• 🆕 New Protein Products 
• 🔥 Flamin’ Hot Cheetos “Creator” Sues PepsiCo
• 🪖 Military Distributor Scores Big Credit
• 🥣 Cocoa Controversy?
• 📰 What We’re Noshing On
• 🔨 Yes, Somos Made Mistakes. But The Fix Is Helping Them Make (And Feed) Millions.

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The M&A market for CPGs may not be red hot with strategic eyes at the moment, but two recent deals have shown us there are avenues to seed growth if you look in the right spot. Today we are running down the deal details behind two very different companies – two-year old cracker brand The Humble Seed and 25-year-old Manuka honey producer Wedderspoon. Let’s dive in:

Last week, Canadian hemp producer Manitoba Harvest Hemp Foods acquired The Humble Seed, which included the startups’ assets such as IP, brand and formulations. According to co-founder and CEO Sarah Meis, the deal conversation actually began as a partnership discussion, but quickly evolved into a dialogue about how Manitoba could put more resources into “shepherding” the business into a “new phase of growth.” 

For Manitoba, the deal lets it try to move deeper into snacking – an initiative it had been considering via both incubation and M&A. But the real draw and potential growth driver? Operational synergies. The two believe the support of Manitoba’s sales team and network of brokers will accelerate The Humble Seed’s retail footprint.

What Meis said: “It’s no surprise that young brands need financial resources in order to grow. Growth doesn’t come without that cost. It is one of the challenges where small brands are always very disadvantaged. We don’t have the supply chain relationships and the sort of purchasing power that a larger umbrella organization could.”

Synergies and shared resources are also the name of the game over at Florenz, the newly formed parent company of Wedderspoon. Backed by New Zealand investment firm Masthead Limited, Florenz is seeking to build a platform of natural-positioned consumer products brands, curated down under, and ready for export to the North American market.

Wedderspoon was the new platform’s “number one acquisition opportunity of choice for the category,” CEO Mike Tod told Nosh. Florenz, which also already owns two supplement brands and a line of plant-based pre-workout powders, is also looking to continue growing through additional M&A opportunities. 

According to Tod, the Florenz team expects to be able to leverage Wedderspoon’s sales and marketing expertise, in addition to its existing agency partnerships, to help grow its other CPG brands globally. 

Nosh Insiders can read more about both deals including details on what growth initiatives and synergies are top of mind for their new teams. 

Consumer demand for protein snacks continues to rise in the U.S., with the market expected to reach $8.2 billion by 2030. Plant-based brands especially are taking now with both Herbalife and Beyond Meat rolling out new products this week. Here’s the 411:

🌱Health and wellness company Herbalife has introduced Protein Chips in the U.S. and Puerto Rico. Each 1.31 oz. bag of the toasted, mild barbecue-flavored chips is packed with 8 grams of plant-based pea protein and is free of cholesterol. 

🌭 Beyond Meat has expanded its portfolio of plant-based meat products with the introduction of Beyond Sun Sausage. Available in three flavors – Cajun, Pesto and Pineapple Jalapeño – the new offering is filled with “whole food” ingredients like spinach, bell peppers, yellow peas and brown rice. Beyond Sun contains 12 grams of protein per link and zero cholesterol. 

Go Deeper: Check out our latest new product roundup on Nosh.

Richard Montañez, a former senior executive at PepsiCo who claims he invented Flamin’ Hot Cheetos, is suing the food and beverage corporation for fraud, racial discrimination and defamation over statements it made denying his role in creating the spicy snack.

📝 The 62-page complaint, filed on Thursday in Superior Court in the State of California in San Bernardino, seeks a jury trial, damages, restitution and an order preventing PepsiCo and Frito-Lay from claiming Montañez didn’t create Flamin’ Hot Cheetos. 

💭 “I created Flamin’ Hot Cheetos not only as a product but as a movement and as a loyal executive for PepsiCo. We built this into a $2 billion industry, and I cannot let them take away my legacy or destroy my reputation,” he said in a statement. 

