This Week in CPG - Aesop on the Block

Author

CPG WIRE
December 03, 2022

Happy Saturday, folks. We have a lot to cover this morning so let's dive in...

The Big Story

Natura & Co — the Brazilian multinational beauty group — is looking to sell a minority stake in one of its prized assets, Aesop.

As a company Natura & Co is a mixed bag. Of its roughly $7.7B in revenue last year, 74.8% came from direct sales (think Herbalife), while only 10.7% originated online. That isn't a great ratio in the 21st century. Additionally, two of its key brands, Avon and The Body Shop, are depreciating assets. In Q3 Avon's sales dipped 8.1% while The Body Shop's dropped by 19.5%.

One thing that's eminently clear, though, is that Aesop is a winner, and possibly Natura & Co's salvation. Founded in Melbourne in 1987, Aesop is a luxury hair, body, and skin care brand. If you don't recognize the name, you'll likely recognize the label.

Despite being over thirty years old, Aesop is still growing at a rapid clip. In Q3 Aesop's sales jumped 21.5%. In countries like Japan & South Korea, sales increased over 50%. Last year they opened 25 new stores in premium markets like Barcelona, Edinburgh, Hong Kong, and Seoul. Analysts suggest the brand could be worth close to $2B.

Given Aesop's growth and luxury positioning, a number of players like CVC Capital Partners, Shiseido, and L'Occitane are circling that minority stake. Though Natura & Co scrapped plans to spin off and IPO Aesop due to market turbulence, it wouldn't be surprising if they revived those plans after securing a long term equity partner. At the end of the day Aesop deserves its own balance sheet, unburdened by relics like Avon.

Deals

  • UK-based meal replacement brand Huel raised $24m in fresh funding and now boasts a $560m valuation. Highland Europe returned to lead the round. Other investors include Idris Elba, Sabrina Dhowre Elba, Jonathan Ross, and Grace Beverley, the CEO of activewear brand TALA. Huel's revenue is up 40% YOY to $170m. Link

  • Aja Labs, a black-owned startup that's bringing plant-based hair extensions to market under the brand Nourie, raised $2.5m in seed funding. Impact America Fund, Better Ventures, and IndieBio participated. Link

  • Nestle is spinning off Freshly – a meal delivery service it acquired in 2020 for $950m – into a joint venture with consumer private equity giant L Catterton. Nestle will retain a 41% stake in the JV but Catterton will manage it. Link

  • Indonesian vegan & Halal beauty brand ESQA raised a $6m Series A round led by Unilever Ventures. East Ventures also participated. ESQA was founded in 2015 and is available across Southeast Asia. Link

  • L'Oreal Groupe acquired a minority stake in Microphyt, a French biotech company that derives functional ingredients from microalgae. L'Oreal's venture arm — Business Opportunities for L'Oreal Development (BOLD) — made the investment. Link

  • Inclusive beauty brand Pound Cake won the $1m grand prize in Pharrell's Black Ambition Pitch Competition. Earlier this year the company also made Time Magazine's 200 Best Inventions of 2022 list. Link

  • New Fare Partners, a venture fund focused on food, beverage, and retail startups, closed on $20m for its first fund. They already have an impressive portfolio: Mid-Day Squares, Bachan's, Omsom, Made By Nacho, Foxtrot, among others. Link

  • Vegan snack brand PeaTos closed their Series A3 round led by cereal giant Post Holdings. Other investors in the round include Carl Lee, the former CEO of Snyder's-Lance, and Carlos Barroso, former Head of Global R&D at PepsiCo. Link

  • Perfect Day, a Berkeley-based start that produces animal-free dairy products via precision fermentation, acquired Sterling Biotech Limited, an Indian gelatin manufacturer. The acquisition doubles Perfect Day's production capacity. Link

  • Refined Brands acquired the intellectual property and assets of Frugi, an ethical childrenswear brand founded in the UK in 2004. Link 

What's New...

  • Actor (and icon?) Tom Hanks introduced a new charity coffee brand: Hanx For Our Troops. 100% of profits go to veterans. A+ branding & packaging, in my opinion. Link

  • New men's skincare brand, Insanely Clean. Very fun and approachable branding. Shout-out to Beauty Independent for highlighting this brand. Link

  • Yolele launched a new line of African Rub & Dip Mixes. Yolele's Fonio Chips remain some of the best-looking products out there. Link

  • Gap-owned activewear brand Athleta opened a new store in NYC's SoHo. Link

  • Dieux Skin launched a stunning new eye cream – Auracle. Link

  • New skincare brand from London, The Face Planner. Link

  • UK-based craft gin distillery Penrhos Spirits will begin packaging its spirits in 100% recycled aluminum bottles. The aluminum bottles actually look good. Link

  • Beverage icon AriZona Iced Tea teased the possibility of launching their Hard Iced Tea in the US. Link

Distribution Quickfire

  • London-based nutrition brand Form launched their Performance Protein at Vitamin Shoppe.

  • Melanin-rich skincare brand Ami Cole found its first retail partner, Sephora.

  • Refillable body care brand Uni hit shelves at Erewhon Market.

  • Vegan snack brand PeaTos launched at select Walmart stores.

  • Elevated canned beans brand Heyday Canning Co. launched at Sprouts.

Personnel

  • Skky Partners, Kim Kardashian's private equity firm, hired David Brisske from Permira.

  • Former Lazada executive Jessica Liu joined fast fashion juggernaut Shein as VP of Global Brand Operations.

  • Simple Mills appointed CPG veteran Sheryl O'Loughlin to their Board of Directors.

  • Wendy P. Davidson is the new CEO at Hain Celestial.

  • Prada will hire former Luxottica CEO Andrea Guerra in a top management role.

If you find this newsletter interesting or helpful, please pass it along to colleagues or friends who might also enjoy it. See you again on Wednesday.

Robbie @ CPG Wire