Sovos Sells For $2.7B 💰

Author

CPG WIRE
August 08, 2023

GM and welcome back to This Week in CPG, folks. Yesterday was a very exciting consumer news day:

  • Sovos sells for $2.7B 💰

  • Solo Brands buys another brand đŸ„¶

  • Tilray juices up craft beer portfolio đŸș

  • Something new from NĂ©cessaire 👀

  • Fishwife x TALEA collab of the year 😍

The Big Story 📰

Publicly traded soup and snacks giant Campbell Soup Company has acquired Sovos Brands for $23 per share, representing a total enterprise value of $2.7B. This is a massive success for Sovos Brands which launched only seven years ago as a vehicle to acquire disruptive, premium positioned food brands.

Sovos Brands, which owns Rao’s Homemade, Noosa Yoghurt, and Michael Angelo’s, is one of the fastest-growing food companies of scale in North America. For 2022, net sales at Sovos Brands hit $878.4m, a year-over-year increase of 22%. Rao’s Homemade, the well-known pasta sauce brand that’s the crown jewel of Sovos’ portfolio and accounted for 66% of their sales, surpassed $500m in sales last year, a year-over-year increase of 38%. Meanwhile Noosa Yoghurt accounted for 20% of their sales, while Michael Angelo’s, a producer of frozen Italian entrees, accounted for 9%.

This is a big bet for Campbell Soup Company, a company that, as evidenced by their $4.8B acquisition of snack firm Snyder’s-Lance, likes making big bets. Despite the considerable investment to acquire Snyder’s-Lance in 2017, Campbell’s snack sales almost surpassed $4B last year.

Sovos won’t impact Campbell’s bottom line as quickly as Snyder’s-Lance did, but they now have two premium brands to plug into their distribution network, and in due time will be able to extract the larger margins that accompany premium brands. I say two brands because Campbell will most likely sell Noosa Yoghurt. They have no business being in the yoghurt business.

Campbell’s $2.7B acquisition of Sovos Brands is a major win for Advent International, the private equity firm and principal backer of Sovos Brands. As of last year, Advent owned 53% of their common stock. Advent continues to impress and string wins together. They made a small fortune when they took Olaplex, the premium haircare brand, public in September of 2021, and will likely make a massive fortune when they sell Parfums de Marly in four to seven years.

M&A in the packaged food space has been on a heater. In addition to the Sovos Brands deal, Mars spent a reported $800m to acquire Kevin’s Natural Foods last month, and Unilever purchased Yasso for an undisclosed sum in June.

Deals 💰

Mergers & Acquisitions 

  • Solo Brands — the owner of Solo Stove, Chubbies, ISLE Paddle Boards, and ORU Kayak — has acquired IcyBreeze, a Texas-based maker of portable air conditioners. Earlier this year Solo Brands purchased TerraFlame, a seller of eco-friendly indoor fireplaces. Business Wire

  • Tilray, a diversified cannabis-lifestyle and beverage company, has purchased eight beverage brands from AB InBev. The acquired brands include Shock Top, Breckenridge Brewery, Blue Point Brewing Company, 10 Barrel Brewing, Redhook Brewery, Widmer Brothers, Square Mile Cider, and HiBall Energy. As John Craven pointed out on Twitter, it’ll be interesting to see what Tilray does with HiBall. WSJ

Fundraising

  • Ansā Roasting, an Israeli hardware startup that created a countertop, self-serve coffee roaster, raised $9m in funding led by Jibe Ventures. Closed Loop Ventures, New Climate Ventures, and Sweetwood also invested. Daily Coffee News

  • Miami-based gin & vodka brand Harry Blu’s secured funding from TV personality Simon Cowell. The Spirits Business

Brought To You By


Ecom sales tax is as messy as a baby eating its first solid meal

As much as you and I want it, we can’t avoid taxes. If you’re running an ecommerce business in the US, you know how weirdly tricky it is to manage your sales tax.

Your average bookkeeper wouldn’t touch it with a ten-foot pole while the existing solutions are either exorbitantly expensive or don’t care about your brand.

You need a white-glove solution that can take sales tax off your plate.

And that’s precisely what Numeral is. Numeral is the most comprehensive sales tax compliance solution for ecommerce brands. Brands spend less than five minutes a month thinking about sales tax once Numeral takes over.

Sam and Kevin, the founders of Numeral, quickly figured out that sales tax is a hot mess while running their own 8-fig DTC brands.

Here’s how Numeral helps you:

  • They do end-end sales tax filing. You just plug your Shopify and Amazon stores and they’ll take it from there.

  • Through virtual mailboxes, they can receive, read and reply to official correspondence from the states that might be important.

  • They continuously monitor nexus across states, thus keeping you compliant at all times.

And much more, which they can tell you over a quick demo.

Oh, did I mention they also do a free Nexus study which others charge thousands of dollars?

What’s New đŸ€©

Apparel, Cosmetics, and Wellness

  • Skincare brand Topicals launched an active primer that visibly fills in acne scars and skin indentations while repairing the skin’s texture over time. Available now for $34. More beautiful branding from Topicals. Twitter

  • Elevated personal care brand NĂ©cessaire is launching two new acne care products — The Body Acne Wash and The Body Acne Solution — later today. The PCR aluminum bottles are stunning. NĂ©cessaire

  • Austin Butler, the actor who recently played Elvis and will play Feyd Rautha in Dune: Part Two (đŸ”„), is now a global ambassador for YSL Beauty. PR Newswire

Food, Beverage, and Alcohol

  • Fishwife and TALEA Beer Co. dropped perhaps the best collaboration of 2023 — Super Smoky Lager. Just an absolutely gorgeous can. Twitter

  • PHOCUS, the energy drink brand that Jack Harlow acquired earlier this year, launched a new Pineapple flavor exclusively at The Vitamin Shoppe. PR Newswire

  • Global beverage firm Asahi has pushed into the functional soda category with the launch of VIBE Soda. VIBE is currently available across Australia in three flavors. Each flavor has a unique functional benefit e.g. Immunity or Gut Health. Twitter

  • The founders of non-alcoholic beer brand Infinite Session are set to launch a low alcohol beer brand called Brisk. Love the vintage look and color scheme. Instagram

  • Blue Moon, a wholly owned subsidiary of Molson Coors, is preparing to launch a non-alcoholic version of its iconic Belgian White Beer later this year. Guilty Eats

  • Energy drink brand G FUEL has pushed into the snack category with the launch of its Protein Puff line. PR Newswire

Data đŸ–„ïž

  • People are drinking less carbonated soft drinks AKA soda. Coca-Cola CSD volume was off 2% while PepsiCo missed the mark by 3.2%. BevInsights