Starco Brands is an inventive consumer products company making the familiar new again through novel formulations, technologies, and marketing. This short video provides an overview of Starco's model for developing and acquiring category-changing brands that spark excitement, tap into cultural trends, and deliver recurring revenue streams.

Source: Company Reports

Mission to Create Behavior-Changing Brands

Starco Brands strives to identify whitespace opportunities in consumer product categories where small operational innovations or improved formulations can yield outsized behavioral impacts and consumer excitement. The company calls these asymmetric risk-return prospects that provide recurring revenue models by unlocking new use cases and tapping cultural or macro trends. For example, spirits consumption growth is rising, but alcohol formats remain stagnant. Starco’s Whipshots enabled new drinking rituals and occasions centered on unique formats and flavors by introducing ultra-premium vodka-infused whipped cream. Known throughout the industry as the “profit topper,” the brand adds a shot of sophistication to cocktails, coffees, cocoas, and desserts. 

• Building a 21st century consumer products powerhouse by inventing or acquiring behavior changing technologies and brands
  

• Grown from 1 brand in 2020, to a current portfolio of 5 brands
  

• Projected 2023 net revenues of $66 million to $77 million ( YOY growth 746% to 887%)
  

• Employs marketing playbook to develop impactful and efficient communication plans for brands resulting in unprecedented awareness
  

• Long track record of commercializing consumer products in personal care, OTC pharma, food and beverage and spirits

Source: Company Reports

Business Model and Approach

Starco Brands leverages a dedicated outsourced infrastructure to design, test, manufacture, market, and distribute small-batch product innovation that can scale dramatically when resonating with consumers. Alongside CEO Ross Sklar’s chemistry acumen, this framework resembles an invention factory, allowing rapid iteration. Starco Brands employs an impactful, modern marketing approach to drive awareness and trial cost-effectively by targeting specific demographic and psychographic niches. A heavy emphasis on data analysis and feedback loops informs strategic pivots and supply chain scaling decisions. With recurring save-the-receipt purchase patterns and multi-vertical production capabilities, Starco Brands believes winning formulations represent both sticky revenue streams and platform innovations extensible through additional products. Recent distribution and marketing relationships with major retail chains provide conventional sales channels to augment digital pathways.

Recent Transformational Brand Acquisitions

In 2023, Starco Brands completed two acquisitions, expanding its portfolio into the nutrition and fragrance categories while greatly extending consumer reach. The purchase of clean fragrance leader Skylar brought products formulated without over 3,000 common irritants found in most fragrances, along with a predominantly digital go-to-market pathway.

Source: Company Reports

Shortly after, Starco Brands acquired category pioneer Soylent, which popularized complete plant-based meal replacement beverages and snacks. Both deals immediately provided retail distribution scale, e-commerce sales infrastructure, and recurring subscription revenues. Starco Brands believes its marketing model can elevate awareness and situate these brands to capitalize on shifting consumer preferences toward conscious consumption. The company continues targeting acquisitions of like-minded inventor brands where introducing operational expertise around manufacturing and digital marketing can unlock growth.

Manufacturing, Innovation, and R&D Expertise

Starco Brands CEO Ross Sklar previously grew The Starco Group, a private label and branded aerosol and liquid fill contract manufacturer supplying retailers across North America. This relationship provides Starco Brands with immense infrastructure covering manufacturing, procurement, R&D, and regulatory affairs to support commercialization. With over a decade of experience developing IP and formulations across household chemicals, food & beverage, OTC pharmaceuticals, personal care, and other verticals, The Starco Group enables rapid prototyping and scale production of Starco Brands’ patented delivery systems. By handling sourcing, quality assurance, compliance, and logistics, The Starco Group allows the Starco Brands team to focus squarely on creative packaging design, sensory experience optimization, channel marketing, and targeted distribution partnerships to spur consumer adoption and loyalty. Alongside licensing certain proprietary technologies, this manufacturing arrangement drives asset-light recurring high-margin revenue.

