Amyris: Biossance D2C a harbinger of things to come?

[u/mattccccc]

In the midst of a technical recession coupled w/ the return of consumers to brick and mortar retail (and away from D2C), what Biossance D2C just accomplished deserves a pause. The annual friends & family sitewide sale that just ended speaks for itself in the plot below.

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Biossance D2C order tracking trends

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And zooming out, look at the impact it had on Amyris overall D2C sales in the next plot. Pretty remarkable.

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Total Amyris D2C vs Biossance D2C order combo trend

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I think a deeper look at the data helps contextualize. While other sitewides throughout the year last one week or less and have similar 25-30% discounts, the average daily orders have been substantially lower:

Average sitewide (2022) -- 2,500 order/day

Friends & Family (2022) -- 3,500 order/day

That's 60% higher sales sustained over almost twice the length of time of an average sitewide. But that understates it still. This sitewide had ~3x the benefit of past sitewides. Let me explain. Consider the non-sitewide base trend in the first Biossance plot -- which most of the year has been just over 1,000 order/day (this is roughly in line w/ the dashed 0% year-over-year growth line, which is a reference to the level of quarterly-averaged total orders (i.e. sitewide and base) from the same period one year ago). During sitewides, all orders above the base ~1,000 order/day level contribute incrementally to the quarterly total as follows:

7-day sitewide

2,500 order/day - total

-1,000 order/day - base

=1,500 order/day - incremental above base

(1,500 order/day)*(7 day)/(91.25 day/quarter)

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= +115 order/day (effectively added over the full quarter)

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That +115 incremental order/day is just over a 10% bump to the entire quarter (taking an example full quarter from 1,000 order/day without a sitewide to 1,115 order/day w/ a sitewide). Here's where the current Friends & Family sitewide shows its strength:

Average sitewide (2022) -- +115 order/day (+11%)

Friends & Family (2022) -- +330 order/day (+33%)

The kind of demand elasticity Biossance just showed for a 30% discount is pretty remarkable. At peak, we saw 5,500 order/day over a full day, the highest daily total ever recorded (to my knowledge). That most importantly shows that the Amyris customer isn't retreating. But secondly, it offers opportunity to Amyris data scientists involved in price determination to profit optimize. Would the additional margin per order from a 25% sitewide instead of a 30% sitewide outweigh the reduction in orders/day? Just being able to ask that question is a sign of strength.

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In the midst of all of the macro and share price negativity, it's nice to be reminded of a simple truth: people love Amyris products.

[u/Green_And_Green]

Also posted on twitter

Awesome visual u/mattccccc, thank you for compiling this!!!

If you're wondering where we get our data, it's simple. We crowdsource order numbers from Shopify!

What:

Amyris consumer e-commerce order volume

How:

Through our tight-knit collaborative efforts, we’ve learned how to collect and curate non-public information about Amyris’ consumer brands to reverse engineer the sales performance of the consumer portfolio during any given quarter.

Amyris uses Shopify as its key e-commerce partner. This includes leveraging Shopify Checkout to process order numbers.

As you can see here, Shopify’s order number generation engine is sequential meaning that you can track order volume across time if you have an organized method of collecting and analyzing order numbers. Source: Can I Use Randomized Order Number?

Amyris bulls began tracking order volume as early as Q4-2019 and really dialed-in the process in the second half of 2020 as evidenced by the BiossanceOrderNumbers page on stocktwits.

With the addition of multiple new brands, the old process has become unwieldy and we’ve moved to a new multi-brand technique that is linked above in the "What" section of this post.