This Week in CPG - Diageo Pounces 🥃

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CPG WIRE
November 05, 2022

Welcome back to This Week in CPG, folks. If you find this newsletter interesting or helpful, I'd be grateful if you'd share it with others who might enjoy it. Let's get into the news...

The Big Story

About two weeks ago we highlighted that Diageo launched a $2B fixed rate bond offering and how it might presage an acquisition spree. Well Diageo put on its Buyin' Pants a lot quicker than expected.

On Wednesday the spirits firm announced its acquisition of Balcones Distilling, a Texas-based distillery known for single malt whiskies and bourbons. In 2021 Balcones sold 15,000 9-liter cases. Link

Founded in Waco, TX in 2008, Balcones was a trailblazer in the craft whisky space, immediately winning industry awards and consumer affection when it hit shelves in 2010. In 2014, however, the company nearly combusted as founder Chip Tate and lead investor Greg Allen fought bitterly. You can read more about this titillating quarrel in the NYT.

All in all it's been a good for American craft spirits. On Monday Campari Group shelled out $420m for 70% of Kentucky's Wilderness Trail Distillery, and on Wednesday Diageo bought Waco's Balcones Distilling.

If Diageo keeps buying they'll likely stick to a familiar formula: acquiring premium brands in the tequila, whiskey (or whisky), and RTD categories.

Deals

  • Scottish cosmetics influencer Jamie Genevieve sold a minority stake in her beauty brand VIEVE for around $6.1m. Buyers include Active Partners, Pembroke VCT, Samos Investments, and Venrex. Link

  • Kering — the owner of Balenciaga, Gucci, and YSL — is in pole position to acquire Tom Ford. A dark horse, Estee Lauder, is still in the mix, though. Link 

  • Hair By Sam McKnight — a luxury haircare brand founded by celebrity hairstylist Sam McKnight — sold a minority stake to Manzanita Capital, a London-based private equity firm that previously backed luxury brands like Byredo, Diptyque, and Susanne Kaufmann. Link

  • As mentioned above, Johnnie Walker & Guinness owner Diageo acquired Balcones Distilling, a Texas-based distiller known for its single malts and bourbons. Terms weren't disclosed. Link

  • Artist and influencer Jason Derulo purchased a "significant" stake in TREO, a functional beverage brand that combines birch water with fruit flavors. Fun Fact: TREO was founded by Bob Golden, the son of the Snapple co-founder Hyman Golden. Link

  • Actress Melissa McCarthy and her husband Ben Falcone invested in Big Nose Kate, an American whiskey brand produced in beautiful Santa Fe, New Mexico. Link

  • One of Brazil's largest cosmetics companies, Grupo Boticario, acquired Brazilian men's grooming and personal care brand Dr. Jones. Link

  • Standing Ovation — a French FoodTech startup that produces animal-free cheeses — secured around $1.8m in financing from Bpifrance. Link

  • Women's intimate wellness brand Joylux closed on $13m in Series A funding. J-Ventures, J-Impact, and Dr. Kathy Fields (of Rodan + Fields fame) participated. Joylux also announced a partnership with global hygiene firm Essity to bring their products to Europe and LatAm. Link

  • Spirits group Next Century Spirits — the folks behind Seth McFarlane's Bear Fight American Whiskey and golfer Greg Norman's Caddy Cocktails — acquired XED Beverages, the producer of hybrid cocktail/seltzer brand SESH. Link

What's New...

  • Waterdrop, the Austrian water additive brand that raised $70m from Temasek earlier this year, launched a new advanced hydration & recovery line, Microlyte. Link

  • Cannabis-infused snack brand TSUMo Snacks launched two holiday flavors. Link

  • Quirky, iconic footwear brand Crocs had a killer Q3. Some highlights: net sales up 57.4% to $985.1m; Crocs Brand Sales up 14.3% to $715.7; HEYDUDE, the footwear brand Crocs acquired for $2B earlier this year, increased sales by 87% to $269.4m. North American sales for Crocs are slowing but APAC & EMEALA sales compensating. Link

  • Hard cider brand Angry Orchard partnered with Brooklyn's Four & Twenty Blackbirds to launch Baked Apple Pie Hard Cider. Link

  • Necessaire, the LA-based body and personal care brand, is now a Certified B Corp. Link

  • Codigo 1530, George Strait's tequila brand that Pernod Ricard acquired two weeks ago, released 400 bottles of a 14-year Extra Anejo Tequila. Great-looking bottle. Link

  • Bodycare brand Saltair expanded into haircare. Link

  • AlphaTauri, the performance apparel brand owned by Red Bull, opened its first store outside of Austria. Link

  • Sovos Brands — the owner of Rao's Homemade, Michael Angelo's, Noosa Yoghurt, and Birch Benders — had an OK Q3. Net sales increased 16.9% to $208.9m but COGS and OpEx weighed on EBITDA. Rao's Homemade is on its way to becoming a $1B brand, though. Link 

Distribution Quickfire

  • Healthy snack brand Sweet Nothings launched their Squeezable Smoothies at Target.

  • Israeli baby formula brand Else Nutrition rolled out at Giant Food.

  • Hydration brand The Pickle Juice Company launched at Wegmans.

  • Boozy cold brew brand Bomani hit shelves at Ralphs.

  • Shanghai-based gin brand Peddlers Gin Company is now available in Canada. Stunning bottle.

  • Aussie teeth whitening brand HiSmile is coming to America, will launch at Walmart.

Personnel

  • Red Bull alum Liz Ahern is the new CMO at Chamberlain Coffee.

  • Fabletics has a new CMO, Ilona Aman.

  • Lady Gaga's Haus Labs has a new VP of Product Development, Nicole Sokol.

  • Eurazeo alum George Birman is now a Principal at PowerPlant Partners.

Thanks for reading, see you again on Wednesday. If you have any thoughts or feedback, you know where to find me.

Robbie @ CPG Wire