Source: Company Reports

Marketing Engine and Expertise in Building Brands

Co-Founder David Dreyer leads marketing efforts for Starco Brands, leveraging over 20 years of experience working on breakthrough campaigns for icons ranging from Apple to Pepsi. The company employs an integrated culture-led strategy utilizing social media platforms, human media, experiential events, traditional media, and guerilla sampling techniques to spread organic awareness, drive trials, analyze data, and closely monitor sentiment. With deep relationships across entertainment, sports, and culture realms, Starco Brands has partnered with renowned names like Cardi B to amplify cultural resonance for its portfolio brands. In today’s fragmented media environment, where advertisements can feel like wallpaper, the company believes strongly in marketing with impact, ensuring that every dollar spent is felt by and engages its core consumers.

Source: Company Reports

Overarching Growth Strategy

Starco Brands employs a multi-pronged strategy combining internal brand incubation centered on inventive formulations and delivery systems with the acquisition of category innovators where operational expertise and marketing infrastructure can aid scaling. The company believes its licensing model, manufacturing relationships, proprietary chemical technologies, and digital marketing competencies represent a unique bundling of services for commercializing consumer products. By leveraging cultural trends and micro-targeting key demographic and psychographic niches, Starco Brands can cost-effectively drive awareness and trial. The manufacturing infrastructure and recurring revenue models enable supply chain ramping to support viral adoption. This framework forms the foundation to nurture brands and assimilate strategic acquisitions organically. With consumer preference shifts toward conscious consumption, personalization, and functional improvements, Starco Brands aims to situate itself at the epicenter of preferences, reshaping the consumer-packaged goods landscape over the next decade.

Source: Company Reports

Internal Incubation Efforts

Starco Brands continually evaluates internal brand incubation candidates, leveraging CEO Ross Sklar’s depth of experience around formulations and delivery systems. Current initiatives include line extensions for existing brands and early development work in air care, over-the-counter health products, casual apparel, and other consumer verticals. The company takes an options-based approach to inventing, often patenting IP and securing exclusive licensing rights before making material investments. With the ability to produce small custom batches, Starco Brands can test reception in demographically targeted digital campaigns and specialty retail locations. Recent packaging and formula iterations for Winona Pure popcorn spray exemplify these low-risk, high-reward invention cycles. Successful pilots warrant supply chain optimization, celebrity influencer partnerships, and expanded distribution relationships to spur viral growth.

Acquisition Framework and Environment

Alongside internal incubation, Starco Brands’ acquisition framework targets two primary profiles – the first being inventor-founded brands with differentiated formulations struggling to scale operations and distribution but demonstrating growth potential. Skylar matches this archetype. Secondly, Starco Brands aims to acquire legacy brands with strong consumer awareness and existing retail networks that can be revitalized through ingredient improvements and digital-first engagement. The company looks for brands with evident passion and communities primed for expanded storytelling. Soylent provided renowned brand equity and early mover advantage. With private equity and strategic consolidators competing aggressively for cash-generative nutrition, personal care, and specialty retail assets, Starco Brands believes its licensing model and operator toolkit uniquely position the company to assimilate brands other acquirers may overlook and stimulate growth through operational changes.

Whipshots represents Starco Brands’ foray into branded spirits as the world’s only ultra-premium vodka-infused whipped cream. Uniquely intersecting behavioral trends around experiential mixology, the wider expansion of the ready-to-drink cocktail segment, and flavor/texture enhancements to existing spirits use cases, Whipshots enhances traditional spirits occasions while igniting new at-home or nightlife rituals.

Source: Company Reports

The malleable spirit tops off everything, including cocktails, coffees, cocoas, and desserts. Initially debuting in vanilla, mocha, and caramel flavors using a proprietary formulation producing a one-of-a-kind mouthfeel, Whipshots introduced spirits occasions centered on playful textures and dessert-themed experiences absent in current bar or retail assortments: seasonal flavors Lime – to top off summer cocktails, Pumpkin – capitalizing on fall’s pumpkin spiked latte craze, and Peppermint – topping off holiday cocoas and desserts.

The product was brought to market in late 2021 with the help of co-founder and global artist Cardi B. Tapping into Cardi’s vast network, the brand immediately became a cultural hit, selling out online in less than 10 seconds every day. In early 2022, distribution partner RNDC helped take the brand to retail shelves and on-premise establishments. The brand is currently sold in 39 states and has sold over 4 million cans to date.

Starco Brands believes occasion-based marketing highlighting interactive and shareable moments tailored to younger adult demographics can elevate Whipshots as a recognizable next-generation spirit brand and sustainable growth contributor. The company aims to continue expanding retail availability and e-commerce assortment presence. With consumers craving new drinking rituals and shifting preferences toward convenient and premixed options, Whipshots sits at the epicenter of multiple tailwinds reshaping alcohol consumption preferences over the next decade.

