• 🍩 Drumroll's New Cash Plans 
• 🍫Luker Chocolate’s COP16 Delegate
• 🥬 Bowery Farms Throws In The Towel
• 🍯 Wisdom Natural Acquires Drizzle
• 📍 Why Trip’s Billion-Dollar Journey Begins And Ends With Obsession

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While the pace of food and beverage acquisitions has slowed from previous years, recent deals reflect two key themes – portfolio reshaping and increased snack demand – that are expected to continue, according to a new report from CoBank, a national cooperative bank and agricultural export credit agency.

Manufacturers are streamlining portfolios by shedding non-core businesses. For example, General Mills divested its Yoplait, Go-Gurt and Oui yogurt brands in September to focus on cereal, snacks and pet food.

“Food and beverage manufacturers are increasingly applying the 80/20 rule and devoting more attention to the 20% of their core brands and categories that account for the lion’s share of company revenue,” said Billy Roberts, food & beverage economist with CoBank.

Meanwhile, the latest deals appear to be driven by growing demand for grab-and-go convenience and healthier snacking. This trend is underpinned by two of the biggest transactions announced this year – Mars’ $36 billion acquisition of Kellanova and PepsiCo’s $1.2 billion purchase of Siete Foods – as well as Our Home’s shopping spree for spun-out snack brands Pop Secret, ParmCrisps, Sonoma Creamery, R.W. Garcia and Good Health.

The number of deals within the sector have dwindled steadily on a quarterly basis since the beginning of last year, per Pitchbook data. Deal count totaled 3,140 in 2022 and 2,630 in 2023, with the amount of invested capital reaching $83 billion and $84.5 billion, respectively. By comparison, 901 deals were completed in the first half of 2024, representing a total of $48.3 billion in invested capital.

M&A activity is poised to accelerate behind interest rate cuts and as companies feel pressure to return to volume-led growth following a period of price inflation, Roberts explained. Executives of Mondelēz International, General Mills and Flowers Foods indicated at investor conferences this year that acquisitions remain a strategic priority.

The report pointed to innovation and growth among smaller companies as a driver for potential acquisition of smaller brands. What’s not clear is the size of those smaller companies referred to in the report, however. Although strategic-driven M&A of late has been for brands with revenue in the hundreds of millions of dollars, as opposed to the relatively tiny “proof of concept” investments that characterized the corporate incubator days of the 2010s. Another recent report, from Capstone Partners referred to these smaller acquisitions as $1 billion or so. 

Go Deeper: Read up on some of the biggest deals announced so far this year.

Amidst accelerated growth, refrigerated donut brand Drumroll Snacks is looking to continue expanding its natural channel footprint with a recent $3 million investment from CPG brand incubator 7 Mile Brands.

🛒 The new funds will be used in part to support the brand’s performance in existing accounts – such as Target, Kroger, Wegmans, and H-E-B. Velocities have held steady and, to date, Drumroll has had no retail churns, according to the brand’s co-founders.

💭 “I don’t think we’ve even hit the tip of the iceberg [in the natural channel], and the main targets [right now] are Whole Foods and Sprouts. There’s a massive opportunity there that is backed up by a lot of the data we see,” said Hassan Safieddine, co-founder of Drumroll Snacks.

👀 The recent capital infusion will also support product line expansion. Drumroll has billed itself as a refrigerated snacking platform, and the brand wants to make good on its promise to expand outside of donuts, said Safieddine.

Insiders can learn more about Drumroll’s upcoming growth plans by reading the full story on Nosh.

Over the past two weeks world leaders from over 180 countries gathered for the United Nations’ 16th annual Conference of Parties to the Convention on Biological Diversity (COP16) in Cali, Colombia. Luker Chocolate’s VP of Cacao Sourcing and Sustainability Julia Ocampo was on the ground sharing how the private sector is leading biodiversity efforts. 

💬 “For Luker, biodiversity contributes to stable cocoa yields, higher quality, and healthier surrounding ecosystems, all of which are essential for long-term business sustainability. Biodiversity also appeals to consumers who value eco-friendly products, building brand loyalty and ethical growth,” Ocampo said. 

📣 We caught up with Ocampo to learn about the message she aimed to bring to COP16, how Luker’s approach stands out in the cocoa sector, how the CPG industry can support its mission and so much more.

Check out the full interview on Nosh.

Vertical farming startup Bowery has shut down after burning through approximately $700 million in venture capital in the nine years since it was founded. The company operated three farms in New Jersey, Maryland and Pennsylvania as well as an R&D facility. 

❌ The company last took on $150 million in debt from KKR in 2022, according to Axios. Bowery has now entered into an Assignment for the Benefit of Creditors (ABC) process, which is being managed by Sherwood Partners. 

🌱 Bowery laid off a significant portion of its workforce in November 2023 as it grappled with financial challenges. The news comes as plenty of other well-funded, high-valuation vertical farming operations have filed for bankruptcy including AeroFarms, AppHarvest and Smallhold. 

🥣 In other news: Private equity partners Charlesbank Capital Partners and Partners Group are preparing to turn Hearthside Food Solutions over to creditors as the snack co-manufacturer has been “consistently” burning cash since the PE groups bought the business in 2018, according to Bloomberg. 

Wisdom Natural Brands, the parent company of SweetLeaf sugar substitute, has acquired Canada-based Drizzle Honey for an undisclosed sum. The transaction opens the door to the U.S. distribution of Drizzle amidst accelerated growth in the honey category. 

🐝 Founded in 2015, Drizzle produces pure, unprocessed, bee-friendly honey from beekeepers who place their hives away from synthetic pesticides, herbicides, or fertilizers. The brand’s products include white raw and golden raw honeys.

🛒 Drizzle’s line is currently available in 1,200 retail stores in Canada. The acquisition is expected to extend the brand’s reach in the U.S., where more than 11,000 stores carry Widsom’s SweetLeaf stevia, monk fruit and other sweeteners. 

🗣️ What they said: "Honey fits perfectly into our line of natural sweeteners, and Drizzle Honey adds bonus wellness and environmental benefits by providing raw honey that retains more of its natural nutrients, line extensions with health-boosting superfoods, and sustainable beekeeping practices that are critical to maintaining pollinator populations.” - Michael May, CEO of Wisdom Natural Brands

Olivia Ferdi, the co-founder of calming beverage platform Trip, discusses how the brand’s philosophy of “product obsession” gave it a fast start and keeps it building towards a more promising future. She also explains why “the customer is sacrosanct” and how the company is applying lessons learned from success in e-commerce to its brick and mortar business.

Listen to the episode now.