It's Time For Recess. Plus, A Bourbon Brand On the Block

0:04Welcome to the CPG Week podcast by BevNet and Nosh. I'm Monica Watrous, here with my co-host, Brad Avery. Now here is the latest in food and beverage industry news. We kicked off the week with some big news from our friends at Recess. Yes, Recess Drinks has closed a$30 million Series B round led by Kavu and other repeat investors, CEO and founder Ben Witte told us. Alongside the funding, Kyle Thomas, the chief commercial officer at C4, is going to be joining Woody as Recess' co-CEO and president. Woody cited Thomas' leadership and development of platform brands, a longtime argument the founder has made around Recess, is one of the main reasons for the hire.

0:48And Thomas also helped build Nutribolt, the parent company of C4, up into the multi-million dollar energy drink brand that it is today. So this is a big move for Recess, which is a relaxation beverage. It initially started as a CBD-based drink and now is focused on mood functionality and mocktails. And it's a big cash windfall in a time where funding has continued to be difficult for brands. Any idea what they're going to do with that 30 million? They are building out the sales team. They are going to be working on DSD, expanding up and down the street in a lot of the traditional ways. This is definitely a scaling round in addition to bringing on the new leadership.

1:31I think it just shows a real get down to business type of moment for the company. Well, Recess is definitely one of the winners in the non-alcoholic beverage space, as we're seeing more consumers slipping away from their drinking ways. Japan's Kirin Holdings is looking to unload bourbon brand Four Roses for$1 billion as part of a shift towards health care. Kirin, which owns Fuji Japanese Whiskey and New Belgium Brewing, has been testing interest from potential buyers in recent weeks, with bids expected to roll in next month, according to a report by the Financial Times. Four Roses is produced in Lawrenceburg, Kentucky.

2:12Kirin acquired the business in 2002 and quickly reestablished the brand as a premium bourbon company after a tumultuous period in the portfolios of other multinational spirits companies. The bourbon brand generates about$70 million in adjusted earnings annually. The move comes as whiskey sales struggle at home and abroad. American whiskey sales declined 1.8 % to$5.2 billion in 2024, according to the Distilled Spirits Council of the United States. Additionally, pressure on American whiskey suppliers has further mounted after a rollercoaster year of new tariffs and negotiations that have at times entangled U.S.

2:49spirits and particularly bourbon in a trade war. American whiskey exports fell 13 % in the second quarter of this year. I would be curious to see what Kirin does with its other alcohol holdings, given this shift towards health care and this move away from alcohol that definitely is, as you outlined, going with trends. Now, the$1 billion is an asking price. That's their goal for this. But I'll be curious to see what they do end up getting from a potential buyer. Yes, so Kirin has operated in the pharmaceutical sector since the 1980s and has accelerated its push into that space in recent years. It also, in addition to New Belgium and Four Roses, owns Bell's Brewery and Kirin Ichiban, the Japanese beer.

3:34And of course, we will continue to follow any developments on a potential sale at BevNet. Taste Tomorrow Ventures, the venture capital arm of beverage incubator LA Libations, has taken a minority investment in Happy Products, the coffee brand co-founded by CPG industry veteran Craig Dubitsky and actor Robert Downey Jr. Financial terms were not disclosed. The deal is the firm's fourth investment after the closing of its$30 million Fund One back in May. And it's also invested in Better For You Ice Tea brand, Just Ice Tea, gummy candy brand, Better Sour, and functional beverage, Juni. So we heard from LA Libations co-founder and CEO, Danny Stepper.

4:16He told us, we bet on founders. When you invest early, the brands are still emerging, pivoting, and changing. So the only through line for us is the founder. In this case, one of the founders is Iron Man. But also Craig Dubitsky. Yes, who has a strong track record in CPG. And Danny did call out Craig by name. What I find interesting about this is RTD Coffee has been a bit of a sleepy category the past few years. Sales have been down. Some people, though, have said that really it's Starbucks that is down. And we've seen growth from brands like La Cologne and others in this space. There's also been a rise of functionality in coffee.

4:55And whether Happy can crack into the latte space, I'll be curious to see because they're going for a new type of branding in this space that we haven't seen much of. And it's nice to see some innovation moving again in the coffee category. Moving on. This week, our colleague Adrian DeLuca reported on the closure of Stockald Dreamery, a Swedish producer of cultured cashew-based cheese and cream cheese alternatives. Over the course of its six years in business, the startup had raised over$20 million in venture capital funding and landed shelf space at Whole Foods Market in New York City. This month, founder and CEO Soros Tavakoli decided to wind down operations after ultimately recognizing that the demand for the category is simply much smaller than he and others initially anticipated.

