Why Entrepreneurs May Benefit From The Mars/Kellanova Deal

0:10Hello, and thanks for tuning in to Taste Radio, the number one podcast for anyone building a food or beverage business. I'm your host, John Craven, and I'm here with my colleagues, Jackie Brugliera and Monica Watrous. Hello. People wouldn't even be able to know the difference between you and Ray. I mean, I rehearsed for so long just to get my Ray voice. It's uncanny. It's as good as it's going to get. But yeah, Ray and Mike are off on vacation or doing whatever it is they do this time of the year. So we'll promise a soccer or English football free episode for once. Also, Monica, your first time on Taste Radio here.

0:52Yeah, I'm really excited to be here. And I guess also we'll give a little plug for CPG Week, which apparently Jackie and Monica just recorded before this, I believe. So really epic episode coming soon. Two epic episodes coming soon. So I'm going to be in Utopia next week during our usual recording time. So we went ahead and recorded an extra episode so we can not miss a week. Lovely. Yeah. And check out social media because there's going to be a great reel of Guy Fieri, I think, coming from one of those episodes. Oh, boy. You got one of you guys doing like an impersonation, I hope. You'll have to listen to figure out what we're talking about.

1:33But it was epic. Nice. And I guess since you mentioned it, Monica, next week is Newtopia. Now you're, I think, one of two people going from our team. So what are you expecting at that? Yeah, I'm not really sure. I know this is going to be a new experience for attendees and exhibitors alike. For those who aren't familiar, this is the show that is replacing Expo East. Oddly, it is in Denver, which is not on the east side of the country, but it's going to be, I think, a scaled down expo compared to, well, definitely compared to Expo West. As far as I know, the booths are all about the same size. So there's not like a giant island booth in the middle that's competing for your attention.

2:17So I think it's intended to democratize exhibition space for folks and also allow for more one-on-one meetings with buyers. and yeah, I'm not really sure what to expect, but I'm excited to go. Well, you'll keep us posted. And obviously anyone who is there wants to talk to our wonderful NOSH managing editor, keep an eye out for Monica. She'll certainly just write about your company. Don't make any promises. No, but hopefully it'll be a good event. And yeah, curious to see what comes from it. Unfortunately, So we'll not be there, but I guess I'll be probably creeping your Instagram or something like that.

2:58Oh, yeah. One other sort of event housekeeping note, I think the applications for our pitch competitions that are Nosh Live and BevNet Live are open now, correct? Yes, they're all open. Head to BevNet.com slash events. You'll see BevNet Live and Nosh Live listed there. At BevNet Live, we have both the New Beverage Showdown and then we also have the Cocktail Showdown. So if you are a non-alc beverage, head over to the New Beverage Showdown application. And if you are an RTD Spirits brand, head over to the Cocktail Showdown application. And then for Nosh, we have the Nosh Pitch Slam. And I believe both of you will be judges again this round.

3:37So they'll have to face both of you for feedback, comments, questions, concerns about their products. There you go. If you need a judge for the Cocktail Showdown, I'm also available for that. There you go. I'm not kidding. That's the dangerous competition to be a judge during. So yes, crazy to be talking about December, but it will be here before you know it. So pretty crazy to see people registering and stressing about hotel rooms and stuff like that. But yeah, don't delay. I guess the room block, especially for BevNet Live, always fills up super fast. So maybe not as bad as the Expo West room block, which hoping our listeners who had marked their calendars for I think it was this Wednesday had success getting rooms but or last Wednesday excuse me anyway moving on I think we have to talk about the mega deal of the week I guess mega deal of the year probably past couple of years of Mars acquiring Calanova for you know just some small change 36 billion wanted to see kind of what the reactions were especially on Monica's side?

4:49Yeah, so it is the biggest deal of the year. It's probably the biggest deal in the last maybe 20 years in food and beverage. For context, some of the big food and beverage deals that, well, Kraft Heinz obviously was a notable one, but Danone buying White Wave for $12.5 billion in 2016, General Mills buying Pillsbury for$10.5 billion in 2001, and PepsiCo buying Quaker Oats for$13.4 billion in 2000. This deal is still bigger than those three combined. So it brings together a number of legacy brands like Rice Krispie Treats, Pop-Tarts, Pringles, Cheez-It with Snickers, M &M's, Starburst, Skittles, Dove, Twix.

