NCN News for April 12, 2018|
Recent Transactions in the Nutrition and Health & Wellness Industry
Campbell creates accelerator unit to drive growth, including Campbell Fresh
Campbell Soup Co. (Camden, New Jersey) announced a new accelerator unit that will invest in food innovation and develop new business models. The accelerator will encompass the Campbell Fresh business, the company’s digital and e-commerce unit, as well as a network of cross-functional teams. The accelerator was announced as part of a strategic reorganization to support the company’s growth strategy, which includes a focus on food that addresses health and wellness. Denise Morrison, Campbell’s president and CEO, said that the acquisition of Snyder’s-Lance served as a catalyst for the strategic reorganization. Campbell announced the Snyder's-Lance $4.87 billion deal in December, after which it said snacking would represent approximately 46 percent of Campbell’s annual net sales, up from 31 percent. Campbell Soup is an NCN Cornerstone Investor.
Smucker to acquire Rachel Ray dog food maker for $1.9 billion
The J. M. Smucker Company (Orrville, Ohio) is to acquire Ainsworth Pet Nutrition LLC (Meadville, Pennsylvania) from L Catterton and the Lang family in a cash transaction valued at approximately $1.9 billion, offset by a $200 million tax benefit. Approximately two-thirds of Ainsworth's sales are generated by its Rachael Ray Nutrish brand, strengthening Smucker’s portfolio in the fast-growing premium pet food category. The purchase price represents a multiple of approximately 12 times EBITDA; Smucker expects a contribution to net sales of approximately $800 million in the first full year after closing. Several of Smucker’s existing pet brands were acquired in 2015 from Big Heart Pet Brands, formerly the pet food division of Del Monte Foods, in a $6 billion transaction. These brands are mostly conventional but also include the premium Nature’s Recipe and Natural Balance brands. According to a new pet market report by Packaged Facts, the growing popularity of super-premium and natural pet foods has caused a shift in the market whereby mass channels appear poised to surpass pet specialty in pet food sales growth, a phenomenon it attributes directly to “mass premiumization.” L Catterton invested in Ainsworth in 2014.
UAS Labs strengthens probiotics portfolio by acquiring Nebraska Cultures
UAS Laboratories LLC (Wausau, Wisconsin) has acquired Nebraska Cultures Inc. (Walnut Creek, California), a specialist in custom-manufactured probiotics including the DDS-1 strain of Lactobacillus acidophilus and the ProDURA brand of spore-based probiotics. Dr. Khem Shahani, founder of Nebraska Cultures, discovered the DDS-1 strain of L. acidophilus in 1959 and has published more than 200 peer-reviewed scientific articles, many demonstrating the potential for DDS-1 to improve health. Recognizing the strength of the strain, UAS Labs conducted multiple double-blind, gold standard clinical studies on DDS-1. Maypro Industries, a distributor for Nebraska Cultures, will continue to support the ProDURA line.
Post Holdings announces proposed IPO of private brands
Post Holdings Inc. (St. Louis, Missouri) announced a proposed initial public offering for its private brands business, which makes nut butters, healthy snacks and pasta and includes Dakota Growers and Attune Foods organic and natural granolas and cereals. Attune is primarily a private label business. The offering does not include Post’s Active Nutrition platform, which houses PowerBar, Premier Protein and Dymatize brands. Post’s private brands businesses (inclusive of Golden Boy, Dakota Growers and Attune) reported net sales of $791.2 million for the fiscal year that ended Sept. 30.
Nutrition data startup Nutrino announces Series A round for diabetes services
Nutrino (San Francisco, California, and Tel Aviv, Israel), a provider of nutrition-data services and analytics technology, announced a Series A round of $8 million, bringing its total raised to $10 million. Pereg Ventures, Nielsen Ventures and Gandyr Group joined existing investors. Funds will be used to expand Nutrino's nutrition services related to diabetes. Nutrino uses AI and machine learning to understand individual responses to particular foods via feedback from wearables and other data-points. These insights allow Nutrino to define an individual's FoodPrint, or the digital signature of how food affects a person's body. This gives individuals greater control over nutrition to combat chronic disease, manage weight and improve well-being, the company said. "With skyrocketing consumer demand for increased information about what they eat and growing health awareness, nutrition data is the largest untapped sector of this [digital health] industry,” said Ziv Ben Barouch, managing partner of Pereg Ventures.
Dunn’s River acquires majority stake in Temple Turmeric
Dunn’s River Brands (DRB), a strategic beverage platform formed in partnership with private equity firm Fireman Capital Partners, has acquired a majority interest in Temple Turmeric Inc. (New York, New York), a maker of cold-pressed organic elixirs, wellness shots, raw vinegars and beverages with vegan probiotics. Terms were not disclosed. The DRB portfolio also includes Sweet Leaf Tea and Tradewinds. Temple Turmeric was founded in 2009 and sources its whole root turmeric from Hawaii. Whipstitch Capital acted as an advisor to Temple Turmeric.
