Mayo-Mustard Merger, Creatine Craze and HOP WTR On Top

0:05Monica Watrous:Welcome to the CPG Week podcast by BevNet and Nosh. I'm Monica Watrous. You're with my co-host Brad Avery. If you're enjoying the show, please subscribe on your listening platform of choice. Here is the latest in food and beverage industry news. Last week on the podcast, we discussed a rumored merger between McCormick & Company and Unilever's food division. And now a deal is officially in the works. The spices and seasonings manufacturer has agreed to acquire Unilever's food business, excluding India, in a transaction that values the unit at nearly$45 billion. Under the deal, Unilever and its shareholders will receive a 65 % equity stake in the combined company, valued at roughly$29 billion, plus$15.7 billion in cash.

0:54Monica Watrous:The combined entity brings together complementary portfolios across spices, seasonings, and condiments, including brands like Knorr and Hellman's from Unilever alongside McCormick's namesake seasonings line, Frank's Red Hot, French's, and Cholula. The companies expect the transaction to expand global reach, enhance scale across the retail and food service channels, and provide greater resources to invest in innovation. Unilever Foods generates roughly 70 % of its sales from the Knorr and Hellman's brands and has delivered approximately 2.8 % in underlying sales growth over the past few years, supported by consistent volume growth, according to the company.

1:38Monica Watrous:McCormick CEO Brendan Foley will lead the combined company, which will remain headquartered in Hunt Valley, Maryland, with an international base in the Netherlands. Unilever will appoint four of the 12 board members. The transaction is expected to close by mid-2027, subject to shareholder and regulatory approval. Insiders can read more about the transaction on NOSH.com.

2:02Brad Avery:There's no doubt this is a massive merger with big ramifications for the entire industry. In a curious way, we're seeing a lot of deals like this happening in recent years. Well, on the other hand, some companies are divesting and breaking up. It's funny how you can kind of have both going on at the same time.

2:20Monica Watrous:Right, right. And I think it all comes down to operational execution and excellence. And we're seeing a lot of synergies across these two portfolios. This continues a pattern of mega mergers and consolidation that we've seen in packaged food, including Mars acquisition of Kelanova and Ferrero Group's acquisition of W.K. Kellogg. A couple years ago, we also saw Smucker by Hostess. And to your point, Kraft and Heinz have been looking at potentially splitting up. So some of these case studies are positive and some not so much. And it will be interesting to see how this McCormick Unilever tie-up plays out.

3:01Brad Avery:Well, in more M &A activity, non-alcoholternatives got a big win last week as Constellation Brands agreed to terms to acquire Hopwater, the functional beer-style sparkling water brand founded in 2020. Constellation first invested in Hopwater five years ago in 2021, and the acquisition is now expected to close this month. Founders Jordan Bass and Nick Toronto will stay with the brand, joining Constellation full-time. It marks a build-out of Constellation's NA portfolio, which has been growing in recent years with zero-proof innovations from their Corona and Modela brands, as well as Kim Crawford's Illuminate.

3:38Brad Avery:The company has also made minority investment in functional adult NA brand, Hyo. And they also previously invested in Toast. This is some big affirmation for non-alc. Hopwater is very much a non-alc beer in a lot of ways, although all but technically.

3:57Monica Watrous:Insiders can read more about that deal at BevNet.com. Moving on to the supplement space, Create Wellness, a trailblazer of the creatine gummy set, is moving into powdered beverages with a$20 million investment. The Series B round was led by Alliance Consumer Growth and Body Armor and Vitamin Water founder Mike Rapoli's family office. Impact Capital with participation from existing company investor Unilever Ventures. There's Unilever again. The brand closed the round in August and reported its current run rate is over$100 million in revenue, said co-founder and CEO Dan McCormick in a LinkedIn post.

4:39Monica Watrous:There's McCormick again.

4:40Brad Avery:They're all over the place.

4:42Monica Watrous:founded in 2022 by McCormick and his wife, Sienna Morey. Create was an early innovator in the creatine gummy category. It currently has six varieties of gummies helping usher in a modern identity for the amino acid supplement previously associated with a male demographic of weightlifters and bodybuilders. Its first portfolio expansion into the stick pack hydration set is Creatine Plus Electrolytes, which is available in watermelon, passion fruit, and lemon lime, and combines 5 grams of creatine monohydrate with electrolytes from sodium, potassium, and magnesium, and 1 ,000 milligrams of taurine.

5:24Monica Watrous:Create also officially announced a packaging refresh that McCormick described as not a dramatic overhaul, but certainly a sharpening. After successfully launching nationwide in Target last year, the brand has also entered the Vitamin Shop, Sprouts Farmers Market, GNC, and Wegmans. Supporting its growth, Create has increased its headcount from five full-time employees to 25, bringing in leaders from AG1, Vital Proteins, Mammoth Brands, and Smart Sweets.

