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Welcome to Dealboard. In this weekly feature, The Current is providing a look at the mergers, acquisitions and venture capital deals making waves in ecommerce, CPG and retail.
This week, there’s new investment for top brands in functional soda, plus-size apparel and skincare. Plus, Mondelez is divesting well-known brands, Weber is going private and DSW is adding to its portfolio.
Take a look at the latest activity:
Silverwood acquires 20% stake in Lush
Lush, which operates in 48 countries, will use the investment to expand into other sectors, including health and beauty and specialty foods. The deal comes after Lush acquired its North American business partner last year.
Silverwood also acquired Japan-based skincare business Sonatas for 18 million pounds.
BloomChic receives investment from L Catterton
Serving women sizes 10-30, BloomChic aims to help women easily find clothes that fit. The brand shares that approximately two-thirds of American women wear clothes sized 14 and above. However, these sizes make up less than half of the US women's apparel market.
Here’s how the brand describes its product development process:
Focusing on customer satisfaction and efficiency, BloomChic employs a data-driven product development process which identifies trending colors, patterns, and fabrics with consideration for different body shapes and each material's properties. New offerings are produced and tested in very small batches, leveraging the founding team's decades of production and inventory management experience as well as its extensive and deep relationships with top suppliers.
With the deal, L Catterton will offer consumer insights and operating capabilities.
"BloomChic puts its customers at the center of everything it does," said Scott Chen, a Managing Partner of L Catterton, in a statement. "This is evident not only from the range and quality of its products, but also the meaningful connections it has formed with customers and its culture of ensuring that the plus-size voice is heard.”
Poppi raised $25M for functional beverages
Poppi. (Courtesy image)
It comes in a year when the brand saw a 148% increase in overall revenue and a 250% increase in online sales. It also vaulted to become a top-10 brand during Amazon’s Prime Early Access Sale. It has also doubled its retail presence, and is now in 20,000 doors.
Poppi started as a farmers market favorite. Then, cofounders Allison and Stephen Ellsworth appeared on Shark Tank in 2018. With the funding, Poppi plans to grow its retail presence, invest in larger-scale media and further product development.
iNNBeauty Project raises $12M for clean skincare
iNNBeauty Project products. (Courtesy photo)
The financing was led by consumer investor Alliance Consumer Growth, with participation from Strand Equity and Beechwood Capital.
Launched by Alisa Metzger and Jen Shane in 2019, the brand is distributed online and in-store through Sephora. Following the funding, it plans to continue expanding this partnership, develop new products and hire to grow its team.
“Seeing our iconic products like Green Machine & Pimple Paste continue to engage new users in-store and on digital platforms is so rewarding as we look toward the new year,” said Metzger, in a statement.
With the funding, the brand will seek to continue growth, including an expansion with Sephora.
Heyday raises $12M for skincare franchise growth
Heyday offers skincare services such as facials at more than 10 shops in New York, LA and Philadelphia. In 2023, it is planning to open over 30 shops, in part through a franchise model that will help it expand to Denver, Boston, Austin and Phoenix. The company is also planning to launch a line of skincare products. Additional funds will be allocated toward tech advancements, product development and growing the team.
Former Yeezy-Adidas innovation lead raises $6 million for footwear lab
Omar Bailey and Abhishek Som. (Courtesy photo)
Bailey teamed with former private equity executive Abhishek Som to create a US-based innovation studio that aims to cut product development times when compared with those of overseas supply chains. Based in LA, the lab will harness technology such as additive manufacturing & 3D printing for use in footwear.
Here’s how a release describes the participating investors:
This initial $6 Million tranche included a diverse group of venture capital firms, top professional athletes and a myriad of pedigreed angel investors. Investors include the Co-Founder of Tinder (via Time Zero Capital), Co-Founder of WeWork, the West Coast Head of Warburg Pincus, and a consortium of NBA & NFL stars via Chicago based Aurelien Capital. Venture capital investment was led by the LA-based, Pay-Pal-backed Slauson & Co, with additional investment from Relay Ventures, Elysian Park Ventures (the private investment arm of the Los Angeles Dodgers ownership group), Level One Fund & Fog City Capital among others.
Former Amazon Prime Video exec raises $3M for shopping app
(Photo courtesy of Trendio)
The startup was founded by former Amazon VP of US Prime Video and CVS head of beauty Alex Perez-Tenessa and David Olmos. They are joined by Amazon Live alum Julie Novak and former Glossier head of make-up category management Leah Grubb.
Powered by video AI, the app allows users to interact with creators through video, pin their favorite products to their dashboard and purchase items from a variety of brands directly through Trendio. The app is available on mobile devices through iOS and Android, as well as via connected TV on Roku. Brands available on the app include Merit, Philosophy, Fig1, Ursa Major, Nudestix, Kjaer Weis, Joanna Vargas, Coola and Avene.
