What Goodles' $500M Acquisition Says About CPG Innovation

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0:37Hello 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 I'm with my co-host for this episode, John Craven, Melissa Traverse, and Mike Schneider. This week, we dig into Barilla Group's acquisition of Goodles and how the mac and cheese brand's success reflects growing demand for better-for-you versions of familiar legacy products. We also look at Medici brand's$2.2 billion valuation following its Series B raise, the launch of its Better For You candy brand Hall Pass, and the company's strategy of rethinking two of the most familiar formats in CPG, candy bars and protein bars.

1:24We sample Hall Pass and get a sneak peek at David's new seasonal pumpkin spice bar and protein shake. Finally, we've got a big celebrity move in the functional beverage space. Kendall Jenner is joining Trip as a shareholder and global ambassador. Welcome back to the studio, everyone. Hope everyone had a good long weekend. I know it's three days past Labor Day, but hopefully no one was actually working on the day because we have a lot going on in the weeks and months to come. That includes our Taste Radio meetups in San Diego and San Francisco that are happening next week in San Diego at the BevNet West Coast branch on September 15th.

2:04that is happening from 5 to 7 30 p.m you don't want to miss it if you're in the san diego area or really anywhere in southern california and can make that little drive up from perhaps la or drive down excuse me don't drive up don't drive up i mean unless you want to go to san francisco if you're in mexico you could drive up if you're in mexico drive up but once again september 15th September 17th, two days later, we'll be in San Francisco at the San Francisco Brewing Company. They have a brand new facility that will be hosting the event at. All the details are at tasteradio.com slash meetups. Many more details to come, including who will be speaking at the events.

2:50I'm really excited to sit down with one of the co-founders of the Angel Group. That's happening at the Taste Radio San Diego meetup. Her name is Maddie Cereventi. I hope I'm pronouncing her last name correctly. But as we all know, the Angel Group is a network of angel investors that have been involved with some of the most high-profile CPG brands in recent years, including, of course, Poppy and a little brand, small up-and-coming brand called Goodles. Has anyone heard of Goodles? I've heard of it. Yeah? Yeah, I've also heard of it. I don't know much about them, though. No? No, that's too bad. because they were sold.

3:30Just kidding. Yeah. Don't you have a webinar with... We just did a webinar with Goodles and Culture Pop, and it was phenomenal. I love how you pronounce Goodles, Goodles. It's a very Massachusetts thing. Goodles, Goodles, Teva, Teva, just eat the damn noodles. Yeah, it's good noodles. That's how I think of it. Oh, I like that. Maybe that's where they came up with the idea. Anywho. Oh, boy. What? What's wrong with that? It's possible. Anyway. Good job, Captain Obvious. Potato, patata. Last week, it was announced that the Barilla Group, the Italian pasta giant, agreed to acquire Goodles, which is, we know, is a better-for-you mac and cheese brand.

4:09According to a story written by our very own Shauna Golden, financial terms of the transaction were not disclosed. But upon closing, Goodles will continue to operate independently as a standalone brand, quote, free to make its own decisions about product, recipes, quality, ingredients, suppliers, marketing, and more. Kind of interesting. Do they have to use Barilla Pasta, though? I don't think so, but maybe in the future they will. They kind of messed up if they don't. If you're a pasta brand and you don't have a protein pasta, what are you even doing? I was actually at a Whole Foods this weekend and I saw DeChico had an entire end cap of their protein boost pasta, which I hadn't seen before.

4:49So if you have pasta, you got to have protein in it somewhere. Lorela was OG with protein pasta. They had it before the protein craze. Did they? I think they kind of started it. Were they using beans or something? Chickpeas, maybe? Chickpeas? Yeah. Well, congratulations to co-founders Jen Zesnut. Excuse me. Zes Zut. I don't know how to pronounce her last name either. Zes Zut. It's called Gen Z. Gen Z. Oh, my. That's even better than a dad joke. Anyway. It was a dad joke. That's just a joke. Yes. Jen Zes Zut. I better remember how to pronounce that name because I'm going to ask to interview her soon.

5:27And, of course, Paul Earl, who is the co-founder and creative genius behind Goodles. According to the article as well, all 73 employees will be retained with no changes to the reporting structure. That's also good news. Good news. I wonder if it's going to cut their Squishmallow budget. What are you talking about? The squishies that they have at Expo West, the plushies and stuff. That's really fun. Well, hopefully you hoarded some away and you have a good... You could sell them on eBay. Sure. Do people still sell stuff on eBay? Oh, yeah. Yeah. Did last week. Yeah. Bro. Yes. Well, I'm going to have to ask Matty about this deal because the Angel Group invested in Goodles back in 2020 when the brand was in its infancy.

