Unilever To Spin Off Ice Cream Biz, Rare Beauty Hires Bankers 👀

GM and Happy Thursday, folks. Here’s what we’re getting into today:

• Sazerac buys BuzzBallz 🍸

• L Catterton bets on early stage brands 💄

• GNGR Labs scores funding 🫚

• Nécessaire breaks into haircare 📈

• SkinnyDipped refreshes packaging 🔥

Unilever To Spin Off Ice Cream Biz 🍦

Unilever, the London-based consumer goods giant, will spin off its ice cream division as it focuses on higher growth categories like beauty, personal care, and wellness. 

Unilever’s ice cream division is home to a number of category leaders like Ben & Jerry’s, Breyer’s, Klondike, Magnum, Popsicle, and Talenti. They also acquired Yasso last June. In 2023, the division accounted for 13% of Unilever’s total sales (€7.9B). 

The calculus behind the decision to spin off ice cream into a standalone business is pretty straightforward. Unilever operates five key divisions — Beauty & Wellbeing, Personal Care, Home Care, Nutrition, and Ice Cream — and ice cream is its smallest and slowest growing division. 

Beauty & Wellbeing, home to brands like Dove, Liquid I.V., Nutrafol, and Vaseline, grew 8.3% year-over-year to revenue of €12.5B. Personal Care, home to brands like Axe, Lux, and Rexona, grew 8.9% year-over-year to €13.8B. Ice Cream, on the other hand, only grew 2.3% while underlying volume dipped -6%.

In addition to overall underperformance, ice cream is just a very different business from an operating perspective compared to Unilever’s other divisions. While there are manufacturing and distribution synergies for brands like Axe, Dove, and Nutrafol, ice cream simply doesn’t benefit from them. 

Ice cream has to be shipped and stored via cold chain ($$$) and the gross margins and shelf life aren’t great to begin with either. In short, the capital intensity required to produce and distribute ice cream is much greater than body wash or deodorant. 

By spinning off ice cream, Unilever can house its higher margin, synergistic brands under one roof, while the standalone ice cream biz will benefit from greater focus from management and the ability to allocate capital and resources more freely. 

More on the announcement here.

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Deals 💰

Mergers & Acquisitions 

• Butterfly Equity is looking to sell Chosen Foods, a San Diego-based producer of avocado-based cooking oils, condiments, salad dressings, etc. Chosen Foods launched in 2011 and Butterfly Equity acquired a majority stake in the brand in 2021. The brand generates around $50M of EBITDA per year. Reuters

• Rare Beauty, the fast-growing cosmetics brand that Selena Gomez founded in 2020, has hired bankers to explore a possible sale. Rare Beauty could be valued as high as $2B. Business of Fashion named Rare Beauty as one of the hottest M&A targets in 2024. Bloomberg

• New Orleans-based spirits firm Sazerac is acquiring RTD cocktail brand BuzzBallz for an undisclosed sum. BuzzBallz was founded by Merrilee Kick in 2009 and is best known for its spherical shaped shots that you’ve most likely seen at a convenience or liquor store. PR Newswire

Fundraising

• L Catterton has been investing in early-stage beauty brands via a new vehicle called Elevate Beauty. Thus far they’ve invested in DIBS Beauty, Eighth Day Skincare, and Irene Forte Skincare. L Catterton has been adept at identifying winners at the growth stage like TULA Skincare and ODDITY, so it’ll be interesting to see if that skill translates to early-stage brands too. DIBS Beauty certainly seems to be a winner, though. WWD

• GNGR Labs, a New York-based producer of wellness beverages, has secured a low seven-figure investment from Gather Ventures and Bochi Investments. The brand is best known for its immunity shots but recently launched a line of 12 oz. prebiotic immunity beverages. BevNET

• TV personality and entrepreneur Daymond John has invested in premium coconut water brand Once Upon a Coconut. BevNET

What’s New 🤩

Apparel, Cosmetics, and Wellness

• Glossier has revamped and relaunched its body care collection. The new collection, dubbed Body Hero, includes a lotion, oil wash, and an oil mist. The packaging is gorgeous 👇 Glossier

• Popular personal care brand Nécessaire has expanded into the haircare category. The new haircare line includes a Rosemary Conditioner and a Rosemary Shampoo. At six years old and growing fast, Nécessaire seems like a prime acquisition target in 2024. Instagram

• Skincare brand Experiment just launched a new smoothing lip treatment called Softwear. The 90s-inspired social campaign is brilliant. Instagram

• One of the neatest brands I encountered at Erewhon last week was Cowboy Colostrum. I wasn’t really familiar with colostrum but it’s a dairy superfood that’s nutrient-dense and high in antibodies and antioxidants. A fantastic example of simple, differentiated branding. Twitter

Food, Beverage, and Alcohol

• SkinnyDipped just revealed a badass packaging refresh. Their old packaging was charming but I prefer this sleeker, more shelf optimized version. Bravo 👇 Instagram

• Pistachio milk brand Táche launched an eye-catching boxed latte. Would love to see more of these boxed lattes in different colorways. Instagram

• Plant-based honey brand Mellody unveiled a Spicy Habanero Hot Honey. Mellody

• Australian non-alc brewer Heaps Normal has partnered with Who Gives a Crap, an eco-friendly toilet paper brand, on a limited-edition Cheeky IPA. 10/10 collab and can. Instagram

• Coca-Cola Europacific Partners (CCEP) is introducing a new line of RTD mocktails under the Schweppes brand in the UK. Just Drinks

Data 🖥️

• Sports Drink volume was down 8.3% for the four weeks ending on February 24th. Gatorade (PepsiCo) volume dipped 10.6% while Powerade/BodyArmor (Coca-Cola) declined 8.2%. Curious if this is because more consumers are opting for hydration supplements like Liquid I.V. or LMNT. Twitter

• Gen Alpha is driving a significant uptick in Mass Skincare sales. WWD

Distribution News 🚚

• Kanpai Foods, the new freeze dried candy brand from Isaac Medeiros, will launch at World Market soon.

• Liquid IV is now available at Boots and Sainsbury’s in the UK.

• The Good Crisp Company launched at select Costco stores in the southeast.

• Fragrance brand Brown Girl Jane launched at Sephora.

• Vodka brand Body is now available at Total Wine & More in Texas.

• Energy drink brand REDCON1 launched at Circle K.

• Premium supplement brand Cymbiotika launched at Sprouts.

• Haircare brand Bread is now available at Boots in the UK.