One of the most important new strategic investors in the beverage sector reported an especially rough fiscal quarter today, resulting in a change in management and a strong hit to its share price.
Boulder Brands, Inc. reported that it expects sales to drop in its second quarter, a disappointing result that brought on the resignation of founding CEO Steve Hughes. He will be replaced on an interim basis by COO James Leighton, who has a long history in consumer goods.
“As Boulder Brands enters a new period of development,” Hughes said, “I believe now is the right time for a leadership transition. It has been exciting to watch a simple idea turn into a leading natural foods company with the scale and resources to expand our mission of making people’s lives healthy across the country.”
That leadership position is one that Boulder Brands planned to exploit when it started Boulder Brands Investment Group (BIG) as a small private equity fund a few years ago in concert with Presence Marketing founder Bill Weiland. With an investment committee run by two Boulder Brands executives, Duane Primozich and Carole Buyers, along with Weiland, BIG has invested what it calls “friendly capital” in cutting-edge beverage brands like Suja and Temple Turmeric, along with Epic bars and Primizie snack chips.
Boulder Brands began when Hughes, as the CEO of non-dairy butter substitute Smart Balance, started acquiring new brands like Udi’s (a gluten-free bread company) and Evol frozen burritos. The expected sales declines follow a rough third quarter of FY 2014, which also saw the company take a loss.
Boulder Brands shares were down nearly 20 percent in trading today, hovering at around $7, after hitting a high of more than $15 in September, 2014.