Apple cider vinegar maker Bragg Live Food Products announced today it has been acquired by an investor group led by private equity firm Swander Pace Capital, positioning the 107-year-old wellness brand for expansion and innovation.
Founded in 1912, Bragg has for decades been a stalwart independent brand in the natural and specialty CPG space. The company is a leader in the $160 million apple cider vinegar category with its line of ready-to-drink products and also produces lines of seasonings, liquid aminos, olive oils and vinaigrettes.
In addition to Swander Pace, investment firm Dragoneer Investment Group, entertainers Katy Perry and Orlando Bloom, and Pressed Juicery founder Hayden Slater have also invested. Financial terms of the deal were not disclosed.
Speaking to BevNET today, Swander Pace CEO and managing director Andrew Richards said Bragg is a timely addition to the firm’s portfolio of health and wellness brands, which includes prior investments in companies such as PlantFusion and JR Watkins. He cited growing consumer interest in natural and healthy products as motivation for the acquisition, noting Bragg’s strong brand awareness and international distribution network will serve as a foundation for growth.
“Bragg is a business of scale in the natural space and it has a 100-year-plus heritage with a consumer base that is rabidly loyal and who care about the ownership,” Richards told BevNET. “So it’s a good fit for us because most of what we do is partner with families and entrepreneurs who have that same mindset of trying to further the health benefits of their companies.”
According to Richards, CEO Patricia Bragg — who has led the company since the 1950’s after the retirement of her father-in-law and founder Paul Bragg — will continue to be involved with the brand. While the company is looking to expand and introduce new innovations, Richards said the investor group is conscious of the brand’s legacy and will seek to maintain its authenticity with consumers moving forward. Even as the company explores new categories with additional food and beverage lines, Bragg will keep its core product portfolio and iconic red-and-yellow trade dress.
According to Richards, Katy Perry will play a prominent role in the direction of the brand. Perry is a member of the board of directors and has known Patricia Bragg since childhood.
“We spent a lot of time thinking about continuity and the next chapter for the business,” Richards said. “We wanted to keep the culture of Bragg and respect the heritage of what they have built as a company. So to be able to do that while working with Patricia, who has been in it most of her life, and Katy, who’s essentially grown up in and around the business, is a really nice consistent progression. We’re bowing to the past, but moving on into the future.”
Richards said that both Perry and Bloom are daily users of Bragg products, but did not specify if they plan to use their celebrity influencer platforms to promote the brand.
According to SPINS, apple cider vinegar sales have declined by more than $33 million in the past year. As of May, branded products in the category were down year-over-year by 17.1% to $160 million. The drop follows a strong growth year in 2017, where the category grew 52.7% to a high of $196 million.
Last year, a joint report by data analytics firm IRI and The Boston Consulting Group showed Bragg was the fourth fastest growing small-sized CPG company in the U.S. in 2017.
Despite declines in the category, Richards said annual total sales for Bragg are approximately $150 million. He noted that while dollar sales for traditional apple cider vinegar drinks are down, the category is still expanding through cross-category innovation in formats such as shots and smoothies. As well, the rise of kombucha has expanded consumer awareness of the health benefits of fermented beverages including vinegars, he added.
“I think the consumption of [apple cider vinegar] is still very strong,” he said. “Where the consumer is getting it from is just through a whole lot of different categories that need to aggregate in order to find out where the overall consumption of vinegar is.”