6:08And this is a classic case of incremental betterness, right? You're not reinventing the wheel here. You're just making something that everyone understands, everyone's eaten at some point in their lives, but making it a little bit better. Exactly. Yeah. And this is John Craven's favorite talking point, which is you don't need to change the world when it comes to innovation. You need to just make something that is incrementally better than what is currently available. Well, at least in this business, that seems to be the case because you didn't really have to do a heck of a lot of education for somebody to understand what Goudl's was.

6:46You see it, you know exactly what you're going to get, and you can see that it's got, you know, more Epicurean flavors. I mean, it is the classic, you know, you took an area of the store or category, whatever, that has kind of a lot of similar old legacy brands. And you gave it a modern, fun brand and you gave it modern, fun flavors. But you also had the Trojan horse in that category, too, that you could follow the playbook of, which was Annie's. Yeah, absolutely. I think this is a brand that spoke, to your point, a bit more to Gen Z consumers. It had a very nostalgic vibe, but also familiar vibe and just felt different.

7:26It was not your mom and dad's or even your older brother or sister's mac and cheese brand. It was theirs. It has protein in it. It has fiber in it. And they really have done such a good job with the flavor. The noodles themselves have some toothsomeness to them. Like sometimes with Better For You pasta, it just turns into mush. They did an excellent job with the product development, which is why people keep buying and eating it, obviously. It has cheese with an S, not a Z. Also, this brand spun up and sold pretty fast compared to a lot of brands that we've seen out there. About six years. Goodles debuted in 2020.

8:02That's pretty standard. I don't know. I feel like that's what so many brands want, but it's hard to achieve. Another really interesting part of the story that Shana wrote, she quoted data from the Wall Street Journal that indicated or stated that the brand, Goodles, captured 7.8 % of U.S. spending on shelf sable mac and cheese during the 12 months ending in June, up 0.8 % from three years earlier, according to numerator data cited by the Wall Street Journal. That is crazy. It's crazy. In that webinar, I was talking to Stephanie, their head of marketing. I can't remember what the exact number was, but it was something like 80 % of the people who are eating and buying Goodles have not been eating mac and cheese.

8:48They haven't been eating Kraft. They haven't been eating Annie's. It's new business, which is incredible. That is amazing. And I think it also speaks to the interest that investors have in CPG, in food and beverage CPG. And it's another acquisition that we've seen, another huge acquisition that we've seen just in recent weeks. I mean, about three weeks ago, it was announced that Purely Elizabeth was being acquired by Ferraro. And even though the acquisition price was not disclosed, as I mentioned on this show, and other investors have pointed out, it was in the range of$850 to$900 million. Our dear friend, Kyle Fitzpatrick, who's the founder of Paperboy Ventures on LinkedIn last week, noted that Goodall sold to the Barilla Group for about approximately$500 million.

9:39And, you know, he would probably know he is in that world and pretty dialed in. So remarkable stuff. Hey, listeners, this September 10th roundup brings jobs at cpgjobs.com from Barrel RM, Revolution Brewing LLC, and Good to Grow. Harkin Sweets, Russian River Brewing Company, and Trade Turbine keep it rolling. Check opportunities and apply today. Need great people? put your opening before category pros following the industry. Reach operators, sales leaders, supply chain pros, and retail buyers spending more time with candidates and less on mismatches. At cpgjobs.com, post your opening. Use code TASTERADIO26 and save on the listing.

10:25More than 70 % of new CPG products fail, often over margins founders never fully understood. Good. Outsourced accounting can close that gap for good. Visit belaysolutions.com slash bevnet for a free small business accounting guide from Belay. Your inbox should reflect the parts of CPG that matter to you. Choose from BevNet's seven free newsletters covering beverage, food, beer, spirits, careers, education, and more. Sign up and select your favorites at cpgmedia.com slash newsletter. Of course, we can't talk about acquisitions in big numbers without talking about Medici Brands, the founder of David.

11:07Well, the owner of David, the founder of David is actually Peter Rahal of RxBar fame. Medici Brands recently closed on a$250 million series B round that valued the company. I get this 2.25, Mike, you can do it. Billion dollars. There is the pinky. There it is. $2.25 billion? That's a lot. Okay. Look, we've been in this business for a long time. John, you've been in this business longer than all of us. Have you ever seen a company achieve that kind of valuation this early into their development? Maybe. Don't know off the top of my head. Okay. But that's quick. It's pretty outstanding. It's pretty remarkable.

