In a move that brings a new strategic investor into the beverage game, protein-based sports drink/meal replacement beverage Mix1 has sold a significant minority stake to candy maker Hershey.
Mix1 CEO John Burns would not reveal the amount of money Hershey is paying to acquire the minority ownership stake, only stating that the company would acquire board seats commensurate with its percentage of Mix1. Burns, who spearheaded the investment under Highland Capital Partners and became the Mix1 CEO last year, will remain at the head of the company.
Under the general terms of the deal, Mix1 will remain largely independent, although it will be able to access the supply-chain, marketing and operations facets of the Hershey company. Mix1 will also be able to aggressively pursue a DSD network of its own, Burns added, without the potential to “step on the toes” of a more traditionally beverage-focused strategic partner. The investment may also signal a larger foray into the beverage market by Hershey, with Mix1 as its cornerstone investment.
Internally, however, Hershey had already begun to play in the beverage space with a sports and nutrition beverage of its own. Last year, the company attempted to leverage the antioxidant-rich qualities of cocoa with a protein-based sports beverage of its own called “reGen.”
“We realized they, among the strategic partners we had been looking at, had been looking at a similar market opportunity,” Burns said.
Mix1 had been looking for a strategic partner since the fall, Burns said. Meanwhile, the product’s marketing and formulation had been shifted slightly, to engage more of a sports recovery focus instead of meal replacement; according to Burns, the investment from Hershey “validates those changes.”
“We feel it’s a great win for Hershey and a great win for the company,” he said.