NOSHscape: The Latest Food Brand News

Get that Cheddar: Goodles Raises $13M to ‘Out Weird’ the Competition

Mac and Cheese and pasta brand Goodles announced in September a $13 million in new capital as it looks to take on its blue box and bunny competitors.

The raise, which closed in May, was led by venture firm L Catterton with Gingerbread Capital, Springdale, Third Craft Partners, Willow Growth and more than 100 musicians, actors, athletes and influencers also taking part. The company had previously raised $11 million via several SAFE notes.

“[L Catterton] is the right partner at the exact right time,” Goodles co-founder and CEO Jen Zeszut said, adding that given the brand is trending towards profitability, this may be Goodles’ last raise. “We’re here to build a legendary business.”

According to Zeszut, the capital will be used to scale distribution beyond Goodles’ existing 30,000 doors. First launched in Target in 2021, in 2022 the brand launched in Whole Foods Market and this year, rolled out a club pack in Costco. In further natural channel expansion, Goodles is launching in Sprouts this week. Given the reach its competition has in grocery and mass, Zeszut said she felt it was important to prove the concept in conventional retailers off the bat. The brand has found that not only is stealing share from larger players but is bringing incremental sales to the category.

Capital has also been used to add to Goodles’ exec team, with former Plum Organics and Cerebelly exec Stacie Hajduk joining as CMO and Nathan Lord, former CFO at Kodiak Cakes, taking on the role of CFO.

Founded in 2021 by a group of long-time CPG execs, Goodles counts Wonder Woman herself — actress Gal Gadot — as a co-founder. While the brand has a slate of more traditional flavors in retail, including a vegan option, Cheddar and white Cheddar, it’s also released more adult-forward options such as Elote, Hatch Chile and IPA, in a series of online-only limited flavors, with another to be released next week.

“We’re really margin focused and we’re margin agnostic in the sense that wherever we sell [online or brick and mortar], we’re making a ton of money,” Zeszut said. There’s no scenario where we are losing money.”

Product diversification may also be on the docket. Goodles released a three SKU line of boxed pasta at Whole Foods this summer. While the company’s formal name is Gooder Foods, which could lend itself to future category expansion, Zeszut said the team has its hands full with mac and cheese and pasta.

“We got our hands full and I think, in general, crossing temperature states and doing anything other than shelf stables just sounds like a headache and a nightmare, she told NOSH. “So we’re going to focus and just hit this out of the park.”

Taking on category incumbents Kraft and Annie’s may be tricky, but the company has some institutional knowledge of the category on hand in Deb Luster, Goodles co-founder and Chief Impact Officer, who previously was the co-founder and former president of Annie’s.

“We’re going up against very big competitors with really deep pockets. We were never intending to raise a ton of money and just throw money at the problem,” Zesut said. “We’re throwing creativity at the problem. We’re out-weirding the competition, we are joyful, we are more joyful than the competition.”

Momofuku Goods Raises $11.5M in Second Round This Year

Asian-inspired pantry staples maker Momofuku Goods raised $11.5 million this September in a funding round led by Alliance Consumer Growth to further its national expansion strategy. This is the “restaurant-grade” brand’s second, eight-figure raise this year.

Founded in 2019 as a subsidiary of chef David Chang’s Momofuku restaurant group, the brand was spun out into its own company in 2020, with a portfolio that includes a Chili Crunch line (its top performer), as well as air-dried noodles, soy sauce, rice vinegar and seasoned salts. While the restaurant group has shrunk its holdings from 15 to six restaurants over the last few years, the CPG line has been expanding. The brand is currently available in over 3,500 doors nationwide including Target, Whole Foods and Wegmans locations.

Momofuku’s new financing follows a $17.5 million round announced in March which was led by Siddhi Capital. Siddhi also participated in this latest round. To-date, Momofuku Goods has raised over $27 million.

“Alliance Consumer Growth has a remarkable track record of supporting consumer brands that have gone on to become iconic, and we’re thrilled that they see similar potential in Momofuku Goods,” said co-founder and CEO Marguerite Zabar Mariscal, in a release. “We’re grateful to have ACG’s expertise, alongside Siddhi, as we continue to navigate the world of consumer packaged goods.”