5:31And that portfolio of businesses together would represent more than$63 billion in sales. Pretty insane. I mean, I think also just some of the brands coming together, hard to not imagine there being some potential product collaborations in there. I don't know. I feel like M &M everything would probably sell well, but also just curious, I don't know what you guys think about maybe potential opportunity that this creates for emerging CPG. And, you know, one of the takes that I saw on LinkedIn that I really liked from our dear friend, John Foraker of Once Upon a Farm, you know, who basically is calling this something that he thinks will start to move the investment and M &A environment for CPG.

6:18I think his exact words were, often it takes just one big rock to fall to start an avalanche. Curious what you guys think of that. I definitely am pretty in agreement with his perspective just to put that out there. Yeah, I would agree too. I think people love these big headlines. They love to see that there's movement, there's money flowing in, and it just opens the door, opens the conversation, makes people feel confident in the space to invest. And yeah, I feel like it's only going to be positive for emerging brands moving forward. I think it's an interesting departure for Mars because if we look at their recent transaction history, you see some premium and better for you brands like Kind, True Fru, Heaven's Natural Foods.

7:01And then to make this move into the more indulgent legacy mainstream acquisition, it's an interesting move. And I don't know what that means for emerging brands. I think it means maybe less money available for those kinds of bolt-on deals. Well, I think it also, you know, I think I would agree with just what Jackie said of general confidence, right? But I do also think that, you know, when big companies combine to get even bigger, the other companies that are in the space that maybe, you know, buy share now get a little smaller, I don't know, take like a Pepsi Frito-Lay situation, maybe other companies need to acquire to keep up.

7:42You know, I'm curious if we'll see a wave of acquisitions from other players who aren't part of this that now, again, feel like they better move now or move soon or they're going to miss out. I think if you're looking at the deal itself, snacking is not going anywhere. Snacking is a huge opportunity and it's really smart of Mars to enhance its exposure to the Salty Snacks category, especially as it competes with Hershey, which has been building its Dulcy Snacks portfolio for the past few years with its acquisitions of Skinny Pop and Pirate's Booty and Dodd's Pretzels. Yeah, it's also interesting.

8:20There are some brands that I feel like overlap and play in similar spaces like Rx Bar and Kind and Nutri-Grain and Nature's Bakery. So I think that just shows that there's opportunity, even more opportunity in those spaces. I'm curious what they're going to do with those brands too and how they're going to work together and how they're going to grow the space together. But I think in general, like Monica was saying, they're, you know, investing in snacking and a lot of the brands that we're working with, they are healthier, better for you snacks. So that only bodes well for that category. Definitely.

8:52Well, I'm sure, you know, this is only a week into this deal. I'm sure it's going to be a while before we actually can feel and, you know, maybe identify the actual ripple effect from it. But either way, I think it's, you know, it's pretty exciting stuff just to see a deal like that take place in this environment where there kind of haven't been a lot of big deals in a while. So again, maybe, maybe it'll just be wishful thinking. But I guess right now feel kind of optimistic that this will yield other M &A activities. So we'll see. Stay tuned to Nosh and BevNet, of course, on that front. All right.

9:32Well, now I think it's a good time to talk about some of the products that we're all snacking and drinking. And I feel like it is only fair since Monica's a first timer here. We've got to start with you. Okay. Well, I was at Whole Foods this weekend and I picked up the new Chia Smash product. They've expanded into snacking. Chia Smash is known for its flagship lines of low or no sugar jams that are made with chia seeds. And now they are doing smash bites, which are these poppable cashew or peanut butter based bites that are filled with like a gooey jam. And they're positioned as superfood snack bites.

10:14I know the term superfood is something that you've talked about on taste radio before. Or I don't know what really makes it super. I guess there's dates and chia seeds and fruit. But the products are really tasty. And I think it's a Whole Foods exclusive right now. Yeah, I think we did sample those a few episodes back. But interesting to know that they're out there at retail now since I'm pretty sure ours were maybe pre-production. But yeah, chia smash stuff is pretty darn tasty. And the folks there are so nice. Yeah. And you said one of them has peanut butter in them or all of them have peanut butter?

10:51One is peanut butter with grape jam and the other is cashew butter with blueberry jam. Cool. Well, speaking of peanut butter, I actually have some peanut butter over here. Something that I feel like I haven't seen a lot of innovation in, haven't seen a lot of new peanut butters coming out, maybe other nut-based butters. This one's called One Trick Pony, which I kind of like, you know, the name, they're just doubling down on the fact that they're just doing something really simple that, you know, might not be as thought of innovation or innovative as other things. But their big point of differentiation is that they are sourcing their peanuts from Argentina.

