Massive Environmental Shifts

With the explosion of the social mobile Internet coupled with smart devices, 5G broadband, 3-D printing, AI and advanced robotics, one thing is certain: disruptive change is not only here its speeding up.

Technology is rapidly transforming our consumer world. McKinsey Global Institute estimates that technologies emerging today could have an impact on our economy between $14 trillion and $33 trillion a year by 2025. The opportunities for growth investors are tremendous as exciting products and entirely new categories are emerging. There are also growing competitive threats and new risks at play, including emerging paradigm shifts in consumer behavior.

These changes are fundamentally changing the relationship between brands and consumers, creating value shifts from producers to consumers and vice versa. Consumers today are smarter and more engaged than ever with more choices but this has created more segmentation. Seizing this engagement is the big opportunity for growth in a peer-to-brand-to-peer networked world. New marketing and new content based storytelling is a the center is this engagement and we specically look for advantages in this space and ways our team can augment those advantages.

Technology is not only transforming the relationship with the consumer, it is at the center of operational excellence today. At Bravo Mondo, we work with management teams to ensure that they are constantly looking for unique and cost efficient marketing and distribution strategies and are applying technology to engage customers, lower costs and produce better products.

Consumers, particularly Gen Z consumers, are increasingly seeking environmentally and socially responsible brands that promote health, safety and sustainability for the planet as well as a consciousness and focus on equality and diversity. This conscious shift in consumer attitudes has created new categories and has invigorated growth and innovation in existing categories. Bravo Mondo believes that environmentally and socially conscious entrepreneurs and companies have many significant, long-term opportunities to profit from responsible policies, products and strategies. From the ingredients being used, to the recycling of waste, to a carbon-neutral energy approach, to innovative marketing and donating, all reflect how companies can be more environmentally and socially supportive which in turn can be a strategic advantage.

"Everything about America now has to do with diversity that we could hardly recognize in 1990." - William Frey, demographer at Brookings Institute.

America is older, more Hispanic and Asian, less wedded to marriage, and increasingly living in multi-generational households. Families have never been more ethnically, racially and religiously diverse. The traditional nuclear family continues to be replaced by single head and multi-generational households, unmarried partner couples, and same-sex couples. Solo living is also on the rise, representing 27% of all households while single parent represents 28%.

The most dramatic shift in the U.S. is the growth of Hispanics. One in five Americans is now Hispanic (18.9%, 2020 US Census Bureau). The growth of Asian Americans is also significant (6.1%, 2020 US Census Bureau). The growth in the buying power of non-white and alternative lifestyle Americans is the consumer story of the 21st century.

Bravo Mondo believes embracing diversity is an opportunity to create competitive advantage by building brand relationships, products and marketing strategies across these new consumer segments and by backing entrepreneurs with deep roots in these diverse backgrounds and communities.

We are living in a unique moment of global connectivity. The advent of our digital economy has accelerated the spread of ideas in the world faster than we might have even imagined. McKinsey estimates that global data flows have increased 45x since 2005 and 2014, and cross-border data flows have been growing at twice the rate of global trade. This digitization of globalization has shifted the parameters of how brands develop across borders.

Today, the ideas behind brands spread faster than the brands can themselves. As we look across the world, we see very similar businesses emerging, each addressing similar, underlying human needs. We believe that an "export" era of globalization in which multi-nationals spread like empires around the world is giving way to a "lift & shift" era of globalization, in which local entrepreneurs compete to bring similar ideas to their own markets at a rapid clip.

When Henry Ford made automobiles affordable to millions of Americans, he did not appreciate that he was catalyzing a massive transformation in the American consumer. Yet countless modern concepts owe their invention to the availability of rapid, efficient personal mobility: suburbia and supermarkets, to-go containers and teenage independence, camping and convenience stores. Indeed, before the automobile, the railroad opened up the middle of the American continent; before the railroad, the steamship kicked off a century of global migration.

