Investing in the Future of Consumer Goods: Aesthetic, Community-Driven Brands with Global Ambitions

In the realm of consumer goods, the fusion of aesthetics and functionality presents a wealth of untapped potential, awaiting exploration by savvy investors.

In this article, we explore the strategic investment potential of consumer goods that seamlessly blend aesthetics and functionality. By examining three Italian beauty companies, we uncover the key ingredients behind their success, scalability, and ability to attract investor partnerships.

Passione Unghie

Passione Unghie is a leading Italian nail polish and nail care company with a 'start small, scale fast' mindset. Founded in September 2014, it began as an online store based in Vicenza, Italy, with a primary focus on UV-based nail art products. Its success stems from a combination of it's innovative approaches to nail care and strategic moves, resulting in remarkable growth:

• E-commerce and going DTC: Its user-friendly website launched with a range of products sold directly to consumers; offering products that were otherwise only available to salons. Women could buy professional semipermanent nail polish in endless colors from the comfort of their living room, all while being entertained with videos and tips. The addition of value-added content to the site was a part of a strategy that helped maintain that initial interest, increase engagement, and kick-off the loyalty lifecycle.

Image From Passione Unghie on Instagram, @passioneunghieoffical

• Clever DTC Marketing Strategy: The brand has also demonstrated a deep understanding of leveraging social media attention, forging numerous influencer partnerships since day 1. The move allowed Passione Unghie to achieve a massive reach, putting the brand in the spotlight and capturing the attention of millions. One of these collaborations happened to be with the leading Italian influencer - Chiara Ferragni, who created momentum for the brand during Sanremo 2023 Music Festival (pretty much the music event of the year in Italy). While traditional nail care companies would focus mostly on trade marketing, Passione Unghie took a different path and ultimately managed to successfully integrate both B2B and B2C approaches in scaling the business.

• Partnering with Private Equity: A pivotal moment in Passione Unghie's journey was being acquired by first - Orienta Capital Partners, and later in 2022 by Trilantic Europe, a prominent pan-European private equity investor. They understood that there comes a time in every brand's life when it needs an external push to go to the next level, and so they did just that.

By leveraging these key success factors, the brand has successfully established itself as a leading player in the nail care industry, with a substantial global presence and a promising trajectory for future growth and expansion.

Vera Lab

Continuing within the Italian beauty sphere, Vera Lab is a Milan-based cosmetics and skincare brand that took a different path than Passione Unghie. Originally created as a product line for the founder's clinic, it quickly found massive success online, leading to the opening of its own vibrant, pink flagship store in Milan. Vera Lab's success can be attributed to its keen understanding of emerging consumer desires and an ingenious marketing strategy.

• Influencer Founder: Vera Lab was founded by influencer Cristina Fogazzi, who launched @Estetistacinica (1M followers on Instagram) and became a trailblazer with her account dedicated to providing professional beauty advice for all women. This complementary account to @VeraLab played a crucial role in establishing her credibility in the beauty industry, attracting a loyal following, and building strong brand awareness. This unique path gave Vera Lab a distinct advantage, as Fogazzi's personal brand and expertise as an esthetician are infused into each product and the brand’s personalized approach to beauty care. Leveraging its social media success, Vera Lab first launched an online store and, following its initial triumph, has since expanded into retail.

• Keeping it "Real": Alongside its relatable founder, Vera Lab’s success stems from its commitment to embracing imperfections and challenging traditional beauty stereotypes. In an industry obsessed with perfection, Vera Lab sets itself apart by promoting authenticity and inclusivity. This approach has resonated deeply with consumers of all ages, who now more than ever seek real, relatable brands.

