Kering Swings For The Fences 💰

GM and Happy Tuesday, folks. Here’s what we’re getting into this morning:

• Kering’s big acquisition 💰

• ODDITY launches IPO 📈

• Ciele x Salomon footwear collab 👟

• Chamberlain unveils new matcha lattes 🍵

• Love Wellness heads to Walmart ✅

The Big Story 📰

More details have emerged about Kering’s acquisition of Creed, the heritage fragrance house that was founded in London in 1760, but moved to Paris in 1854, the same year Louis Vuitton was founded.

Two things stand out — Kering paid a lot, and Creed has tremendous margins, even for a luxury fragrance brand.

Kering paid a total of €3.5B for Creed as it aggressively prioritizes the high-end beauty market. €3.5B might sound like an obscenely rich sum, and it is, but it’s not an irrational business decision.

First, there just aren’t many luxury assets out there for the likes of Kering, LVMH, and Richemont to buy. One of them, Aesop, was taken off the board earlier this year for $2.5B, leaving only a handful of other luxury acquisition targets (Augustinus Bader, Creed, etc.).

So long as there’s scarcity, brands like Creed have a lot of leverage over potential acquirers.

Second, Creed is a wildly profitable company with terrific margins. In 2022 the company posted revenue of $250m, and EBITDA of $150m. Creed’s EBITDA margin is roughly double that of LVMH, making it a world class asset from a profitability perspective, and an extremely valuable one to buyers like Kering.

Strategically speaking, beauty and fragrance are critically important growth categories for Kering, and Creed offers them a luxury brand foundation to really build upon. Roughly 65% of Creed’s revenue derives from men’s fragrance, so if Kering pushes Creed further into women’s fragrance, and if they expand into new categories like skincare, makeup, and home fragrance, there’s considerable upside.

More on the transaction here.

Deals 💰

Mergers & Acquisitions 

• French dairy giant Danone has sold its 38% stake in Irish organic yogurt producer Glenisk for an undisclosed sum. Glenisk is now entirely controlled by the Cleary Family. The Irish Times

• Italian luxury fashion retailer Coltorti sold a majority stake to South Korea’s NHN Commerce. Coltorti was founded in 1934. WWD

Fundraising

• Naked Life, an Australian producer of better-for-you sodas and iced teas, raised $3m on crowdfunding platform Birchal. The beverage brand expects almost $13m in revenue this year. Smart Company

• ODDITY, the Israeli consumer technology firm behind beauty brands IL MAKIAGE and SpoiledChild, officially launched its IPO and will seek a $1.7B valuation. Reuters

Premium ✅

Become a Premium Subscriber for only $10/month to receive This Week in CPG on Thursdays & Saturdays too.

What’s New 🤩

Apparel, Cosmetics, and Wellness

• There’s a new vegan & eco-friendly skincare brand from Los Angeles called JunkTheory. JunkTheory uses aluminum bottles & jars to eliminate virtually all plastic. The packaging looks pretty great. JunkTheory

• Inter Parfums secured a fragrance license with Roberto Cavalli and will manage Cavalli’s global perfume business. Beauty Packaging

• Luxury outerwear brand Canada Goose unveiled its first-ever sneaker which will be available as a low top and a high top. The “Glacier Trail” will be available online and in-store on July 18th. Hypebeast

• Speaking of sneakers…Ciele Athletics and Salomon collaborated on a beautiful footwear collection called Distance Nirvana. Instagram

Food, Beverage, and Alcohol

• Austin-based Siete Family Foods launched a new line of Grain Free Puff Snacks. Three flavors are available: Fuego, Chile Lime, and Queso. The new snack line is available at Whole Foods Market and Sprouts. Instagram

• The busy folks at Chamberlain Coffee unveiled two new oat milk matcha lattes — Strawberry Matcha and Blue Matcha. I hear Chamberlain’s matcha line is terrific. Chamberlain Coffee

• Kim Kardashian collaborated with Alani Nu on a new collection called “Alani by Kim K.” The first product, Kimade, is a limited-edition energy drink that’s Strawberry Lemonade flavored. Kimade will begin hitting shelves at Target, Walmart, Kroger, and GNC later this summer. PR Newswire

• Tequila Cazadores introduced a new tequila-based coffee liqueur called Cazadores Cafe. The product will retail for $29.99. PR Newswire

• LA-based Norwalk Brew House collaborated with Don Clemente Loteria, a popular maker of a traditional Mexican game, to co-create a Mexican-style lager. Gorgeous can. The Dieline

Data 🖥️

• Regular beer sales in the UK are down 6% as low and non-alcoholic options pick up steam. Beverage Daily

Distribution News 🚚

• Living Proof, a science-backed haircare brand that Unilever acquired in 2016, launched at Ulta Beauty at Target.

• Love Wellness, a leading women’s wellness and personal care brand, launched at 1,600 Walmart stores.

• Vitamin & supplement brand Care/of is now available on Amazon.

• Safely, the eco-friendly cleaning brand founded by Kris Jenner, is now available at select Kroger banners.

• Hey Tiger, an ethical chocolate brand from Australia, launched at Woolworths.