From Huel to Hellmann's, Big Food Makes Its Moves

0:04Monica Watrous:Welcome to the CPG Week podcast by BevNet and Nosh. I'm Monica Watrous, here with my co-host, Lukas Southard. If you're enjoying the show, please subscribe on your listening platform of choice. Here is the latest in food and beverage industry news. Danone has acquired British meal replacement brand Huel for a reported$1.1 billion. The acquisition deepens the French dairy giant's roster of functional nutrition brands. Huel's portfolio spans powder-based shakes, ready-to-drink beverages, and snack bars. Created by Julian Hearn and James Collier, Huel launched as a digital native brand in the United Kingdom in 2015 and is now available in over 250 ,000 stores worldwide, with estimated revenues of more than$333 million in 2025.

0:59Monica Watrous:The company raised more than$24 million in 2022 at a valuation of$560 million, backed by notable names such as actor Idris Elba and entrepreneur Grace Beverly. Under Danone's ownership, Fuel will have the infrastructure, distribution, and research and development capabilities to scale into new markets. Danone described the acquisition as in line with its Renew Denone strategy, designed to, quote, enhance Denone's presence in functional nutrition and extend its portfolio into the fast-growing, complete nutrition space. Denone's support will allow Huel to, quote, accelerate growth, innovation, and international expansion, according to the company.

1:43Does this mean that we're going to see more of those cool Huel vending machines at Expo West next year?

1:50Monica Watrous:Oh, yeah, I hope so. The frozen dumpling category is heating up. Washington, D.C.-based Laoban raised$7.2 million recently as the brand scales into other Asian food categories in the freezer aisle. In the last two years, Laoban's portfolio has blossomed into over 16 SKUs. That spans bao buns, scallion pancakes, crab rangoon, and lo mein noodles. Laoban is not the only frozen dumpling brand extending its reach into new freezer doors. At Expo West earlier this month, Washington State brand Mila was showing off its own expansion into Baoban's. The brand started in soup dumplings and has added noodle kits and desserts like ice cream to its repertoire.

2:37Lulu Asian Kitchen made its debut at Expo West as the St. Louis-based restaurant group goes deeper in CPG. Founded 30 years ago as a Chinese food and dim sum concept, the restaurant chain took a step into the grocery channel about 11 years ago when it started producing authentic Asian food for the grab-and-go deli section. At Expo, I spoke with the brand about its decision to move into a new store part where it is launching four ready-to-eat frozen entrees and three varieties of frozen dumplings. Lulu self-manufactures its frozen products in St. Louis, but also operates a refrigerated product facility in the San Francisco Bay Area.

3:19Monica Watrous:We continue to see a lot of restaurant brands that are adding consumer packaged goods lines and in some cases just going all in on that business. It seems like it's happening more and more and especially in this Asian food set. But it's also smart to diversify into retail, especially when various economic factors or even global pandemics affect the restaurant channel. It's good to be able to meet consumers where they are. And a lot of times that's at the grocery store and in their home freezers. And in different parts of the grocery store, too. Yeah, definitely. Well, moving into the condiment section of the grocery store, Unilever is in talks to sell its food business to McCormick and Company, though no transaction is guaranteed.

4:11Monica Watrous:Such a deal would add Hellman's mayonnaise and Knorr stock cubes to McCormick's broad portfolio of condiments, sauces and seasonings under the Frank's Red Hot, French's Old Bay, Zataran's, Lowry's and Stubbs brands, among others. Both companies are sticking to the usual corporate script for now. Unilever described its food division as a, quote, highly attractive business with strong fundamentals, while McCormick emphasized that it's always evaluating strategic options to drive shareholder value. The scale here is difficult to ignore. McCormick does about$7 billion in annual sales globally, while Unilever's food division alone pulls in nearly$15 billion.

