Is Another Massive M&A Deal Right Around The Corner?

0:10Hello and thanks for tuning in to taste radio the number one podcast for anyone building a business in food or beverage. I'm Ray Lateef, the editor and producer of Taste Radio, and with my co-host for this episode, John Craven, Jackie Brugliera, and Mike Schneider. I want to tease some of the products that we're going to be talking about in this episode, and not necessarily products that we're going to be eating or snacking on or drinking, just products that we'll be talking about, brands that we'll be talking about, including Funyuns. Weird, right? Yeah, I thought you were going to say a product that rhymes with bunions.

0:43No. uh olipop poppy big surprise right sachet which is not a product it's a brand it's a bottle shop also a bottle shop also wild wonder key and anybody else oh let's just say i have a plant-based beverage okay plant-based beverage i've got a surprise okay mike's got a surprise too i think you're also talking about pop tarts too we are talking about pop tarts yes so uh tune in for all those. Mike and I decided to wear the exact, well, not the exact same outfit, but a very similar outfit today. It is 85 degrees outside in Boston. It's quite cooler here in the office. It's like 52. About 52. But even I'm not wearing a collared shirt underneath my BevNet hoodie.

1:29What is going on with that? I wanted us to wear the same uniform for a change. Yeah, but that's, that's, you got the only chance. Are you not sweating your neck off? This feels like you're going to, you're going to start it's a it's a polo i feel like you guys are going to start talking about being made with real egyptian cotton 500 thread count that would be if adam merch link in bio that's right while supplies last is that just like your sweatshirt that you have stashed in your office for when you get cold i feel like i have one of those it's basically my blanket yeah yeah actually i saw john mckenna who is our head of sales wearing adam stearns fleece yeah yeah he stole stearns fleece Yes, he said he wears it all the time.

2:06And you know it's Stern's fleece because he's had it for like 20 years. It's this hideous green fleece that has a patch of like a fried egg on it. It's very strange. Well, that is weird, yeah. It's like grandma's curtains green. It's the kind of thing you would find in a thrift store. And even the kids who like love thrifting, they are not buying that. Not even for a dollar. This must not leave the office then. It must just be a granny sweater for the office. Look, it's a little cold in here, you guys. I don't know what to tell you. The whole building AC does what it does. So we have jackets, fleeces, blankets, whatever you need.

2:43Puffy coats. We do, yeah. Snowmobile suits. I want to let people know, listeners know, that if you're kind enough to leave a review for us on the Apple Podcast app, we'd be happy to send you some clothing as well. If you get 10 people to review, we'll give you a sweatshirt. Is it like you've got to earn different levels? Kind of, kind of. Well, just request with you. We got T-shirts. We got hats. We got, well, we don't have Taste Radio hats. We don't have Taste Radio sweatshirts. But we have BevNet hats and BrewBound hats. We got hats. We got T-shirts. We got some Taste Radio hats. We got hoodies.

3:14We digress. But anyway, send your request. Review us on Apple Podcasts. I know some of you listeners have already done that this past week. Thank you so much for doing so. We really appreciate it. And five-star reviews on top of it. I was expecting like a three and a half, but five stars across the board, which means they like us. They really, really like us. Or their bots. Or their bots. Thanks for bursting my bubble. No, I think that's just, we've got great listeners out there willing to give us good feedback. Thank you so much. They're so willing. And we really appreciate it. Thank you so much.

3:45If you haven't, it's very easy. Just go to Apple Podcasts on your phone. I don't think you can do it on your laptop. So that's kind of the weird part about leaving reviews. Anywho, I digress. Funyuns. I definitely mentioned Funyuns at the top of the show. People are going to be like, why the hell are you talking about Funyuns after a week in which you talked about Twinkies? Folks, this is not going to be a reoccurring theme that we're talking about junk food. GMOs, yes. Yeah, but loyal listeners of the show know that Jackie is Funyun fan number one. Yes, I know it's like very polarizing and some people hate them, but I feel like Funyuns were my childhood.