"We launched Trendio because traditional ecommerce wasn't working for customers who wanted to discover new beauty brands and products in a way that felt personal and that they could trust,” said Perez-Tenessa, in a statement. “Our technology roadmap not only enhances the shopping journey, it reinvents how people experience video altogether - we are creating the first ever personalized video experience."
Pack raises $3M for headless commerce
Pack, a platform for headless ecommerce raised $3 million in a second seed round.
The round was led by Norwest Venture Partners, with participation from Vanterra Ventures and existing investor Alpaca.
Following the funding round, the company plans to continue developing the product, add partnerships beyond the Shopify ecosystem and increase go-to-market efforts.
“More than the money, the funding is further validation from investors that the hard work and late nights we put in bootstrapping our way through our first three years to build the platform we have today was the right decision,” wrote CEO Cory Cummings, in a blog post.
ProfitWheel raises $1.2M for consumer intelligence
ProfitWheel, a SaaS platform for consumer intelligence, raised $1.2 million in a pre-Series A round according to a news release.
Investors in the round include Eightfold AI CEO Ashutosh Garg, former head of Google Search
Amit Singhal and Nigel Morris, former Chief Strategy and Innovation Officer and CEO Americas and EMEA of Dentsu International. The SAFe note round values the company at $30 million. It follows a $3 million seed round raised last year.
Founded by a team of former leaders from Dentsu and Nielsen, ProfitWheel says it balances user privacy with providing brands and retailers with the ability to derive analysis from first and third-party data.
“Digital marketing is constantly disrupted by ever-changing systemic changes and privacy concerns – creating lesser audience transparency,” said CEO Gautam Mehra, in a statement. “ProfitWheel was established to empower marketers with more intelligence to help them navigate these changes and have better consumer understanding to steer their businesses.”
MERGERS & ACQUISITIONS
Mondelēz to sell gum business for $1.35B
Mondelēz International announced plans on Monday to sell its gum business to Mentos maker Perfetti Van Melle Group. The deal is valued at $1.35 billion, which Mondelēz said is 15x estimated current year EBITDA.
The business, which spans the US, Canada and Europe, includes brands such as Trident, Dentyne, Stimorol, Hollywood, V6, Chiclets, Bubbaloo and Bubblicious.
In a statement, Mondelēz CEO Dirk Van de Put said the company "is pleased to transition our developed market gum business to a values-led, family-owned company whose portfolio is a strategic fit, and where our brands and people can thrive.”
Oreo and Ritz maker Mondelēz has been reshaping its portfolio to focus on chocolate, biscuits and baked snacks. Earlier this year, it made headlines with the acquisition of Clif Bar and Mexican confectionery company Ricolino.
Weber goes private in mergerwww.needpix.com
Weber, the grill brand, will be taken private in a merger with investment firm BDT Capital Partners.
With the deal, Weber receive a $350 million loan that will be used to repay existing debts, invest in new product initiatives, and fund working capital for the upcoming 2023 outdoor cooking season.
BDT will purchase all outstanding Class A shares of Weber that it does not own for $8.05 per share, which is a 60% premium. This values Weber at $3.7 billion.
The deal is expected to close in the first half of 2023.
DSW parent acquires Topo Athletic
Founded by former Rockport exec Tony Post in 2012, Topo makes footwear for running, walking and hiking. It joins a growing portfolio of DSW’s Owned Brands, which are sold at its stores alongside other brands. Sales grew 25% in this category in the third quarter, and DSW aims to double sales of these brands by 2026.
Post will remain with Topo following the acquisition.
Trü Frü acquired by Mars, Inc.
Mars Inc. acquired Trü Frü, a better-for-you, whole fruit snacking brand.
Founded in 2017 by CEO Chief Brian Neville, President Taz Murray, and COO Brandon O'Brien, Trü Frü brings together natural fruit and chocolate. At Mars, it will join a portfolio of health and wellness-focused snack brands that includes KIND and Nature’s Bakery.
“Trü Frü is a perfect complementary fit for our health & wellness portfolio and our capabilities will help the brand strengthen its operations, broaden distribution and accelerate growth,” said Andrew Clarke, global president of Mars Snacking, in a statement.
Barilla buys Back to Nature
Crisco and Cream of Wheat maker B&G Foods announced plans to divest health store snacking staple Back to Nature. Barilla Group, which is known for pasta, will buy the brand.
"Our decision to sell Back to Nature is part of a broader effort at B&G Foods to focus our portfolio on businesses that are core to our long-term strategy as we transition to a business unit structure,” said Casey Keller, President and Chief Executive Officer of B&G Foods. “The divestiture will also allow us to reduce long-term debt, while providing Barilla America with a great brand.”