11:29And that's supposed to make these tastes even tastier, which I guess, just is the question, you know, whose peanuts is the best peanuts? That's my question. I mean, do you give that like a PB &J test or what's the way to figure out if it's actually good? I mean, you have to just eat it plain first. I mean, I'm going to definitely do like a taste test. Like maybe this is a real idea. Have like Jiffy, have some other peanut butters with like different peanuts from different places and just really do a blind taste test. Because I personally can't notice a huge difference. But they do have kind of crunchy peanut butter.

12:05They have unsalted peanut butter. they have silky smooth and they also have these like little to-go squeeze packs so they hit the nail on the head with all the you know traditional versions that people are expecting what else is in it it's literally just peanuts just peanuts no added oils or anything uh just and this one a little bit of sea salt but yeah just peanuts a little bit of sea salt so i guess that's another great thing that has no added sugar it has no palm oils it's gluten-free and they say it's bread certified which is interesting wait bread certified yeah bread certified so the bread is happy when it has the one trick pony peanut butter on it nice well i love that brand name i mean that's kind of amusing uh would love to try that stuff hopefully we'll get some uh out here at some point hint hint hint i guess i'll i'll bust out some uh refreshment here we just got the new Liquid Death Hot Fudge Sundae flavor, which is a collaboration with Van Luen Ice Cream.

13:09Give this a little test here. This one has 20 calories, so it's not just flavored water, which I guess, I don't know, would you have a hot fudge sundae without a little bit of sweetener in it? I don't think you can. I mean, you'd need a lot of bit of sweetener to be clear, but yeah, I mean, it tastes like chocolate soda. I don't know if this comes in a 19.2 ounce can. Would Do you be able to drink all of that? Like, is it too sweet? Do not think I could drink an entire can of this just because the chocolate flavor is pretty rich. Not for me personally, but yeah, one can has 20 calories. Let's see, four grams of sugar, agave and stevia, as I mentioned.

13:51It's interesting. I mean, it definitely tastes like ice cream. I wonder if anyone's going to try pouring that on top of their sundae. I think Liquid Death did some videos to support this product launch that have people doing all sorts of insane things. Although, you know, in fairness or credit to Liquid Death, the bar for insane things relative to their campaigns is pretty high. So this is really kind of mild for them. Yeah, there's no cannibals or I don't know, Coffin's Death. Very kid friendly, I feel like, product for them. Yeah, I mean, you know, this is fun. Again, I don't know if I could drink a whole one of these.

14:32I kind of wish it were like a 12-ounce can. But yeah, it's pretty cool. Are those hitting stores or are they like limited release online? I think it was a limited release that was on Amazon. Okay. You could also get it at the Van Leeuwen Scoop Shops. Could you? Okay. Yeah, I didn't admittedly read the complete details, except that it had an Amazon link. So I'm like, I'm going to get some. I think they sold out on Amazon like the day that they announced it. It was a pretty quick, quick sellout. But yeah, it's interesting to see Van Leeuwen partnering in this way because we've seen that company do some interesting partnerships with its ice creams.

15:09They've done like a Kraft mac and cheese inspired ice cream. They also partnered with Hidden Valley Ranch to do a ranch flavored ice cream. And they've done pizza flavored ice cream as well as a Grey Poupon ice cream. So it's kind of fun to see them partnering in a different way and also to see Liquid Death partnering with a company, which is a first for that brand, if I recall. Think so? But yeah, I mean, Van Leeuwen, you know, makes great ice cream, too. So I think a good brand to partner with. It's honestly like my favorite sort of widely available or relatively widely available like ice cream brand.

15:50So I was pretty excited to try that. But yeah, I mean, never a dull moment for liquid death either. 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. Moving on, I think at least Monica and I both have the new Diamond Brew Craft Espresso, which is a new take on instant coffee comes in these little kind of pods that you dump out. I was pretty impressed by this. I mean, we've had a lot of instant coffee come our way over the years that promises to be just as good as the real thing.

16:36I guess I did not try this as a replacement for espresso and like a latte or anything, but it's a pretty darn good cup of coffee. I'll say that much. What do you think, Monica? I agree. It was really tasty and I love the convenience. But the unboxing experience too is pretty premium. And a lot of folks already know the founder of this brand. It's Douglas Yu, the Forbes contributor who has covered a lot of CPG news over the years. And this is his first stab at launching his own CPG brand. I think he did a really nice job. Yeah, no, I mean, this definitely has, again, the unboxing experience of this is very different than, I don't know, I feel like a lot of instant coffee has just gone into like stick pack type things, you know, copying the Starbucks via and, you know, they just kind of feel like a commodity, like something that just doesn't have a good experience to it where, you know, this seems like a nice alternative, you know, it does feel like something that has a little bit of a, I don't know, almost ritual to it, which is kind of funny to say for an instant product.

