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McCormick Chases Sauer Brands, Liquid Death Secures Debt ☠️

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CPG WIRE
December 19, 2024

GM and Happy Thursday, folks. Sadly this is our final edition of This Week in CPG for 2024. We’ll be back in your inboxes in early January, though. If anything major happens over the next 13 days, we’ll cover it on Twitter and Instagram. See you in 2025!

Let’s dive into the news:

  • Puig ups stake in Charlotte Tilbury 💄

  • Post Holdings acquires PPI 🥔

  • Versed unveils new look 😍

  • Kindling launches protein pretzels 🥨

  • Guayaki refreshes packaging 🍵

McCormick Chases Sauer Brands 📰

According to Bloomberg, McCormick (NYSE: MKC) is reportedly in talks to acquire Sauer Brands for more than $1B. Founded in 1887 and based in Richmond, Virginia, Sauer Brands produces a broad range of condiments, sauces, spices, and toppings. 

The company’s best-known brand is Duke’s Mayo, but they also own Kernel Season’s, The Spice Hunter, Tasty Shakes, and a handful of others. In addition to their branded range, Sauer also produces a wide variety of private label products for the retail and foodservice channels. The company employs over 1,000 people and operates four manufacturing facilities across the U.S.

Since 2019, Sauer Brands has been owned by Falfurrias Capital Partners, a Charlotte-based private equity firm that also owns Carolina Foods, Local Hive, and Snak-King. Falfurrias reportedly paid $300M for Sauer Brands which, until that point, had remained entirely family-owned. 

Falfurrias has implemented a number of changes since acquiring Sauer Brands. Falfurrias overhauled Sauer’s executive team, improved their supply chain and sourcing practices, and dialed up M&A by purchasing Chicago Custom Foods and Mateo’s Gourmet Salsa in 2020 and 2021, respectively.

Fast forward to today and Sauer Brands is a well-oiled machine that generates more than $120M in annual EBITDA, and Falfurrias is eager to find its next owner. Besides the usual strategic suspects — Kraft Heinz and Unilever — McCormick is likely the best fit for Sauer Brands.

By purchasing Sauer Brands, McCormick not only adds over $100M in EBITDA to its P&L, but they add the #3 mayonnaise brand in the U.S. (Duke’s Mayo), and they add a fast-growing brand in the shelf-stable salsa category (Mateo’s Gourmet Salsa). McCormick currently doesn’t own a dedicated mayo brand like Duke’s or Hellmann’s, so the acquisition would also fill a considerable void in its portfolio.

McCormick has been an aggressive acquirer over the years and they’re not scared to spend big on the right assets. In 2017, McCormick shelled out $4.2B to buy Reckitt Benckiser’s food division, home to category leading brands like French’s and Frank’s Red Hot. In 2020, they acquired Cholula Hot Sauce from L Catterton* for a clean $800M.

More on the potential deal here.

*Cholula was an incredible deal for L Catterton. The consumer PE firm acquired Cholula in April 2019, sold it in November 2020, and reportedly generated a 4x return in less than two years.

Deals 💰

Mergers & Acquisitions 

  • Spanish beauty firm Puig announced that it will assume full ownership of Charlotte Tilbury by 2031. Puig acquired a majority stake in Charlotte Tilbury at reported valuation of £1.2B in 2020. Since then, Charlotte’s Tilbury has more than tripled net revenue. Fashion Dive

  • Post Holdings agreed to acquire Potato Products of Idaho (PPI), a producer of refrigerated and frozen potato products. Terms of the transaction were not disclosed and the deal is expected to close in Q1 of 2025. Assuming this means that Post Holdings is no longer chasing Lamb Weston for north of $10B. PR Newswire

  • Gregory Hall, the founder of Virtue Cider, has reacquired the beverage brand from AB InBev for an undisclosed sum. AB InBev acquired a 51% stake in Virtue Cider in 2015, then purchased the remainder of the company in 2017. Prior to starting Virtue Cider, Hall was the brewmaster at Goose Island Brewery. Just Drinks

Fundraising

  • Liquid Death secured a revolving credit facility worth $55M from Ares Commercial Finance. Proceeds of the financing will be used as working capital to expand product assortment and distribution. ABL Advisor

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What’s New 🤩

Apparel, Cosmetics, and Wellness

  • Clean skincare brand Versed is unveiling a new look early next year. Their sleek new packaging taps into the “quiet luxury” movement and it looks very, very good. Beauty Independent

  • Italian fragrance brand Massimiliano Torti opened its first store in London. The store is located in Soho and boasts a range of 300 hand-crafted perfumes. Cosmetics Business

  • InnBeauty Project launched an anti-redness serum that retails for $54. After sinking $200K into clinical testing for the product, InnBeauty is eager to become a leader in the anti-redness skincare category. WWD

Food, Beverage, and Alcohol

  • One of the co-founders of Kodiak Cakes, Cameron Smith, and the former VP of Marketing at Kodiak Cakes, Brandon Parrish, launched a high-protein pretzel brand called Kindling. The packaging, flavors, team, and timing are all strong so I’m bullish on the brand. Kindling is currently available at Hy-Vee and will launch at Costco, Harmons, and Harris Teeter early next year 👇 Instagram

  • UK-based sports nutrition brand Warrior launched a new range of Creatine + Protein Bars. Each bar contains 20g of protein and 3g of creatine. This isn’t the first ready-to-eat creatine bar to hit the market, but it’s a sign of what’s to come. Given how many nutrition influencers are consuming 5-10g of creatine per day, RTE creatine is here to stay. Warrior 

  • C4 Energy launched a new range of energy drink mixes in stick pack form. Three flavors are currently available. Each stick pack contains 200mg of caffeine, beta-alanine, and a number of other active ingredients. Stack3d

  • Florida-based Nourish launched its flagship product line: high-protein, instant chia pudding. Each serving contains 22g of protein and 5-6g of fiber. Two flavors are currently available: Chocolate Bliss and Almond Spice Lucuma. NOSH

  • Indonesian food startup Mamame Whole Foods has turned tempeh into a snack with Tempeh Chips. Their debut product line launched in March of 2023 and has already expanded into international markets like South Korea and Japan. Mamame also secured shelf space at Erewhon earlier this year. Food Business News

  • It appears that yerba mate brand Guayaki is rolling out an entirely new look. In a rather shocking turn of events, they’ve gotten rid of any legible mention of “Guayaki.” The updated can looks pretty slick, though. Twitter

Data 🖥️

  • Canned cocktail brand Dirty Shirley had a big year. Revenue surged 934% YTD and they added retailers like Meijer, Walmart, Total Wine, and Circle K. PR Newswire

  • Chomps is the fastest-growing food brand in the U.S. Not just meat snacks, not just snacks, all of food. Incredible. Instagram

Distribution News 🚚