• 🥔 Uglies Heads Into C-Store
• 👀 Blue Stripes’ Growth Plan
• 🚚 Golden Organics Acquires by IVFH 
• 🔥 No Flamin’ Hot Defamation?
• 🧇 TreeHouse Foods’ Waffles Recall

As mass retailers have invested more into delivery, eGrocery sales saw a boost – up 13.8% in Q3 – to $27.4 billion, according to new data from grocery insight firm Brick Meets Click. Delivery sales alone jumped 25% year-over-year after a nearly 6% decline during the prior year.

Mass format retailers posted the largest delivery gain, reaching 52.7% during the quarter, while supermarkets declined to 38%. Brick Meets Click partner David Bishop attributes the continued success to mass retailers ongoing investment in delivery, pickup and ship-to-home logistics as well as their ability to leverage shopper insights and “better understand online shoppers’ preferences.”

The share of total grocery spending online has held an upward trajectory, rising to 14.6% in the third quarter, after pulling back in Q3 FY2023, according to the report.

Supermarkets have an upward climb ahead while they compete with the scale of mass retailers and the growth of private-label offerings – such as Walmart’s bettergoods or Amazon’s Saver to name a few – which have further enabled the latter group to bring cost-savings to price-conscious consumers.

How can smaller retailers compete? Operationalizing data to create personalized experiences and targeted savings unique to different shoppers is the key, said Mercatus chief growth officer Mark Fairhurst: “Supermarkets must deepen their customer connections and enhance their service.”

If grocery retailers want to compete they need to invest further in online platforms to win back shares. Coresight Research has also echoed some of these sentiments and predicted there will be “a divergence between those with scale and those without.” 

The penetration rate of ecommerce sales across the food and beverage space is expected to increase to 6.9% by 2028 up significantly from 2.1% in 2019, according to the recent Coresight report.

But there will likely be winners and losers. Right now, targeted investments  in promotional activity to build bigger membership bases and enroll new or existing consumers in subscription programs has proven itself a successful first step.

Go Deeper: Bifurcated Consumer Spend Favors Branded, Private Label M&A

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Uglies is pushing deeper into convenience. According to Bob Zender, director of Marketing at the Dieffenbach-owned brand, the channel presents a “natural growth opportunity” that will help it capture Millenial and Gen Z c-store shoppers and grow awareness for the brand and its food waste reduction mission.

📦 Uglies’ single-serve bags are a core to the expansion. The 2 oz. format now comes with a hole punch to maximize grab-and-go merchandising opportunities; That format, alongside its 1 oz. single-serves, will also now be available to retailers in a smaller, 10-count pack size.

💬 What they said: “That’s so the retailers don’t feel like they’re over investing in something they haven’t tried – same principle as the consumers buying a smaller bag. We’ve greased the skids a little bit to make that an easier buy for the consumer and the customer, and it’s gotten traction.” – Bob Zender 

Nosh Insiders can access the full story to understand how Uglies is approaching channel expansion.

Blue Stripes, the brainchild of renowned chocolatier Oded Brenner, is looking to increase brand awareness, drive sales and roll out new marketing efforts to support its whole cacao products with the support of a recent $20 million Series B funding round led by Zintinus.

🤝 In-store demos will be key to the New York-based company’s efforts with the goal of familiarizing consumers with the flavor of the cacao fruit; it will also partner with influencers across several industries – from food to fitness to wellness – to help share its sustainability  story.

 💭 “The main thing for us is telling the story of the cacao fruit that consumers will understand, leading to them trying and purchasing the products,” Brenner told Nosh last week. “What we’re doing with cacao is incredibly real.”

🌍 In the past 18 months alone, Blue Stripes has upcycled 968 tons of cacao fruit and shells, avoided 9.8 tons of methane emission – equal to the amount of carbon absorbed by 290 acres of forests – and conserved 60,000 gallons of water, according to Brenner.

Insiders can learn more about Blue Stripes’ plans for growth in the full story on Nosh.

Specialty food vendor Innovative Food Holdings (IVFH) announced it has acquired Denver, Colo.,-based distributor Golden Organics for $1.75 million; the deal includes Golden’s inventory, customer based and a leased, 20,000 sq. ft. warehouse in the Denver area. 

• According to the announcement Golden Organics has grown at a CAGR of 22% since 2018 and has generated $6.8 million in trailing-twelve-month revenue
• The distributor’s over 200 customers span the U.S. and include restaurants, food manufacturers, and food retailers; no single customer accounts for more than 8% of Golden’s total sales, the company claims
• Golden Organics will bolster IVFH’s assortment with the addition of 800 incremental organic items; IVFH plans to cross-list Golden’s products within its other channels including a drop-ship business with foodservice distributors and on Amazon.

An attorney for Frito-Lay on Friday asked a California federal judge to toss out a former employee's suit claiming he invented Flamin’ Hot Cheetos and had his livelihood destroyed when the company denied his role in creating the snack, reported Law360. 

⏪ The July suit, filed by former PepsiCo janitor-turned-senior-executive, Richard Montañez, sought a jury trial, damages, restitution and an order preventing PepsiCo and Frito-Lay from claiming he didn’t create Flamin’ Hot Cheetos. 

💼 On Friday, the snack company’s attorney argued that it’s not inherently defamatory to say that someone hasn’t invented a product and “without knowing what was actually said, it’s impossible to accept the interpretation of a statement that hasn’t been pled.” 

🧑‍⚖️ However, the judge disagreed, saying Montañez “made a lot of money” as the alleged inventor of Flamin’ Hot Cheetos – writing books and giving speeches – and his reputation was directly impacted by the statements. 

🤔 Montañez’s role in creating the spicy snack was first questioned in a 2021 LA Times article entitled “The Man Who Didn’t Invent Flamin’ Hot Cheetos,” which cites interviews with over a dozen former Frito-Lay employees.

Hundreds of frozen waffles produced by private label manufacturer TreeHouse Foods are at the center of a new Listeria outbreak. 

⛔ The company has voluntarily recalled over 700 waffle products, according to the New York Times, including Kodiak Cakes as well as private brand items from Target (Good & Gather), Kroger (Simple Truth) and Walmart (Great Value).

🏭 According to TreeHouse, the issue was discovered during routine testing at the facility; the company operates more than 24 production facilities in the U.S. and Canada. Affected products were distributed throughout Canada and the U.S.