Yellow Wood Acquires ChapStick, Huberman Buys Beverage Brand 🍵

GM and Happy Saturday, folks. We have a lot of fun stuff to cover today so here’s a preview:

• Yellow Wood x Chapstick 💰

• Huberman bets on yerba mate ⚡️

• The Coconut Collab scores funding 🥥

• Rob’s Backstage Popcorn rebrands 😍

Shout-out to Barrel, the go-to web agency for brands like KIND Snacks, Dr.Jart+, Sweet Loren’s, Austin Eastciders, The Nue Co., and many others.

Yellow Wood Acquires ChapStick 💰

Yellow Wood Partners, the consumer-focused private equity firm that’s best known for buying large, unloved brands and turning them around, continues its aggressive acquisition spree. 

Suave Brands Company, a portfolio company of Yellow Wood Partners, is acquiring iconic lip balm brand ChapStick for $510M. The seller is Haleon, the British consumer healthcare giant, who will receive $430M in cash and a minority equity stake in Suave Brands. 

ChapStick traces its roots back to the early 1880s when Charles Browne Fleet developed the now-iconic product in Lynchburg, Virginia. The brand has traded hands multiple times, and became a subsidiary of Haleon when Pfizer and GlaxoSmithKline merged their consumer healthcare businesses in 2019.

The most obvious takeaway from this transaction is that it’s an absolute steal for Yellow Wood Partners. ChapStick is the #1 lip care brand in the mass, drug, food, and convenience store channels. It’s also #1 by volume and is purchased by one out of every five households in the United States. 

Since ChapStick generated just over $142M in revenue in 2023, Yellow Wood Partners is basically only paying 3.5x revenue for a brand that’s dominated the category for more than a century. That’s a wildly low revenue multiple for such a strong brand, and a major coup for Yellow Wood Partners and its LPs. 

ChapStick is no doubt under pressure from brands like Burt’s Bees, eos, Poppy & Pout, and many others, but given its size, distribution, and overall brand awareness, none of these brands represent an existential threat to ChapStick. 

If Yellow Wood simply follows their own playbook — expand into new categories, double down on marketing and innovation, and kill underperforming SKUs — ChapStick will likely be a major win for them.

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Since 2006, we’ve helped build digital experiences for well-known brands like KIND Snacks, Dr.Jart+, Sweet Loren’s, Austin Eastciders, The Nue Co., and many others. We’re also Shopify Plus Partners.

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Deals 💰

Mergers & Acquisitions 

• Popular podcaster Dr. Andrew Huberman partnered with investment firm Tiny to acquire Mateina, a Canadian yerba mate brand that sells RTDs and loose leaf teas. Mateina also announced that it launched in the U.S. Love the branding. BevNET

Fundraising

• Filmland Spirits, a Los Angeles-based whiskey brand, secured $1.5M in Series A funding from undisclosed investors. The company positions itself a whiskey brand for movie nerds. Twitter

• The Coconut Collab, a UK-based producer of coconut-based yogurt, milk, and ice cream, raised £1.5M in fresh funding from the likes of Ground Force Capital. The company last raised funding in 2020 when it secured $7M. The Grocer

What’s New 🤩

Apparel, Cosmetics, and Wellness

• Millie Bobby Brown is expanding her consumer goods empire with a ready-to-wear fashion line — Florence By Mills Fashion. The first collection drops in early February. Anyone else find it peculiar that all her different consumer businesses — beauty, coffee, and now fashion — are all housed under the Florence By Mills brand? WWD

• Popular suncare brand Vacation launched a new fragrance called After Sun. Instagram

• Country music stars Eric Church and Morgan Wallen are reviving an outdoor retailer & media brand, Field & Stream, that traces its roots back to 1871. The pair purchased the brand from DICK’S Sporting Goods. PR Newswire

Food, Beverage, and Alcohol

• Rob’s Backstage Popcorn quietly dropped a fantastic brand refresh. Not sure which agency facilitated the brand refresh, but they knocked it out of the park IMO. Instagram

• Ocean Spray has launched a new premium juice brand called Revl Fruits. The packaging is terrific. Revl Fruits

• J.M. Smucker has officially discontinued its Knott’s Berry Farm brand in order to focus on brands and categories with higher growth potential. Food Business News 

• Onda, the RTD tequila seltzer brand that’s backed by Aria Growth Partners and Clayton Christopher, has expanded beyond cans and launched their first-ever bottled tequila. It’ll be hard to miss on a shelf. Onda

• Energy drink brand Juvee launched a new flavor — Galactic Berry. A great-looking can. Stack3d

Data 🖥️

• Fantastic report from FABID on the CPG fundraising landscape in 2023. Unsurprisingly, 77 fewer brands raised funding last year compared to 2022. FABID

• Sour Strips is becoming a juggernaut. Per CEO Maxx Chewning, Sour Strips will start selling over 2M bags per month later this year. Twitter

• LVMH wine & spirits sales fell from around $7.6B in 2022 to $7.1B in 2023. It was their only business unit to report declining sales last year. The Spirits Business

Distribution News 🚚

• Better-for-you toaster pastry brand Flings launched at Target.

• Tepache brand De La Calle is now available at Weis Markets.

• Afghan sauce brand Mazzah launched at 275+ Target stores in the Midwest.