4:21It was like I was eating a vegetable. It was like my healthy snack. Oh, geez. It's amazing you're alive, Jackie. Yeah, I look at the ingredients and I see onion mentioned once. They have MSG in that thing? I'm not judging. I'm just curious. I hope so. I don't think so. But the reason I'm mentioning Funyuns this time around is because... How many bags of this do we have? Do we each get a bag? Oh, okay. You get a bag. I don't want a bag. This isn't the Oprah show. So they, Funyuns as in they, have collaborated with a ramen brand, probably the most famous ramen brand, Maruchan. Is that how you pronounce it?

4:57or a maruchan. Anyway, M-A-R-U-C-H-A-N to create a hot and spicy chicken ramen flavored Funyuns. And it was so interesting because Jackie, a couple of weeks ago, brought to the table a ramen flavored popcorn that I believe is a much healthier ramen flavored snack food than this is. But I felt like we had to try this. It is naturally and artificially flavored for those who are wondering. Not surprised. Not surprised. This is a Pepsi product. More specifically, it's a Frito-Lay product, but everyone knows. It does have MSG, so we're good. It does have MSG, monosodium glutamate. I hope so. Yes. It wouldn't be authentic if it didn't.

5:40It also has yellow six lake, red 40 lake, blue one lake. Why does it have blue? I never understood this. You know, Ray, when you mix a little two colors, you get a different color. Oh, yeah. I think you skipped that part in school. I skipped a lot of school, and I'm still here. What color are they? I can't see from here. They are very... They're like a burnt orange. Okay, okay. This tastes like Jackie's childhood. Yeah, that's what I was going to say. I used to, when I thought I was like a top chef back in the day when I was a kid, I would take the ramen packets, like the sauce, the spices, and just put it on anything.

6:17Like noodles, just dry noodles. Wow. Bread, toast. David Chang would be proud of you. I feel like that's a David Chang move. He's actually been very outspoken about the fact that MSG is something that he uses. And I don't want to be 100 % quoting him on this, but I do recall him getting mad at the fact that MSG has been so vilified over the years when it does add quite a bit of flavor. But back in the 80s, everyone said MSG, at least too much of it, would give you the C word. If you use MSG, you're an MS genius. MS genius. All right, I'm going to have a little bit of this. That'd be a great sponsor for us.

6:58I mean... How are they? Adjunomoto, or however you pronounce it. They're just like, they're Funyuns with a little bit of a little kick. Yeah, they're just kind of spicy. He would love them. Yeah. I will save one bag, and I'll bring it directly to you, Jackie. Yes, because you're going to be here. I'm going to be in San Diego, along with Mike and John. Me too. We are heading to Southern California on September 25th for another edition of the BevNet and Naturally San Diego meetup. Naturally San Diego, one of the chapters of the Naturally Network, which supports entrepreneurs in CPG. And as we have in the past, we're going to get the community together.

7:42san diego la anywhere in southern california anywhere really in california i think if you can make the trip we'd be happy to just get on a plane like us we could do that too yeah hop a ride on i think you're making the furthest trip but i mean we can make it a challenge easier than la traffic yeah saying yeah september 25th 5 to 7 p.m there will be food they will be drink they'll be networking and maybe some content maybe some content what do we call that taste radio on the road or something taste radio live well i don't know if no it's not really taste radio live recording a live episode it's like taste radio on location taste radio on the go on the go just uh for the two people who believed we do not have a bev net jet bev jet no yeah not yet how about taste radio near cop we have a bev chopper but not a jet we bought a broken down Greyhound bus.