Expanding into air-powered flavor delivery systems, Starco Brands’ Winona Pure brand debuted the first indulgent popcorn spray designed to provide authentic movie theater flavoring and scent to homemade popcorn. Delivering a proprietary butter-salt taste that is absent cumbersome liquid options creating sogginess, this innovative spray formulation offers a turnkey solution capitalizing on surging at-home popcorn preparation and cinema nostalgia.

Initially distributed in Walmart stores thanks to early retail partnerships, Winona represents an internally developed brand now available through grocery chains like H-E-B and Meijer.

By focusing occasion-based messaging around enhancing modern streaming and entertainment consumption, Starco Brands now sees a considerable opportunity to expand Winona’s emotional resonance beyond early sales driven predominantly by novelty.

Source: Company Reports

Representing a transformational acquisition aligning with shifting consumer preferences, Starco Brands acquired category pioneer Soylent in early 2023 to spearhead its entry into the rapidly growing plant-based nutrition sector, which is now projected to reach nearly $108 billion by 2030.

Source: Vantage Market Research

Well-known for its convenient line of Complete Meal shakes, drinks, powders, and bars powered by soy protein, Soylent boasts a devout subscriber base, a thriving Amazon business, and nearly 50,000 retail doors of distribution in North America alone.

The company was originally founded in 2013 as the original food hack — a way to get an entire meal’s worth of nutrients in a single shake. Soylent maintains exceptional unaided brand awareness rates, highlighting the foundational equity established through first-mover efforts to popularize nutritionally complete meal replacements. Starco Brands sees immense untapped potential by integrating its commercialization playbook around social media resonance, influencer partnerships, and emotionally compelling storytelling to elevate relevancy. Early initiatives include renewed college campus sampling programs targeting busy schedules, innovation around new flavors suited to Gen Z palettes, and convenient on-the-go powder stick packs addressing portability.

With a complete lineup focused on meal replacement, protein, and energy, Soylent possesses a multifaceted product portfolio ready for platform expansion into hybrid use occasions. Soylent presents an opportunity to demonstrate Starco Brands’ operating system for revitalizing brands with exceptional yet underutilized consumer equity and recurring revenue streams.

Representing a timely alignment with ingredient-conscious personal care trends, Starco Brands announced the acquisition of Skylar in late 2022 - obtaining a digital-first brand focusing exclusively on hypoallergenic fragrances free of many harmful ingredients found in most perfumes and body sprays. Formulated without phthalates, parabens, formaldehyde, and over 3,000 other potentially irritating components, Skylar’s scents represent an early mover in the rapidly growing clean beauty movement gaining significant traction. This brand is primed for growth with a thriving D2C business, a growing Amazon channel, and nationwide distribution at Sephora.

Source: Company Reports

Starco plans to employ its impactful marketing playbook and continue to innovate against the clean fragrance proposition. The recent introduction of clean Hair & Body mists aims to build momentum in this burgeoning category.

Skylar boasts enviable recurring subscription revenues representing predictable baselines for cash flow harvested to fund emotionally resonant growth marketing as consumer scrutiny over physical and environmental implications of daily product choices accelerates amidst legislative tailwinds.

Source: Company Reports

Representing Starco Brands’ 2022 entry into science-backed athletic product formulations, Art of Sport was launched in 2018 by co-founder and NBA legend Kobe Bryant.

Art of Sport debuted a line of body care products free of harsh chemicals explicitly designed for high-intensity training environments. The moisturizers, deodorants, and muscle recovery items contain natural ingredients to soothe muscles, hydrate skin, and refresh efficiently between workouts or competitive performances when pores open and abrasions peak - an underserved need in locker rooms.

Source: Company Reports

Starco plans to leverage the incredible foundation built and expand it to own the entire locker room. The company plans to diversify the portfolio to enter categories such as pain management, nutrition, sun care, and beverage.

Diverse and Advanced Manufacturing Infrastructure

Central to Starco Brands' capacity for innovation and rapid market response is its advanced manufacturing capabilities, facilitated through a dedicated partnership with The Starco Group. This alliance provides Starco Brands with the versatility to develop, prototype, and scale production across a wide range of product forms, including aerosols, liquids, powders, and other innovative delivery systems. The manufacturing strength of The Starco Group is characterized not only by its diverse capabilities but also by its commitment to quality and regulatory compliance.