11:45It's an exceptional number to see at a time when, what, maybe two years in, if that? and a lot of credit to Peter Rahal, who is moving as quickly as he can. And really, I think, attempting to deliver again, that incremental change that people want out of protein bars. And as we're seeing out of candy bars, and as we're going to see very, very soon out of protein shakes as well. I mentioned candy bars because Medici brands recently introduced a new brand called hall pass spelled like you would expect it to be spelled and hall pass is a maker of well i don't know if i could call it better for you because they contain artificial ingredients but better than existing candy well that is what better for you is i guess that is better for you it's a different type of better for you it's a different you don't have to reinvent better for you you can just use it better for you is not a one-size-fits-all right okay so technically better for you.

12:48They make peanut butter cups. They make VFY. Although, that's actually a good point. Is Diet Coke better for you because it has zero calories and zero sugar? No. But there's better for you Diet Coke. Better for you Diet Cola, rather. If you want to talk about Nixie, I know you're going to bring up Nixie. I would say that's better for you Diet Cola. Zero calories, zero sugar. It does have aspartame in it, though. Diet Coke does. Yes. But anyway, Hall Pass is debuting in Walmart stores exclusively. They have three products out right now. They have an M &M type product, which they call chocolatey candy pieces.

13:20As I mentioned, they have peanut butter cups and they have a peanut cream crispy wafer, which is KitKat-ish, but not really KitKat-ish. It's just different. All of them contain 70 calories per package, one gram of sugar. Well, you know what would be great, Ray, is if we had Peter Ray, I'll come to... Nosh Live. To Nosh Live. Yeah. Or BevNet Live. Well, yeah, exactly. He's got products in both food and beverage, and maybe we can have some Hall Pass on hand and some David Bars on hand at both events. Of course, Nosh Live is happening on December 3rd and 4th. BevNet Live on the 6th through the 8th.

13:56And BrewBound Live December 9th and 10th. Very exciting stuff. You don't want to miss any of the events. I don't know. Perhaps if you're an investor or a retail buyer or distributor, you might come to all three. But if you're in any of the one particular industries that of food, beverage, beer, or adjacent beverages, as I like to call them, you definitely need to be at these events. And of course, yes, we would love to have Peter Rahal on stage at BevNet Live or Nosh Live or Post. Industry legend Bill Shufeld says you should come to all three. There you go. You know, I was talking to the team.

14:28He said it. Not you. It was him. It was him. I was talking to the team at Pepper Tux last week, and they were saying that they met their primary investor and they met the retailer that they just did a big launch in at Nosh Live. So that's the kind of stuff that happens. Outstanding. And yes, we are going to be announcing speakers over the next few weeks for all three events. So stay tuned for that. I have a feeling we're going to hear some pretty big names. We're going to keep you up to date on those names and all things that are related to the events in podcasts to come. So keep listening to Taste Radio and keep your eye on BevNet, Nosh, and Boobound.com.

15:10Obviously, there's a.com after BevNet and Nosh. It's not obvious, right? Mike likes to point that out. Ray's the guy that still finds websites by going to Yahoo. I love Yahoo. I really do. Of course you do. Of course I do. What's wrong with Yahoo? That's right. That's the now who's dating themselves. Okay. I just, I have like so many useless jingles in my head and I can still hum the whole what's happening theme song. So the one thing I'll say about Hall Pass is that I mentioned these contain artificial ingredients. They're artificially flavored specifically. And, you know, I was having lunch the other day with a few industry folks and someone pointed out that because Because Diet Coke has been a beverage of the moment for a lot of folks, fridge cig, and they seem to, they call it a fridge cig, and they don't seem to care that Diet Coke does have artificial ingredients.

16:04Who's to say that consumers are going to care that much about Hall Pass having artificial ingredients, especially when these products only contain 70 calories and one gram of sugar? 70 calories is a good number for, I'm actually holding the chocolatey candy pieces here. I mean, it's a significant number of pieces of candy that you get here. I tried these and it's probably no surprise to anyone that they weren't my favorite. When I tried them, I think I immediately just tasted the sweetener system, the fat system, the color and flavor system. You taste the colors? Well, I mean, I didn't taste it like...

