Hershey Buys Sour Strips, Molson Coors Ups Stake in ZOA⚡️

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

• LVMH backs Our Legacy 🧢

• Uncle Arnie’s grabs $4M 🫧

• Grüns refreshes packaging 😍

• Something new from Little Sesame 🥕

• e.l.f. Beauty crushes Q2 📈

Hershey Buys Sour Strips 👀

After reporting dismal Q2 results back in August, The Hershey Company is back in acquisition mode. Yesterday, the confectionery giant announced that it’s acquiring Sour Strips, a fast-growing sour candy brand, for an undisclosed sum.

Sour Strips was founded in 2019 by Maxx Chewning, an internet personality with nearly 400,000 subscribers on YouTube and more than 300,000 followers on Instagram. Chewning’s thesis was pretty simple: by leveraging his preexisting audience and focusing on shockingly sour flavors and compelling packaging, he could turn Sour Strips into a formidable challenger brand. 

Chewning would regularly post status updates on Twitter and one thing was quite clear: for a young brand, Sour Strips was doing impressive volume at retail. In just one week toward the end of last year, Sour Strips sold a whopping 180,000 units at Target. 

The Hershey Company kicking back into acquisition mode should come as a surprise to no one. Despite being very acquisitive from 2019 until 2021 — Hershey spent just over $2B in that period to acquire Dot’s Pretzels, Lily’s Sweets, and ONE Brands — they’ve been very quiet for the last three years.

Hershey’s Q2 results were likely what spurred the company back into action. In Q2, Hershey’s net sales dipped by 16.7%, and their confectionery sales dropped by 20.7%. The only bright spot in Q2 was their salty snack division which grew by 6.4% to nearly $290M.

It’s unclear why Hershey stopped buying over the past three years, but they’re worth $35B today largely because of acquisitions, and they ought to be buying often and aggressively. They purchased Reese’s in 1963, Twizzlers in 1977, and Jolly Rancher in 1996. 

The days of Hershey building brands ended a long time ago, and they ought to be buying more emerging brands like Sour Strips and plugging them into their vast distribution network. 

More on the acquisition here.

Deals 💰

Mergers & Acquisitions 

• Molson Coors increased its ownership stake in ZOA Energy to 51%, up from 40% last September. ZOA Energy was co-founded by Dwayne “The Rock” Johnson in 2021 and Molson Coors was their primary distribution partner. According to an SEC filing, Molson Coors is shelling out $53M in cash to increase its stake. Food Dive

• Next8 Investments, a recently formed investment firm, has acquired Matter of Fact, a skincare brand that launched in 2018 but laid off the vast majority of its employees in January. Next8 Investments was co-founded by Edward Connaghan and Denise Russell, former execs at K18 and Olaplex, respectively. Matter of Fact had raised $16M across two funding rounds. Cosmetics Business

• LVMH has acquired a minority stake in Our Legacy, a Swedish apparel brand that launch in 2005. LVMH will help Our Legacy expand into new markets and grow its retail footprint in key cities. The Industry

Fundraising

• Uncle Arnie’s, a California-based purveyor of THC-infused beverages, secured $4M in funding from Mindset Capital. Twitter

• Heineken invested in G Spot, a functional beverage brand co-founded by actress Gillian Anderson. The Dutch brewer will help G Spot scale its distribution and marketing efforts. Just Drinks

• Collider, a UK-based producer of non-alcoholic and adaptogenic beer, secured £720K in pre-seed funding. Investors include DMG Ventures and Syndicate Room. The Drinks Business

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What’s New 🤩

Apparel, Cosmetics, and Wellness

• Lemme is launching a new hair growth supplement, Lemme Grow, on November 12th. The product features clinically-studied Keratin Complex along with essential vitamins and minerals. Instagram

• Haeckels, a UK-based natural beauty brand, is ditching its brand name after twelve years in business. The brand will operate without a name for the next year. Design Week

• Popular Australian fragrance brand Who Is Elijah officially launched in the UK. The Sydney-based fragrance house was founded by Raquel Bouris in 2018. Beauty News Daily

Food, Beverage, and Alcohol

• J.M. Smucker opened a 900,000-square-foot manufacturing facility in McCalla, Alabama for its fast-growing Uncrustables brand. Smucker expects Uncrustables to hit the $1B in annual net sales milestone by the end of fiscal 2026. PR Newswire

• TALEA Beer Co. collaborated with Milk Bar on a new brew — Chocolate Milk Stout. The label is outstanding. 10/10. Instagram

• Daily nutrition brand Grüns revealed a vibrant brand refresh. The refresh was facilitated by Interact Brands, an Austin-based branding and design agency. Curious what y’all think 👇 Twitter

• Little Sesame launched a great-looking line of on-the-go hummus cups for kids. Each individual carton contains four 2.5 oz. single-serve hummus cups. The branding is adorable. Little Sesame

Data 🖥️

• e.l.f. Beauty delivered massive results in Q2. The affordable beauty brand’s net sales surged 40% to $301M, while international sales jumped by 90%. Gross margin also expanded to 71%, while adjusted EBITDA increased 15% YoY to just over $69M. CNBC

Distribution News 🚚

• Zevia expanded its presence at Walmart to 4,300 stores.

• Hippie Water launched at Total Wine & More in Florida.

• Sensei Farms launched at Weis Markets.

• Prime Shrimp launched at select Whole Foods Market stores.

• NUFS is now available storewide at Sprouts Farmers Market.