This Week in CPG - A Skincare Unicorn is Born

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CPG WIRE
November 12, 2022

Happy Saturday, folks. De Soi — the non-alc aperitif brand founded by Katy Perry — is seeking a Senior Brand Manager. Link 

Now let's get into what happened in CPG this week...

The Big Story

The latest member of the CPG Unicorn Club is an almost five-year-old luxury skincare brand from Germany: Augustinus Bader. On Wednesday the company, now based in London, announced $25m in funding with the likes of Antoine Arnault, Natalia Vodianova, Diageo chairman Javier Ferran, General Atlantic, and Impala joining the cap table.

How, you might ask, with valuations collapsing and a general sense of economic despair in the ether, did a skincare brand become a unicorn? The answer is threefold.

1) First and foremost, Augustinus Bader's growth has been explosive. Since hitting the market in 2018 they're largely in a class of their own in terms of revenue growth:

  • 2018 - $7m

  • 2020 - $70m

  • 2022 - $200m

2) Second, AB's products aren't just slightly modified cosmetic formulations with luxe labels and a high price point (like quite a few other skincare brands). They have a formidable intellectual property moat that's backed by hard science and decades of stem-cell research. The founding story is now legend.

Professor Augustinus Bader, a world-renowned stem-cell researcher, met his future co-founder Charles Rosier at a dinner. With a background in finance, Rosier was discussing how to secure funding for clinical trials for Bader's latest innovation: a wound gel that restores the skin of burn victims. Rosier had an idea, though: instead of raising many millions of dollars for clinical trials that might not yield anything, why not use Bader's breakthrough technology to produce an anti-ageing cream? Two years later they launched Augustinus Bader with two products.

3) Beyond their explosive growth and intellectual property moat, there's a third reason why AB warrants unicorn status: they're a luxury brand that can get away with charging luxury prices. A single 1.7 ounce vial of The Rich Cream retails for a cool $280. Yep, you read that correctly.

As Bernard Arnault reportedly once said, "luxury good are the only area in which it is possible to make luxury margins."

This potent mix — explosive growth, proprietary products, and the ability to charge customers whatever the hell they want — has prospective acquirers interested. With Centerview Partners already exploring M&A options on behalf of Augustinus Bader, it will be interesting to see who writes a massive check to buy them. LVMH? Estee Lauder?

Deals

  • Beverage giant Keurig Dr Pepper (NASDAQ: KDP) invested $50m in Athletic Brewing Company, the non-alc craft brewery founded by Bill Shufelt and John Walker in 2017. Athletic Brewing is now a top-20 craft brewer in the US. Link

  • Acne care brand Zitsticka was acquired by brand aggregator Heyday. Zitsticka was founded in 2018 by Daniel Kaplan & Robbie Miller. Acne care has been a hot category lately: Hero Cosmetics was acquired by Church & Dwight for $630m in September and Peace Out raised $20m earlier this week. Link

  • Toronto-based skincare brand Three Ships announced $1m in seed funding. Investors include Martin McCourt (former CEO of Dyson), Tara Bosch (founder of SmartSweets), and Arati Sharma (founder of Backbone Angels). Link

  • Something & Nothing — a London-based seltzer and spritz brand that recently launched in the U.S. — raised $2.8m led by ACF Investors and Rianta Capital. Link

  • LA-based skincare brand Topicals announced $10m in Series A funding led by CAVU Consumer Partners. A number of celebrities like Gabrielle Union, Kelly Rowland, and Hannah Bronfman also participated. The company was founded by Olamide Olowe in 2020. Their products are stunning. Link

  • As mentioned above, Augustinus Bader closed on $25m in funding. Link

  • O'Neill Vintners & Distillers — a large portfolio of premium wine & spirits brands — acquired FitVine Wine, a wellness-focused wine brand founded in 2015. Link

  • Some craft brewery consolidation in Wyoming. Jackson-based Roadhouse Brewing acquired Alpine's Melvin Brewing. Link

  • Wine & spirits group E & J Gallo acquired Denner Vineyards, a Paso Robles winery with 130 acres of vines. Founded by Ron Denner over two decades ago, Denner Vineyards is known for quirkily named, widely celebrated wines like Dirt Worshipper and Ditch Digger. Link

  • Aussie sugar-free beverage brand Nexba raised A$3.96m on crowdfunding platform VentureCrowd. Link

  • Multinational retailer NEXT acquired the intellectual property of Made.com, the once fast-growing furniture retailer that recently went bankrupt. NEXT paid $3.8m. Link

  • Pet's Table, a Mexico City-based fresh dog food startup, closed on $2m in seed funding from Left Lane Capital and Goodwater Capital. Link

What's New...

  • Ridge, the premium accessories brand known for their wallets & backpacks, just launched into a new vertical: rings. Ridge has been cooking lately. A few weeks ago they launched into another tough vertical, watches. More from founder & CEO Sean Frank here.

  • Renowned fashion designer Brunello Cucinelli is now in the winemaking business with the launch of Castello di Solomeo. Link

  • Cutwater Spirits, the beverage brand known for their canned cocktails, unveiled their latest line: high-proof mixers for making hot cocktails. Link

  • Toronto's Bellwoods Brewery is getting into the non-alc beer game. Link

  • Chamberlain Coffee, the impressive coffee brand founded by influencer Emma Chamberlain, unveiled their stunning First Class Collection. Link

Distribution Quickfire

  • Oral care brand Burst is launching at 1,200 Walmart stores.

  • Beleaguered energy drink brand Bang is heading to the UK & Ireland.

  • Functional beverage brand Vybes is now available on Gopuff.

  • Non-alc beer brand RationAle partnered with Breakthru Beverage to launch in Nevada.

  • Sparkling turmeric lemonade brand Golden Tiger went nationwide at Meijer.

Personnel

  • Sabeen Mian has been named President of Beauty Pie, the UK-based members-only beauty retailer.

  • Adam Minto, the CEO of Revolution Beauty, resigned after an accounting probe.

  • Ozan Dokmecioglu, who become CEO of Keurig Dr Pepper 3-4 months ago, resigned over code of conduct violations.

Thank you for reading and see you again Wednesday morning!

Robbie @ CPG WIRE