Mondelēz To Prioritize Investing, M&A 📈

GM and welcome back to This Week in CPG. Hope y’all had a good weekend a productive Monday.

Here’s what we’re getting into this morning:

• Mondelēz to juice up deal efforts 📈

• Hostess Brands explores options 🍩

• ABG sells stake in Hunter to Chinese firm💲

• Too Faced founders launch new beauty brand 💋

• Juvee heads to Canada ⚡️

• Madison Reed launches at Walmart 🚛

If you’re interested in sponsoring the newsletter, don’t hesitate to reach out.

The Big Story 📰

Per a report from Food Dive, Mondelēz International, the massive sweets and snacks firm that owns Oreo, Clif, Ritz, Tate’s, and many other brands, will kick its investment and acquisition efforts into overdrive.

Mondelēz’s innovation & venture arm, SnackFutures, was founded in 2018 and has two key functions. They either a) take direct equity stakes in food startups or b) accelerate them via CoLab, its mentorship program that offers a 12-week curriculum, guidance from industry experts, and a grant worth $20,000. Mondelēz is more interested in accelerating its direct investment efforts, though, and plans to at least double the size of its portfolio by 2030.

The firm also plans to use SnackFutures as a sort of farm league for its corporate development team. In fact, Mondelēz hopes to replicate the success of its involvement with Hu Kitchen, the organic chocolate brand they invested in in 2019 via SnackFutures, then outright acquired in 2021. Thus far, Hu Kitchen is the only brand that Mondelēz has invested in and then acquired.

The fact that Mondelēz is eager to accelerate its investment and M&A efforts is exciting news for sweets and snacks brands. So, what are some targets that Mondelēz should consider? Here are my favorites:

Mid-Day Squares - MDS, the fast-growing Canadian brand that sells functional chocolate squares, is the most obvious choice here. Mondelēz has a vested interest in the refrigerated bar category after they acquired Perfect Bar in 2019. Fast forward a few years, and Mid-Day Squares is now #1 in terms of units sold per week for the refrigerated bar category, while Perfect Bar is #2. An investment via SnackFutures or an outright acquisition is a no-brainer, IMO.

Whoa Dough - Whoa Dough is a shelf-stable cookie dough bar brand for health-conscious consumers. Their bars are pretty clean label and only contain 7G of sugar. Mondelēz is already involved with Whoa Dough via its accelerator program, CoLab, but a direct investment would make a lot of sense, too.

Feastables - The chocolate bar brand founded by super YouTuber MrBeast is another pretty obvious selection. Investing in Feastables via SnackFutures would give Mondelēz greater control over one of its greatest threats, while an acquisition would neutralize it. I’m not convinced that Mondelēz’s and MrBeast’s goals align, however.

BelliWelli - The brand sells nutrition bars that are free of processed grains, dairy, and other gut aggravators. With gut health being top of mind for consumers, backing BelliWelli could be a wise move.

Undercover Snacks - Undercover Snacks sells chocolate covered quinoa crisps, combining two of Mondelēz’s key interests – chocolate and snacking. Their retailers include Target, Walmart, CVS, Publix, and others. Undercover Snacks would become even more formidable if plugged into Mondelēz’s distribution network.

WNWN Food Labs - Though Mondelēz is outwardly known for their brands, they’re very interested in the food technologies of tomorrow, and invest in the space via SnackFutures. WNWN is a producer of a cocoa-free chocolate alternative, one that’s more sustainable and healthier than regular chocolate. Backing WNWN would be a more than sensible move for Mondelēz.

You can find the Food Dive article here. If you have any suggestions on who else Mondelēz should invest in, let me know!

Deals 💰

Mergers & Acquisitions 

• Hostess Brands — the sweet baked goods firm that owns Hostess (Twinkies, CupCakes, Ding Dongs, etc.), Voortman, and Big Texas, is exploring a possible sale. After filing for bankruptcy twice in 2004 and 2012, Hostess Brands was acquired by Apollo Global and Metropoulos & Co. for $410m. After delivering net revenue of $1.35B and net income of $164m last year, the company is now valued at over $3.5B, so Dean Metropoulos and Apollo stand to make a killing. Reuters

• Authentic Brands Group (ABG) has a sold a 51% stake in iconic boot brand Hunter to Chinese e-commerce tech firm Baozun (NASDAQ: BZUN). ABG is bullish on Hunter’s potential in China and Southeast Asia which is why they’re partnering directly with Baozun. Fashion United

• Brazilian cosmetics firm Natura &Co is exploring a sale of The Body Shop, the well-known skincare and cosmetics retailer that it acquired from L’Oreal in 2017 for £880m. Results have been mixed for Natura &Co lately. Aesop was their fastest-growing portfolio brand until they sold it to L’Oreal in April for $2.5B, and sales at The Body Shop have been declining steadily (Q2 sales were down 12% to $163.7m). Perhaps more focused ownership could turn things around for the brand. CNBC

• Austin-based hard seltzer brand Mighty Swell has been purchased by Lemonati, LLC for an undisclosed sum. Details are scarce — the only public statement was a press release from investment bank Houlihan Lokey — so we can confidently assume it was an opportunistic acquisition to keep the brand alive. Brewbound

• Per a tweet from CEO Ron Shah, supplements brand Obvi has acquired Coffee Over Cardio, a seller of flavored coffee products and functional coffee creamers. Terms weren’t disclosed. Twitter

Fundraising

• Sadly no notable fundraising events to share with you ☹️ 

What’s New 🤩

Apparel, Cosmetics, and Wellness

• Polite Society, the new clean beauty brand from Too Faced founders Jerrod Blandino and Jeremy Johnson, officially launched and is now available exclusively at Ulta Beauty. Good-looking products. The founders previously sold Too Faced to Estée Lauder for $1.4B. Polite Society

• Fast-growing acne care brand and Gen Z favorite STARFACE introduced a new product called Hydro-Star + Tea Tree. The new pimple patch is available online. STARFACE’s packaging is kinda iconic in its simplicity. Instagram

• Athleisurewear brand Alo Yoga is expanding into the supplements space with the launch of its wellness shots. While Alo has already expanded into skin, hair, and body care, this is their first ingestible wellness product. Six different shots are now available online and at Sephora. WWD

Food, Beverage, and Alcohol

• PRIME, likely the fastest-growing beverage brand on the market right now, launched a new flavor for its hydration line called GLOWBERRY. The new flavor will be available for purchase in the U.S. and U.K. on 8/30 at 1pm EST. PRIME

• LA-based Jumbo Time Wines collaborated with rapper Freddie Gibbs on an orange wine called Faderade. Very fun label. Twitter

• Popular Netflix series Stranger Things launched an ice cream brand — Scoops Ahoy — exclusively with Walmart. Scoops Ahoy is a fictional ice cream parlor from the show. Six flavors are currently available. Instagram

• Framer, a craft hard seltzer brand from Australia, officially launched with two flavors: Watermelon and Lime & Cucumber. Love the branding. Framer

Data 🖥️

• Despite launching only one year ago, Rhode Skincare has sold 1m units of its Peptide Lip Treatment. Insane growth for Hailey Bieber’s skincare brand. Glossy

Distribution News 🚚

• Professional hair color brand Madison Reed launched at Walmart.

• Per Beauty Independent, eco-friendly personal care brand Clean Age is also launching at Walmart.

• Better-for-you mac & cheese brand GOODLES is now available at Wegmans.

• Juvee, the energy drink brand founded by 100 Thieves CEO Nadeshot, made its debut in Canada.