The Insurgent Brands Playbook

0:04Welcome to the CBG Week podcast by BevNet and Nosh, your source for the latest food and beverage industry news. I'm Monica Watrous, Managing Editor of NOSH, here with my co-hosts Brad Avery and Lucas Southard. If you're enjoying the show, please subscribe on your listening platform of choice. On the podcast today, we're discussing insurgent brands. Who are they and what are they doing differently? But first, how are your March Madness brackets faring, Lucas and Brad? Well, let's just say I decided to take part in the BevNet communities bracket or tournament. And I am second to last. So not very well, I guess would be the short answer to that.

0:50I chose UCLA to win it all, not because I really care that much. It was just they're a California UC. I'm a UC grad. I thought I'd go with them, and I think they got knocked out in the second or third round. You never just go with your home team. You can't do that. You've got to be objective. Step back. Yeah, considering I don't follow college basketball at all, as most listeners probably know, I'm a big NBA fan. I'm very tuned into what's going on in professional basketball. But when it comes to the collegiate level, it's hard to keep up. There's too many teams. There's too many games to watch.

1:29I just think everyone should remember that if you do not call every game correctly, that is a personal failing on you. It is a moral failing. You should feel bad. You should have been able to correctly call every single match. That is a thing that is reasonable to be expected of a person. Yeah, of course. Well, my alma mater, Mizzou Tigers, lost in the first round. So I feel your pain. You can't just go with the team that you like the most. I mean, let's say if the fighting banana slugs from UC Santa Cruz, my alma mater, were in, I would pick them every time, even though there's not a chance in hell that they will ever even be in the tournament, let alone win.

2:11Is it Warren Buffett who has a thing that if you turn a perfect NCAA bracket, he'll pay you a million dollars or something like that? It's statistically impossible for the most part, like almost impossible. I bet AI could figure it out. Nah, it's just too many variables. It could probably generate every single possible bracket, in which case, well, of course, then you're right. All I know is that Kellogg is launching a bracket challenge with two of its serial mascots, Tony the Tiger and Toucan Sam. And if a bird makes it to the finals, five winners will get a year's worth of Froot Loops. if a cat makes it to the finals then five winners get a year's worth of kellogg's frosted flakes they couldn't give them something better than just like the cereal like really like it's like you guys got some money like just give them some money too i'd be like okay great i've got a lot of like frosted flakes to feed me but yeah a thousand dollar check would probably be better per the rules if there's no cat or bird in the finals we all lose i don't know what that means They discontinue the cereals, they take them off the market, you'll never have them again.

3:23Well, you know, if these food additive bans continue to pass across various states, then we probably won't be seeing Froot Loops on the shelves for a while. Moving on. Bain & Company released its ninth annual list of insurgent brands, featuring 120 CPG companies that combined drove 39 % of incremental category growth while holding less than 2 % of market share in their respective categories. The criteria for being an insurgent brand, according to Bain, is generating more than$25 million in tracked channels in annual sales, growing more than 10 times the category average over the past five years, and maintaining positive growth over the past two years as an independent company or recently acquired company.

4:11Brad, you were looking at the beverage brands on the list and found some commonalities. Can you tell us more? Yeah, so one thing I thought was interesting about this year's list is a lot of these brands we've seen start making moves and start getting acquired. Poppy was on the list, Alani New, Ghost, three brands that have been picked up by major larger companies, including PepsiCo and KDP, just in the past six months. We also see brands that have aligned closely, like Black Rifle has aligned with KDP. And we see these insurgents starting to win in the market. You know, some of these brands are really establishing themselves as leaders now.

4:54Are they, what point do they stop being insurgents? That's a great question. And certainly the broader food and beverage industry is seeing all kinds of challenges right now from consumer confidence waning and stagnating volumes, as well as all of this discourse around ultra processed foods and the rise of GLP-1 weight loss drugs. These brands are obviously overcoming some of the big headwinds that are stymieing the bigger players in the industry. One thing I thought was interesting in the Bain report is they call out certain scale insurgents, which are companies that now make more than a billion dollars in sales.

5:35So brands that were on the list ordinarily last year, Celsius, Chobani, Rouse, are now considered these$1 billion plus scale insurgents. They're sort of graduating into this place of being, again, leaders in their categories, in their space. And Celsius just threw around$1.8 billion to pick up Alani, another insurgent brand on the list. So the insurgents are acquiring the insurgents. And on the food side, we saw new insurgents, including Aloha, Goodles, Graza, Mike's Hot Honey, So Good, a lot others. And what's interesting about these brands or what they have in common is that they're all establishing strong retail partnerships.

6:21They have created consumer-centric innovation and really fostered brand loyalty among their core consumers. They're executing innovative collaborations with other on-trend brands. Just look at Mike's Hot Honey. Every day I feel like I see a new product in the market with Mike's Hot Honey and some other brand. We're also seeing these insurgent brands expanding into high-impact segments. So Good, for example, had a timely pivot into freeze-dried candy once that company saw this picking up on social media. We also saw Goodles expanding into the deluxe segment of mac and cheese. So these brands are very thoughtful about their innovation pipelines.

7:07They're not proliferating innovation, but really focusing on their core assortments and their hero skews. And they also have founder-led mentalities that they're embedding throughout the organization. And consumers are really gravitating towards these things. Some of these are also brands that are simply outpacing their category. Among the new insurgents, we see busy cold brew and counterculture coffee. As coffee has slowed down a bit in recent years, these are brands that are getting recognized because they are continuing to grow at a pretty rapid pace while the rest of their set is struggling or slowing down.

