• 📉 TreeHouse Foods Posts $16.7M Q2 Loss
• 🤔 Reuters: Mars to Acquire Kellanova?
• 💰 Agrovision Raises $100M
• 🎃 Pumpkin Products Impinge on Pool Season
• 🌊 Is Capital Starting To Flow Again? Plus, A New ‘Fast Track’ Emerges.

“The business you launch is rarely the one you succeed with. That’s certainly been the case with Eat the Change,” Seth Goldman, co-founder and CEO of Eat The Change, said last week in a LinkedIn post.

Goldman is shuttering the sustainable snacking arm of his plant-based food startup and going all in on bottled tea – a business he, honestly, knows quite well. 

But Goldman, who co-founded Bethesda, Md.-based Eat The Change with chef Spike Mendelsohn in 2020, emphasized that as an entrepreneur, you need to know when to “pivot to where the water is leading.”

That’s been evidenced by the four-year-old company’s trajectory so far: It initially launched with a line of mushroom-based jerky, then added Cosmic Carrot Chews, a better-for-you alternative to traditional gummy fruit snacks made with dehydrated carrots. 

In 2022, the pair announced the debut of Just Ice Tea, a line of organic, fair trade ready-to-drink teas, in response to Coca-Cola’s decision to discontinue Honest Tea, which Goldman founded in 1998 and sold to Coca-Cola in 2011.

The 2024 version of Eat the Change will see Goldman and Mendelsohn Drinking the Change, at least for now. The company discontinued the jerky line in October 2023, with Goldman telling Nosh at the time the decision came after the team recognized they did not have strong enough consumer appeal in comparison to the broader jerky set.

At the same time, they had refreshed Cosmic Chews and expanded the product line to about 2,000 retail doors, Goldman said. However, demand remained weak, leading to the recent decision to discontinue that line, too.

“We weren’t seeing strong enough velocities in our core natural channels and consequently weren’t seeing new authorizations in mainstream channels,” Goldman told Nosh. “The decision became much easier to make once we saw how the tea was taking off – the velocities were multiples of the carrots, and the margins were better, too.”

Just Ice Tea has grown dollar sales 272.4% in the last 52-week period ending July 24, according to Circana data. 

“Running a start-up is a bit like letting water flow down a hill – you can’t always control where the water chooses to go. If we had insisted on sticking with snacks and forgoing the tea opportunity, we would be out of business,” Goldman said.

While Eat the Change will be following the flow of its tea, Goldman said that’s just “for now.” 

“There are bound to be more twists and turns on our journey. We’re not afraid of failure,” Goldman said.

Go Deeper: Listen to Goldman discuss lessons from the second time around at BevNET Live.

TreeHouse Foods today reported a $16.7 million loss driven by greater operating costs and planned exits across the private label manufacturer’s coffee and in-store bakery segments. Here’s a top-level look:

• Net sales decreased 1.9% y/y to $788.5 million compared to $803.5 million in Q2 2023. The sales slide was a result of targeted commodity-driven pricing adjustments.
• Gross profit as a percentage of net sales was 16.3% in the quarter versus 16.6% in the prior-year period, primarily due to costs related to the restoration of one of TreeHouse’s broth facilities. 
• Total operating expenses jumped to $132.3 million in Q2 2024 compared to $102.9 million in Q2 2023, an increase of $29.4 million. 

Looking ahead, the company expects full-year net sales to range between $3.43 billion to $3.5 billion – representing 0% to 2% y/y growth. The company has narrowed its expectation for adjusted EBITDA to a range of $360 million to $380 million. 

💭”We believe the journey to focus TreeHouse's strategic capabilities and depth across our snacking and beverage portfolio combined with continued improvement in execution position us well to deliver profitable volume growth beginning in the third quarter," said president and CEO Steve Oakland in a statement. 

Don’t go mixing your Pop-Tarts and Snickers just yet. According to a report in Reuters, Kellanova is only beginning to explore a potential sale to the candy conglomerate, but notes the deal would be massive considering Kellanova’s $27 billion market valuation.

💸 However, amid high grocery prices and an already tense regulatory environment, its likely a mega-CPG-merger could face even more scrutiny than the current Kroger/Albertsons proceedings. 

📈 For Mars, the deal would be a major win in its diversification strategy, which has been primarily executed via acquisitions; on Kellanova’s side, the move would help improve its stock price, which has risen 20% since its split from sister co. W.K. Kellogg, but is still trading below that of its competition. 

⛔ Sources emphasized to Reuters that it is equally possible another buyer could approach the company with an offer or that no deal with any party is made. Either way, we’ll be on the lookout for a Cheez-It x Mars Bar collab…

Get ready for our August Community Calls! This month, dive into how POD Foods can slash your distribution costs, gain insider tips from Amazon on optimizing integration and reviews, learn from big CPG innovations, and explore the timeline for profitability in retail. Our August calls are free and open to the public – just register in advance and mark your calendar.

Agrovision, a large-scale, vertically-integrated superfruit business, has closed $100 million in equity financing from Aliment Capital at a $1 billion valuation. New and existing investors also participated in the round. 

📈 The new funding will be used to fuel global distribution and accelerate product innovation. The raise comes after Agrovision, sold under the Fruitist and Big Skye Brands, nearly tripled sales over the past three years. 

🫐 The company has positioned its products in line with the healthy snacking space, investing  over $400 million in global expansion, new genetics, AI and other technology since it was founded in 2012. 

🌎 With owned and controlled large-scale land and water assets in Peru, Mexico, Morocco, the U.S., Egypt, India and China, the company has developed a year-round supply of blueberries, raspberries, blackberries and cherries for premium-oriented retailer partners around the world. 

💭 “Agrovision is truly the ‘right place, right time’ with its unique model of owning the full stack, enabling them to guarantee customers high-quality superfruit throughout the year regardless of their geographic location,” said Ben Belldegrun, co-founder and managing partner of Aliment Capital, in a statement.

What better way to cool down during this summer heat than by sipping on…a pumpkin spice slurpee from 7-Eleven. That’s right; it's only August, and food and beverage brands are already rolling out autumnal items. 

🍫 Reese’s moved the Halloween hype-building even earlier after it put its Peanut Butter Pumpkins on sale online as of July 23 – marking the earliest the candy brand has ever made the seasonal product available, according to a press release.

🍪 Protein cookie company Love + Chew is bringing back its Pumpkin Chip cookie flavor, made with almond butter, chia seeds, dates, pumpkin and chocolate chips. 

🥛 La Colombe and Chobani have also unveiled their Pumpkin Spice portfolio with the addition of Chobani Pumpkin Spice Greek Yogurt Drink and Chobani Pumpkin Spice Barista Oatmilk to the brands’ existing 6-SKU seasonal lineup. 

☕ What do you think, our dear readers: Should we enact a requirement that the temperature drops before yearly PSL LTOs?  

Does the announcement of a new $135 million fund offer any indication about the flow of new capital in food and beverage? The hosts discuss and also highlight a Poppi-infused snack, Walgreens’ private label prowess and some “notable” folks. We also feature an interview with five entrepreneurs who are drawing upon their experience and networks to support emerging brands via a new venture.

Listen to the episode now.