, and the launch of Gixo's live workout app and funding announcement just a few weeks before. Amp was developed to ensure, in Zeitsiff’s words, that the gym chain would not become the fitness industry’s equivalent of Blockbuster Video.
“If you look at the fitness industry today, fitness industry club members or studio members are looking for the utmost flexibility in their workout routine,” he said. “There’s a number of new technologies, disruptive services, and fitness apps that have been out there and they’re finding ways to fulfill consumer need. As health club operators — not just us, but [others too] — we’re finding that these technologies and services are kind of disintermediating our members and our clubs, and we don’t want to do that.”
The comparison to Blockbuster is interesting even though I don’t see brick and mortar gyms going away. I am also curious what he considers to be a “disruptive service” in the fitness industry.
-Step inside the life of a fitness model
-Good interview with the CEO of SoulCycle
-Fast fashion comes to athletic apparel
-Meanwhile in China
-The new Apple Watch should be a hit with runners