Case Study: Subscription Foods
Engagement Overview
Fulcrum Consulting Group was engaged by a buyout client considering an investment in a high growth B2C subscription protein business.
Client
Private Equity Buyout
Engagement
Market Diligence
Industry
Food & Beverage
Target Company
Subscription Protein Delivery
Key Diligence Issues
In order to inform deal team understanding of business risks and opportunities, the project scope included a market assessment and voice of the customer study with the following areas of focus:
Market Assessment: Analyze the total addressable market for the business, with a focus on understanding the core opportunity for a premium priced delivery segment within the larger commodity protein market.
Company Assessment: Collect and analyze customer feedback to evaluate key performance indicators (e.g., NPS), understand the impact of the COVID-19 pandemic on customer acquisition and retention, and capture customer base demography. Determine if the company would be able to sustain its growth rate.
Competitive Assessment: Profile the players within the subscription protein market and determine competitive positioning. Develop case studies of other subscription food businesses (e.g., meal kits).
Approach
Fulcrum crafted and deployed an online survey instrument tailored to current and former customer audiences. Successful engagement of the management team as an active partner in the work allowed the survey to add value to the existing business leaders, while also addressing the needs of the deal team. A sample of ~1,500 current and former customers was gathered in a matter of days.
In addition to the customer survey efforts, Fulcrum conducted extensive desktop research and analysis on consumer trends, market dynamics, and the competitive landscape.
Fulcrum communicated with our client frequently to discuss findings and adjust focus. Fulcrum delivered a formal substantive update midway through the project and a final report within deal timeframe constraints.
Impact
A key consideration for the client was understanding the relationship between robust recent growth for the business and the COVID-19 pandemic, and the extent to which churn would increase with the easing of lockdowns and proliferation of vaccines.
Although not detailed in the original scope of work, Fulcrum delivered a scenario-based customer retention forecast for the business. The analysis overlayed data from the customer survey with historical churn information for the business. The findings revealed not only the drivers of recent business growth, but also expectations going forward.
In grappling with the ongoing pandemic related uncertainty, decision makers need to ground investment and strategic decisions in data. Get in touch to learn how Fulcrum Consulting Group can support your team.