Danone Divests Dairy Brands, SYSTM Bets on Kombucha 🥛

Welcome back to This Week in CPG, folks. Now that the news cycle has shaken off its NYE hangover, we have a lot of exciting headlines to sink our teeth into.

Here’s a preview:

• Danone dumps two dairy brands 🥛

• SYSTM buys another bev brand 👀

• Mezcla raises $4M 🍫

• Acid League shutters online store 👎

• Kencko launches at Target 🎯

Interested in sponsoring the newsletter? Feel free to email [email protected] for more details.

Danone Divests Dairy Brands 🥛

Danone, the French food & beverage giant, is selling two U.S. dairy brands — Horizon Organic and Wallaby Organic — to Platinum Equity for an undisclosed sum. Danone will retain a minority stake in the biz. 

Horizon Organic, the largest USDA-certified organic dairy brand in the world, sells a variety of dairy products, including milk, cheese, creamers, yogurt, and butter. Wallaby, on the other hand, produces Australian-inspired Greek yogurts that are made with organic milk and premium ingredients. 

Both businesses accounted for roughly 3% of Danone’s €27.7B in global sales in 2022. 

These divestitures serve a few different purposes for Danone. First, though Horizon and Wallaby are both strong brands with considerable revenues, they’re negatively impacting Danone’s year-over-year sales growth and operating margin, and Danone is eager to divest underperformers. 

Second, this transaction enables Danone to focus their attention on faster growing brands in higher growth categories. By selling Horizon and Wallaby, Danone can better allocate resources to ensure that hotter brands like International Delight, Silk, Stōk, Two Good, and Oikos continue to dominate their respective categories. 

Third, Danone can use the proceeds from the sale to either pay down debt — as of 2022 Danone had a 2.5x net debt-to-EBITDA ratio — or reward shareholders in the form of a dividend.

Lastly, since Danone doesn’t have the bandwidth or desire to grow Horizon or Wallaby, Platinum Equity will likely be a better steward for both brands. By improving marketing, focusing on innovation, and killing underperforming SKUs, Platinum Equity could return Horizon and Wallaby to growth and profitability. 

Brand turnarounds really come down to focus, investment, and execution. Look what happened when Ferrero Group acquired Nerds from Nestle U.S. in 2018. By dialing up innovation and marketing, sales of Nerds went from $50M in 2019 to $500M in 2023. Platinum Equity won’t experience this level of success with Horizon or Wallaby, but they can at least revive these brands by using a similar playbook.

More on the transaction here.

The Go-To UGC solution for CPG Brands 👇

minisocial connects your brand with high-quality micro influencers who produce fully-licensed content & share it with their followers! The best two-in-one solution out there, minisocial is a win for your entire marketing team.

Brands like Plant People, Topicals, immi, and Imperfect Foods have seen results like ads performing in the top 1% CVR on TikTok, 50% decrease in costs per add-to-cart, and over a 30% increase on ROAS.

Plus minisocial is accessibly priced starting at just 1.7k for 25 UGC videos - just mention CPG Wire to get 15% off!

Deals 💰

Mergers & Acquisitions 

• SYSTM Foods, the functional beverage brand platform that owns Chameleon Cold Brew and REBBL, has acquired HUMM Kombucha for an undisclosed sum. HUMM was founded in 2009 in Bend, Oregon. SYSTM now boasts a pretty impressive portfolio of functional beverage brands. PR Newswire

• Firelight Capital Partners, a consumer-focused private equity firm, has acquired Fromm International, a well-known seller of high-quality grooming and beauty accessories. Fromm was founded in 1907 and has (until this point) remained majority owned by the Simon-Johnson family. PR Newswire

• Society Brands, a brand aggregator that raised over $200M in 2022, purchased clean label personal care brand Primal Life Organics for an undisclosed sum. Happi

Fundraising

• Mezcla, a New York-based maker of better-for-you protein bars, closed a $4M Series A round which was co-led by Dream Ventures and Santatera Capital. Mezcla launched in 2019 and retails at Gelson’s, HEB, Whole Foods Market, The Fresh Market, and others. Forbes 

• Forward Consumer Partners, a new private equity firm focused on consumer brands, secured $425M for its debut fund. Forward’s founder and managing director, Matt Leeds, was formerly a partner at L Catterton. The firm will make equity investments of $25M-100M. Axios

What’s New 🤩

Apparel, Cosmetics, and Wellness

• Sexual wellness brand Dame is launching a new line of at-home tests for sexually transmitted infections today. Though best known for their devices and topicals, this is their first push into healthcare. WWD

• Adaptogenic wellness brand Moon Juice launched some stunning functional mocktails which are only available at their stores in Los Angeles. Curious if they plan on making this a permanent offering — the labels are fantastic. Instagram

• Fragrance brand Snif is launching a new scent, Vanilla Vice, on January 11th. Love their products. Instagram

• Temperley London, the recently acquired fashion label, unveiled a new line of lingerie and sleepwear. Dubai-based Times Square Group acquired the brand at the end of November. Drapers

Food, Beverage, and Alcohol

• Chobani officially launched their new dessert-inspired yogurt line which is called Chobani Creations. Six flavors are available: Bananas Foster, Cherry Cheesecake, Caramel Sundae, and others. PR Newswire 

• Acid League, the experimental pantry staples brand, is officially shutting down their online store on January 31st. The company is aiming to simplify operations and will instead focus on retailers like Harmons, Sprouts, Whole Foods, etc. Instagram

• Better-for-you snack brand LesserEvil launched yet another new product — Ranch Rocket Ship Space Balls. More great packaging from the LesserEvil team. Twitter

• Optimist Drinks, a producer of non-alcoholic distilled spirits, introduced a new RTD product called the Cali Spritz. Good-looking can. Optimist

Data 🖥️

• Some interesting data from WeStock on which retailers experienced a spike in consumer demand in 2023. Surprised Aldi didn’t make the list. Twitter

Distribution News 🚚

• Kencko launched their instant smoothies nationwide at Target.

• Popular makeup brand Charlotte Tilbury will launch at Ulta Beauty in February.

• Mooski Snacks launched at select Sprouts stores in SoCal.

• Clean makeup brand Youthforia is now available nationwide at Ulta Beauty.