**Startups Leverage Hospitality and Wellness Venues to Build Brand Recognition**
Before committing to large, expensive orders from major retail chains, some startup brands are experimenting with hospitality and health venues to connect with their ideal early adopters.
Cadence, a hydration brand that launched this summer, is focusing on selective venues such as members-only clubs, boutique hotels, wellness studios, and run clubs to build brand awareness. A notable partnership is with Soho House, a members-only club where Cadence products are featured on bar menus, in gyms, and inside mini-bars at U.K. locations, with plans to expand to U.S. locations soon.
“It’s working really well in our favor,” said Cadence co-founder Ross McKay. He contrasted this approach with the distribution strategy of his previous startup, Daring Foods, a plant-based chicken brand. “I’m used to the volume of being in retail and what that does to your business,” McKay said. “But it’s been incredible to start with these more niche spaces, which are showing higher velocities.”
Hospitality and wellness venues are often seen as a lower-effort sales channel compared to physical wholesale. Brands can fulfill orders from hotel and health club partners much quicker than from national retailers. These venues offer a captive audience, often on-site during vacations, workouts, or wellness visits. As brands approach wholesale retail cautiously, these destinations can serve as a bridge between a product’s online and offline presence. While these accounts may not be significant revenue drivers, they are viewed as effective marketing tools, with some brands attributing new customer sales to these placements.
For example, canned water brand Open Water expanded its on-premise footprint through partnerships with restaurants, hotels, and even zoos. Similarly, direct-to-consumer supplement brand Dose, which launched during the pandemic in 2020, tested its product-market fit by targeting wellness enthusiasts before entering hundreds of stores nationwide.
Dose, founded as a daily drink supplement aimed at liver health, initially sold primarily through its website before moving into brick-and-mortar stores. Over the past year, Dose has seen significant retail growth, now available in 1,879 locations, a 79% year-over-year increase. Earlier this year, Dose entered 700 stores with Vitamin Shoppe and is currently rolling out in 100 HEB stores.
Dose’s hospitality partnerships began while the startup was still establishing early retail partners like The Vitamin Shoppe and Erewhon. Throughout 2022, Dose secured deals with luxury hotel and resort chains, starting with 1 Hotel and later expanding to Equinox health clubs. Today, Dose products are available in about 29 hospitality locations, including The Maybourne Beverly Hills, with plans to add more 1 Hotel and Equinox locations in the coming months. Depending on the property, Dose products may be found in hotel rooms, cafes, or spa areas.
Dose’s founder and CEO, Vasu Goyal, views these locations as marketing channels that help the brand showcase its benefits while physical availability is still limited. “We think it’s a way to showcase the product to an audience that tends to be early adopters of these wellness products,” Goyal said. For instance, 1 Hotel’s focus on sustainable products and services made it a fitting partner for Dose. The goal is to drive trials that lead to in-store sales, as Dose’s tonic is designed to be taken daily for noticeable effects.
While these health and wellness accounts represent a small portion of Dose’s overall sales, Goyal noted that they have had a significant marketing impact, prompting the company to expand into more hospitality venues. Customer surveys indicate that people often order Dose after trying it at one of the brand’s hospitality partners. These prestigious hospitality venues also support Dose’s broader wholesale goals, with traditional retail partners expressing excitement about the brand’s presence in these luxury spaces.
Beyond Soho House, Cadence is primarily testing physical sales at health and wellness venues before expanding into retail. The brand’s latest wellness partners include Othership, a New York City-based sauna and ice bath studio, and Heimat, a fitness club in Los Angeles.
Rachel Hirsch, founder and managing partner of Wellness Growth Ventures, which backs brands that rely heavily on on-premise growth, said that CPG brands in the wellness space are getting more creative as they transition from online to wholesale. “Rather than jumping straight into big chain stores, many are strategically placing their products in locations where their target audience is already primed for wellness and self-care experiences,” Hirsch said.
One of Wellness Growth Ventures’ portfolio brands, Cure Hydration, is using hotel rooms to introduce its drink mixes to dehydrated and jetlagged travelers. Cure is stocked at select Auberge properties, Canyon Ranch, Miraval, and several Marriott and Hyatt properties. Hirsch also highlighted another portfolio company, canned wine brand Nomadica, which has expanded its national network of hotels and concert venues since launching during the pandemic in 2020. Nomadica is available at InterContinental, Fairmont, W, and Ace Hotels, among others. “This channel is definitely not a replacement for wholesale, but more a tool to incite buying at either DTC or retail,” Hirsch said.
As Dose prepares for its next retail chain launch, Goyal mentioned that more hotels and spa locations will be added later this year. “We’ve also had inbound inquiries from other hotel and spa groups,” he said, declining to name the deals as they are still being negotiated. “These locations remain an important part of our flywheel as we transition to being omnichannel.”
Source: modernretail.co