What does Fair Trade snack and confections producer Alter Eco and a waste water and salt water disposal service provider have in common? They are both portfolio companies of the newly established investment vehicle called Trek One Capital.

Alter Eco was acquired by Texas-based Trek One in a deal that closed December 22. Winds of change were blowing prior to the deal, with CEO Arnulfo Ventura leaving the CEO seat and board director Keith Bearden –   who brought the company to Trek One as a potential capital partner — was installed as CEO. Bearden will continue in that role moving forward, according to Trek One operating partner and CFO Brian Fontana.

With a history in the oil and gas industry from drilling operations to field service companies, Trek One was founded last year from a “family office’s various businesses” with the intention to be “an agnostic industry investor,” Fontana said. Alter Eco is the investment team’s entrance into CPG food and beverage.

In the short term, Trek One has shifted Alter Eco’s headquarters from San Francisco to Houston. Founded in 2004 as a mission-based company to support cacao farmers in South America, Alter Eco makes chocolate bars, truffles, granola and quinoa products. The new owners’ primary focus moving forward will be expanding distribution beyond natural and specialty stores and targeting more conventional retail channels, Fontana said.

“The previous owners either didn't want to focus on growth [or] they were happy with the consistency of the annual revenue and turnover that the company had,” he added. “Our focus is to provide the capital and the leadership to expand the business to other markets in addition to expanding the product offering itself.”

The future for the brand will be interesting to watch judging by the sudden exit of another organic, Fair Trade chocolatier (see below) and the most recent cocoa pricing outlook (also below) for the coming year.

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OCHO Candy has ceased operations due to a lack of ongoing funding, according to a LinkedIn post yesterday by the company’s VP of sales and marketing Todd Kluger.

🫰 Founded in 2010, the organic and Fair Trade certified chocolate maker had generated more than $100 million in retail sales, with nationwide distribution in the U.S. and Australia, Kluger wrote. 

🏭 OCHO initially made its confections in small batches in an Oakland, California facility. In 2021, the company moved production to Trinidad & Tobago. Its lineup included more than 50 products sold in such retailers as 7-Eleven, Costco, Trader Joe’s, Whole Foods Market and others, according to Kluger.

💭 “It was a long journey for the brand, and we were successful with meeting many of the challenges laid in front of us over the years, but we are no longer a business,” Kluger wrote.

To go along with all the news in chocolate candies, that heart-shaped box on Valentine’s Day might also be a little more expensive this year as the cost of cocoa has ticked up recently. Cocoa prices have been on the rise for the last year, up 64.7% compared to a year ago with prices spiking 31.1% in the past six months alone, according to a report from CoBank this week.

🍫 Is inflation to blame for the high cost of a Hershey bar? Inflation hasn’t helped with chocolate prices rising 17% in the U.S. over the past two years, according to data from Euromonitor. As a whole, candy prices are up 9.2% compared to a year ago.

🚜 Why is chocolate costing more? Cocoa production in West Africa — where about 70% of all supply derives — declined in the last year. This is contributing to lower volume sales for the chocolate confections category, which are 5% below their year-ago levels, according to Circana data provided to CoBank.

📉 What does this mean for the rest of the year? CoBank predicts that cocoa prices “are likely to remain elevated” until a new crop is harvested and enters the market in late 2024.

🫣 Stay Tuned Next Week When Hershey’s Reports Its Fourth Quarter Earnings

After making two key acquisitions of American brands last year, Asian foods multinational DayDayCook is making the U.S. a key focus going forward. The company reported 25.5% total revenue growth ($23.7 million) for the nine months ended September 30, with gross profit up 48.4% to $6.3 million.

🤝 Last year, Hong Kong-based DayDayCook acquired U.S.-based brands Nona Lim and Yai’s Thai in separate deals and went public on the New York Stock Exchange, raising $33.15 million in its IPO.

🤔 DayDayCook founder and CEO Norma Chu spoke to Nosh about the company’s strategy, which is to become the “General Mills for Asian food” by continuing to build a portfolio of brands.

⬆️ According to Chu, the company intends to swiftly scale its acquisitions and continue to seek out potential additions to its portfolio.

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Hispanic grocery retail group Heritage Grocers announced today it has added DeAnn Brunts to its Board of Directors. Brunts brings over 30 years of industry experience including most recently serving as CFO of Benson Hill.

🛒 The grocery retailer currently operates three banners: Tony’s Fresh Market, Cardenas Market and most recently, El Rancho Supermercado, which it acquired last June. 

🤝 Heritage Grocers came to fruition after both Cardenas Market and Tony’s Fresh Market were separately acquired by Apollo Global Management in 2022 and merged to form an ethnic-focused supermarket chain.

🗺️ The company has also increased its door count significantly both through acquisitions of smaller chains and new brick and mortar locations. Heritage operates over 113 stores between its three banners.

Following a series of disputes between Kona coffee farmers and retailers over falsely labeled “Kona” coffee, Hawaii lawmakers are introducing legislation requiring stricter coffee labeling regulations. 

⏪The longstanding debate over the required percentage of coffee originating from the area to qualify as “Kona coffee” has persisted for three decades. In 2022, the legislature passed Act 222, requesting the Hawaii Department of Agriculture (HDOA) conduct a study on the economic impact of coffee labeling regulations. 

📈Currently, a bag of coffee must have a minimum of 10% Kona coffee to be labeled as such. According to HDOA’s findings report, released last month, increasing the minimum amount of Kona coffee to either 51% or 100% would greatly benefit local farmers, increasing the price of Kona coffee without significantly impacting quantities grown and sold. 

⚖️House Bill 2298 would establish a timeline for Kona coffee products that “use a geographic origin in labeling or advertising are required to contain a certain percentage of coffee by weight from that origin.”

🚓House Bill 2613 would expand the criminal offense of falsely labeling Hawaii-grown coffee to include roasted coffee and impose a fine of $10,000 for each separate offense.