5:54Brad Avery:And speaking of electrolytes, Q Mixers is launching its first ever functional product line, Q Refresher, a four-flavor line of hydrating mixers. They come in flavors like Pineapple Passion and Raspberry Lemon and are packaged in Variety 8-Pack. I spoke with Betsy Frost, the CEO of Few Mixers, and she had some interesting insights into what drove this innovation and why are cocktail mixers turning to functionality. Part of it is that consumer behavior with alcohol, as we all know, is evolving and shifting. And the brand has seen the average person begin mixing with coconut water, mixing with gut health friendly modern sodas.

6:38Brad Avery:And so they're already putting functionality into the drinks. And here's a brand now that is bringing functionality packaged, ready to mix for a cocktail or mocktail. We've also been seeing refreshers, particularly that term, being used on quick service restaurant menus and in cafes. Starbucks has its own refreshers line and has been moving it into CPG with refresher concentrates, while also expanding its menu listings with energy refresher. It's part of a continuous shift in the cocktail mixer category, which has increasingly inhabited two worlds, the alcohol occasion, the classic, and the modern N.A.

7:20Brad Avery:mocktail occasion. So Q Refreshers is a way for this brand to embrace versatility and create a drink that is more ready to be consumed with alcohol or on its own. It's only a matter of

7:36Monica Watrous:time until we see creatine-infused mocktails. Well, hopefully more time than less.

7:45Monica Watrous:we need to talk about this year's april fools marketing stunts how much creatine none that i have found so far but i gotta tell you about some of these products now this episode is dropping after april fools but these products have been under embargo until april 1st so we haven't been able to discuss them until now deep indian kitchen mocked up a coconut curry protein shake, which is described as a sippable spin on a classic deep Indian kitchen favorite, blending creamy coconut, bold Indian spices, and 24 grams of protein per serving.

8:22Brad Avery:Drop curry from that, and I think that's workable. I think you could have some Indian spice flavors in a protein shake with coconut, and it could work.

8:32Monica Watrous:What about a lassi, like a

8:34Brad Avery:protein lassi?

8:35Monica Watrous:Okay, okay, you know, not far off. And a lot of times we see some of these fictional products become a reality when consumers react to these marketing stunts and they say, hey, I'd actually buy that. So maybe a little workshopping, Deep Indian Kitchen.

8:48Brad Avery:Become a little bit of like a trial balloon for brands. See what actually could they get away with sometimes.

8:54Monica Watrous:How about this one? Mingle Mood by Mingle Mocktails. It's pomegranate spark, a first of its kind functional beverage blended with ancient aphrodisiac botanicals, including rose cardamom and maca designed to elevate your mood awaken your senses and

9:12Brad Avery:get you in the mood not a good april fool's joke because that sounds completely real it does sound

9:20Monica Watrous:real it sounds 100 real this feels like something that they're testing this is a test this isn't

9:26Brad Avery:there's been brands in the past that have just leaned into like not even aphrodisiac but just using the word orgasm in their marketing. So this to me, if they think this is a joke, no, no, you're just going to confuse a lot of people now who are going to be looking for this product. So you better start making it.

9:45Monica Watrous:Yeah. Well, how about this one? Calafia Farms and Carbone Fine Food are teaming up to announce their most unexpected collaboration yet. Spicy Vodka Almond Creamer, made with simple, familiar ingredients, including almond milk, 100 % imported Italian tomatoes, a touch of Calabrian chili, and a splash of vodka with some sea salt.

10:08Brad Avery:Oh, it's like a vodka sauce. Oh, no, it's like a coffee creamer.

10:14Monica Watrous:But with Italian tomatoes? That's flavored like a spicy vodka sauce.

10:19Brad Avery:Okay, because I was thinking vodka almond creamer, you're like halfway to a plant-based white Russian.

10:26Monica Watrous:Or an espresso martini. well olipop and good wipes is another partnership that uh marks the introduction of peachy clean flushable wipes inspired by the prebiotic soda brands peaches and cream flavor i don't know

10:43Brad Avery:much about good wipes that area of the industry cpg is a little out of our realm do they normally do like scented wipes like that that's a good question okay i'm on their website now and they've got varieties like lavender, shea cocoa, botanical bliss.

11:01Monica Watrous:These are all fragrances that one would expect to use in the bathroom.

11:06Brad Avery:If they really wanted a good April Fool's product, they should have chose the Olipop Ridge Rush, which is their kind of version of a Mountain Dew.

11:14Monica Watrous:Yeah, that seems really refreshing.

11:17Brad Avery:Peaches, though, you start getting a little too appetizing and then you don't really want to combine those sensations, I'm sure.

11:23Monica Watrous:Keep peaches away from my toilet. One more crossover that has potential maybe is Fishwife and Glossier, which is a personal care company, are teaming up for a pretend partnership involving sardines for skincare. I guess the idea is eating beauty, beauty from within that concept.

11:47Brad Avery:I like it. I like where we're going here.

11:49Monica Watrous:Yeah.

11:49Brad Avery:I think the sardines should have to at one point be rubbed on your skin. I think that would be part of the routine