4th & Heart Scores $10M To Scale 🧈

Welcome back to This Week in CPG, folks. Even though the news cycle is recovering from its postprandial somnolence, we still have some exciting CPG items to cover. Here’s a preview:

• Suja Life explores sale 🥕

• Martin-Prouet sells stake 🥂

• Jibby lands funding ☕️

• Nicki Minaj teases new brand 💅

4th & Heart Scores $10M To Scale 🧈

4th & Heart, a Los Angeles-based producer of innovative ghee products, secured $10M in growth equity funding. Per NOSH, the round was led by Cambridge SPG, with additional participation from BFG Partners and Harbinger Ventures, an all-around impressive lineup of CPG investors. 

Founded in 2015 by Raquel Tavares, 4th & Heart has quickly established itself as a leader in the ghee category both online and in retail. Based on reviews, 4th & Heart is the largest ghee brand on Amazon by an enormous margin, and they have significant retail penetration. Their retail partners include nationwide and regional players like Albertsons, Sprouts, Target, Walmart, Wegmans, Whole Foods, Publix, and many others. 

So, how did 4th & Heart go from upstart to incumbent? The answer is threefold. 

First, 4th & Heart was the beneficiary of great timing and a handful of dietary trends. For the uninitiated, ghee is a clarified butter that’s made by heating butter in order to remove water and milk solids. This process renders the product lactose-free and an ideal fit for Paleo, Keto, and Whole30 diets. If you look at Google Trends, interest in the abovementioned diets began to surge not long after 4th & Heart launched, and they capitalized on it. 

Second, 4th & Heart was one of the first domestic brands to offer flavored ghees. While there are plenty of standard ghee options on the shelf — Target sells a very popular ghee under their Good & Gather brand — 4th & Heart differentiated by offering elevated flavors like Garlic, Turmeric, Vanilla Bean, and Himalayan Pink Salt. This, in my estimation, made an exotic pantry staple like ghee more approachable to consumers en masse. 

Lastly, in addition to flavor innovation, 4th & Heart introduced some key packaging and form factor innovations to the category. They were the first brand to offer ghee in spray form — a major draw for convenience-minded consumers — and they also introduced ghee in bar form, similar to how Kerrygold and Land O Lakes package their butter. Though these form factor innovations might seem minor in hindsight, they were critical for driving product trial and adoption, a difficult task given that ghee is still considered slightly exotic.

Overall I’m bullish on 4th & Heart. They’ve consistently proven to be a category trendsetter as opposed to a follower, and since they control the majority of their manufacturing, they’ll likely continue to produce higher quality products than their competition. Also, due to their proximity to manufacturing, there’s a higher likelihood that they continue to out-innovate brands that rely on co-packers. 

Another positive indicator is the fact that the main contributors in this growth round are all existing investors. They’ve looked under the hood and like what they see.

Bullish.

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Deals 💰

Mergers & Acquisitions 

• Private equity firm Paine Schwartz Partners is exploring a sale of Suja Life, the cold-pressed juice brand it acquired in 2021. We don’t have any details on Suja Life’s valuation, but the company reportedly exceeded $185M in sales the year it was acquired. Paine Schwartz Partners acquired another beverage brand, Vive Organic, and merged it with Suja in 2022. Two possible buyers are Bolthouse Farms, which is owned by Butterfly Equity, and Tropicana Brands Group, which is owned by PAI Partners. Axios

• French investment firm Sofiprotéol acquired a minority stake in Martin-Pouret, a producer of luxury vinegars and condiments that traces its roots back to 1797. Martin-Prouet was dubbed the “Hermes of vinegar” by The Daily Beast. Sofiprotéol is a subsidiary of Avril Group that focuses exclusively on the agricultural and food sectors. Just Food

Fundraising

• Functional beverage brand Jibby raised over $450K on crowdfunding platform Wefunder. The nascent beverage brand grew revenue 450% year-over-year in 2022. Love their packaging, particularly the powdered products. Wefunder

• Australian sports drink brand Level Lemonade raised over $580K on crowdfunding platform Birchal. The Sydney-based brand has sold 4M bottles since then. Big fan of their novel bottles 🔽 Birchal 

• Indonesian baby care brand Gently secured an undisclosed amount of seed funding from Accel and Northstar. Gently was founded by Nyoman Anjani and sells a variety of bath, body, and hair care products. Deal Street Asia

• Canadian eyewear brand Sol Kyst raised $100K from Michele Romanow on popular television show Dragon’s Den. Sol Kyst sells wide-face friendly sunglasses. GlobeNewswire

• Australian organic infant formula brand Bubs will raise $28M to drive growth in the United States. First quarter sales in the U.S. jumped 24% to $11.6M. Thus far they’ve raised $14M. Business News Australia

What’s New 🤩

Apparel, Cosmetics, and Wellness

• Singer Nicki Minaj is preparing to launch a luxury press-on nail brand, Pink Friday Nails, in January. They’re currently selling passes which range from $30 to $120 which guarantee access to product at launch. Instagram 

• Diptyque, the French fragrance brand that Manzanita Capital acquired in 2005, opened a stunning new flagship store on Madison Avenue in NYC. They now have six stores across Manhattan and Brooklyn. Glossy

• Instead of participating in Black Friday, sustainable sneaker brand Veja offered customers free sneaker repair at one of its cobber locations. Very cool. Footwear News

Food, Beverage, and Alcohol

• Hidden Valley Ranch announced a partnership with AMC Theaters to bring ranch flavored popcorn to AMC cinemas across the United States. Hidden Valley has been on a tear with their partnerships and licensing deals lately. Food Business News

• There’s a new hard kombucha brand from Australia called Bower Brewing. Lovely packaging 🔽 Bower Brewing

• Australian rye whiskey brand The Gospel is preparing to launch a five-year-old rye whiskey that was aged in vermouth casks. They have some of the best-looking bottles on the market, IMO. Instagram

Data 🖥️

• Unsurprisingly, sales at champagne house Laurent-Perrier were slightly down for the first half of the fiscal year. Sales slipped 3.7% to $153.4M but they did increase operating margin by 410 bps to 37.4%. Yahoo Finance

• PRIME Hydration and Electrolit continue their impressive growth stories. For the four week period ending on November 4th, PRIME grew volume by 191% while Electrolit volume jumped 25%. Twitter

Distribution News 🚚

• Hydration brand A-GAME will launch at Meijer.

• Tequila brand Tromba is now available in the UK.

• Aguas frescas brand Picadas launched chainwide at Bucee’s.