NOSHscape: The Latest Food Brand News

PepsiCo Buys Health Warrior for new HIVE unit

In October, soft drink and snack giant announced that it was buying Health Warrior, an upstart snack bar company that is best known for its use of chia – and other nutritional seeds and nuts – in its plant-based products. The company will serve as the first investment in the PepsiCo HIVE, a new emerging brands unit within the company’s North American Nutrition group. Financial details were not immediately available.

Company CEO Shane Emmett noted that “In joining the PepsiCo family we will offer more Americans access to good for you food more quickly. It’s still early. We are just getting started.”

Health Warrior was started by three college friends; one of them, Emmett, is a former attorney for the Commonwealth of Virginia, co-founder Dan Gluck remains active in the food business as a managing partner of Powerplant Ventures, while Nick Morris works on Wall Street. The company is closely tied to the communities that are known for their use of chia, including raising money for the Tarahumara of Mexico, whose use of chia brought attention to the seeds when it was written about by author Christopher McDougall in the widely-read book Born to Run.

Recently, the brand expanded from its original chia line to incorporate pumpkin seeds and plant-based protein. Since then, it has also launched a vegan protein powder and a microwaveable “mug muffin.”

Emmett will continue to lead the business from its headquarters in Richmond, Va. PepsiCo noted in a press release.

“This will enable us to continue building the Health Warrior brand at a deliberate and sustainable pace and to leverage its entrepreneurial expertise and talent to benefit our broader portfolio,” said Seth Kaufman, president of PepsiCo North America Nutrition. “Health Warrior is a nutrition-forward trailblazer that can provide great insight into high value categories and consumers while benefiting from our expertise and resources to bring plant-based nutrition to more people.”

Kite Hill Raises $40M

While plant-based milks are bringing in hundred of millions of dollars per year and plant-based meats such as Impossible Foods and Beyond Meat are the darlings of the burger crowd, plant-based yogurt and cheese have yet to generate the same buzz. But the CEO of plant-based dairy brand Kite Hill – and its investors – are betting that’s about to change, and financed that bet with a $40 million round.

The round was led by existing investors, including General Mills’ venturing arm 301 Inc. CAVU Venture Partners, and Whole Foods Market. The company – which originally spun out of Impossible Foods – previously raised $18 million from 301 Inc and CAVU.

2018 has proved to be a year of transformation – at least on the executive team – for Kite Hill, with the hiring of a new CEO, Rob Leibowitz, who took over in February for interim CEO – and 301 Inc. general manager – John Haugen. Since then the company has also brought on a new a slate of other six executives.

The company also temporarily pulled back on production of its drinkable yogurts, kids’ yogurt tubes, and two flavors of Greek yogurts – which were all originally launched in 2017 – to focus on production of its core line and increase capacity. All products were re-released into the market late this summer.

“Every single day is a struggle to make sure that we keep our top retailers in stock on the product so that every consumer who wants it within arms reach can get to it,” Leibowitz said. “It’s a great problem to have when your biggest struggle is to make sure you have enough capacity to get things out the door. [I felt that] I’d rather satisfy people coming after our core business then launch some new ones.”

The company, which is in thousands of stores including Whole Foods, Publix, Target, Kroger, Whole Foods, Sprouts, Safeway and Albertsons, doubled sales last year and plans to double sales again this year and next, Leibowitz said.

“2018 is a ‘poised for growth year,’” Leibowitz said. “We know what the future is going to look like and we know what it needs to get done and that was capital investment, people investment. And so while we were growing, we brought in the resources to make sure we could continue on in that vector. This is a year of ‘get ready, get set, go.’”

Both Leibowitz and Haugen told NOSH that the reason plant-based dairy alternatives – particularly yogurt – have yet to see the same consumer interest as plant-based milks is due to the lack of products that taste as good or have the same functional benefits as their dairy analogues. According to research firm Mintel, almond milk represents roughly 64 percent of the U.S. plant-based milk category, but almond-based yogurts – such as Kite Hill – are not seeing nearly the same growth.

Still, General Mills knows yogurt: The company counts Yoplait (and its subbrand YQ), Oui, Annie’s yogurt and Liberté among its portfolio of brands.