The BFY Soda Arms Race 📈

Welcome back to This Week in CPG, folks. Hope everyone had a relaxing weekend and a productive Monday. Let’s dive in:

• RIND Snacks buys manufacturer 👀

• L Catterton partners with Tod’s 🥿

• Snoop & Dre unveil RTD cocktail 🍸

• Feastables packaging refresh 💯

• Soft Services x Sephora 🧴

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The BFY Soda Arms Race 📈

With the better-for-you soda wars heating up, so is the arms race. On the same night that Poppi debuted a terrific (and very expensive) Super Bowl ad, we learned that probiotic soda brand Culture POP secured $21M in additional funding. 

Founded in 2020 by beverage industry veterans, Culture POP sells low-sugar sodas that contain billions of probiotics. Unlike other BFY soda players, Culture POP products are free of stevia, stevia leaf, and artificial sweeteners. Instead, their products are sweetened with a combination of organic fruit juice and steeped spices and herbs. There’s an argument to be made that Culture POP is the most better-for-you soda of the better-for-you sodas. We’ll leave that argument to the CPG Braintrust on Twitter, though. 

With deep-pocketed rivals like OLIPOP and Poppi vying for consumers' hearts and minds, this funding couldn’t have come at a better time for Culture POP. 

OLIPOP, a prebiotic soda brand that launched in 2018, eclipsed $100M in annual sales in 2022, and, per SEC filings, has raised over $50M in funding. OLIPOP has done a terrific job of brand marketing, too, which is why they’ve become the unofficial face of BFY Soda. It certainly helps having celebrities like Camila Cabello, Gwyneth Paltrow, and The Jonas Bros on the cap table to raise awareness, too. 

Poppi, which originally launched as Mother Beverage in 2015 before wisely rebranding as Poppi in early 2020, shares a number of similarities with OLIPOP. They’re growing fast, they’re well-capitalized, and they also boast a star-studded cap table. In 2022, Poppi’s revenue surged 148% year-over-year and they landed a $25M investment from CAVU Consumer Partners. CAVU, the firm that guided Bai to a $1.7B exit in 2017, is one of Poppi’s strongest assets. 

Culture POP, on the other hand, has been quietly building its brand without much fanfare or PR bluster. Culture POP’s greatest asset is likely its founder & CEO, Tom First. Prior to launching the better-for-you soda brand, First was one of the co-founders of Nantucket Nectars, a beloved beverage brand that was acquired by Cadbury Schweppes in 2002. After selling Nantucket Nectars, he launched First Beverage Group which cut an early check to Essentia Water (acquired by Nestlé in 2021). In short, Tom First lives and breathes the beverage industry, and he’s proven that he can scale a beverage brand. 

Despite being later to the game than its competitors, Culture POP has established an impressive retail presence at Albertsons, Kroger, Sprouts, Target, Whole Foods Market, and others. 

In addition to OLIPOP and Poppi, Culture POP will have to compete with a number of other recent entrants as well. Cove Drinks, a Canadian beverage brand known for its kombucha line, just launched their probiotic soda line at The Fresh Market in the U.S. Similarly, Health-Ade recently expanded into BFY soda with SunSip which is available nationwide at Whole Foods Market.

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Deals 💰

Mergers & Acquisitions 

• RIND Snacks, a purveyor of dehydrated fruit snacks, is acquiring Small Batch Organics, a Vermont-based producer of granola and granola snacks. Terms of the agreement were not disclosed, but RIND is buying the company in order to bring manufacturing and fulfillment in-house. NOSH

• Consumer private equity giant L Catterton is partnering with the founding family of Tod’s to take the luxury footwear company private. The Della Valle family tried to take Tod’s private last year but failed. Tod’s delivered net sales of just over €1B in 2022, up from €883M in 2021. Reuters

Fundraising

• Tennessee-based craft kombucha producer Walker Brothers raised $3.68M from undisclosed investors. Brothers Sam & Luke Walker launched the brand in 2019. Their retail partners include Sprouts, Whole Foods Market, and Trader Joe’s in select markets. Instagram

• HALO Hydration, a New York-based seller of hydration products and electrolyte-infused coffee, raised $2.38M in funding from undisclosed investors. SEC

What’s New 🤩

Apparel, Cosmetics, and Wellness

• Hero Cosmetics has named popular podcast host Alix Earle as its first-ever Global Ambassador. A really smart move from Hero. WWD

• Jones Road Beauty continues to expand into new categories. Their newest product is a nail polish kit that includes three different shades. Jones Road Beauty

• L’Oréal has signed a long-term license agreement with Miu Miu, the Italian fashion house that’s owned by Prada. Under the terms of the agreement, L’Oréal will develop and distribute beauty products under the Miu Miu brand. The first line of fragrances will launch in 2025. Happi

• BelliWelli, the brand that’s best known for its gut-friendly protein bars, is expanding into wellness with a new line of daily fiber supplements. This was not on my bingo card but it works! Instagram

Food, Beverage, and Alcohol

• Snoop Dogg and Dr. Dre have joined forces to launch a line of RTD cocktails called Gin & Juice By Dre and Snoop. Investors in the brand include Jimmy Iovine, Main Street Advisors, and others. The packaging is pretty brilliant IMO. Definitely different 👇 PR Newswire

• Philadelphia-based Two Robbers is launching a new line of vodka sodas. It looks like the company, which is best known for its craft hard seltzer, is now focusing on RTD cocktails. Do we like the packaging? Two Robbers

• Feastables, the candy brand founded by YouTube sensation MrBeast, just unveiled a sleek packaging refresh. Massive improvement IMO 👇 Dexerto

• Scottish beverage firm BrewDog has launched a new tequila brand called Casa Rayos. The bottle is pretty novel. The Spirits Business

• After a 14-year run, organic candy brand OCHO is sadly shutting down due to a lack of funding options. Just Food

• Icelandic Provisions has launched a new oatmilk skyr line which comes in five flavors and is available nationwide at Whole Foods Market. Instagram

• Asian-inspired oatmeal brand Yishi launched a new line of oat flour pancake and waffle mixes. NOSH

Data 🖥️

• Despite economic headwinds, Hermès delivered net sales growth of 18% in Q4. During the same period, Kering sales decreased by 6%, while LVMH sales were up only 5.5%. WWD

Distribution News 🚚

• Hydration brand Cure is now available at Meijer.

• Sustainable wine brand Ami Ami is launching at Foxtrot.

• Bodycare brand Soft Services is launching at Sephora.

• Plant-based bacon brand MyBacon launched nationwide at Whole Foods Market.