5:46He said the entire StockL team stayed on board and were paid their final salaries as they helped sell off equipment, sell through inventory, and close up the offices. While a few of its team members have already secured new gigs, a handful, including Tevacoli, are still weighing what's next. In the meantime, he said all suppliers have been paid in full, and he is currently having conversations about selling the brand's IP, including its cream cheese formulation. Insiders can read the full story on Nosh. On a lighter note, gut-friendly nutrition brand Belly Welly is diving into one of the hottest supplement formats via a new Walmart exclusive.

6:26This week, Belly Welly fiber gummies debuted in a single flavor, watermelon, and they were in development for a long time before the brand's Walmart buyer pushed the team to solidify the innovation and bring it to market. Co-founder Katie Wilson told us. The gummy supplement market is on fire and reached a valuation of$10.5 billion in 2024. Would you like to find some gummy supplements in your trick-or-treat bin? Or we used to use pillowcases when we were kids. Oh, I used like an old Walmart shopping bag. Oh, that's easy. But hell yeah, I would like some gummies in my trick-or-treat bag. so it's halloween week candy sales are popping off and it does seem the gummies are hot and getting hotter as they have been for several years now the new york times reported this weekend that while reese's peanut butter cups are still the top choice of halloween shoppers gummies are only continuing to grow in popularity with gen z and alpha well alongside a growth in gummies they're also more expensive.

7:30CNN reported that candy is 10.8 % more expensive this Halloween season than last year. That is citing an analysis of Nielsen IQ data from Progressive Think Tank Groundwork Collaborative. In 2024, Halloween candy prices only rose 2.1%. So it's a pretty steep spike. Guess we're all handing out potatoes to trick-or-treaters this year. Potatoes? Yeah, it's a thing. I've never heard of this. Look it up. Explain, explain. Have you gotten potatoes for Halloween or given potatoes for Halloween? No, but I read about it a couple years ago. It was this novelty thing. People started putting potatoes in their buckets of candy, and the kids were choosing the potatoes because they thought it was funny.

8:10Okay, I guess that's fair. It is kind of funny. Yeah, it is funny. Well, speaking of gummies, we've also seen a lot of innovation in the space. and in sugar confections in general at Naxx, where I was a couple weeks ago now, saw a lot of unique candy innovations, a lot of freeze-dried, sweet tarts, Skittles, M &Ms even. I wrote about that for Nosh, which you can read on the site. Or spicy Skittles gummies, which I was really surprised had some genuine spice and kick to them. One of the biggest, most hyped innovations from Ferrera, which produces the Nerds brand, was Nerds Juicy Gummy Clusters, which they're going pretty big on.

8:51And I got to say, the mascot that they had for the Nerds Gummy Clusters was terrifying. Good Halloween costume because it was a jump scare. He was a freak. How do I describe it? Nightmare fuel. I know. So there are some good mascots at NACS this year and some good innovations. If you missed last episode of CPG Week, we talked about other trends and innovations at the NACS show. Lucas Southerd, our colleague and co-host of this podcast, was also on the ground in Chicago and talked about meat snacks and tea and all kinds of fun things. So be sure to tune in if you missed it. Here are some other notable bits of news from the week.

9:35Doubling down on its portfolio restructuring efforts, B &G Foods has agreed to sell the Green Giant and LeSueur frozen and shelf-stable vegetable product lines in Canada to Nortera Foods. Better for You Soda startup NoCap is raising the ante on its co-branded collaboration strategy by partnering with the IC Company for a three-year licensing deal to license the Slush brand's name and flavors. And finally, organic frozen fruit pot purveyor Hundi has secured$350 ,000 in fresh equity funding, according to a filing with the U.S. Securities and Exchange Commission. For these stories and more, become an insider at BevNet and Nosh.

10:15And if you're enjoying the show, please subscribe on your listening platform of choice. That wraps up this edition of CPG Week by BevNet and Nosh. Thank you to our audio engineer, Joshua Pratt. Our director is Mike Schneider. And our designer is Erin Willett. If you enjoyed the podcast, please subscribe on your listening platform of choice. And we will see you next time.