Impossible Foods reaches $396 million in venture funding
Impossible Foods (Redwood City, California) announced closing $114 million in convertible note financing. The food-technology startup has raised approximately $214 million in the past 18 months, for total venture funding of about $396 million since the company’s founding. Started in 2011 by Stanford biochemistry professor and former pediatrician Dr. Patrick O. Brown, Impossible Foods makes meat alternatives from plants. The flagship Impossible Burger is made with water, wheat protein, potato protein and coconut oil, and a plant-based version of heme derived from genetically engineered fermented yeast. Heme is a protein obtained from hemoglobin.
Kerry acquires Dutch meat alternative processor
Kerry Group (Tralee, Ireland) has acquired the Dutch plant-based meat company Ojah BV (Ochten, The Netherlands), which came under the control of Korys, the investment arm of the wealthy Colruyt family, just more than a year ago. Founded in 2009 by two extrusion technologists, Ojah sells its textured meat alternatives under the Plenti brand, offering the soy- and pea-protein-based products in formats comparable to chicken, beef, pork and fish. The deal was reported at less than €20 million by the Irish Independent newspaper. Kerry launched a plant-based protein ingredient brand, ProDiem, for nutritional bars, beverages, etc. at the end of 2016.
Strand Equity invests in superfood skincare brand
Strand Equity has made a minority investment in vegan skin care company Youth to the People (YTTP, Los Angeles, California). YTTP's skincare products feature superfood ingredients, cold-pressed extracts and natural botanicals but contain no parabens, sulfates, phthalates, dimethicone or mineral oil. Co-founded by cousins Joe Cloyes and Greg Gonzalez, whose grandmother founded Eva's Esthetics in 1979, YTTP describes itself as a team of artists, musicians, painters, designers and entrepreneurs. Strand Equity’s current and past investments include Banza, Hippeas, HUM Nutrition, Happy Baby, Revive Kombucha, Vita Coco and Bai Brands.
Beta Hatch raises seed round to commercialize proprietary insect ranching
Wilbur-Ellis (San Francisco, California) announced a $2.1 million seed round in Beta Hatch (Seattle, Washington), a company industrializing the production of insects as a sustainable protein for animal feed. Seed investors included Cavallo Ventures, the venture capital arm of Wilbur-Ellis, Element 8 Fund, Keiretsu Capital, NQV8 and Frontier Angels. Funds will be used to build a pre-commercial facility. Founded in 2015 by entomologist Virginia Emery, Ph.D., Beta Hatch is developing proprietary technology for rearing mealworms on organic byproducts that would otherwise be landfilled. Beta Hatch's mealworms could disrupt the fishmeal market, according to Wilbur-Ellis, an international distributor of agricultural products, animal feed and specialty chemicals. Frass, or insect manure, is generated by Beta Hatch insects and can be used as an organic fertilizer for specialty crops.
Land O’Frost gets entry into natural and organic market via Wellshire Farms
Land O’Frost (Munster, Indiana) has purchased Wellshire Farms Inc. (Swedesboro, New Jersey), a brand of natural and organic deli meats sold in natural and specialty retailers such as Whole Foods Market, Trader Joe’s and Sprouts Farmers Market. The transaction unites two family-owned companies in the deli meat industry. Wellshire Farms produces sausage, bacon, deli and dried meat, ham, hot dogs and snacks that are minimally processed and free of nitrates, nitrites and preservatives; its brand portfolio includes Wellshire Organic and Colameco’s Primo Naturale. Founded in 1958, Land O'Frost is a manufacturer of pre-sliced meats and specialty hot dogs and sausages.
Juice It Up! acquired by SJB Brands
Juice It Up!, a smoothie, raw juice, and superfruit bowl franchise, announced its acquisition by SJB Brands LLC, a partnership between Dover Shores Capital, Britt Private Capital and Jupiter Holdings. Juice It Up! was founded in 1995 in Orange County, California, and has 100 locations either open or in development across California, New Mexico, Oregon, Texas and Florida. Under new ownership its key initiatives will be product innovation, growth in prime markets, and sourcing high quality site locations and franchisees.
Bain leads investment in plant-based restaurant chain by CHLOE.
Bain Capital Double Impact announced a strategic investment in by CHLOE., a plant-based, fast-casual restaurant startup, with Kitchen Fund, Collaborative Fund, and TGP International/Qoot International participating. Moneyish.com reported that $31 million was raised. Funds will be used to expand to 20 locations domestically and internationally over the next two years. Founded in 2015, by CHLOE. has grown from its flagship in New York City’s West Village to 10 locations in New York City, Los Angeles, Boston, Providence, Rhode Island, and London.
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