Campari Bets on Scotch, ZBiotics Unveils Second Product 🧪

GM and Happy Thursday, folks. Here’s what we’re covering this morning:

• Rise Baking Co. gets acquired 🍪

• L Catterton backs Vyrao 💰

• Tekla heads to Seoul 😍

• Coca-Cola collabs with Bacardi 🍹

• Free Rein Coffee lands at Walmart ☕️

Campari Bets on Scotch 🥃

Campari Group, the Italian firm that’s best known for its aperitifs but also owns spirits brands like Espolon, SKYY Vodka, and Wild Turkey, acquired a minority stake in Capevin Holdings, a South African company that owns a variety of Scotch whisky brands. Campari will shell out just over $91M for its 14.6% stake in Capevin.

Capevin Holdings is the parent company of CVH Spirits, a Glaswegian spirits company that produces and sells blended and single malt Scotch whiskies under brands like Bunnahabhain, Deanston, Tobermory, and Ledaig. Last fiscal year, CVH Spirits posted revenue of £140M and a pre-tax profit of £17M. 

What’s most surprising about this deal is that it happened at all. Speaking purely from an M&A perspective, Scotch hasn’t been a hot category. Most of the major spirits players have either been divesting Scotch assets in favor of acquiring American whiskey brands, or they’ve spent their energies acquiring brands in hot categories like gin, rum, and tequila. Even Edrington — the proud owner of The Macallan, The Glenrothes, and The Famous Grouse — tapped the American whiskey market for its most recent acquisition, Wyoming Whiskey.

Despite the chilly M&A conditions mentioned above, this deal makes sense for Campari. Besides Glen Grant — the Speyside distillery that was founded in 1840 — Campari’s portfolio is light on Scotch. By partnering with CVH Spirits, Campari not only gains exposure to a number of sophisticated Scotch whisky brands, but also sophisticated distilleries with impressive visitor centers and advanced bottling, blending, and warehousing facilities. 

More on the transaction here.

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Deals 💰

Mergers & Acquisitions 

• Platinum Equity and Butterfly joined forces to acquire Rise Baking Company, a Minneapolis-based manufacturer of baked goods for the retail and foodservice channels. Established in 2013, Rise Baking Company has made thirteen acquisitions since its founding. The seller is Olympus Partners who acquired a stake in Rise Baking Company in 2018. PR Newswire

• Platinum Equity also acquired Polli S.p.A., an Italian manufacturer of pasta sauces and vegetable preserves. Polli is one of the largest producers of pesto in the EU. They also produce a whopping 190 million products per year. PR Newswire

Fundraising

• L Catterton has invested in Vyrao, a functional fragrance brand founded by Yasmin Sewell. Vyrao, which launched in 2021 and is based in London, claims that its fragrances have mood-enhancing qualities. Estee Lauder is also an investor in the brand. Business of Fashion

• IVB Wellness Lab, a premium Spanish supplements brand, secured €5M in funding from Label Capital. Isabel Viña Bas, an endocrinologist and influencer, launched IVB Wellness Lab with one SKU in 2023. WWD

What’s New 🤩

Apparel, Cosmetics, and Wellness

• ZBiotics, a producer of genetically engineered probiotics that solve common problems, released its second product — Sugar-to-Fiber Probiotic Drink Mix. The drink mix uses genetically engineered probiotics to convert dietary sugar into prebiotic fiber throughout the day. Really clever. Business Wire

• Momona Skincare is looking to turn tallow into a luxury skincare staple. The brand, which launched yesterday, was founded by Stacie Trout, Slater Trout, and Tyler Miller. Beauty Independent

• Women’s wellness brand O Positiv unveiled their newest product — URO Boric Acid Suppository. The 100% vegan suppository is formulated for optimal comfort and effectiveness, specifically designed to provide relief from acute and urgent symptoms. Trend Hunter

• Tekla, the Danish lifestyle brand, opened a stunning 6-week pop-up in Seoul. Instagram

Food, Beverage, and Alcohol

• Coca-Cola teamed up with Bacardi to launch yet another co-branded RTD cocktail. The canned rum and coke will begin hitting shelves early next year. Coca-Cola collaborated with Brown-Forman on a RTD Jack & Coke last year, and they also partnered with Pernod Ricard on Absolut & Sprite earlier this year. Coca-Cola is clearly bullish on booze. CNBC

• Nestlé officially launched Vital Pursuit, its line of frozen foods specifically designed for GLP-1 users. Vital Pursuit offers 14 frozen meals that are high in protein and fiber. The new line is available at Walmart, Target, and Kroger. My take is that focusing on GLP-1 users is a little self-limiting, and Nestle will instead focus on the health and convenience factors down the line. PR Newswire

• Graza partnered with RIND on a great-looking line of granola. Graza is quickly becoming a lifestyle brand vs. just an olive oil brand. Instagram

• C4 and The Hershey Company joined forces to bring a number of Hershey’s iconic confectionery brands to the energy drink, protein powder, and pre-workout categories. C4 is releasing a line of Jolly Rancher branded energy drinks, a Reese’s Peanut Butter Cup protein powder, and a handful of other products. PR Newswire

• Uncrustables launched a Raspberry PB&J, their first new flavor in 10 years. Uncrustables did over $800M last fiscal year and J.M. Smucker expects it to be a $1B brand by 2026. Baking Business

• There’s a new craft sotol brand from Chihuahua called Acrónimo Sotol. Their debut product is a Sotol Blanco that retails for $60 per bottle. The sotol category is slowly gathering steam. The Spirits Business

• Gatorade (owned by PepsiCo) is taking on Liquid IV and LMNT with their new Hydration Booster line. Gatorade’s RTD volume has been declining month-over-month for some time now, and it looks like hydration powders are the primary culprit. Food Dive

Data 🖥️

• Grey Goose (owned by Bacardi) sold a whopping 556,000 servings of its Honey Deuce cocktail at the U.S. open, a 26% YoY increase compared to 2023. Sportico

Distribution News 🚚

• Free Rein Coffee launched nationwide at Walmart.

• Nixie launched their BFY soda range at Cub Foods.

• JuneShine launched their non-alc kombuchas at Erewhon.

• Kosterina launched two of its olive oils at 600 Target stores.

• Dune Suncare launched at select PacSun stores.