The documents, filed in April, stated the reason for the closure was a “lack of funds,” but NutraIngredients-USA received confirmation from Bayer this week of the company’s basis for the decision.
“By ceasing further investment in CareOf, Bayer will be able to invest more in future innovations that help people manage their health, including investing in our current portfolio of brands to bring innovations to our consumers and customers,” said Christine Miller, Bayer’s director of strategic communications.
On Monday, Care/of customers received an email from the company’s co-founder and CEO, Craig Elbert, informing them that the company was no longer accepting orders for supplements and was offering customers a 40% discount on multi-month purchases through June 7.
“We greatly appreciate our customers’ support over the years and appreciate their understanding,” Elbert said. “We have been evaluating potential options regarding the brand.”
Privately, a source close to Care/of said Elbert has been open about the company’s potential future and that negotiations with outside parties are currently underway.
Rapid growth
Elbert and co-founder Akash Shah founded Care/of in 2016 with the goal of customizing the right vitamin and supplement choices for consumers through personalized supplement packs after customers complete a five-minute health questionnaire. Care/of was one of the first companies to implement a customized supplement product by taking insights and data from its users. The company gained traction, and nearly two years after launch, Care/of raised $46 million in funding.
This amount was quadrupled in 2020 when Bayer acquired a majority stake (70%) in the privately held company for $225 million. Care/of joined Bayer’s North American Consumer Health portfolio.
But during that time, Bayer began to have financial concerns.
Bayer’s profits were down from a year ago, even though the company’s revenue is expected to reach nearly $52 billion in 2023. The company also cut 1,500 jobs in the first quarter of 2024 as part of the CEO’s new business plan.
Bayer has also been fighting lawsuits over whether its subsidiary’s weed killer, Roundup, causes cancer since it bought chemical giant Monsanto in 2018. Bayer spent about $11 billion settling Roundup litigation in 2020 alone.
Anonymous sources who spoke to NutraIngredients-USA said that while Bayer’s financial situation may be tough, its consumer health products division is profitable. The company did acknowledge, however, that revenues at Care/of have declined.
Discussion of differentiation
In 2021, Care Of established retail relationships with brick-and-mortar retailers, including Target. Sources said the company’s supplements were priced at $15 to $19, comparable and competitive to others. Despite the price comparisons, Joshua Anthony, founder and CEO of personalized nutrition consulting company Nlumn, said delivering personalized nutrition messaging on a website is different than delivering it on store shelves.
“The idea of expanding into a market without a clear point of differentiation may have been a real problem for them,” Anthony said. “They’ve been successful in creating clean labels, but not necessarily in communicating a differentiated benefit.”
What sets Care Of apart from other brands is the five-minute survey, Anthony cautioned, adding that a growing number of companies are using diagnostic tests, such as stool samples or blood tests, to give consumers accurate information about their health and the supplements they should take.
A NutraIngredients-USA source close to Care/of said that the five-minute survey actually made a clear difference to consumers, because not everyone wants or has the time to have invasive information collected about them every three months.
“Yes, it’s hard to compete, but the industry is growing and there are multiple ways to compete. [personalized nutrition]”On a macro level, treating illnesses is expensive. Big pharma is investing in a huge self-care industry. There are big trends around cost, and younger generations are more interested in health and wellness than previous generations,” the source said.