8:36That's about our speed. Oh my goodness. That was unexpected. Fung Wa bus, if anyone from the Northeast remembers that. Yes. No. You will never make it here if it was a Fung Wa bus. There's a 5 % chance we make it. Fung Wa. 5 % or 95 % chance we drive off a cliff. $5 though. So Fung Wa was a low cost bus that was based in Boston. and they would go back and forth between Boston and New York and always, always four hours on the dot. And they would make a stop midway at like the local McDonald's or the McDonald's on 90. And they would always make it on exactly on four hours because they would drive like 90 miles an hour.

9:17You definitely would get passed by one of those. There was a cost of trauma to other drivers, but yes, they'd make in four hours. They did crash at the exit of the town where I grew up, Auburn, Massachusetts. And I remember seeing in the news, it was on its side, it was terrible actually. No one got killed, thank God. No one got killed. But anyway. That got dark. It did get dark, yes. So, by the way, more in the junk food realm. I promise we won't spend too, too much time on this. But I have to mention Pop-Tarts. You know, it was like six or seven years ago that I went to a Pop-Tart pop-up in New York City.

9:49And they made all these different desserts and I think even like a frappe out of Pop-Tarts. And so recently in the news, Pop-Tarts has created a party-sized Pop-Tart. It's like, imagine, I don't know, like a huge sheet cake. A humongous sheet cake, though, that you have to lift with your legs to get off the ground. And it's humongous. And so I saw this on Instagram, figured I should mention it because our dear colleague, Shauna Golden, is our local Pop-Tart aficionado or resident Pop-Tart aficionado. And she was very happy that I mentioned this. And I'm going to try to get a sample. Folks from Pop-Tart, if you're listening, I believe it's a, isn't it Kellogg's brand?

10:33Yep. Kellogg's brand. Dude, have we hated on Kellogg's? Maybe I have. So - You hate on everyone. You don't love hate. Yeah. I don't mean to hate on Kellogg's. If you're big food, Ray's hated on you. Not true. I said these Funnians were not bad. That's true. Yeah. See? Did you see how that works? So anyway, Shauna replied that, well, actually I asked her, is this everything to you or is this evil incarnate? So she replied, it's everything in caps with three G's. That's how the Gen Z kids do it these days. Yeah, I would definitely want a Pop-Tart cake for my birthday. I feel like that's a great option now.

11:11The only thing, though, is toasting. How do you toast a sheet cake of a Pop-Tart? Oh, my goodness. What an incredible question. No, that's such a good question. I didn't realize. John's Pizza Oven. Ooh, Pizza Oven. I think maybe it's because they deliver it. and it's already warmed up. I don't think you can... Oh my goodness. That would be next level. So confused. Yeah. Well, anyway, I'll include the link as to what this looks like and where you can perhaps purchase it. But yeah, that's a good question. Since Pop-Tarts have sprinkles, can we talk about a snack with a better for you ingredient panel?

11:44Did you see that? I mean, you saw a sampling name? No, hold on for a second. Hold on for a second. I'm going to be out of the office the next couple of weeks. And did you see Mike's segue? That was a great segue right there. That was. Thanks, man. Very good. Thank you. Oh boy. We talked about Jackie's birthday and sprinkles. So I'm like, oh, we've got sprinkles cupcake cups here. We've got three different flavors. We've got birthday cake, red velvet, and double chocolate. 80 calories, 70 to 80 calories each. Really nice ingredient panel on these. And super tasty, John. Double chocolate. So I saw these at Expo West.

12:23Sprinkles teased these at the show. And I was like, I need to try this. I don't think they had samples at the time, but I posted it on Instagram. And this was one of the most liked posts that I put out there. People were like, oh, I need to try those. What do they taste like? I'm like, I'm sorry. They weren't tasting yet. And now we have them here in August. I got to tell you, these are fantastic. I had the red velvet and I had a birthday cake. I mean. Do you know who's leading the charge on these? I do. You tell the audience though. The former now Spudsy CEO, Ashley Brown. Founder. Founder and CEO, right?

