• ❌ ANF, Above Terminate Agreement
• 👀 McCormick Eyes Saucier Set
• 🥔 Post to Acquire Potato Products of Idaho
• 🧑‍⚖️ FTC, Illinois AG Charge Grubhub
• 🤡 No Joke, This Comedian’s ‘Basic’ Brand Gives Modern Consumers What They Want

The chocolate sector is closing out a year plagued by adverse weather conditions and supply chain woes in West Africa on an increasingly bitter note.

Prices for the commodity (as measured by the New York cocoa futures index) rose to a new record high – about 5.5% to $11,938 per metric ton on Monday – and reinstated concerns over extreme price volatility, CNBC reported. What’s more, the 2023-24 marketing year saw the global cocoa market register a deficit of 478kt, its largest in over 60 years. 

How did we get here? A mix of low rainfall, plant disease, and aging trees in 2023 led to a “disappointing crop” in the Ivory Coast and Ghana this fall. The two countries produce roughly two-thirds of the world’s cocoa, so the shortage quickly led to dramatic price swings. 

Though port arrivals have climbed 30% year-over-year in 2024-25, they’re still roughly 15% below 2022-23 levels, according to Reuters data cited by Jefferies. It’s unclear whether the improvement over 2023-24 was propelled by a better harvest or the fact that some beans were harvested earlier than anticipated given weather-related risks. 

What does this mean for CPG? Confectionery giants like The Hershey Company and Mondelēz International have hiked prices on select products and will likely continue doing so if the cost of cocoa doesn’t stabilize. 

• During an earnings call last month, Hershey CEO Michele Buck told analysts, “We’d expect pricing next year to look a lot like this year. We’ll make sure we’re competitive and work with retailers to make sure we get a good execution of that.” 
• Still, Buck expressed confidence in the improvement of cocoa fundamentals and believes there will be a global surplus in 2025 driven by a recovery in West Africa. 

Ushering in a new era: As cocoa prices continue to soar, more investors are betting on alternatives to preserve the $100 billion chocolate industry. Earlier this month, Planet A Foods secured $30 million in a Series B funding round co-led by Zintinus and Buda Principal Investments, and Celleste Bio nabbed $4.5 million in a seed round with participation from Mondelēz’s SnackFutures Ventures. In May, Voyage Foods closed its Series A+ round at $52 million.

Steve Molino, partner and head of investments at Clear Current Capital, views the innovation strategy of the alt-cocoa space – fermentation, plant cell culture, etc. – as similar to the alt-protein space but with a slightly different storyline. He believes that consumers and big strategics are pushing back on alt-proteins but willingly searching for cocoa alternatives because they fear losing chocolate altogether.  

“If everyone is going to ensure that we have a cocoa supply that is resilient to climate change, it needs to be a ‘yes’ to everything. Yes to regenerative agriculture, yes to precision agriculture, yes to plant-based alternatives that use side streams and upcycle them, and yes to trying plant cell culture,” said Molino. 

Will the price spikes accelerate the adoption of cocoa-free chocolate products? We suppose only time will tell. 

Catch Up Quick: Hershey’s Not-So-Sweet Q3 Earnings

Loma Linda parent company Atlantic Natural Foods (ANF) has withdrawn from a three-year-old agreement to enter the public market alongside regenerative ingredient platform Above Foods.

⏪ Above has had numerous starts and stops since it first moved to take the company public via a SPAC merger with Bite Acquisition Corp. in 2023. The company acquired the GoodWheat brand earlier this year and completed the business combination in June 2024.

✂️ However, now, ANF (which also owns alt-protein brands TUNO and neat) has decided it would be better off going at it solo. While both said they will maintain “collaborative ties” and both ANF and Above will retain shares in the other company, ANF will no longer pursue a public strategy.

💬 “This decision reflects a strategic realignment following a comprehensive evaluation of the evolving business landscape… Factors such as the global impact of COVID-19, supply chain disruptions and rising food inflation played a key role in its decision,” ANF said in a statement. 

Spice and seasonings company McCormick & Company is in talks to acquire Duke’s Mayonnaise owner Sauer Brands for more than $1 billion, according to a report from Bloomberg. 

• Sauer, which also makes seasonings under its Kernel Season’s and The Spice Hunter brands as well as Mateo’s Salsa and eponymous sauce and condiment brand, is currently owned by Falfurrias Capital Partners.
• Add this one to the scoreboard: Once again, a focused brand portfolio may be leaving PE ownership for a spot in a more strategic house. 
• A deal has not yet been reached, but it is easy to see how Sauer could fit in at McCormick, which has steadily increased its sauce and condiment set and owns several big names in the set already including French's mustard, Frank's RedHot and Cholula hot sauce.

Post Holdings has agreed to acquire Potato Products of Idaho (PPI), a manufacturer and packager of refrigerated and frozen potato products, for an undisclosed sum, according to an announcement on Tuesday. 

🏭 The transaction includes a manufacturing facility in Rigby, Idaho, and is expected to close in the first calendar quarter of 2025, which coincides with Post’s second quarter of fiscal year 2025. 

⏪ Last week, Reuters reported that Post Holdings was working with bankers on a potential deal with Lamb Weston Holdings, a frozen potato producer facing pressure from its shareholders to implement “significant” board and leadership changes. Considering the new deal with PPI, it seems unlikely that a transaction with Lamb Weston will come to fruition. 

Grubhub has a stiff bill to pay the federal government. The food delivery platform has reached a $25 million settlement with the Federal Trade Commission and Illinois Attorney General after being charged with using an array of deceptive practices toward platform users, restaurants and workers. 

🕵️ The multiyear investigation found that the food delivery business added unaffiliated restaurants to its platform (as many as 325,000) to deceptively show a larger tranche of options and created a system of chaotic ordering and unpaid food.

😡 The wide-ranging complaint also accused Grubhub of deceiving drivers about earnings claims and a “pricing shell game” for users.

💬 “Our investigation found that Grubhub tricked its customers, deceived its drivers, and unfairly damaged the reputation and revenues of restaurants that did not partner with Grubhub — all in order to drive scale and accelerate growth…There is no ‘gig platform’ exemption to the laws on the books,” said FTC Chair Lina Khan.

Being “basic” has long been a theme of Trey Kennedy’s popular standup routine and sketch comedy. He recently introduced the perfect pairing for his humor, Basic Cellars. In this episode, Trey talks about how the upstart wine brand presents itself as both an accessible and premium option and how he attempts to authentically incorporate the brand into his social media content.

Listen to the episode here.