We sit at the precipice of a new era in personal mobility. Innovations in electronic vehicles will soon make the internal combustion engine obsolescent. 5G wireless technology and innovations in artificial intelligence will enable a technology grid that is smarter and more efficient than we can even contemplate today. Autonomous vehicles will reshape the day of millions of American consumers, freeing up billions of hours annually to be redirected toward media consumption, work, or commerce. Each of these innovations will potentially undermine the notion of personal car ownership, as each edges us closer to an era of autonomous, on-demand car sharing.

It is impossible to predict today the full extent of transformation this new era of mobility will unleash. However, as we evaluate the consumer landscape for opportunities, we remain cognizant of how these innovations could fundamentally alter categories across the consumer economy.

AI is likely to be either the best or worst thing to happen to humanity" – Stephen Hawking

If we continue at the pace of technological innovation we have matched over the last fifty years, it is likely that within the next thirty years, artificial intelligence will match the "computing" power of the collective brainpower of the entire human race. This future state engenders much angst among philosophers and futurists, many of whom are quick to imagine all the apocalyptic potentialities of computer run amuck. However, obsessing over the science-fiction future blinds one to the possibilities that will emerge in the interim. Innovations in machine learning and artificial intelligence already are opening countless new opportunities in the consumer space. They are reshaping how consumers learn, research, and shop. Whether through search algorithms, AI-assistant driven commerce, programmatic advertising, pricing algorithms, or geolocation, these advances are already transforming the consumer economy. With the use of AI-powered automation, companies will be able to streamline processes and reduce costs, leading to increased efficiency and productivity. AI will also be used to analyze data and make predictions about market trends and customer behavior, which will help companies make more informed decisions. AI Image and text content creation tools like ChatGPT are rapidly showing whats possible.

"Imagine a retailer that... grew into a mammoth that redefined the American shopping experience. Among its innovations: No matter where you lived, it shipped your order directly to you, whether you were looking for cast-iron cookware, a mandolin, the newest technological marvel, or the latest in petticoats...Actually, it was Sears, a century ago." – The New York Times

Just as Woolworth's, Sears, WalMart and did before them, Amazon, Alibaba and the full slate of eCommerce giants have fundamentally transformed the consumer economy. We are living in an era of unparalleled consumer choice and efficiency. Today, consumers can browse well over 800 million items on Tmall.com. A stack of Sears catalogs that contained the full scope of Tmall’s product portfolio would reach 7,000 feet tall – that’s four times the height of the building formerly known as the Sears Tower.

This scale of consumer choice has empowered the consumer to an unparalleled degree. There is more transparency around quality, price, and provenance than has ever existed before. There is more room for customization and personalization than ever before. And goods can be transited around the world faster than ever before.

While this has created opportunities for innovative, new challenger brands, it has also raised the stakes for all consumer brands. Brands today must work harder & faster to make themselves relevant and distinctive amongst this breadth of choice; they must form personal, 1:1 relationships with consumers leveraging big data; and, they must develop cutting edge supply chains to keep pace with rising consumer expectations on cost and shipping.

Cryptocurrencies and blockchain technology are expected to have a significant impact on global business in the next decade. According to a study by the World Economic Forum, 10% of global GDP will be stored on blockchain technology by 2027. Additionally, a report by Markets and Markets estimates that the blockchain market size will grow from $3.0 billion in 2020 to $39.7 billion by 2025, at a CAGR of 67.3% during the forecast period.

Businesses in the finance and banking sector are expected to be the most affected by these technologies. Blockchain technology can improve efficiency and transparency in financial transactions, and cryptocurrencies can provide an alternative to traditional banking systems. Other sectors that are expected to be impacted include supply chain management, healthcare, digital asset and IP management, rights management and real estate.

For example, in supply chain management, the use of blockchain technology can increase transparency and traceability, reducing the risk of fraud and errors. In healthcare, it can improve the security and privacy of patient data. In real estate, it can streamline property transactions and reduce the need for intermediaries. In the music business It can completely restructure how royalties can be tracked, reported and paid.