By Rachel Brown. This article originally appeared on Beauty Independent on May 2, 2019.
For Needed, Instagram flash isn’t enough.
The new supplement brand has reeled in $2.15 million in seed funding from investors including Sekhmet Ventures, Able Partners and Finn Capital Partners. In a buzzy category, it’s out to back up style (its seafoam green signature color and lowercase logo completed with a period are certainly stylish) with substance. Needed partners with the firm Bio-Up Mimetic Technologies Inc. on a clinically-studied liposomal system to improve absorption of the nutrients it’s providing, and pursues a two-pronged distribution strategy selling through health and wellness practitioners like naturopaths, doulas, nutritionists and health coaches, and directly to consumers.
“Needed is a nutrition company that emphasizes a better approach to making supplements that work in the body by being recognized as food, replicating the way nature delivers nutrients,” says Julie Sawaya, who founded Los Angeles-based Needed with Ryan Woodbury. “We have a community where we bring together health and wellness practitioners to talk about what’s needed for health broadly, encompassing nutritional and emotional health, and we emphasize what is really needed at each stage of life.”
Barbara Paldus, founder partner of Sekhmet Ventures, was drawn to the clinical data Needed has amassed to corroborate the efficacy of its product. She says, “In a supplement space where there’s a total lack of transparency and a lot of marketing, the company has a depth of technology, science and intellectual property that is very, very unique.” On top of third-party lab analysis of its ingredients, manufacturing and finished goods, Needed tests every supplement batch to ensure quality.
Sawaya and Woodbury met in 2015 while they were attending Stanford University Graduate School of Business. The then neighbors bonded over a shared interest in the nutrition field. As they examined the trendy supplement category, they noticed offerings in the general consumer channel that had palatable supplement formats (e.g., gummies), but suspect performance, and supplements in the professional practitioner channel with superior performance, but formats that were wanting (e.g., huge fish oil capsules). They believed a brand could bridge the gap.
Needed’s Omega-3 Liposomal Powder comes in a box of 30 packets for daily use that’s priced from $50 to $75 depending on dosage. The vegan powder can be mixed into food or drinks. The omega-3’s source is sustainable microalgae, and the other five ingredients in the powder are sunflower lecithin, a dash of sugar, and rice dextrin, fiber and flour. Needed’s liposomal delivery system masks the taste of the microalgae. Sawaya and Woodbury say the powder is virtually tasteless, but the sunflower lecithin can impart a slight nutty flavor.
“Needed is a nutrition company that emphasizes a better approach to making supplements that work in the body by being recognized as food, replicating the way nature delivers nutrients.”
Needed is starting with omega-3 for personal and market reasons. Both Sawaya and Woodbury have suffered from a dearth of omega-3, and they’re not alone. In conversations with practitioners and consumers, the pair learned omega-3 deficiencies are a widespread problem. They learned people are often short on vitamin D, too, and Needed will address vitamin D deficiencies next.
Talking about omega-3, Woodbury says, “The ability to get it from diet isn’t that great, and the alternatives from a supplement perspective aren’t really that great. You think of a lousy big fish oil pill, which is unpleasant to taste and not the easiest to break down in your body. There was an opportunity to meet the need while showcasing this interesting liposomal technology. Our powder is so different from a fish oil pill, and it’s easy for a consumer to understand.”
Sawaya describes Needed’s core customer as a mom or soon-to-be mom turning to supplements to fortify her health. Harnessing the expertise of practitioners, it’s developing supplements for that core customer as she crosses various milestones. For example, its forthcoming supplements are expected to respond to fertility and postpartum concerns as well as the nutrition demands of young children. A multivitamin is in the product pipeline.
In Needed’s professional distribution model, practitioners provide codes to their clients to input with online purchases of the brand’s powder to receive 15% of the purchase amounts. Kicking off with a network of around 50 practitioners, Needed projects it will reach $3 million in revenues in its first year on the market. Beyond practitioners and its digital footprint, it’s open to retail. Sawaya says, “Building a brand solely online is potentially not fully serving our customer.”
“Consumers are increasingly waking up to the fact that most of the products in this category have no underlying product differentiation, and the brands that are going to win are going to put the emphasis on product differentiation and proving that the products work.”
As they build their brand, Sawaya and Woodbury aren’t driven by sales alone. Rather than being set up as a S corporation or limited liability company, Needed is set up as a public-benefit corporation (PBC). Woodbury explains, “What it means is that our mission is baked into the organizational structure. At a board level, we are not just tasked with maximizing shareholder returns, although that is a priority, but the mission of improving access to better nutrition products, education and community sits there alongside of that.”
Paldus calls Needed’s PBC status “a badge of honor.” “This generation of new companies coming out in the beauty and wellness space have an opportunity to change the dynamics of corporations,” she says. “This [PBC] structure is particularly appealing because there’s a commitment by the company from day one to act in a socially-responsible manner.” Needed anticipates achieving B Corporation certification in the future.
In the crowded supplement category filled with well-funded players (Ritual, Care/of, Vital Proteins and Hum Nutrition have raised $41.5 million, $42.2 million, $25.5 million and $20 million, respectively), Sawaya and Woodbury argue consumers initiated into the practice of taking vitamin by snazzy startups will become more discerning over time. They contend Needed is positioned to gain supplement consumers in the discerning ranks.
“Consumers are increasingly waking up to the fact that most of the products in this category have no underlying product differentiation, and the brands that are going to win are going to put the emphasis on product differentiation and proving that the products work,” says Sawaya, adding, “We emphasize that we are not white-labeling products, but formulating them from scratch and making them from the ground up.”