Mars & Mondelez Make Moves 🍭

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CPG WIRE
December 21, 2022

The Big Story

What started off as a dreadfully slow news week was saved by two big transactions.

Mars, Inc. — the confectionery, snack, and pet care giant with almost $45B in annual sales — acquired Tru Fru, a better-for-you confectionery brand based in Utah. Founded in 2017, Tru Fru produces chocolate covered fruit products for the frozen section and snack aisle. If you haven't tried their products, you very well might've seen them at Target, Walmart, or your favorite local grocer.

Anecdotally speaking, Tru Fru is one of those brands that landed in every frozen aisle seemingly overnight. SPINS data (sort of) confirms this supposition. Tru Fru's sales increased 104.3% year-over-year to $84m. Sales in the convenience channel were up 82% while sales in the natural channel increased 58.7%. The West Valley City, Utah startup with 50 employees quietly built a CPG juggernaut, and Mars, Inc. is an ideal steward for their phase of growth.

Tru Fru's founders — Brian Neville, CEO; Taz Murray, President; and Brandon O'Brien, COO — will continue operating the business within Mars once the acquisition closes.

The second transaction that disrupted the holiday news malaise was Mondelez selling its developed market gum business to Perfetti Van Melle, the European confectionery group that owns AirHeads, Mentos, Chupa Chups, and many other brands. Perfetti paid $1.35B or around 15 times estimated EBITDA.

Included in the transaction were two manufacturing facilities along with brands like Trident, Dentyne, Chiclets, Bubbaloo, and Bubblicious. Since Perfetti is only acquiring these brands in the U.S., Canada, and Europe, Mondelez will retain them in Africa, Asia, Latin America, and the Middle East.

So why did Mondelez divest their developed market gum business? Two reasons.

First, consumer interest in gum has largely peaked in developed markets. Any meaningful growth for these brands will involve complete brand & product overhauls. Less synthetic ingredients, more functional benefits, and better branding/positioning. Perfetti, given that it's primarily focused on this category, is better suited for the task.

Second, Mondelez wishes to focus on its strengths: confectionery and snacks. By 2030 it hopes to derive 90% of its revenue from these two categories.

Deals

  • Consumer private equity giant L Catterton invested in BloomChic, a digitally native apparel brand for women wearing sizes 10-30. The company was founded in 2021 by Bill Hu and is headquartered in Hong Kong. Catterton and BloomChic believe plus-size customers in Western markets are underserved. Link

  • Designer Brands, the footwear producer and retailer that owns Designer Shoe Warehouse (DSW), acquired athletic footwear brand Topo Athletic. Topo was founded by Tony Post in Framingham, MA in 2012. Link

  • As mentioned above, Mars, Inc. acquired Tru Fru. Link

  • Mondelez sold its developed market gum business to Perfetti Van Melle. Link

  • Indian fast fashion startup Virgio raised $37m at a post-money valuation of $161m. Prosus Ventures, Alpha Wave, and Accel co-led the Series A round. The company was founded by former Myntra CEO Amar Nagaram. Their goal is to build a global fast fashion powerhouse based India, similar to China's Shein. Link

  • Private equity firm TSG Consumer Partners acquired Radiance Holdings, an owner and franchiser of beauty & wellness service providers like Sola Salons and Woodhouse Spas. Radiance also owns BeautyHive, an online distributor of professional beauty products. Link

What's New...

  • Nestle is testing its new animal-free dairy brand, Cowabunga, at six Safeway stores in the S.F. Bay Area. The two SKUs were developed in conjunction with Berkeley's Perfect Day Foods. Link

  • There's a good-looking new creatine monohydrate gummy brand, Create Wellness. They're taking the stigma out of creatine and making it more accessible to everyday consumers, similar to what Goli did with apple cider vinegar. Link

  • London-based apparel brand PICANTE launched a very fun canned cocktail. Link

  • Another London-based apparel brand, PANGAIA, is now a Certified B Corp. Link

  • Australian eco-friendly cleaning and personal care brand Zero Co launched a beautiful toilet paper line. Link

  • Another Australian brand, Mischief Brew, is disrupting the sleepy cocktail mixers category by being a little loud and different. Love it. Link

  • Keys Soulcare, the skincare & wellness brand founded by Alicia Keys, launched a new Multi-Benefit Peptide Serum. Link

  • Japan's Kao Corporation announced a new skincare brand targeting Gen Z men, UNLICS. Link

Distribution Quickfire

  • Functional water brand Shine Water is now available at Walmart across the Southeast.

  • Clean skincare brand MARA Beauty launched at 252 Sephora stores in the U.S.

  • Vegan & gluten-free cookie dough brand DEUX rolled out at 380 Sprouts locations.

  • Baby formula brand Bobbie announced a NYC delivery pilot with Uber Eats.

  • Terpene-infused tequila cocktail brand El Hempe partnered with Pemberton Distribution in Nevada.

If you enjoyed this newsletter, please pass it along to others you might enjoy it. See you again on Saturday.