16:42What is that, synesthesia? Synesthesia. I can also taste... Taste the rainbow? I can taste sound. How much LSD were you having before? No, I'm just kidding. They were speaking to me. But I didn't taste candy. I tasted the whey powder and the corn. Man, womp womp from Melissa. Yeah, womp womp. I don't know. It didn't taste like candy to me. So this stuff, I'm looking at the back of the peanut butter cup here. It's got some recognizable non-nutritive sweeteners, allulose, erythritol. Tagatose. Sucralose, S-sulfame, potassium. I think it's actually pretty good in terms of products that have gone heavy on alternative sweeteners.

17:19maybe a little bit of like an aftertaste, but I don't know. These stack up pretty good compared to like a Reese's product. There's definitely better, higher-end candy out there, but I think for what they're going for, which just seems like, again, mainstream, I'm kind of impressed with the flavor. I mean, so first of all, you guys have been hoarding this thing for at least a week, and I finally got my hands on the peanut butter cup, which is my favorite candy. I'd say this is maybe my third favorite CPG peanut butter cup. This is pretty good. Interesting. I will say the chocolatey candy pieces seem like the weakest of the three.

17:55That's the only thing I tried. I mean, if you're wondering what the ranking would be, Superfoodio, nothing touches that. And then Reese's peanut butter cup and then Hopass. Justin's doesn't make it on there. There's so many betters. They're pretty good. They're pretty good. Pretty good. So I think to Peter's credit, he is focused on flavor first and foremost. When David Barr's first came out, people were not enamored with the flavor. And he's like, look, we got to make this taste better. And so he said, if we need to include artificial ingredients to make it taste better, that's what we're going to do.

18:25And David Barr is currently contained artificial flavoring. And so the way to get people to eat better food is training wheels, is incremental. Like you've got to start somewhere. You got to say, okay, this is a better product that has a similar taste to what you expect. Now, eventually, and I hope this is the case with David and Hull Pass, they'll get to a place where they can remove those artificial ingredients and make it taste better. They're not there yet. David also introduced a new pumpkin spice flavored bar. I assume this is a limited edition product just for the season. I have not tried this yet, but it comes in this beautiful pumpkin-y gold wrapper here.

19:05Let's give this a whirl. It is very orange. Yes. I mean, I hope you like pumpkin. And the bar is very orange, too. Oh, man. Ray sampling. Oh, my God. Wow. I don't have to touch a glass. That is so orange. It's insane. That's like taste radio orange. It is taste radio orange. Oh, yeah. It's very good. I mean, the texture is excellent. The flavor of the pumpkin is not overwhelming, but it's spicy. I found it to be awfully pumpkin. This is delicious. Yeah, it really is. It's good if you like, again, you better like pumpkin. Ray does. Why would you pick up a pumpkin David bar if you don't like pumpkin?

19:38I mean, there's degrees of pumpkin, John. That is like, that's maximum pumpkin. Does it have the pumpkin spice in it or is it just... It is a little bit spicy. Yeah, it's pumpkin spice. Yeah, it's pumpkin spice, but this is several times better. That's like Starbucks double sugar pumpkin spice latte level of pumpkin. Of pumpkin. But this is again several times better in terms of texture and flavor than the original first David bar. I think it's good. Yeah. If you like pumpkin. How many times do you have to say pumpkin? Well, a lot of people hate pumpkin spice with the ferocity that is incredibly hot.

20:13Yeah, they're just tiring. Agree. So again, don't touch it. Yeah. If you don't like it. The last thing I want to say about the Hall Pass, by the way, this to me is really intriguing in the sense that compared to David, which is very much like a functional product, this has no tie to David. Right. And it's not really pitching you anything hard. It's just kind of letting that 70 calories per package be the hero, which I think is kind of a clever strategy, to be honest. You know, it's just simple. Like it doesn't need to say much else, you know? Yeah. And they are using EPG in the Hall Pass products as well, which makes sense.

20:55But there's two grams of protein in this, so it's not like something that you would market it for having protein. Right. Notable also that the one gram of sugar call out is pretty small in the package. I think a lot of times consumers will see a low sugar count and think this is not going to taste good. So interestingly, they don't call that or I guess strategically intelligent that they don't call that out as much as they probably could. Well, once again, kudos to Peter and his team. They are pressing on the gas and doing some really remarkable things in food and now beverage as well. Stay tuned for our discussion and perhaps a review of the David Protein Shake, which I believe we'll be getting soon.

