SYSTM Foods, the strategic partnership of private equity firm SYSTM Brands and venture capital fund PowerPlant Partners, staked its first claims on the impact-focused food and beverage category on Wednesday by announcing it has acquired Chameleon Coffee from Nestlé USA, along with independent functional beverage brand REBBL.
“I couldn’t think of two better brands to combine,” said Andy Fathollahi, CEO of SYSTM Foods. “We look for great brands, great products and this acquisition was phenomenal.”
Through SYSTM Foods, which is focused on socially conscious food and beverage products, both brands will be operated by SYSTM Brands with PowerPlant serving as lead investor in the partnership. The deals were both closed in May but were officially announced Wednesday.
Although the details of the partnership were undisclosed, the launch of SYSTM Foods allows SYSTM Brands to use its expertise in consumer product acquisitions and move into the food and beverage space where PowerPlant has invested heavily, Julian Cheng, chief strategy and investment officer for SYSTM Brands, told BevNET.
Based in Austin, Chameleon Cold-Brew, started as an organic cold brew concentrate business in 2010 and was acquired by Nestlé in 2017. Under the leadership of one of the world’s largest coffee companies, Chameleon rounded out Nestlé’s offerings with at-home pod-based products, packaged coffee and single-serve RTD coffee drinks.
Nestlé’s decision comes as oversaturation in the RTD coffee category and increased competition in the market has led to shakeout in the category. There were 326 active coffee brands (excluding private label) in the market in December 2021, down from 350 in 2020 and a peak of 357 in 2019, according to SPINS data for MULO and convenience.
California-based REBBL makes plant-based elixirs and protein beverages and most recently launched its own functional RTD coffee line called Stacked, as well as prebiotic soda REBBL POP. REBBL frames itself with a conscious capitalism business by using recyclable materials and supporting social justice and human rights organizations through a portion of its sales.
REBBL’s acquisition continues the company’s relationship with PowerPlant Partners who invested in the brand in 2018. The venture capital firm has invested extensively in the food and beverage space helping fund companies like Beyond Meat, Thrive Market, Liquid Death, and Vive Organic.
Chameleon and REBBL will continue to be run as two separate businesses with SYSTM operating the finances and sales on the backend. SYSTM Foods reported that the strategies for the new companies would “stay fairly in line with what both brands have been doing with some refinements to growth strategies.”
In establishing a natural beverage portfolio, the company sees these two brands as an opportunity to invest beyond consumer products like mobile phone cases that have populated its portfolio until now, Cheng said.
“From a consumer product standpoint, managing multi brands and delivering really high-quality products is something that we’re very comfortable doing. The only thing that’s really different is ingredient mix and supply chain,” Fathollahi said. “We have the good fortune of having a largely domestic-based supply chain here. We co-man(ufacture) and distribute everything domestically within REBBL and Chameleon.”
At this point, SYSTM Foods is solely focused on the integration of the two new brands and does not have future acquisitions planned, Cheng said.
“We’re obviously gonna leave our options open, but if an opportunity pops up, we’re going to be looking at it closely.”