12:57Yeah. of spudsy ashley rogers has taken on the uh sprinkles cupcake cup roll and she's created these yeah because sprinkles this is their first i well they have bars now too but they're just now getting into cpg or or at least packaged products like these so it's exciting for ashley i'm wondering if she is still doing anything with spudsy or i think we should catch up with her right we probably should we should catch up with her yeah he's always a great guest yes pretty tasty these are delicious though i feel bad jackie does not have any funyuns she has no sprinkles no pom-tarts living through you all more things that you need to bring to san diego okay good call the birthday cake ones are good i hate birthday cake everything really what usually oh my goodness birthday cake is like the best flavor except for birthday cake i like birthday cakes but not birthday cake flavored stuff generally okay yeah i don't like any of that stuff i don't i don't really like birthday cake flavor birthday cake.

13:54That's kind of surprising, honestly, because birthday cake is such a delicious flavor. I mean, it's vanilla with a little bit of extra sugar in it, if that makes any sense. And a weird tang. The birthday cake flavor that always threw me off, though, was the Bang birthday cake flavor. You know Bang Energy? They had a birthday cake flavor that people raved about. Can't say I had that. It was very saccharine. Were people actually raving about it? Yes. It was like their number one flavor. Oathouse birthday cake's really good. Nice. Their birthday cake. Granola butter. Yes. Well done, Sprinkles. Well done, Ashley Rogers.

14:28We got to catch up with you soon. So in the news this week on BevNet, if you're an insider, you would probably know this already, but Olipop. Olipop, the leading brand of gut healthy sodas, or we'll just call them better for you sodas, recently announced a new Shelf Stable line. So they're selling Shelf Stable multi-packs in four can varieties. They have cherry cola, classic root beer, cream soda, lemon, lime, strawberry, vanilla, and classic grape. They're going to launch in select retailers such as Walmart, Meijer, and HEB. This is big news because forever Olipop was a refrigerated brand or has been a refrigerated brand.

15:17And they did so because their key ingredients needed to be refrigerated to be efficacious. And so they figured out a way to create a product that is just as efficacious, but shelf stable. And it's going to, I would assume, open up the door to many new distribution opportunities outside of the cold chain. And it'll probably close the door on the refrigerated product eventually. One would think so, yes. Yes. I mean, no benefit to continuing with that if you don't need to. Well, I got to tell you, Ben Goodwin and David Lester, whom I spoke with recently and who we're going to feature in a upcoming episode of Taste Radio, stay tuned for that, didn't mention anything about a potential discontinuation of the refrigerated line.

16:02But one would expect that. Well, why would they? They have a lot of inventory out there. Yeah, this is true. This is true. But this is a fantastic conversation, if I don't mind saying myself. Ben and David have built a company that is expected to generate$500 million in sales this year. No, not a billion, Mike. 500 million. 500 million as he raises his right pinky to his mouth. And they're profitable, which is incredible for a brand that is six years old and a beverage brand at that. That just doesn't happen very often. So very exciting stuff. we cover quite a bit from top to bottom. Tune in soon.

16:39Meanwhile, Olipop's chief rival, it was revealed this week, has spent, you can believe this,$43 million on advertising from January to April of this year. $43 million in four months. Of course, now Jackie pointed out earlier that, well, before we jumped on the mics, that a lot of that was spent on the Super Bowl ad. Super Bowl, yeah. Yeah. But that's still nuts. $43 million? They don't have a strategic partner. Where's this money coming from? $42 million was the Super Bowl ad. Yeah, I was going to say a pretty small percentage of that was a Super Bowl ad in reality. Yeah, this is true. Yeah. So this information came from a source called Media Radar.

17:27and Coca-Cola led the way in terms of non-alcoholic beverages from January to April. They spent, it looks like about$78 million. Red Bull spent$60 million. And then Poppy was next. Poppy was next with$43 million. After that, it was Gatorade and Dr. Pepper. But I mean, talk about unheard of. I mean, imagine Ollie Poppy and Unheard of with their sales at this stage of their development. But Poppy spending that much money is... Got to spend money to make money, Ray. Welcome to the game of beverage. I mean, that's one of the oldest lines out there, but you would know more than I do because you run a business.