Alliance Consumer Growth – which has invested in CPG brands like Krave Jerky, Suja, Evol Foods and Athletic Brewing – also has experience with foodservice concepts and has backed Shake Shack, Tender Greens, Blaze Pizza and Snooze Eatery.

“Momofuku Goods is one of the most exciting emerging brands in food. In our view, it’s the most authentic, trusted brand in its category,” added Josh Goldin, co-founder of Alliance Consumer Growth, in a release. “Grocery consumers everywhere have just begun to discover Momofuku’s incredibly delicious and authentic products, which enable home cooks to make restaurant-quality food in minutes.”

The raise also marks another significant institutional investment for Asian pantry items. In 2022 alone, competing chili crisp maker Fly By Jing closed a $12 million round, Japanese barbecue sauce Bachans raised $13 million, and dumpling producer XCJ (now Mila) took in an additional $21 million.

While Chang certainly gives Momofuku a leg up when it comes to marketing, competition in both chili crisp and heat-and-eat noodles is fierce. Sauce maker Omsom added its own premium noodle kits earlier this year and Trader Joes has launched a private label “Squiggly Knife Cut” noodle offering. There’s also overseas entrants, with Taiwanese brand A-Sha Noodle debuting a revamped, “clean label” formula in Sprouts and Whole Foods earlier this summer.

Boxed Bought From Bankruptcy by Distributor

Boxed.com is getting a second chance, with regional distributor MSG buying up the beleaguered online bulk food and household goods provider, the company announced in August.

Terms of the all cash transaction were not disclosed. The deal includes Boxed.com as well as other intellectual property portfolios and affiliates

Boxed declared bankruptcy earlier this year, after finding it was unable to turnaround net losses and deliver results for shareholders. It was a far cry from its heyday in 2018, when the company reportedly turned down a $400 million acquisition offer from Kroger. After fellow ecommerce player Amazon bought Whole Foods, the company raised $110 million later in 2018 at a $600 million valuation.

The retailer then went public in 2021 after merging with blank check company Seven Oaks. Last January executives told investors the company was considering a sale, subsequently raising $20 million to fund operations. However, it wasn’t enough and in March the company warned of an impending bankruptcy, which ultimately came to fruition in early April. Soon after it announced that Spresso, its proprietary technology platform for retailers, had been sold, but the retail side of the business was still up for grabs until now.

Privately held MSG is a 20 year-old national distributor focused on natural and sports nutrition goods, with its website listing brands such as Long Island Iced Tea, Amazing Grass, Protes, Red Bull, Zing and RxBar. The company has distribution centers in Florida, Texas, California and Farmingdale, New York (the latter also serving its headquarters), and also offers DSD services to New York City’s five boroughs and Long Island. In a press release MSG president Mark Gadayez said the pickup “strengthens [the company’s] inorganic growth strategy and diversifies [its] distribution models nationwide.”

According to the press release, and an FAQ on the Boxed website, MSG plans to relaunch the business later this year. The company cited its existing distribution and warehousing facilities as vital assets in bringing Boxed online again quickly. While promising the return of many of the “established” household brands Boxed once sold, the company said customers should expect to see “new and up and coming brands” as well.

“In synergy with this acquisition, MSG will further enhance its capacity for processing and distribution to Boxed customers nationwide,” Gadayez said. “In conjunction with our growing operations and patented innovations for distribution and warehouse management, the future of Boxed.com is bright.”

TreeHouse Sells Snack Bar Business To Strengthen Balance Sheet

TreeHouse Foods announced in September that it will sell its Lakeville, Minn. manufacturing facility and snack bars business to global nut distributor John B. Sanfilippo & Son, Inc. for approximately $63 million as it shifts focus to becoming a private label leader. The deal is expected to close by early October.

The news comes as John B. Sanfilippo, which owns Fisher, Orchard Valley Harvest, Squirrel Brand, Southern Style Nuts and recently-acquired Just the Cheese brands, continues its push to diversify its snacking portfolio.

TreeHouse said it divested the snack bar assets after determining the business was unlikely to contribute positive adjusted EBITDA in fiscal year 2023. The Lakeville facility produces a range of fruit and grain, chewy, crunchy and protein bars and has been part of the company’s network since its acquisition of the Private Brands business in 2016.

