Chosen Foods Sells Majority of Company To Butterfly

Condiment, sauce and oil producer Chosen Foods announced yesterday that Butterfly Equity had acquired the majority of the company. Terms of the transaction were not disclosed.

What is Chosen Foods?

Founded in 2009, Chosen produces oils, condiments, cooking sauces, and dressings all made with avocado oil or fruit.

In January 2017 Chosen was acquired by its then majority shareholder, seed supplier and oil producer Sesajal S.A de C.V. At the time of the acquisition, Gabriel Perez, Chosen’s Chairman of the board and a Sesajal executive, was appointed CEO.

Since its acquisition, the company has invested heavily in direct-to-consumer sales, branding and tried to broaden the use cases for its products, entering new categories such as cooking sauces and launching exotic condiments such as a black garlic mayo.

Sesajal S.A. de C.V. also invested in vegetable snack producers Rhythm Superfoods last summer, telling NOSH at the time that it now had a 50/50 split between ingredient sales and branded CPG products, with a goal of potentially increasing its focus on packaged food items.

How Does Chosen Fit into Butterfly’s Portfolio?

With a “seed-to-fork” focus, Los Angeles-based Butterfly has investments across the food industry, backing companies working in agriculture, aquaculture, foodservice, distribution and branded food and beverage products.

The firm acquired majority control of Pete and Gerry’s Organics in May, a deal that followed its purchases of both Bolthouse Farms and Orgain in 2019. According to a Bloomberg story earlier this year, Butterfly is now considering either a sale or IPO for Orgain and, according to the Wall Street Journal, is currently raising its third fund, with a target of $750 million.

Chosen aligns with Butterfly’s core strategy of acquiring brands that straddle the line between supplier and producer. For example, while Bolthouse has its own branded drinks, bagged carrots, salad dressings and just launched carrot based sausages and zoodles, it also is one of the country’s largest carrot suppliers.

“In getting to know [the Butterfly team] over many months, it was clear their approach, expertise and values align squarely with our aspirations for Chosen Foods, Perez Krieb said in a statement. “This partnership brings unprecedented opportunity to grow globally and expand our impact on consumers’ health through delicious, nourishing avocado products.”

What Does This Help Chosen Accomplish?

After multiple delayed attempts at launching into the produce aisle, the San Diego-based company finally succeeded when it launched perishable avocado products (guacamole and salsa) in early 2020. Perez has spoken in the past about his ambitions to go further into the category, with branded Chosen avocados being one such potential item.

However, entering a new part of the store, especially one where products are apt to have shorter shelf lives, can be costly. Drawing on its experience with other perishable products, such as eggs, vegetables and beverages, Butterfly could help the team craft a portfolio that is financially sound and utilizes technologies to help preserve freshness.

The capital can also help drive awareness of the new products with customers who are used to seeing Chosen largely in one aisle of the store. A press release about the deal also indicated that the company has a desire to expand into new geographic markets.

Finally, Bolthouse’s robust experience in foodservice and branded CPG, along with Sesejal’s existing knowledge of sourcing and supply chain, will help Chosen better connect with shoppers, develop new products and potentially launch branded food service partnerships. Focusing on the CPG products comes at a time when competition is high in the condiment and oil categories, with other brands such as Primal Kitchen (which is owned by Kraft Heinz) also heralding their use of avocado oil.

“The company is well positioned and has great supply partners, who will be able to provide a consistent supply of high-quality avocado oil to meet the ever-growing consumer demand,” said Butterfly co-founder Adam Waglay in a press release.

Chosen Foods was unable to comment for this story.