18:07Well, you own a business. Well, we don't spend$43 million on advertising. Tell me about it, right, Jackie? Yep. No. No, I mean, I think it is hard not to look at that. and, you know, again, look at the team that is running that and where the money's come from and how much money they're spending. Let's go off with some context. Who is the team that you're referring to? Or what is the team you're referring to? Again, you could just look at this. I don't want to name names, but, you know, I think... Poppy is backed by a private equity firm known as Kavu. Right. And also, I think, you know, some of the people that are involved in it who have been at other beverage companies, you know, There's kind of only one playbook that they're running, and this upping the spending is typically the later stage part of the playbook before the exit.

18:58Not in this case, though. Well, we'll find out. I mean, are you expecting that? I think we talked about this like the first episode of the year. I mean, I've talked about this constantly. I sound like a broken record. But, yeah, I mean, I would assume that there's probably, you know, at least the goal would be some sort of exit in the not-so-distant future. not so distant future, obviously being left up to each person to decide what that means. But now for someone who is often quoted in mainstream media publications, such as the New York Times and the Wall Street Journal, if, say, a journalist was to call you up and say, hey, or were to call you up and say, hey, John Craven, do you expect poppy will be sold this year?

19:38What would you say? I feel like I've done that interview twice, most recently with AdAge. There you go. Yeah, I think I would say yes. You would say yes. I would say yes. Okay. I mean, you know, if you just think about this sort of logically, if your goal is profitable company,$43 million of advertising is probably for a beverage company. I'm not sure that's going to get you there. That seems like that erases any chance of profit. So what does that do? I mean, that's going to hopefully move the needle on the top line sales and moving the needle on the top line sales is, you know, and having a nice path that's accelerating, you know, is kind of a good story.

20:19And, you know, I think also already being fully shelf stable, which certainly that will help Olipop out as well, makes that something that slides in a certain beverage systems pretty nicely. Well, you heard it here third, folks, because John's already said it twice. I've said this like a hundred times. poppy will be sold this year okay wait no that was a hypothetical wasn't it you it was hypothetical i said for the record i said if only we had a world-class interviewer who could ask him the question instead of i think i suppose that i asked you this question i think i posted this on on twitter uh now the dumpster fire known as x but um i said 2024 2025 that seems like the fastest Okay.

21:02They should rebrand X to Dumpster Fire. That would be awesome. I think everyone calls it Dumpster Fire nowadays. Yeah, it's such a dumpster fire. I don't know. I just, oh, man. Talk about a fallen star there. Anyway, I'm sorry. No, I mean, look, I'm not in any way, you know, hating on either of these brands and all of this is just based on what I see in here. But, you know, I think it really is incredible what both of those brands have built. And, you know, I've said this before, too, but I think, you know, the CSD category has for a long time been a place that kind of hasn't had a lot of like excitement and innovation that's actually managed to gain traction.

21:42And these are like brands that have effectively changed the game. So, you know, they fully deserve to get rewarded for their efforts. So if these companies continue on independently and Nollipop's profitable and follows that path, great. if they choose to exit, you know, great. I mean, I think both are, you know, good things for the overall CPG industry to show that money invested in, in brands can build something of real massive value. And I think they're on the path to doing that. Yeah. I mean, it's amazing to me. I recorded an interview with Allison and Steven when they changed from, or when they changed the brand, essentially from Mother Beverage to Poppy.

22:24And that was in 2020. And I spoke with Ben and David from Olipop early in 2020. I think it was like a week before the pandemic hit. And just to see the growth that those brands have experienced in the past four years, they're outliers for sure, but they've built a whole new subset that just didn't exist before 2020, really. I think the last thing I would just add on that is that as much as they sometimes hate on one another subtly or less subtly sometimes, they kind of do need each other. I mean, I don't think either one of them could have built this category up to what it is right now if it were just one of them going it alone.