4:55Monica Watrous:An all-stock deal could land within weeks, according to reports, putting a massive portfolio of legacy pantry staples into new hands. It's another signal that condiments and flavor are having a moment, and not just a fleeting one. The trend is increasingly tied to the protein-forward GLP-1 era of eating, that is smaller portions, simpler bases, more reliance on sauces, spices, and condiments to stoke a shrinking appetite. That's partly why we've seen a steady drumbeat of dealmaking in this space. This year alone, the Marzetti Company snapped up Bachans for$400 million. Highlander Partners acquired Tapatio, and Advent International bought Duke's Mayo owner Sour Brands.

5:40Monica Watrous:In a low-growth food environment, flavor is one of the few areas still delivering excitement, repeat purchases, and pricing power. It's also worth noting that over the past decade, McCormick has padded its portfolio through multiple acquisitions. In 2017, the company added Frank's hot sauce and French's mustard through the$4.2 billion purchase of Reckitt's North American food operations. And in 2020, the company bought Cholula hot sauce for$800 million from private equity firm El Catterton. We will continue to follow this potential transaction and report the latest at Nosh.com. The new dietary guidelines for Americans announced in January directed people to eat real food.

6:28That guidance might mean real costs to consumers at the grocery checkout. According to a recent report from Consumer Insights and data firm Numerator, the directive to eat more protein, whole fruits and vegetables, and full-fat dairy could increase grocery bills 32 % annually. That amounts to about$1 ,012 per person per year. According to the most recent tracking of inflation by the Consumer Price Index, food costs were up 3.1 % year over year in February. Now, while eating more protein and produce is a healthier alternative to most processed foods, The center store aisles where much of that food is merchandise also happens to be the least expensive part of the store to shop.

7:15This presents a problem for consumers who seek to follow the dietary guidelines but are also living on a budget. One notable piece to the Numerator Report was that 28 % of respondents said they did not trust the government's health and nutrition guidance, and another 35 % were neutral. Yet those very same skeptical households were allocating about 48 % of their grocery dollars to fresh perimeter store categories. While in contrast, the high trust households only allocate about 42 % of their spending to these healthier categories.

7:51Monica Watrous:Those findings are really similar to a report that I've been looking at from the mobile app Yuka and Harvard Law School's Food Law and Policy Clinic. That study analyzed more than 800 products across a dozen grocery categories at national retail chains, including Walmart, Whole Foods, Costco, Trader Joe's, and Aldi. And a consistent pattern surfaced across the data. Cheaper food has more additives and longer ingredient lists. So one of the key findings there was that the lowest price products contained on average 2.6 times more additives than the premium counterparts. And if you look into various categories, the cheapest breads contained nearly four times more additives than the most expensive options, while low-cost pizzas averaged about 12 additives per product versus roughly four in higher-priced versions.

8:45Monica Watrous:Another thing to note here is that a lot of the lower-priced options also contain higher amounts of sugar and sodium. For many shoppers, the findings reinforce growing skepticism around ultra-processed foods, But for the broader industry, it raises the stakes around regulation. And the report calls for changes across the generally recognized as safe or grass loophole, changes in school nutrition policy, and also strengthening post-market review. These moves could force reformulation across a wide swath of packaged food categories. These are both really interesting reports, and I know that all of us at NOSH will continue to track how this affordability gap is changing both consumer buying trends as well as how food brands are developing new products and bringing new innovation through the pipeline.

9:42Monica Watrous:And here are some other notable bits of news from the week. Sazerac has acquired Dirty Shirley, the ready-to-drink vodka-spiked take on the classic Shirley Temple. Hot Girl Pickles has raised$3 million from Strand Equity, River Park Ventures, and Nucleus Ventures, with a follow-on investment from Collaborative Fund. And finally, Just Date has partnered with private equity firm Contour Ridge to accelerate expansion of its natural sweeteners. For these stories and more, become an insider at BevNet and Nosh. That wraps up this edition of CPG Week by Bevna and Nosh. Thank you to our audio engineer, Joshua Pratt.

10:23Monica Watrous:Our director is Mike Schneider and our designer is Aaron Willett. If you enjoyed the podcast, please subscribe on your listening platform of choice and we will see you next time.