BFG Closes Fund II to Back Emerging CPG Brands
In late February, Boulder Food Group (BFG) announced the close of its second fund, valued at approximately $100 million. BFG’s previous fund closed in 2015 at $54 million. Founder and managing partner Tom Spier told NOSH that Fund II was largely comprised of investors from the group’s previous fund.
BFG typically backs organic or non-gmo brands with $1 million to $10 million in annual revenue, although Spier said that the fund can flex to invest in larger companies as well as brands with only $10,000 in revenue a month. The second fund, although larger in size, will maintain this investment thesis.
“We’re not necessarily an impact investing group, but I hope when we look back we feel like we’ve made an impact,” Spier said. “In some cases [the social benefit] is pretty clear and in some cases the company has to work a bit harder to emphasize that.”
Fund I is not yet fully deployed, but BFG is no longer investing in new portfolio companies from it. That fund saw the group invest in roughly a dozen fast-growing, emerging brands including Caulipower, Barnana, Malk and Chameleon Cold Brew – the latter of which sold to Nestle in 2017, two years after BFG invested.
The first investment from Fund II is in OLIPOP, a digestive health beverage, which closed a $2.5 million round earlier this year.
RX Brings in New Leadership, Launches ‘Contrarian’ New Brand
On March 1, Chicago Bar Company, makers of RXBAR, announced its plan to rebrand as Insurgent Brands, expand its product mix under the RX brand and launch a new “contrarian” sub brand. All of which will move forward under new leadership.
The move comes roughly 18 months after the company was sold to The Kellogg Company for $600 million. As the brand moves forward, Peter Rahal and Sam McBride will not continue in their respective roles as CEO and COO. Former CFO Jim Murray has assumed the role of President. Co-founder Rahal will step down from his position, but will remain with the company focusing on product development, while McBride will move to the role of advisor.
The company is also changing its overarching brand identity and will rename itself from Chicago Bar Company to Insurgent Brands, a transition the company said will better reflect its broadened portfolio.
The company will also expand into RX Oats – a line of high protein oatmeal. With 12 grams of protein per cup, the oats will launch in maple, chocolate and apple cinnamon flavors and can be eaten hot or as overnight oats. Rahal told NOSH the oats are less sweet then alternatives on the market and answered a pain point from their consumers.
“What we found was that people are frustrated by breakfast,” Rahal said. “So we took our brand and our principles and our ingredient philosophy and looked at how we could apply it to breakfast.”
The company will also add three new flavors to the RXBAR lineup. And in opposition to RXBAR, Insurgent will launch a new brand, TIG Snacks, that Murray calls “the rebellious child of the organization.” While RX is about performance and can come off to consumers as “earnest and serious,” TIG will be more playful. The line of lentil, chickpea and rice bars will launch in indulgent flavors such as pizza, buffalo, BBQ and chili lime.
TIG will launch direct to consumer in March and may or may not eventually wind up on store shelves. Murray said Kellogg was hands off, although supportive, in designing the line. He expects future product development to maintain a similar path.
“Our approach is really to focus on what we’re seeing from a consumer lense and place a lot of smaller bets,” Murray. “Use our direct connection with consumers to get feedback and adjust and go from there.”
Beverage Vet Lance Collins Launches CORE Foods
Beverage veteran and BodyArmor, Fuze and CORE Nutrition founder Lance Collins announced in March the launch of his newest CPG venture, Core Foods. The new brand introduced its first product, the refrigerated Core Bar, at Natural Products Expo West 2019.
Collins told NOSH that CORE had tried to launch a bar in 2014, but was stopped by Corey Rennell, CORE Food’s then owner, for trademark infringement. After Collins sold CORE Nutrition to Keurig Dr Pepper (KDP) for $525 million last year, Rennell reached out and offered to sell the trademark. And with the brand in hand and KDP agreeing to a co-existence agreement, Collins couldn’t resist giving the concept another shot.
Those who are familiar with the older CORE Bar will find the product drastically changed, with new branding, flavors and formulation. The resulting product is an chilled, overnight-oats inspired bar enhanced with probiotics. Each bar will retail for $2.99 and has five to eight grams of protein with no added sugar. Whole Foods Market, Amazon and CIBO Markets nationwide have picked up the line, which has six flavor options to start.
Collins told NOSH the desire to start the brand came from an appreciation of the potential of the category and seeing how his former BodyArmor business partner, Mike Repole, was able to convert his skills to the snack set with brands such as Pirate’s Booty.
“I love the bar business but I looked around and didn’t see anything that I really loved in the marketplace,” Collins said. “And I thought, ‘we can do better.’”
Supporting Collins, who has the title of chief visionary officer, are CEO Jesus Delgado-Jenkins, the former chief merchandising officer of 7-11; CMO Brett Hartmann, the former VP of marketing for snacks at Hain Celestial; and SVP of sales John Davidowitz, the former director of sales for PUR Gum & Mints. Delgado-Jenkins will pull double duty, remaining on as the CEO of Collins’ other business, Outlaw Energy.
Siete Closes $90M from Stripes Group to Scale ‘Audacious’ Platform
Mexican-American family-owned food brand Siete Family Foods announced in February the close of a $90 million minority investment from Stripes Group in order to help fulfill the company’s growth plan, according to co-founder and CEO Miguel Garza.
Siete had previously closed a smaller round of angel investment roughly three years ago, but Stripes will be the brand’s first institutional investor. As part of the deal, Stripes partner Karen Kenworthy will join Siete’s board as a director and Stripes partner Chris Carey will join the board as an observer.
Siete began discussions with Stripes roughly two years ago, but at that time the family had not decided if they wanted to take significant outside capital. Garza told NOSH that it was only recently that he, and his family, came to understand just how much Stripes supported their vision.
“The brand that we’re trying to build, it’s an audacious goal that we have,” Garza told NOSH. “I was really excited that they were willing to jump in… and amplify our efforts to build an iconic, billion dollar brand.”
The money, Garza said, will likely be the last round of outside funding the business needs to take in, adding that he and his family are “risk averse” and prioritize profitability. Rather than filling an urgent need, the hope is that this round will simply allow the company to move faster and grow in a shorter window. To do so, the family plans to concentrate on supporting innovation and marketing, along with increasing staff.