For its part, Barilla is aiming to build a multi-brand bakery platform.
“We focus all our business activities and products on health and indulgence and hence Back to Nature was a natural choice," said Barilla CEO Guido Barilla.
B&G previously acquired Back to Nature from Mondelez International in 2017. The brand makes cookies, crackers, granola, nuts and trail mix.
The deal with Barilla is expected to close in the first quarter of 2023.
Prima, Prospect Farms form Uplifter Brands
Plant therapeutic brand Prima acquired hemp and hemp brand Prospect Farms. The brands are joining together to form Uplifter Brands, which is described as a next-gen CPG house for clean and conscious brands across personal care, supplements, spa and hospitality, private label and pet wellness.
With the deal, Prima will own the eponymous Prospect Farms, which has over 250 acres of hemp cultivation and manufacturing facilities including a greenhouse, filing system, and on-site lab formulation and fulfillment. Uplifter Brands will be led by former Prima CEO Laurel Angelica Myers and former Prospect Farms CEO Brad Tipper as co-CEOs. Honest Company Founder Christopher Gavigan is serving as executive chairman.
"At a time when many of our competitors are shutting down, consolidating, or moving away from cannabinoids all-together, we're doubling down on the ingredient and its vast therapeutic benefits," said Myers, in a statement. "With the acquisition of a USDA Certified Organic hemp farm and an even bigger plan to lead the wellness category with the cleanest, science-backed botanical therapeutic products, we can't wait to share what's coming next."
Beiersdorf acquires skin microbiome researcher
Personal care multinational Beiersdorf acquired S-Biomedic, a life science company specializing in skin microbiome research. Beiersdorf had previously invested in S-Biomedic in 2018, and is now acquiring a majority stake. S-Biomedic will continue as a standalone company.
Founded by Veronika Oudova and Bernhard Paetzold in 2014, S-Biomedic research and develops ingredients for cosmetics that use living skin bacteria.
One to watch: VF Corp. considers selling JanSport
The North Face and Vans owner VF Corp. is mulling the sale of backpack brand JanSport, Bloomberg reported Monday. Such a deal could value JanSport at $500 million, but no final decision has been reached. The news comes after CEO Steve Rendle announced his retirement from the company.
Trending in Operations
Campbell Soup Company CEO Mark Clouse offered thoughts on messaging amid inflationary shifts in consumer behavior.
After months of elevated inflation and interest rate hikes that have the potential to cool demand, consumers are showing more signs of shifting behavior.
It’s showing up in retail sales data, but there’s also evidence in the observations of the brands responsible for grocery store staples.
The latest example came this week from Campbell Soup Company. CEO Mark Clouse told analysts that the consumer continues to be “resilient” despite continued price increases on food, but found that “consumers are beginning to feel that pressure” as time goes on.
This shows up in the categories they are buying. Overall, Clouse said Campbell sees a shift toward shelf-stable items, and away from more expensive prepared foods.
There is also change in when they make purchases. People are buying more at the beginning of the month. That’s because they are stretching paychecks as long as possible.
These shifts change how the company is communicating with consumers.
Clouse said the changes in behavior are an opportunity to “focus on value within our messaging without necessarily having to chase pricing all the way down.”
“No question that it's important that we protect affordability and that we make that relevant in the categories that we're in," Clouse said. "But I also think there's a lot of ways to frame value in different ways, right?”
A meal cooked with condensed soup may be cheaper than picking up a frozen item or ordering out. Consumers just need a reminder. Even within Campbell’s own portfolio, the company can elevate brands that have more value now, even if they may not always get the limelight.
The open question is whether the shift in behavior will begin to show up in the results of the companies that have raised prices. Campbell’s overall net sales grew 5% for the quarter ended April 30, while gross profit margins held steady around 30%. But the category-level results were more uneven. U.S. soup sales declined 11%, though the company said that was owed to comparisons with the quarter when supply chains reopened a year ago and expressed confidence that the category is seeing a longer-term resurgence as more people cook at home following the pandemic. Snacks, which includes Goldfish and Pepperidge Farm, were up 12% And while net sales increased overall, the amount of products people are buying is declining. Volumes were down 7%.
These are trends happening across the grocery store. Campbell is continuing to compete. It is leading with iconic brands, and a host of different ways to consume them. It is following that up with innovation that makes the products stand out. Then, it is driving home messaging that shows consumers how to fit the products into their lives, and even their tightening spending plans.
Campbell Soup is more than 150 years old, and has seen plenty of difficult economic environments. It is also a different business today, and will continue to evolve. At the end of the day, continued execution is what’s required.
“If it's good food, people are going to buy it, especially if it's a great value,” Clouse said.