Functional Chocolate On The Rise 🚀

Author

CPG WIRE
February 08, 2023

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

  • Functional chocolate heats up 🍫

  • L Catterton circles A.P.C. 💰

  • BYOMA celebrates its birthday 🎂

  • Unilever brings Michiru to the U.S. 📈

  • Target adds a host of skincare brands 🎯

The Big Story 📰

Canadian functional chocolate brand Awake Chocolate raised over $3.5m from Btomorrow Ventures, the corporate venture arm of British American Tobacco (BAT). Btomorrow first invested in the company in late 2021.

Founded in 2012 by PepsiCo alums, Awake sells two different functional chocolate products: Awake, its caffeinated line, and Mello, its relaxation line. Despite being over a decade old, the company posted 90% YOY growth, and claims over 12,000 doors across the U.S. and Canada.

Functional chocolate has remained a hot category over the past few years. Sourse, a vitamin infused chocolate brand that launched in 2020, landed actress Sarah Hyland as a co-founder and launched nationwide at Whole Foods Market. Tabs, a marketer of sex enhancing chocolates, sold over $500K worth of product in January.

Perhaps the most successful functional chocolate brand is Mid-Day Squares. The brand has been on an absolute tear since their 2018 launch. On pace to hit $17m in revenue this year, they recently raised $10m from the likes of Siddhi Capital, Boulder Food Group, and Selva Ventures. Additionally, Mid-Day Squares rebuffed an acquisition offer from Hershey.

Consumers do seem eager to add some utility to their sweet treats. Per Data Bridge Market Research, the functional confectionery market is expected to grow at a CAGR of 9%, hitting close to $3B by 2029.

More on the Awake Chocolate fundraise here.

Deals 💰️

Mergers & Acquisitions

  • Consumer private equity firm L Catterton is reportedly in talks to acquire A.P.C., the fashion brand founded by Jean Touitou in 1987. Per WWD, the company generated $88m in revenue in 2021. Last summer it was reported that L Catterton was trying to sell Danish fashion brand Ganni for $700m. WWD

  • Diageo will increase its stake in East African Breweries Limited (EABL) from 50% to 65%. EABL is a Kenya-based producer of beer, wine, and spirits. With at-home alcohol consumption on the rise in Africa, Diageo is eager to take advantage. MarketWatch

Fundraising 

  • Hydration brand ROAR Organic raised $6m from existing investors. The company posted revenue growth of 116% in 2022. Business Wire

  • Plant-based chicken brand Rebellyous Foods secured $9.5m to build its production technology. Food Dive

  • UK-based El Rayo Tequila raised just over $1m in funding as it looks to double sales this year. Their bottles are quite fun. The company was founded by Jack Vereker and Tom Bishop. The Grocer 

What’s New 😍

Cosmetics

  • To celebrate its first birthday, skincare brand BYOMA launched three new products, two of which are available exclusively at Target. Their packaging is terrific. PR Newswire 

  • LA-based boutique grocer Erewhon launched a line of private label personal care products. I kinda love them. Erewhon

  • Unilever is bringing Japanese scalp care brand Michiru to the United States. Unilever is seemingly bullish on category — last week they invested $2m in STRAAND, an Australian scalp care brand. Glossy

  • Canadian skincare brand Masque BAR introduced what they claim is the world’s first compostable sheet mask. PR Newswire

Food, Beverage, and Alcohol

  • Howler Head, the flavored whiskey brand that Campari invested in last August, is set to expand into Australia and Brazil. The Drinks Business

  • Funny Farm Foods received a terrific brand refresh. The Dieline

  • A $200 cup of coffee at Proud Mary in Melbourne. AFR

  • Talking Rain (the company that owns Sparkling Ice) announced I.C.E. Labs, an innovation arm to experiment with new beverage concepts on a small, iterative scale. I.C.E. Labs

  • A.P.C., the French fashion brand mentioned above, launched an olive oil featuring illustrations from Mathias Augustyniak. Hypebeast

  • Proper No. Twelve Irish Whiskey, the whiskey brand founded by Conor McGregor and now majority owned by Proximo Spirits, announced a new product: Proper No. Twelve Irish Apple. PR Newswire

  • Washington D.C.-based Call Your Mother Deli launched a cute line of bagel chips. Instagram

  • Rum brand Ten To One unveiled a limited release for Black History Month. A beautiful bottle. Artwork by Brooklyn-based Devin B. Johnson. Ten To One

  • CORE Foods launched a line of refrigerated adaptogen bars. Instagram 

Data 💻️

Distribution News 🚚

  • Gotham Greens adds 700 more Kroger stores.

  • Loops, the skincare brand founded by Emily Ratajkowski, launched at Target.

  • Latina-owned skincare brand VAMIGAS now at Target & Whole Foods.

  • ROAR Organic added 1,300 Publix stores.

  • Haircare brand Odele went nationwide at Ulta.

  • Skincare brand BioRepublic launching its Activated Charcoal Mask at select Target stores.