17:44So yeah, I guess, uh, you know, props to, uh, Douglas for this. Maybe he'll, uh, focus on coffee instead of writing. That would be okay by us too, but just kidding. Douglas, uh, super nice guy, lots of, uh, respect for his work, both on this and as a journalist too. So. Yeah. I like the, I like the name diamond brew, definitely premium. It looks like the box almost looks like a box of chocolates, like opening it. And then it has each the individual, you know, pods. I've actually been drinking more instant coffee, weirdly. I've been camping a lot and drinking a lot of instant coffee. And then I just started doing it at home because it's just so convenient.

18:21So if I can have a premium experience, you know, even better. So I'm going to have to try that too. I'm looking forward to traveling with those little pods. I think that that'll be a nice thing to have in the hotel room. Yeah, for sure. I mean, that's it's funny how if you do travel a lot, it's sometimes pretty difficult to get decent coffee. Yeah. Just not a K-cup fan. So yeah, I'd rather have no coffee, but this would certainly be something I would maybe chuck in my bag and take with me. We'll see. Got some travel coming up. So any other products that you guys have that you're excited about lately?

18:58So there's a local company here in Kansas City called Ruby Jeans Juicery. They have non-premise locations, but they also bottle and distribute their juice mostly regionally. They're in some Whole Foods and some other specialty shops, as well as coffee shops and things like that. But I did my first ever juice cleanse because they offer a special regimen for that. And it was not bad. It was actually quite enjoyable. The juices are really good and i have learned that they are a favorite of travis kelsey he gets them sent to him at his house and he was drinking it at training camp recently nice yeah interesting yeah you don't hear a lot about juice cleanses anymore no or travis kelsey oh wait no no no i hear a lot about him yeah yeah i was gonna say even uh we're not in uh kansas city but hear plenty about him.

19:54So yeah, yeah. And I've seen those on your Instagram though. They look, look pretty good. Yeah. They're cold pressed and, and, um, fresh produce. And, uh, one of my high school friends is the COO there. So she's the one who was like, Oh yeah, we've got a cleanse. You should try it. Did you go like hardcore green juice with like no sugar, uh, no sweet fruit in it or? Oh no, no, no. Yeah. That one's intense. Yeah. And what's your, what's your Instagram Monica for people that want to follow along to your new products that you're spotting. It's a what's Monica eating. The handle is at Monica watchers.

20:31Great. There you go. I'm also excited to see just what's going on in San Diego recently. I know a lot of people have been on vacation. They're going to be coming back after Labor Day and we have a meetup coming up in San Diego. So we'd love to, you know, re-engage, see people in person again. That is on September 25th. So that's Wednesday, September 25th from five to 7 PM. All the information is at bevnet.com slash events. I know you Craven and the rest of the taste radio team will be there and we'll have some samples, new products, networking, some pizza, delicious pizza. And then I think we might be doing some content as well.

21:09So definitely check that out. Yeah. Should be a fun time. Always good to get to, uh, our BevNet San Diego office. Those meetups have been a pretty good hit. You know, usually I think get, I don't know, 150 people show up or something like that. Lots of good new samples to try and should be fun. Looking forward to it. Yeah. And for people in San Diego, we're right off of Marina Boulevard near the Costco. Everyone knows where the Costco is. So I always use that as a landmark. Yeah, it should be fun. Don't miss it if you're in the San Diego area or feel like making a drive down from LA. We always get some of those folks.

21:44So should be good. All right. That brings us to the end of this episode. Thank you so much for listening. I'm trying to be Ray Latif here, but we're just going to go with it. I like it. Taste Radio is a production of BevNet.com Incorporated. Our audio engineer for Taste Radio is Joe Cratchy. Our technical director is Joshua Pratt and our video editor is Ryan Galang. Our social marketing manager is Amanda Smirulinski and our designer is Amanda Huang. Just a reminder, if you like what you hear on Taste Radio, please share the podcast with friends and colleagues. And of course, we'd love it if you could review us on the Apple Podcasts app or your listening platform of choice.

22:21Check us out on Instagram. Our handle is BevNetTasteRadio. And as always, for questions, comments, ideas for future podcasts, please send us an email to ask at tasteradio.com. On behalf of the entire Taste Radio team, thanks for listening and we'll talk to you next time. Thank you.