The Checkout: UPSIDE Foods Opens New Facility; Utz Acquires RW Garcia

Welcome to The Checkout: an express lane for the weekly news you need to know, always 10 items or less.

UPSIDE Foods Opens New Innovation Center

Cell-based protein company UPSIDE Foods announced yesterday it has completed construction on its new Cultivated Meat Engineering, Production, and Innovation Center (EPIC). Located in Emeryville, California, the 53,000 square foot campus is designed to produce ground and whole cut products of cell-based meat, poultry and seafood.

According to the company, EPIC’s custom-made cultivators have the ability to produce over 50,000 pounds of cell-based proteins, and UPSIDE has plans to grow that capacity to 400,00 pounds per year. EPIC also includes office space and multiple facilities to test products, mill and mix cell feed, and forumate and package products. Following the opening, the company said it plans to add approximately 50 in areas such as production, maintenance, and engineering.

“When we founded UPSIDE in 2015, it was the only cultivated meat company in a world full of skeptics,” UPSIDE Foods founder and CEO Dr. Uma Valeti said in a press release. “When we talked about our dream of scaling up production, it was just that — a dream. Today, that dream becomes a reality. The journey from tiny cells to EPIC has been an incredible one, and we are just getting started.”

The company today held a virtual grand opening for the facility today, and said it will begin consumer tours of the facility in January 2022.

Founded as Memphis Meats, the company announced a rebrand to UPSIDE Foods in May, focused on “optimism” and the potential of cell-based foods. The company secured the largest investment in the cultivated meat space last year, according to the Good Food Institute, raising $186.25 million in Series B funding from investors including Whole Foods CEO John Mackey.

Utz Acquires RW Garcia

Snack company Utz Brands this week announced that its subsidiaries have entered into an agreement with R.W. Garcia Holdings to acquire equity in and the real estate assets of RW Garcia — a maker of organic tortilla chips, crackers and corn chips — for $56 million. The transaction is expected to close in the fourth quarter of 2021.

Founded in 1982, family-owned RW Garcia offers a range of organic, gluten-free and low sodium snack offerings, distributed at retailers in North America, Europe and Australia. The company generated net sales of $66.2 million for the fiscal year ending June 30, according to a press release.

The deal includes RW Garcia’s manufacturing facilities in Nevada and North Carolina, growing Utz’s production capacity to “support the continued growth of the Utz portfolio of brands,” Utz said. According to Utz, the acquisition complements its purchase of Michigan-based Festida Foods in June, which produces tortilla chips, corn chips and pellet snacks through a production facility in Grand Rapids, Michigan. Now, the company will operate production facilities across the U.S. in the North, East and West regions, while RW Garcia said it will benefit from Utz’s distribution network and retailer and foodservice relationships.

“Our RW Garcia team is excited to be part of the Utz culture that fosters a growth mindset and places a strong emphasis on talent development,” RW Garcia founder and CEO Robert Garcia said in a press release. “They are truly an ideal long-term partner for RW Garcia.”

With the addition of RW Garcia, the company expects its better-for-you retail sales to exceed $100 million annually, Utz CEO Dylan Lissette said in a press release.

“We expect this strategic acquisition will enable strong supply chain synergies, enhance our ability to expand distribution of our existing brands, and supplement our better-for-you product portfolio,” said Dylan Lissette, Chief Executive Officer of Utz. “RW Garcia has a great track record of better-for-you innovation and production capabilities…We believe this strategic combination will help accelerate the growth of Utz’s brands and expand margins over the long-term, and we look forward to continuing to serve RW Garcia’s existing customers.”

Farmstead to Offer Grocers Dark Store Services

Online grocer Farmstead revealed this week new plans to offer same-day ecommerce solutions for grocery retailers. As part of its Grocery OS grocery delivery solution rolled out to grocers last year, the company has formed new real estate and last-mile delivery partnerships that will offer “everything a grocer or retailer needs” to open dark-store operations within two weeks.

Launched in 2017, the California-based startup uses proprietary AI technology and a dark store model with a delivery center that can serve a 50-mile radius. The company raised $7.9 million in November 2020 to expand its operations to the East Coast.

According to the company, Grocery OS was originally developed as a software solution to help grocers boost delivery capacity and manage picking, packing and operations. Now, it’s expanding operations to support faster grocery delivery within a larger radius that can be profitable to grocers while avoiding passing along exorbitant fees to shoppers. As part of the service, the company is offering grocers warehouse space, inventory sourcing and stocking, order managing software and dark store labor.

“Right now, rapid grocery delivery comes with high markups and fees, and Farmstead wants to change that,” said Pradeep Elankumaran, co-founder and CEO of Farmstead, in a press release. “The combination of Grocery OS and dark stores enables faster delivery, a much larger delivery radius, and higher profits per order, while customers get lower prices. We’ve been doing this ourselves for several years, and are now offering it to other grocers.”

FMI Survey Looks at Consumer Attitudes Toward Holiday Grocery Shopping

FMI this week released its U.S. Grocery Shopper Trends Tracker: Holidays, taking a look at the effect of COVID-19 on grocery shoppers’ behaviors ahead of the holiday shopping season.

While concerns remain surrounding supply chain issues that affect the availability and cost of shoppers’ favorite products, the report found that the majority of shoppers plan to resume more traditional holiday celebrations after many had scaled-back festivities last year due to the pandemic. However, approximately half of shoppers said they are still planning smaller gatherings than they typically would pre-pandemic.

According to FMI, 58% of shoppers were concerned about the availability of groceries necessary for holiday meals. However, FMI noted that those sentiments have remained steady since the summer, so recent supply chain shortages may not be a major top-of-mind issue for shoppers. Still, 18% said they’ll plan their shopping further in advance to mitigate any potential issues.

While many major CPG companies have executed price increases as a result of inflated input costs, average house spending has actually decreased to $144 from the $161 seen at the peak of the pandemic last year.

“Both grocers and consumers have demonstrated tremendous resilience over the last year, and shoppers are excited about a cautious return to normalcy for their holiday gatherings this year,” FMI president and CEO Leslie G. Sarasin said in a press release.