7:47Yeah, and to go along with that, I mean, you look at some of the new insurgents this year, like you pointed out in the food side, Monica and Graza or Coco June, even Mike's Hot Honey, as you pointed out as well, all kind of fit into this reinventing categories or products that have been in the market for a long time. olive oil, honey, you know, the kids' pouches and yogurt, like bringing a new spin to it that is really catering to a new generation and a new type of consumer. And that's really resonating. These are brands that are really starting to make a name for themselves, not just in natural channel, but all over the country and in conventional retailers as well.

8:31And we're also seeing existing insurgents that have made the list yet again, including Impossible Foods, Kevin's Natural Foods, Catalina Crunch, Chomps, Van Leeuwen. Again, premium positioned brands with better for you attributes, reinventing stagnant categories and really trampling the incumbents. One thing that I did think was a little interesting, and I wish they had to provide a little bit more clarity is they talk about these emerging insurgent brands. So as you stated, Goodles, Coco June and Mike's Hot Honey were part of 18 different brands that were emerging insurgent brands last year. And now they are part of the new insurgent class of 2025.

9:12They didn't actually name the other 15 brands that were part of this emerging insurgent class that had graduated up to becoming full-on insurgent status. But they did highlight that brands like Cleveland Kitchen, solely and belgian boys were part of the 2025 emerging insurgent class which i think is interesting because those are all great brands that we know very well um i'm a big fan of solely actually i have a bunch in my pantry because i love their their take on just the dried fruit and the fruit belts or fruit wraps whatever you call them fruit belts fruit belts what do you call them no one's called a fruit belt fruit leather i guess is the property fruit leather I like fruit belts.

9:55I like it because it's like a belt, you know? You can wear them. You put it on your wrist and then you eat it. Oh, that's how you consume them? You wear belts on your wrist? That's true. Actually, I don't wear belts on my wrist. I think if you call something a fruit belt, you should be able to wear it around your waist. It should be long enough. If you strap a bunch of the solely fruit belts together, you could make a whole belt to go around your body. Are fruit belts like the new candy necklaces? Are we edible accessories? Is that back in, in 2025? I'm all about it. Should be. At least with the dried fruit ones, it might be kind of sticky, though.

10:27You know, you can't wear them for too long. The emerging insurgents, those are brands with between$10 million and$25 million in annual revenue in tracked channels. So graduating up, like you mentioned, Goodles and a few others that had come from the emerging side of things last year. Obviously, they're sustaining strong distribution expansion, velocity growth, and having a strong omnichannel presence is also a big factor here. So one of the key takeaways from this report, in my mind, is that while these brands combined account for less than 2 % of the market share, Monica, you mentioned earlier they drove 39 % of incremental category growth.

11:10Compare that to 2023 when the insurgent brands list that year accounted for just 17 % of incremental category growth. 17 % to 39 % last year is huge. These brands are not just setting the trends. They're setting the pace of the industry. Well, and you're talking about how much more incremental growth this class is driving versus the class a year ago. But there are actually more insurgents this year than there were in previous years. Last year, Bain tracked 97 brands. And this year, like we mentioned, there were 120. So I think that says a lot about not only how powerful these brands are, but how many more of them are rising to this level and achieving this sustainable growth.

12:03It's exciting because it feels a bit like a tale of two cities sometimes in the industry where we can look at all these next-gen brands that are really changing the game, changing the landscape, changing the culture in a large way. Compared to what we've also been experiencing a lot of shakeout in the industry, a lot of other brands that came up around the same time that haven't been able to make it or have been distressed or just struggling to find money. And we see companies that have similar ideas or similar prospects and winners. And I don't want to say losers because sometimes it's just a matter of getting the right luck or getting the right play executed.

12:44But that is something that I think is interesting. We talk so much on the show about how difficult the industry is right now. But we can also look at this class and we see not just the big names like Poppy or your Liquid Deaths. But we see companies have just been plugging along and growing steadily. Remedy Organics, Salty. These are companies that have been around for years now that maybe haven't set the world on fire yet, but they've played it smart and they've kept it going. They've kept it growing. And on the food side, Purely Elizabeth, Bobo's, Kodiak. These are brands that continue to plug away and keep growing.

13:20It is something that I'm sure we will all be returning to look at this list because as you see, some of these existing insurgents are part of the class of brands that were acquired this year. Siete being one of the biggest ones. But as you said at the top, Brad, Alani New and Ghost, Poppy, these are all brands that we've been talking about this whole year that have been acquired. And that is just a sign of where the bigger strategics and the bigger food and beverage companies are looking to grow their portfolios and where they're going to invest significant amount of capital. One last thought on this is that I think you can look at this class of brands here and maybe not every company is doing everything perfectly.

14:08Maybe there's stuff we don't know about behind the scenes, but you can look at every brand and you can take lessons away of what they've been doing right. Whether it's their product, whether it's their branding, whether it is their strategy and their execution and their merchandising. There's lessons in every single one of these brands. And I think they all stand out in a very distinctive way that when I look at these logos here all combined, I think, ah, yes, them. They feel so different and stand out on the shelf so much from the next brand right next to them. And we write about all these brands and how they're operating differently and some of these case studies that they're showing the rest of the industry.

14:47So it's great to see them celebrated in this way. And we'll continue to be distilling lessons from these insurgents going forward. And here are some other notable bits of news from the week. Why blended meat brands are struggling to gain ground in retail. Highball energy returns to brick and mortar. And a conversation with Yum Earth's CEO on trends in the candy category. For these stories and more, become an insider at BevNet and Nosh. 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 Ouellette.

15:27If you enjoyed the podcast, please subscribe on your listening platform of choice and we will see you next time.