Vera Lab Stores in Milan and Rome

• Viral Marketing: Vera Lab has had great success creating buzz worthy moments throughout Italy including sponsoring the Christmas tree in Piazza del Duomo, collaborations for new product launches and exhibitions with the Uffizi Museum in Florence, and the hot pink "beauty truck" which gives a new and exciting way to access their products. Alongside this, one of Vera Lab's effective touchpoints is their well-executed email marketing strategy. The results speak for themselves, with a remarkable quarter of sales being attributed to their newsletter campaigns. By personally crafting one email per month, written in a conversational tone, the brand establishes a strong connection with its audience. Each email includes an enticing discount code, creating an added incentive for customers to engage and make purchases. Through this approach, Vera Lab nurtures customer loyalty, ensuring that their brand remains top-of-mind for its audience.

Altogether, this strategy enabled Vera Lab to reach €62 million in revenue in 2022 and in 20203 it secured a minority investment from Peninsula, providing the brand with the resources to explore global expansion plans.

Nashi Argan

Our third Italian case, Nashi Argan, was founded in 2014 and offers a line of hair and skincare products centered around its namesake, argan oil (and linseed oil), drawing on its long history of natural beautification benefits. The brand's identity is built on three key pillars: environmental impact, being made in Italy, and a global mindset. These elements have been strategically combined with external support to propel the brand to where it is today, with a registered turnover of €25 million in 2022.

• Commitment to Sustainability and Organic Ingredients: Nashi Argan's website credits its success to its dedication to providing a tailor-made hair and skin care experience for women using 100% organic and environmentally friendly ingredients. However, their commitment to the environment is not only skin deep, as they provide resources on how to recycle the packaging after use proving to the ever-increasing conscious consumer they are involved in every stage of the life cycle. Being a member of the Italian Environmental Fund (FAI) further showcases the brand's commitment to sustainable practices. Research from NYU Stern's Center for Sustainable Business has shown that 77% of consumers state that sustainability is important when selecting products, an increase of over 800% since they were asked in 2021. By effectively communicating their brand ethos, Nashi Argan has showcased both their environmental mission and deep understanding of consumer desires.

• Distinctive Italian Heritage and Expertise: Nashi Argan's "Made in Italy" label carries significant weight in the beauty industry as such the brand has capitalized on its Italian heritage and expertise to offer premium-quality hair care products that align with the country's reputation for craftsmanship and style. Despite the large international market, there was a space for "made in Italy" products and Nashi Argon fit perfectly. This aspect adds a touch of authenticity and exclusivity to the brand, appealing to consumers who appreciate the excellence associated with Italian-made products.

Image From Nashi Argan on Instagram, @nashiargan

• Strong Global Distribution Network: Nashi Argan's distribution strategy has undeniably played a pivotal role in its remarkable success, allowing them to connect with a wide audience, gain market share, and solidify their position as a leading player in the fiercely competitive industry. By effectively tapping into a network of distribution in around 40 countries across Europe, Asia, and Latin America, the brand has established a strong global presence, expanding its reach to diverse markets and customer segments. Leveraging the power of partnerships, the brand has established over 2000 salon partners, operates through a vast network of 7,000 wholesalers, and strategically operates 18 retail stores including one in Piazza Cordusio, Milano. This extensive global network has enabled Nashi Argan to reach a wide and diverse customer base.

• Supportive Investments and Partnerships: The brand's success has been bolstered by its strategic approach to funding and partnerships. Their alliance with Milano Capital, which acquired a minority stake in January 2022, has further bolstered Nashi Argan's position and provided access to valuable resources and expertise needed to accelerate its growth trajectory and expand its market reach. Since its foundation, Nashi Argan has carved a niche in the hair care industry, attracting a loyal customer base, and achieving notable financial growth in a competitive market.

The consumer goods segment is booming, offering significant potential for high growth and global scaling for many emerging brands. As demonstrated by the brands outlined above, it takes a clever mix of ingredients to get the scale-up formula just right. What connects them is their innovative approach to marketing and their fearlessness in pursuing global ambitions. It also takes a bit of magic and a strong aesthetic touch.

If you're looking for a partner to help grow your portfolio of consumer goods, we are open for business and ready to help you scale. Reach out to us at hello@flamestrategy.com