Rum, Rum, Rum 📈

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CPG WIRE
September 14, 2023

Welcome back to This Week in CPG, folks. Our only ask is that if you enjoy this newsletter, please forward it to others who might find enjoy it too.

Here’s what we have on the docket this morning:

  • InvestBev backs Ten To One 🍹

  • Birkenstock officially files IPO paperwork 💵

  • Estee Lauder invests in Chinese beauty 💄

  • Ulta Beauty unveils new startup cohort 🆕

  • New Lunchables products from Kraft Heinz 🧀

The Big Story 📰

InvestBev, a leading private equity firm focused on the wine & spirits space, has poured $1M into Ten To One Rum, an ultra-premium rum brand founded by former Starbucks exec Marc Farrell in 2019. Later, in 2021, musician and businesswoman Ciara joined Ten To One Rum as an investor and co-founder.

Ten To One Rum

Ten To One’s premium, pan-Caribbean blended rums and elevated branding have clearly resonated with consumers. Beyond their on-premise success – Ten To One can be found at desirable locations like Nobu and various Four Seasons Hotels – their off-premise business is also thriving, with retail partners that include Bevmo, Total Wine & More, and Spec’s.

The rum category has shown a lot of promise lately, so it’s not a major surprise that InvestBev is homing in on the space. Per ISWR, rum was one of the fastest growing spirits in 2022, with volume up 9%. The premium-and-above rum category, where Ten To One competes, posted an 8% CAGR between 2014-19, and that growth is expected to maintain.

Strategics like Diageo and Brown-Forman are making big bets on premium rum, too, hoping the category will experience a surge in popularity like tequila and mezcal. Earlier this year, Diageo spent €260M plus a potential earnout of €177M to acquire Don Papa Rum, a premium rum brand from the Philippines that launched in 2012. Late last year, the owner of Jack Daniels and Tequila Herradura, Brown-Forman, spent a reported $775M to purchase Diplomático, a Venezuela-based super-premium rum brand.

In short, InvestBev is wise to enter the ultra-premium rum category, especially with a brand like Ten To One which has an authentic founding story, a global celebrity to drive awareness, and an established, growing retail presence.

Deals 💰

Mergers & Acquisitions 

  • German footwear manufacturer Birkenstock officially filed to go public in the U.S. The company is majority owned by L Catterton and posted net sales of €644M and net income of €40M for the first half of fiscal 2023. Birkenstock currently has $172M of cash and a massive pile of debt ($2.3B). Axios

  • New York-based American Exchange Group (AXNY Group) purchased Danecraft, a fine jewelry brand, along with its subsidiary, Primavera Italy. Terms of the deal weren’t disclosed. In August, AXNY Group acquired diversified cosmetics company HatchCollective. National Jeweler

Fundraising

  • New Incubation Ventures, the venture and incubation arm of beauty giant Estee Lauder, invested in Chinese clean beauty brand Code Mint. Code Mint was founded in 2021 by Chinese internet personality Grace Chow. This is Estee Lauder’s first-ever investment in a Chinese cosmetics company. KrASIA

  • Tech-enabled beauty startup PROVEN secured $12.2M in Series A funding. The round was led by NewH2 Ventures. PROVEN operates two beauty brands: PROVEN Skincare, an AI-powered, personalized skincare brand, and personalized fragrance brand Noteworthy. WWD

  • Singapore-based Neso Brands invested $4M in Le Petit Lunetier, a French affordable eyewear brand that launched in 2015. Le Petit Lunetier currently operates 16 stores in France. Neso Brands, which is backed by Indian eyewear retailer Lenskart, will help Le Petit Lunetier scale internationally. Fashion Network

  • Iris Ventures and Five Seasons Ventures co-led a €14m investment in Mammaly, a Cologne-based pet supplements brand. Mammaly was founded in 2020 by Stanislav Nazarenus and Alexander Thelen. Pet Business World

What’s New 🤩

Apparel, Cosmetics, and Wellness

  • Ulta Beauty unveiled their 2023 MUSE Accelerator cohort. MUSE is an eight-week program for early-stage BIPOC beauty brands. Participating brands include DEON LIBRA, OOLI, Octavia Morgan Los Angeles, among others. Business Wire

  • The much-anticipated Byredo x Susanne Kaufmann collaboration officially launches today. Susanne Kaufmann

  • Therabody, the wellness technology startup behind the popular Theragun, is doubling down on beauty with the TheraFace Mask, a LED light therapy mask that helps reduce signs of aging. Mashable

Food, Beverage, and Alcohol

  • Kraft Heinz introduced a new line of microwaveable grilled cheese sandwiches under its Lunchables brand. The new line, Crispy Grilled Cheesies, comes in two flavors: Original and Pepperoni Pizza. The packaging is pretty great IMO. Twitter

  • Washington DC-based Dolcezza Gelato collaborated with NPR on a new limited edition ice cream called All Things Cone-sidered. The product is available at Dolcezza stores, select Foxtrots, and on GoldBelly. PR Newswire

  • Plant-based cheesemaker Miyoko’s Creamery unveiled a new line of cheese spreads that are made with organic cultured cashew milk. Four flavors are available: Classic Chive, Garlic Herb, Roadhouse Cheddar, and Sundried Tomato. Vegconomist

  • Maine Crisp, a maker of buckwheat crackers, has rebranded as Better With Buckwheat. A pretty strong glow up. Food Business News

  • Instead of launching a pumpkin spice flavor for fall, Belgian Boys introduced a maple version of its Pancake Cereal. Great-looking product. Instagram

Data 🖥️

  • Despite only launching in retail in April of last year, GOODLES now has over 35,000 points of distribution nationwide. Insane growth. They also expect revenue to 3x this year. Twitter

  • Zegna Group posted strong results for the first half of 2023. Revenue was up 23.9% to 903M EUR and profit was up 147.9%. Business Wire

Distribution News 🚚