The Retail Experts Behind Navarro Discount Pharmacies Enter The CBD Segment With Karibo And Mintedleaf

Add Shana Lydle to the ballooning list of executives so confident about the potential of CBD that they’ve left conventional beauty companies for brands specializing in products with it.

She joins industry veterans the likes of Roseann Fernandez, prior head of marketing at Hain Celestial and current CMO at Ambari Brands, Christopher Gavigan, co-founder of The Honest Co., part of the leadership team at Prima, and Undefined Beauty creator Dorian Morris, a brand orchestrator previously at Coty, Sundial and Kendo, in the great green rush. Lydle, formerly a VP at HauteHouse, Enviroscent and Astral Brands, is doubling down—literally—on CBD with two brands, one to look good, the other to feel good.

The brands, Karibo and Mintedleaf, are backed by the retail experts at MMG Consumer Brands, a growth equity firm formed by members of the Navarro family, including managing director Gabriel Navarro, who guided Navarro Discount Pharmacies into becoming a $340 million business snapped up by CVS in 2014. There’s a lot at stake in their bet on CBD, with sales in the category projected by BDS Analytics and Arcview Market Research to exceed $20 billion by 2024.

Karibo fills what Lydle, VP of business development at MMG, views as an untapped area: value-priced CBD skincare. Launched last year, the brand’s lineup contains a moisturizing cream, facial moisturizer, hand and body lotion, hydrating gel and face mask. The mask is often the entry into the brand, but the hand and body lotion is currently the top seller.

“We’re creating a buzz in drug and mass because of our price points that are under $20 instead of $50 for a face oil,” says Lydle. “You don’t have to spend a fortune to see or feel results.”

Six new Karibo items—face cleanser, face mist, face serum, face oil, eye cream and lip balm—will roll out in June. The brand’s products are infused with broad-spectrum CBD from organic hemp farmed in the United States. The formulas are free of parabens, phthalates, sulfates, gluten, titanium dioxide, genetically modified organisms, and artificial colors and dyes. They’re not tested on animals.

While devising Karibo, Lydle paid as much attention to its packaging, which is black and white with delicate graphics of the cannabis plant, fragrance and texture as she did its formulas. She sought out traditional skincare manufacturers for the products rather than turning to cannabis companies that have extended into skincare without a background in the business. Lydle emphasizes Karibo “is great for all skin types whether you are just starting out as a skincare customer or have sensitive skin.”

“There will be a clean-out of the one-hitters. The brands left standing are those committed to the long term.”

She holds the brand stands out as a beauty authority in a mass-market sector dominated by wellness-oriented CBD brands. “With Karibo, we are taking a true beauty direction with beautiful products that you use every day instead of when in pain or in need of relaxation,” says Lydle. “We combine CBD with great ingredients like hyaluronic acid, vitamin C, peptides and ceramides.”

MMG isn’t ignoring wellness-focused CBD products. Mintedleaf is its wellness play. In tinctures, a popular CBD format, Lydle says the difference between the brand’s offerings and competitors’ offerings is taste. Mintedleaf’s tinctures have a peppermint flavor she describes as refreshing. Consumers frequently complain CBD tinctures taste and smell like cannabis. Mintedleaf’s five topical products harness the benefits of menthol to provide cooling. Similar to Karibo, the brand’s prices are under $20. The affordable pricing has helped Mintedleaf secure distribution in food stores Weis and Tops along with drugstore chain Fruth. Karibo is carried in select CVS stores. Combined, industry sources expect the brands can topple the $20 million mark within the year.

MMG didn’t jump on the CBD craze as it was getting underway. The firm diligently observed the category and took over a year to develop its CBD brands. Lydle argues the patience will pay off in a crowded cannabis space where it seems as if a new brand enters the fray daily and a shakeout looms. “There will be a clean-out of the one-hitters. The brands left standing are those committed to the long term. We’re in this for the long haul, not just throwing products out there with a little CBD in it,” she says, explaining many people with no retail and beauty experience have jumped into cannabis beauty and wellness to take advantage of the buzz. It could be difficult for their brands to thrive as seasoned retail and beauty professionals dive into CBD.

Despite the slew of CBD products, some retailers have been skittish about them due to legal uncertainties and a rash of dubious marketing claims in the CBD field. Lydle characterizes 2020 as “phase two” and the year when retailers are ready to roll with CBD items. MMG’s retail reach will increase by 8,000 doors later this year. Lydle declines to disclose the retailer behind the surge, but it’s illustrative of retail bullishness on CBD products.

Lydle asserts Mintedleaf and Karibo have a leg up at retail because she understands the nuances of the business and specific channel needs. She underscores not comprehending the terminology and the commitment it takes to succeed in tonnage retailers can put nascent brands out of business. Her retail acumen can aid retailers’ understanding of how to merchandise the emerging cannabis category.

With CBD products gaining traction, Lydle believes retailers will become increasingly sophisticated at merchandising them. For example, Karibo will move into skincare rather than be situated near pain relief. “It doesn’t always make sense to have a foot balm with a face mask,” she suggests. To begin with, however, she recommends CBD-dedicated displays that bring an array of CBD products together to draw shoppers searching for them, and brand blocking concentrating on key brands covering several subcategories rather than shallow merchandising with a range of brands selling one or two stockkeeping units. With her well-thought-out strategies, Lydle plans for Karibo and Mintedleaf to remain standing after the CBD category shakeout.