“The sale of our Lakeville facility and snack bars business is another example of our strategy in action,” said Steve Oakland, TreeHouse chairman, president and CEO, in a press release. “We remain focused on deploying our capital in a manner that supports our long-term growth targets and enhances value creation for our shareholders.”

The private label manufacturer has been working to shift focus and reshape its portfolio to center around higher growth and higher margin categories to “drive improved execution” – a process that began when Oakland took the helm in 2018. In July 2019, the company sold its nuts and trail mix business to private equity firm Atlas Holdings for $90 million. In June 2021, TreeHouse offloaded its cereal division to Post Holdings for $85 million.

Most recently, TreeHouse sold a majority of its meal preparation business to U.K.-based private equity firm Investindustrial for $950 million in August 2022. TreeHouse said the deal would reduce the company’s debt, strengthen its balance sheet and help focus the business on high margin snacks and beverage categories.

The sale dramatically reduced the company’s portfolio and retail footprint. Before selling the meal prep arm, TreeHouse was spread across 29 categories with 40 plants manufacturing approximately 40,000 SKUs. After the deal, the company was in 18 categories with 26 plants producing 9,000 SKUs. Core categories now include single-serve beverages and private-label crackers.

In Q1 2023, price increases and improvements in its supply chain helped TreeHouse beat analysts’ expectations and drove net sales up 15.8% year-over-year. In the quarter alone, net sales rose to $894.8 million.

Meanwhile, Sanfilippo made its first foray into the snack bar category in Q2 2023 when it began shipping a line of private brand nutrition bars. In a press release, CEO Jeffrey T. Sanfilippo said the deal with TreeHouse will help the company “offer [its] private label customers a complete portfolio of snack bars, including fruit and grain, crunchy, protein, sweet and salty and chewy bars that complement [its] internally developed nutrition bars.”

The acquisition is also expected to add between approximately $105 to $120 million in incremental net sales during the remainder of Sanfilippo’s 2024 fiscal year.

According to Mintel’s recent U.S. Snack, Nutrition and Performance Market Report, 75% of current snack bar buyers said they anticipated maintaining or increasing their category purchases in 2023. Senior food and drink analyst Sydney Olson in the report said, “[A] challenge stems from category crowding that will further intensify competition.”

Next Level: G Fuel Brings BFY to Gaming Snacks With Protein Puffs Launch

G Fuel has long focused on selling better-for-you alternatives to mainstream energy drinks through its gamer-centric branding. As of August, the company is looking to trade on its authentic reputation in the gaming community by applying that same focus to snacks with its first food product: G Fuel Protein Puffs.

Available in a single White Cheddar flavor, the puffs contain 17 grams of protein and just 3 grams of carbohydrates per 1 oz. bag. The snacks are available online direct-to-consumer for $10.99 per 3-pack or up to $35.99 for a 12-pack.

A press release in August indicated that the puffs are only available while supplies last, but G Fuel COO Jack LoParco told NOSH the product is one of several food and beverage innovations in the works that will further extend G Fuel’s presence into new categories.

While protein puffs are far from a new product format – options on the market range from standard nacho-flavored Cheetos alternatives to organic chickpea puffs – G Fuel’s credibility with gaming and pop culture aims to convert a new audience to the space.

Around three-quarters of U.S. households have at least one gamer and as of 2020 the Entertainment Software Association reported 64% of American adults and 70% of people under 18 play games. As LoParco pointed out, that is more than the percentage of U.S. adults who drink alcohol.

“I always find that the misconception of marketing is that they treat gamers like different people, like it’s a subclass of people,” LoParco said. “Like myself, I start off every day working out in the morning, I play video games at night when I’m not working… when we look at the gamer we just look at them as ordinary people.”

But if you google “best gamer snacks,” you’ll find no shortage of lists recommending indulgences most often associated with an older stereotype of gamers as slackers: Cheetos, nachos, beef jerky, pizza, etc. And there’s been little to no healthy snacks marketed directly towards gaming culture.

While it may be a stereotype, LoParco said that consumer studies back up the belief that most players aren’t making the healthiest snacking choices during their gaming sessions. G Fuel, he believes, could be uniquely positioned to change that.