Although the document was filed in April and said the closure was due to a “funding loss,” NutraIngredients-USA received confirmation this week from Bayer about the company’s rationale for the decision.
Christin Miller, director of strategic communications at Bayer, said that “ceasing further investment in Care/of will allow Bayer to better invest in future innovations that help people manage their personal health. This includes investing in our current portfolio of brands to deliver innovation to our consumers and customers.”
On Monday, Care/of customers received an email from company co-founder and CEO Craig Elbert that it would stop accepting supplement orders, offering customers a multi-month purchase at a 40% discount until June 7.
“We are so grateful for the support of our customers over the years and appreciate your understanding” and “we have been working through potential options for the brand,” Elbert wrote.
Speaking off the record, a source close to Care/of told us that Elbert is being upfront about future possibilities for the company and that current negotiations with outside parties are underway.
A meteoric rise
Elbert and co-founder Akash Shah created Care/of in 2016 with a goal of tailoring the right vitamins and supplements options for consumers through individualized supplement packs after customers complete a 5-minute health questionnaire. Care/of was among the first companies to implement tailored supplement products, gaining insight and data from users. It got noticed. Nearly two years after it launched, Care/of had raised $46 million in funding.
That dollar amount would quadruple by 2020, when Bayer bought majority stake (70%) in the privately held company for $225 million. Care/of joined the Bayer’s Consumer Health, North America portfolio.
However, Bayer began to have financial concerns within that period.
Despite company revenues topping nearly $52 billion in 2023, Bayer earnings declined from the previous year. Additionally, the company eliminated 1,500 jobs in the first quarter of 2024 as part of the CEO’s new operating plan.
Since it acquired chemical giant Monsanto in 2018, Bayer is also grappling with ongoing litigation about whether the subsidiary’s weed control product Roundup causes cancer. Bayer spent approximately $11 billion to settle Roundup lawsuits in 2020 alone.
The unnamed source who spoke to NutraIngredients-USA said Bayer’s financial situation may be challenging but that its consumer health division is profitable. However, they acknowledged that revenue was down for Care/of.
The differentiation argument
In 2021, Care/of established retail relationships with brick-and mortar retailers, including Target. Its supplements were priced at $15 to $19, comparable and competitive to other companies, sources said. Despite the price comparison, Joshua Anthony, founder and CEO of Nlumn, a personalized nutrition consultancy, said that getting a personalized nutrition message across on a website is different than on a store shelf.
“Just this idea of market expansion without necessarily a clear point of difference may have been a real issue for them,” Anthony said. “They do a nice job of having a clean label, but they don’t necessarily do a great job of communicating a differentiated benefit.”
What does differentiate Care/of from other brands is its 5-minute survey, Anthony said with a caveat. More and more companies are using diagnostic tests, whether that’s stool samples or blood tests, to give consumers precise measurements about their health status and what supplements to take, he added.
NutraIngredients-USA’s source close to Care/of said it was, in fact, the 5-minute questionnaire that offered consumers a clear difference because not everyone wants or has the time for invasive information to be gathered about them every three months.
“Yes, it’s hard to compete, but this industry is growing, and there’s multiple ways to do [personalized nutrition],” the source said. “The macro picture is that disease care is expensive. Pharmaceutical giants are investing in the massive self-care industry. It’s a huge trend when it comes to cost, and younger generations are more interested in health and wellness than previous generations.”
