Healthcare plans as a growth strategy?
collecting underpants, I don't get Athletic Brewing, Costco raises fees, John Mackey's new book... and more
3-min read
Are you a food brand going after health plans as a growth strategy?
I’m seeing some food brands making moves specifically with FSA (Flexible Spending Accounts) and HSA (Health Savings Accounts). If you’re doing this, I’d like to know how you are thinking about the size of the market and adoption rates.
Here is a low FODMAP chili crisp that accepts HSA/FSA payment
This powdered human breast milk is also HSA/FSA eligible
And this personalized chef service, which is already approved for Medically Tailored Meals with major health plans in California, is working on accepting HSA/FSA payments.
I asked my friend that’s in the employer health plans biz to explain these types of benefits. She said:
Getting subsidized food to people through these programs has a ways to go. First of all, lots of people don’t have an FSA or an HSA [through their employer plans].
The construct of the FSA involves employer risk — there is some employer skin in the game on those funds — just because the products are eligible doesn’t mean the employer will approve them for reimbursement. Furthermore, what goes into the health plan as a covered benefit raises the cost. HSA is slightly more likely. Expenses aren’t that well monitored on the HSA side, so depending on how it’s billed … if it’s billed by an eligible entity, it could feasibly get approved, but it wouldn’t stand up to an audit … and brands can’t market that.
Currently, things that are covered [with health insurance] are those that are medically necessary.
Seems like a rough road.
Someone should do a collab with FIGS, the scrubs company
Partnering with healthcare adjacent brands might be the way to go. FIGS is coming off their Olympics ad campaign created by agency Mother, “Anatomy of a Champion”.
I received notice that my Costco annual membership is going up (first time in 7 years)
Investors liked the news and the stock responded favorably. I did go to Costco this weekend and it was packed (back to school, lots of demos), and, I wanted to post something positive in light of last week’s market correction (*this is not investment advice).
What else I do besides write this substack
I was reminded recently when asked what it is that I do of the Underpants Gnomes theory of business. This is from an episode of South Park where the gnomes cannot connect from Phase 1 - collecting underpants to Phase 3 - Profit.
As a business you might be doing a lot of underpants collecting – but where to go from there is not obvious. You may have a clear vision of how you want this journey to end but getting from Phase 1 to Phase 3 and living to tell the story will require assistance. That’s where advisors can help you out. These are the growth phases —
Off brand?
It is weird to me that Athletic Brewing would be sponsoring scholarships to the All In Summit. This is 3 days where Silicon Valley bros get together to network and party. Maybe someone at AB thought they were sponsoring a nature trail?
I do like the podcast.
I have not (yet) read John Mackey’s book on founding Whole Foods. But here is my old buyer, Errol Schweizer, former head of Grocery, with a review and anecdote from a meeting in 2009 where he challenged the CEO. Go Errol!
Hope you’re having a great week.
All my best,
Jennifer