23:04So, you know, take that for what it's worth. But it is really hard to build a category and build something that people take seriously when you're like the only one doing it. Right. No one's trying to do it. That generally means it's not a good idea. Yeah. It's not exactly Coke, Pepsi, but it's somewhat like that. I think the more recent example might be Vitacoco and Zico. Yeah, for sure. Yeah. Yeah. Well, Mother Beverage won the New Beverage Showdown before it was poppy, won the New Beverage Showdown. I think it was in 2017, 18, I want to say. Yes. That was the same year that a lot of brands that participated in that competition showed out.

23:39I thought that was a great show. And I bring up BevNet Live because just before BevNet Live, we're going to be hosting our Nosh Live show. Nosh Live, winter 2024, has just announced his first two speakers of the show. And they are some powerhouses in our industry. They are Justin Gold and Jane Miller. Justin Gold, the founder of Justin's. Talk about a great brand of peanut butter cups and peanut butter products. Oh my God, one of my favorites. Yes, he is the chief innovation and strategy officer of Rudy's. And Jane Miller is the CEO of Rudy's. Rudy's is a maker of organic and gluten-free breads and bakery products.

24:23Most recently, they introduced a line of Sando's, peanut butter and jelly Sando's, and some breakfast sandwiches. Super good. And some Texas toast, all of which are amazing. So yeah, very excited. They're going to be speaking at Nosh Live. I've interviewed both of them for Taste Radio. they are just fantastic speakers and inspirational in particular justin who has been working with early stage entrepreneurs for a long time i believe he was an instructor or a mentor at the university of colorado boulder or maybe i'm forgetting which university but where they're based i think yeah he's worked with a lot of folks and been a huge help to so many people in this industry so if you're thinking about attending nosh live you should because you have an actual opportunity to meet justin and meet jane and meet so many other people that are attending this incredible show meet some retailers we've got all kinds of great stuff planned wait till you see get your ticket fun times on the roof oh yeah no context yeah sunsets and the bev copter order the nosh nosh chopper we'll skin at the nosh chopper for that day.

25:35Yeah. Nosh purr. No, I can't do it. Anyway. Quick break. If this episode has you thinking about what's next in food and beverage, explore BevNet and Nosh Insider, our subscription platform with deeper insights from the BevNet team. Visit Tasteradio.com slash insider to learn more. Bottle shops back in the news, more specifically, non-alcoholic bottle shops back in the news. One bottle shop, there's good news. One bottle shop, not so good news. Seshay, S-E-C-H-E-Y, a non-alcoholic bottle shop that has curated a pretty amazing selection of products and brands, announced that they have picked up funding from private equity firm InvestBev.

26:22InvestBev funds adult beverages. And so it's interesting to see that company get into, or that firm get into the NA space. Cechet was founded by Emily Heights in 2021 as a brick-and-mortar boutique for NA alcohol alternative drinks. In January, Cechet partnered with Target to create the retailer's NA alternative set in their stores, which includes Dissois, Kinyo Forks, and Gia. So very exciting news on that front. And not the first time we've seen an investment group fund a bottle shop, a non-alcoholic bottle shop. Of course, we saw Perneau's investment arm invest in Boisson. But Boisson has been having lots of problems.

27:11Our very own Farron Salnikar wrote an article last week about Boisson's problems. As we know, and as we've talked about, in early April, the company filed for bankruptcy. see, they've had a really hard time paying back the people that they owe, in particular small businesses, brands that they carried in their stores who are just waiting for a check and have not received it. So Farron's article details quite a bit about the brands and the founders that are owed money and that are quite upset about this, even though Boisson is seemingly trying to rewrite the ship. Yeah, I think it makes a little bit of sense.