2025 Brands to Watch
Welcome to 2025! The year will bring a new administration in Washington and with it lots of discussion of tariffs and tax policy and Greenland.
Here are my 2025 brands to watch.
Private College Tuition
Selective private colleges have long embraced a simple model: raise tuition and increase financial aid. The result: families with resources pay more while the school remains accessible to all.
It is a nice concept, but the model is no longer working. As the cost of attending college reaches $100,000 per year, there are fewer and fewer families that can pay the full cost. Children of wealthy families are highly sought after and showered with merit scholarships. Even for the families with resources, is Carleton or Bates or Washington University in St. Louis worth $350,000 more than the local state school?
Brown University has apparently reached a milestone. Despite increasing tuition by 4.5%, the school reports that overall tuition revenue is flat. The increases in financial aid and shifts in student mix are negating the list price increase.
The high cost also invites criticism. Colleges that charge over $100,000 a year are easy targets for politicians for regulation and taxes. Even with financial aid, the schools seem elitist and out of touch.
It is time for selective colleges to go the other way and reduce tuition. A small tuition cut will make a school seem more accessible. It will be less of a political target. The move won’t have a significant impact on overall revenue. Paired with a fund-raising campaign, a tuition reduction would likely be financially positive.
Will any top school take the lead? I predict not, but they should.
Beyond Meat
Beyond Meat was once a high-flying CPG firm. The company received enormous attention and had a valuation of over $14 billion in 2019. People marveled at the products.
Things have since unraveled. The company’s valuation is now down to $235 million. The stock price peaked at $195 per share and is now at $3.47.
If possible, the actual financial results are even worse. Last year the company had revenues of $343 million, and net income loss of $338 million. When your negative net income is about the size of your revenue, you have trouble. In the most recent quarter, the firm lost another $27 million. The company has been steadily burning cash.
Will the company survive? I suspect we will see financial distress in 2025.
The problem for Beyond Meat is that there isn’t a great value proposition. People who like to eat meat like to eat meat. People who don’t like meat don’t like meat. So, a plant-based meat will have a narrow appeal.
Beyond Meat’s mission highlights the brand’s problem: “We build meat from plants to nourish and protect our bodies, heal earth and climate, and better share the planet with the miracle of life that surrounds us.” As all too many companies have learned, for many people, healing the earth is important but not motivating. It is a bit like protecting democracy. How about more concrete benefits like taste, price and nutrition?
Louis Vuitton
As we start 2025, the luxury industry is encountering some rare turbulence, and no brand better represents the industry than Louis Vuitton, part of the global giant LVMH.
There are two big problems for luxury goods. The first is China, where a weak economy is leading to a slow-down in luxury good sales.
The second is pricing. Luxury brands have dramatically increased prices in recent years. For a while, the strategy worked because the move increased margins and perceptions of exclusivity. It seems pricing has now gone too far, so the value proposition is starting to weaken. The brands seem unattainable, and the price increases give people a sense of discomfort. Everyone ultimately wants to think they are getting a good value.
The super-wealthy often don’t buy the classic luxury brands. They buy elite brands that few people know about or sometimes just wear things from Uniqlo.
Can Louis Vuitton find the right balance and rebound? It is hard to see a quick improvement for the brand or for LVMH.
BYD
Chinese car company BYD is positioned to have a big year in 2025. The company is now the world’s largest maker of EVs. The firm’s overall strategy is simple: build market penetration of EVs with low prices.
BYD has a range of models and brands, but many of the company’s sales are inexpensive EVs. The least expensive cars cost less than $10,000.
With a super low price point, EVs start to make sense. Think of these cars as one step up from a golf cart.
Scale matters, which is why BYD’s size is super important. The only way to succeed with low prices and margins is with volume that drives efficiency.
The big risk is tariffs. I suspect tariffs will be a challenge for BYD, but even with a 100% tariff, BYD’s offerings will be a solid value.
Look for BYD to have a huge year as other EV firms struggle.
DEI
Companies are backing away from DEI at an astonishing pace. Almost every day, it seems, another major firm announces a shift in policy to put less emphasis on DEI efforts.
The problem is that the DEI brand has developed negative associations. Activist investors are now pressuring companies to change policy and companies, eager to avoid complexity and attack, are complying.
I suspect DEI will fade in 2025, just as Black Lives Matter faded as it, too, developed some negative perceptions.
Something else will likely emerge. The idea of diversity is both appealing and a business necessity; shifts in the population mean organizations must be welcoming places where people from different backgrounds can thrive. Look for a new brand to emerge this year to represent the idea of inclusion without using the words diversity, equity or inclusion.
Stock Market
Every major investment firm is projecting an up year for the stock market. I’m not so confident. We are coming off two big years and the new administration will focus on tariffs and tax cuts, completely ignoring the deficit. All of this will lead to higher interest rates and damage the economy, at least in the short run. So, I project the S&P 500 will finish down 3%, at 5,706.
The only thing I’ve learned about predicting the stock market is that it usually goes up and I’m usually wrong. So, I’m not making any investment moves based on my forecast and you shouldn’t either. Timing the market is hopeless. Just keep buying stocks.
Best wishes for 2025!
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