⏪ The former PepsiCo executive’s role in creating the hot snack was first questioned in a 2021 L.A. Times article entitled “The Man Who Didn’t Invent Flamin’ Hot Cheetos,” which cites interviews with more than a dozen former Frito-Lay employees. 

California distributor Pro Food Solutions, which supplies food for the U.S. military channel, has secured a $153 million senior secured credit facility from Comvest Credit Partners, according to an announcement by the firm.

🦾 The financing is intended to support dividend recapitalization of Pro Food’s business, while also facilitating “organic and acquisitive growth,” Comvest reported.

🇺🇲 Pro Food’s business covers military bases, aircraft carriers and commissaries for the U.S. military across the world, carrying meat, vegetables, dairy and snack foods.

🥕 What they said: “The Comvest team was quick to understand a complicated industry and a complex deal. They moved with efficiency and thoughtfulness in delivering a one-stop financing package that best positions Pro Food to respond to ever-shifting military needs while pursuing its business-building and expansion initiatives.” – Tarrus Richardson, founder and CEO of Pro Food parent IMB Partners.

Everyone knows that kids “go cuckoo for Cocoa Puffs” but the brand may want to rethink that tagline after its parent company General Mills was sued this week in California federal court. 

📝 According to the complaint, filed on Friday, those chocolatey puffs allegedly contain high levels of lead with independent testing indicating .432 micrograms of lead per 1 cup serving of cereal; the daily allowable level established by California law is .5. 

🥛 A report in Law360 indicated that plaintiff Mark Tobin said almost all consumers average a serving size that’s between 24% and 132% more than one cup.

🍫 The news follows reports over the past two years that have tracked high levels of lead in everything from chocolate bar products to baby food.

From Forbes: Early this week, grocery industry expert Errol Schweizer published a review of the new book from former Whole Foods CEO John Mackey, The Whole Story:​​ Adventures in Love, Life, and Capitalism. We’ve eaten up the review and while we wait for the grocery giant’s parent to bring us the book, we will leave you with this sentiment from Schweizer:

“CEO’s have to be good storytellers. Like Bible Belt fire and brimstone preachers, CEO’s know that nothing binds the flock better than a good yarn. John Mackey’s vision, through his gift for storytelling, enabled Whole Foods to change the way America eats, buys and thinks about foods. But not all good stories have happy endings.”

From The New York Times: Not all celebrity partnerships are simply for show. Recent NYT report From the Playing Field to Wall Street details the star-studded deals coming through private equity firm Patricof Co., and how the firm has devised a structure that allows athletes to dovetail their interests into investments and put between 10% to 30% of their wealth into PE deals. With a roster of over 250 athletes, including Jason Kelce and Joe Burrow, it seems this firm’s unique approach may be working. 

From Food Dive: Ellia Kassoff was more than disgruntled when his favorite childhood candy brand – Astro Pops – was discontinued by Spangler Candy. The nephew of former operators of Leaf Brands (i.e.: creators of Jolly Ranchers and Milk Duds), Kassoff turned his disappointment into a new business opportunity and has gone from tech headhunter to resurrector of long forgotten candy brands.

From Food & Wine: Grocery Store Travel is apparently trending on TikTok… but what does that mean? Well for startup food and beverage brands (that often build up retail in their own backyards before reaching an expanse of retailers) this sounds like good news. According to the Tok-ers, visiting a grocery store while traveling is a form of sight-seeing: it's not only a cultural experience they claim, but also a great opportunity to find delicious souvenirs. 

Miguel Leal, the co-founder and CEO of modern Mexican food brand Somos Foods, talks about how the company adjusted its positioning to resonate with a broader audience; mistakes that, in hindsight, were avoidable; how Somos identified areas for improvement in how the products tasted and were named; and how his timeline for an potential acquisition has changed significantly.

Listen to the full episode now.