Flexibility in Production

The manufacturing infrastructure of The Starco Group is adeptly aligned with the diverse needs of Starco Brands’ product portfolio. Their facilities are designed to handle both the intricacies of mass production and the scalability required to meet burgeoning demand. This flexibility is crucial in maintaining high-quality control standards and swiftly adapting to evolving market trends and consumer preferences.

Innovation and Technical Expertise

A strong emphasis on innovation is at the forefront of The Starco Group’s manufacturing approach. Their production facilities serve as hubs for creative and technical advancement, where new ideas are actualized, and existing products undergo continual enhancement. The Starco Group's expertise in developing innovative delivery systems is crucial in supporting Starco Brands' mission to offer distinctive and engaging consumer experiences.

Adherence to Quality and Compliance

The Starco Group prioritizes quality and compliance, adhering to stringent industry standards and regulatory guidelines. This dedication ensures that each product meets and often exceeds consumer expectations in safety, effectiveness, and environmental impact. Such commitment is fundamental in fostering consumer and partner trust in Starco Brands' offerings.

Outlook

As Starco Brands navigates the dynamic consumer goods landscape, its robust manufacturing partner’s capabilities will remain crucial in fueling growth and fostering innovation. The synergy between Starco Brands' visionary product development and The Starco Group's manufacturing acumen positions the company to effectively seize upcoming market opportunities and continue delivering products that align with consumers' evolving needs and preferences.

Massive Consumer Category Horizontality to Feed a Growth Playbook

Starco Brands operates across diverse higher-growth consumer verticals ripe for disruption by leveraging cultural insights and inventive formulations.

• Spirits: With further premiumization and ready-to-drink evolution, the $270B+ global spirits market offers substantial room for elevated experiential brands like Whipshots providing unique consumption rituals.

• Beauty & Personal Care: The clean beauty wave within the sustainably growing $500B+ beauty and personal care sector positions Skylar as an aspirational brand activating aesthetic preferences through awareness and accessibility.

• Nutrition: Based on shifting preferences, the total addressable market for plant-based food alone could expand from ~$29B to ~$108B by 2030 - tailwinds benefiting first-mover Soylent.

• CPG/Retail: Consumers crave newness - by deploying proven rapid prototyping capabilities, Starco Brands can infuse stagnant CPG categories with invention and regularly captivate retail partners seeking differentiation.

With each of its growth-stage incubated brands boasting defiant loyalty yet often still niche followings primed for expansion, Starco Brands sells into a wider horizontal opportunity, perhaps measuring towards a half trillion dollars.

An already robust manufacturing and marketing engine focused on enhancing sensory enjoyment through formulations generates immense optionality not just organically to nurture existing brands but to digest lucrative acquisitions rapidly. The company's ultimate goal is to develop consumer products that significantly influence and expand their respective categories, first leveraging cultural insights, followed by inventive chemistry commercialization.

Thoughtful Acquisition Framework Targeting Cash Generative Small Caps

To scale aggressively amidst an increasingly competitive landscape, Starco Brands implemented an acquisition framework targeting cash-generative yet under-resourced small-cap CPG innovators previously unable to fund customer acquisition budgets. Alongside synergistic category adjacencies, ideal buyout candidates boast existing distribution networks begging for activation and marginal operational fixes or CAPEX investments, unlocking discernible growth and margin upside.

Strategic deals provide brands seeking to maximize their DTC-led beginnings with broader offline reach, coveted manufacturing relationships, and asset-light licensing infrastructure capable of supporting viral digital marketing campaigns when positive signals emerge. In a post-pandemic environment conducive to category and channel blurring powered by e-commerce liberation, Starco Brands believes its operating blueprint offers an enviable advantage in driving topline sales and ultimately taking cost out of scalable platform brands.

Source: Company Reports

Balanced Growth Mix Focused on Building an Enduring Powerhouse

To responsibly balance risk across incubation, innovation, and M&A, Starco Brands targets allocating its growth investment mix as ~1/3rd into new internal brand development pursuing whitespace white labeling opportunities, ~1/3rd into existing core brand marketing fuel and adjacent category or product R&D pursuits, and ~1/3rd into acquiring shelf-ready differentiated CPG platforms. This steady mix aims to nurture the atmosphere, enabling continued homes for growth while providing market excitement through routine capability showcases.

