Flowers Foods Bets on Simple Mills 🍞

Author

CPG WIRE
January 09, 2025

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

  • Wellful buys Ancient Nutrition 💊

  • Safety Shot scoops up Yerbaé 🍵

  • Being Frenshe expands lineup 🆕

  • Fly By Jing drops another collab 🔥

  • MALK lands at Costco 🥛

Flowers Foods Bets on Simple Mills 💰

Flowers Foods (NYSE: FLO) agreed to acquire better-for-you snack brand Simple Mills for $795M in cash. The deal represents another major win for Chicago’s already thriving CPG ecosystem. 

Founded in 2012 by Katlin Smith, a former Strategy & Ops Consultant at Deloitte, Simple Mills offers a wide variety of products including crackers, cookies, snack bars, and baking mixes. In addition to being gluten-free, Simple Mills products are made with non-GMO ingredients and are free of artificial flavors, colors, and preservatives. 

Simple Mills was an early mover in better-for-you packaged foods and never really wavered from their original vision. By focusing on whole-food, nutrient-dense ingredients and eschewing the artificial ones that are common in the snack aisle, Simple Mills was able to build a cult following that went national as soon as distribution expanded. 

Today, Simple Mills is the #1 natural baking mix brand, the #1 natural cracker brand, and the #1 natural cookie brand. This is a particularly impressive feat not only because they pulled it off in a relatively short period of time, but because they did it in three different categories.

By the end of 2024, Simple Mills hit 30,000 points of distribution, including blue-chip retailers like Costco, Target, Walmart, and Whole Foods Market, while revenue jumped to $240M, a year-over-year increase of 14%. 

Flowers is a surprising buyer for Simple Mills only because they’re primarily a bread & baked goods company. Yes, Flowers has a tiny bit of exposure to snacks via their organic protein bar line, but they generate the vast majority of their revenue from bread: 

Nature’s Own - $1.5B in retail sales in ‘23

Dave’s Killer Bread - $1B in retail sales in ‘23

Wonder - $512M in retail sales in ‘23

Canyon Bakehouse - $164M in retail sales in ‘23

Even though this acquisition is a significant departure for Flowers Foods, that’s not to say it’s a bad or misguided deal. On the contrary, this is the best deal Flowers has made since acquiring Dave’s Killer Bread in 2015 for $275M in cash. 

The margins on bread and baked goods are notoriously slim, so Flowers choosing to buy a higher margin snack business shouldn’t come as a surprise. With Simple Mills, they’re getting an asset that will be immediately accretive to net sales and adjusted EBITDA, while also offering greater exposure to more attractive segments like snacking. And they’re only paying 3.3x sales for it. 

Flowers Foods will likely be a faithful steward for Simple Mills, too. Since acquiring Dave’s Killer Bread in 2015, Flowers has grown the brand’s revenue by around 6x without jeopardizing the brand or pissing off loyal customers.

More on the transaction here.

Deals 💰

Mergers & Acquisitions 

  • Wellful, an omnichannel health & wellness platform and a portfolio company of Kainos Capital, acquired Ancient Nutrition for an undisclosed sum. The sellers include VMG Partners and Hillhouse Investment. Founded in 2016 and based in Franklin, TN, Ancient Nutrition is a purveyor of science-backed supplements and superfoods. According to Kainos Capital, the acquisition of Ancient Nutrition establishes Wellful as the largest independent VMS platform in North America. Business Wire

  • Tru Fragrance & Beauty purchased a majority stake in Lake & Skye, a fragrance brand that launched in 2015. Tru Fragrance & Beauty first became involved with Lake & Skye after making a strategic investment in 2018. The brand retails at Nordstrom, Ulta, and Blue Mercury. Happi

  • Yerbaé Brands, a purveyor of plant-based energy drinks, has been acquired by Safety Shot (NASDAQ: SHOT) for $19.7M in an all-stock deal. Yerbaé generated approximately $12M in revenue in fiscal ‘23. CityBiz

Fundraising

  • New York-based Via Carota Craft Cocktails raised an additional $11M in equity funding from undisclosed investors. SEC

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What’s New 🤩

Apparel, Cosmetics, and Wellness

  • Women’s wellness brand O Positiv Health unveiled their newest product — FLO Women’s Endocrine Superfood Powder. The new SKU is available nationwide at Target. PR Newswire

  • Being Frenshe, the wellness brand co-founded by Ashley Tisdale, expanded into the haircare category with a collection of 13 products. The new haircare line is available exclusively at Target. NewBeauty

  • Minimalist beauty brand REFY officially launched its skincare range with two products: a cleanser and a moisturizer. REFY expects to hit £100M in sales over the next fiscal year. The Industry

Food, Beverage, and Alcohol

  • Asian pantry staples brand Fly By Jing released a great-looking snack collab with IRVINS. Two products are available: Chili Crisp Salmon Skin and Chili Crisp Potato Chips. The packaging is very good IMO. Instagram

  • Halfday Iced Tea released their first new flavor in a minute, Sweet Tea. Sweet Tea is available now at Whole Foods Market. Look at that can and tell me you don’t love it…Instagram

  • Fort Point Beer launched their debut non-alcoholic beer range after three years of R&D. Two NA beers are available: Light & Crisp Kolsch and San Francisco Style IPA. San Francisco Chronicle

  • Little Sesame has named Drew Martin as its Chief Commercial Officer. The Chobani and Oatly alum will be responsible for Little Sesame’s nationwide expansion. NOSH

  • Owen’s Craft Mixers launched a new THC-infused soda brand called Daizy’s Social Soda. Five flavors are available and each can features 10mg of THC. BevNET

  • Kodiak and Zac Efron released a new product — Apple Brown Sugar Pecan Oatmeal. The accompanying launch video is actually pretty amusing. Good work. PR Newswire

Data 🖥️

  • Instacart released a list of their fastest-growing emerging brands from 2024. A lot of familiar faces like Belgian Boys, Graza, IQBAR, MALK, OWYN, SkinnyDipped, and many others made the list. Instacart

  • In 2024, Korean beauty exports surpassed $10B for the first time ever. Global Cosmetics News

Distribution News 🚚

  • Bumpin Blends launched at nearly 1,500 Target stores.

  • MALK launched at Costco in TX, LA, and OK.

  • Battle Bars launched at H-E-B and The Vitamin Shoppe.

  • MEILI Vodka launched on Princess Cruises.

  • Luxury Korean tea brand OSULLOC launched at Erewhon.

  • BFY candy brand Joyride launched at H-E-B.