21:59Visit VibrantIngredients.com. The Angel Group was among the first believers in brands like Poppy, Bachans, Goodles, and Siete. The next generation of great consumer brands is being built right now. Learn about investing alongside other industry professionals at WeAreTheAngelGroup.com. So I got a great email last week from the co-founder and CEO of Temple Lifestyle Brands, which is a Canadian-based functional beverage platform that is a maker of Thirsty Buddha Coconut Water and Rise Kombucha. The email was from a man named Chris Magnon, and his last name is spelled M-A-G-N-O-N-E. I'm trying to pronounce it as they might in Montreal.

22:46He noted that we screwed up last week, or maybe I screwed up last week. We screwed up? What? Again? How is that possible? What did we do? One minute he said, just for context, I was talking about the Montreal Expos and how the team was moved to Miami and became the Miami Marlins. I was wrong about that. As Chris pointed out, just listen to episode 858. And as a Montrealer, figured I would let you know that the Expos moved to Washington, not Miami. That's right. It's true. Yes. He noted that it's still painful for us. Not sure if you saw the documentary on Netflix that released this year, but it's good.

23:20I knew all of this. I just didn't want to call you out on that. Yeah, I don't care about MLB enough to correct that. Yeah, yeah. I did watch that documentary, though. Oh, yeah? Yeah, it was pretty good. Okay, well, as noted, yeah. They had top uniforms, the Expos. I can see why they'd be sad that they would leave. The Expos, I mean, it's just a really fun team. Montreal's a really fun city, and Chris pointed out that we need to swing up to Montreal and make a trip soon. Maybe a future taste radio. Yeah, we need another international taste radio meetup. Maybe Squares is up there. Yeah, let's do it.

23:53a few good brands up there it's done we're going to montreal folks jake we're coming up but if you do have an idea for a future taste radio meetup location we'll take suggestions yeah for 2027 we do have some ideas for expansion sorry chris oh i see what you did there okay yeah uh let us know send us an email to ask at tastereader.com if you have some ideas for cities for future meetups. All right. As per usual, we have a lot of new products that were sent to the office over the past week. And we have an extra day because no one was in the office yesterday. So we have about eight days worth of new products instead of seven.

24:34Melissa, I think a Capri Splash flavor. I am really interested in this. This is an interesting flavor for a familiar brand. Yes. So I have Koya's new protein pop here in front of me. I'm holding the Capri Splash. I also have the Pink Twist and the Sour Squeeze. I haven't tried this yet. These are new flavors for their protein pop line, if I'm not mistaken, right? Yeah. Yeah. So it's protein pop, two grams of sugar, 10 grams of protein, four grams of fiber. Before you sip that, I'll indulge with you. Okay. Oh, you don't want Melissa's germs on? I don't want her to drink alone. Okay. I appreciate that.

25:15Cheers, Mike. Cheers, Melissa. So Koya, which is Helms and co-founded by Chris Hunter, they introduced protein pop. Was it earlier this year or last year? I can't remember. I'm getting all the timelines mixed up. I think it was earlier this year. I think earlier this year. Like around Expo West, maybe? Yep. I love Capri Splash as a flavor. That's such a fun idea. It's something like it makes you think of Capri Sun. It kind of tastes like Capri Sun. But again, that sweetness that comes from the stevia and the monk fruit, it's a strong sweetness. Yeah, I'd say the flavor needs a little bit of work.

25:53The can's fantastic. Value proposition works. All that's, you know, it's using the Koya brand. It screams protein pop over Koya, which I think is fantastic. And I really like the graphics. Yeah, the design is gorgeous. And again, Capri Splash, that sounds like something I'd want to drink all day long. What's the protein they're using? So much fun. They are using clear pea protein. Pea protein is one of those that the flavor is really hard to mask. I also find with protein sodas, the thing that turns me off immediately is usually whatever sweetener they're using. It just comes out so strong a lot of the time.

26:27Well, again, they're trying to mask that pea protein, which is very strong flavor. I'm curious as to why Koya felt like they needed to use sort of made up names for the flavor as opposed to familiar ingredients. So as Melissa pointed out, they have a sour squeeze, a pink twist, and a capri splash. I think one could deduce what the flavors might be based on the color of the can. Sour squeeze seems like lemon and lime. In fact, they do have lemons and limes on the can. Pink twist feels like a grapefruit flavor. But did I see a watermelon as well? Yep. Yeah, it's a watermelon. And the capri splash looks like it has some oranges on the can as well.