Backed by over 75 cumulative years of consumer packaged goods expertise, Starco Brands boasts a seasoned executive team blending Fortune 500 scale distribution proficiency with entrepreneurial guerrilla marketing scrappy insight to craft resonant brands beloved by loyal consumers. CEO Ross Sklar, CMO David Dreyer, COO Darin Brown and Interim CFO Kevin Zaccardi lead a dynamic decision-making team at Starco Brands. This team excels in blending expertise in chemistry and formulations, achieving significant milestones in digital engagement, spearheading iconic brand turnarounds, and successfully navigating the retail landscape. Their combined efforts have contributed to expanding category-leading manufacturers by 10X.

Source: Company Reports

Ross Sklar, Founder & CEO

Ross Sklar leads Starco Brands and oversees R&D pipelines, M&A integration, and omnichannel revenue generation. He has over 20 years of M&A and consumer products experience centered around innovating and commercializing across multiple CPG categories spanning household, personal care, pharmaceuticals, food, and spirits. With expertise in formulation, in the early 2000s, he founded the private aerosol and liquid-fill manufacturer The Starco Group, a manufacturing partner of Starco Brands today. Ross maintains deep relationships with leading retailers to propel distribution and drives the vision of evolving this vertically integrated consumer products company.

David Dreyer, Chief Marketing Officer

As CMO, David Dreyer leads all sales and marketing for the organization. Dreyer helped co-found the organization with over 25 years of executive marketing experience leading advertising for such brands as Apple, Pepsi, Dr Pepper, and the Grammys. During his career, Dreyer has been part of several award-winning campaigns, bringing that creative spark to Starco Brands. In addition to his role as CMO, he is an adjunct professor at USC, introducing undergraduate students to advertising.

Darin Brown, Chief Operating Officer

Darin heads up all operations for the organization – including Product Development, Manufacturing, Supply Chain, Finance, Business Development, and HR. He joined Starco Brands with over 20 years of experience in chemical manufacturing, business development, finance, and M&A. A seasoned expert in turnarounds, Brown has led over a dozen acquisitions in the last decade.

Kevin Zaccardi, Interim Chief Financial Officer

Kevin Zaccardi, serving as the Chief Financial Officer of Starco Brands since June 2023, brings extensive expertise in financial management within the food and beverages industry. With a solid background in strategic financial planning, budgeting, and operations management, he has been instrumental in shaping the company's financial direction. Zaccardi's prior role as CFO at Soylent, from January 2021 to June 2023, saw him skillfully navigate the complexities of investor relations and cash management, demonstrating his adeptness in driving financial strategy and growth.

Robust Growth and Strategic Financial Management

Starco Brands stands out with its self-financed model, showcasing exceptional strategic agility compared to the norm of rapid-growth consumer startups. While others might focus on capital table-led growth and early-stage external funding, Starco Brands has adeptly managed cash burn during its formative licensing phase to maintain crucial strategic flexibility. This prudent financial approach has positioned the company to capitalize on growth opportunities without the constraints often imposed by external funding structures.

FY 2023 Financial Outlook:

• Projected Net Revenue: Starco Brands anticipates a significant leap in revenue for FY 2023, with net revenue estimated to be between $66 million and $77 million. This projection represents a staggering year-over-year growth of 746% to 887%. Such an impressive growth trajectory is a testament to the company's effective acquisition strategy and scaling efforts, explicitly citing the impactful acquisitions of Soylent, Skylar, and Art of Sport alongside the continued scaling of Whipshots.

• Adjusted EBITDA: The forecast for adjusted EBITDA is equally promising, with expectations set at $7 million to $9 million. This projection reflects a substantial year-over-year increase of 159% to 233%. Growth in adjusted EBITDA is attributed to improved cost management and enhanced margins driven by pricing and product mix optimization.

Source: Company Reports

Note on Financial Metrics:

Starco Brands emphasizes the use of Adjusted EBITDA to provide a clear picture of its operational performance. Adjusted EBITDA includes historical EBITDA for acquired entities and offers a more consistent metric for financial evaluation, excluding fluctuations caused by stock-based compensation and income tax expenses. This choice of metric underscores the company's commitment to transparent and meaningful financial reporting.

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