CPG Week: Keeping Up With Kardashian’s Snack Brand. Plus, A Co-Packer’s Abrupt Closure

[00:00:00] Monica Watrous: Welcome to the CPG Week Podcast by BevNET and Nosh. I'm Monica Watrous, here with my co-host, Lukas Southard. Out here is the latest in food and beverage industry news. Khloé Kardashian's snack brand is popping off. Within months of launching, Cloud Protein Popcorn has expanded into more than 2,500 retail doors nationwide, including Target and Sprouts Farmers Market, with distribution and additional retailers slated for this month. Early Traction has outpaced projections. Cloud's chief operating officer told Nosh that the brand has significantly outperformed other salty snacks and sold out at many Target stores within days. The products are seasoned with a proprietary powdery substance called Cloud Dust, which contains a blend of milk proteins. A serving has seven grams of protein, which is about three times the amount of protein found in traditional ready-to-eat popcorn. Ahead of its debut, the Los Angeles-based startup raised $12.5 million in equity funding, with investors including Springdale Ventures, Serena Ventures, K5 Global, and others.

[00:01:17] Lukas Southard: Obviously, the Kardashians are no strangers to the CBG industry. Khloé Kardashian was the chief taste consultant for Beyond Meat and Courtney has a supplement brand called Lemmy, as well as being a brand spokesperson for the plant-based brand Daring Foods. What's interesting with this one is Chloe has really put a lot of herself behind it, including basically her name.

[00:01:47] Monica Watrous: I was speaking with somebody involved with the brand at Fancy Food who was telling me that Khloé Kardashian has a lot of hands-on involvement. She's not just the face of this brand, but she's also involved in marketing and product development. I know that they plan to expand beyond popcorn into potentially other snack categories, but already a strong start, and it's clear that Cloud has a lot of clout behind it.

[00:02:12] Lukas Southard: A Rhode Island-based co-packer has abruptly shut its doors, leaving several brands to scramble for alternate sources for manufacturing. Plants to Food, located in Lincoln, Rhode Island, specialized in vegetarian and dairy-free co-manufacturing of sauces, dressings, and spice blends, as well as vegan cheeses and other vegan products. The company also operates a warehouse and third-party logistics. Employees of Plants to Food were notified on June 18th that they would no longer be receiving paychecks and that they should not return to work. Plants to Food was purchased by Scott Lively in 2022. Lively acquired the business from its former owners after using the co-man as a client from his now-defunct vegan food brand, Wildtree. According to reporting from local media sources, Lively invested about $300,000 into the plants-to-food manufacturing facility after he took over the business.

[00:03:10] Monica Watrous: Our editor-in-chief, Jeffrey Klineman, has been reporting on this story and spoke with several founders who use that co-packer for their business. Global, which is a globally inspired baby food company, uses Plants2Food as its sole manufacturer and was really in a bind after this abrupt closure. So we'll be tracking the fallout and reporting more as the story develops. Amidst bankruptcy proceedings, Rite Aid has found a buyer for its Thrifty Payless subsidiary, which houses the Thrifty ice cream brand, as part of a $19.2 million transaction that also includes KPH Healthcare Services. Hillrod Holdings, a limited partnership tied to Monster Energy Corporation executives Rodney Sachs and Hilton Schlossberg, was named the successful bidder in court documents filed on June 26th. The deal was approved in the U.S. Bankruptcy Court for the District of New Jersey on July 1st. Founded in 1940, Thrifty was born out of a small factory in West Hollywood, and its ice cream was sold at the flagship Thrifty Drugstore in downtown Los Angeles. Rite Aid acquired Thrifty Ice Cream in 1996 as part of a $2.3 billion deal that included 1,000 West Coast Thrifty Drugstore locations. Known for its cylindrical scoops, Thrifty was available at counters inside Rite Aid locations across the West Coast. The brand also sells retail cartons of its best-selling flavors, including Black Cherry, Caramel Cookie Crunch, and Red Velvet, at select stores like Rite Aid and Albertsons. Now, the sale of Thrifty Payless comes after Rite Aid filed for bankruptcy in May, marking the second time the drugstore chain has done so since October 2023. Since its most recent bankruptcy filing, the company has announced the closure of more than 1,000 stores.

[00:05:02] Lukas Southard: Well, obviously, we've seen a lot of protein ice creams come out, and this just means we're going to see some caffeinated ice creams come out. So why not?

[00:05:09] Monica Watrous: Oh, you think so?

[00:05:10] Lukas Southard: Oh, OK. I wouldn't say no to caffeinated ice cream. I just wrote a feature about alternative caffeine sources. At the Summer Fancy Food Show last week, I talked to a coffee candy company. So why not just put some caffeine in some ice cream?

[00:05:27] Monica Watrous: I think I'm going to stick to coffee and tea for my caffeine sources.

[00:05:31] Lukas Southard: Well, it's interesting you brought up tea because I talked to the founders of New Jersey's Joe Tea at the specialty food association, Summer Fancy Food as well. And Joe Tea is moving beyond tea. They are most known for their glass bottled iced teas and lemonade, as well as their bags of potato chips that are sold in many delis and independent quick serve restaurants. but they have been slowly, or as they said, crawling into some other categories. Last year, they were showing off their canned teas and lemonades. They had three SKUs in 12 ounce cans last year. This year at the show, they were offering seven flavors in both a 12 ounce and a 16 ounce. But more interesting to me, they were moving into the hydration category with a new product called SpaceSip. They were also showing off some new snack brands, including a kettle chip brand called Couch Potato that will soon be offered in a mustard hot dog variety, as well as pizza. And they had a new trail mix brand called Offroad. Now, Jyoti has been in operation for about 30 years now, and they've really built along this ethos of being a privately held company that isn't looking for an exit and just slowly growing its model. And it's done a pretty good job of that.

[00:07:11] Monica Watrous: Lucas, do you do cold plunges?

[00:07:13] Lukas Southard: I have not done one myself, but I am really interested in getting one because it does seem like some sort of masochistic thing that I would enjoy.

[00:07:23] Monica Watrous: Would you do one in a cold plunge tub that is shaped like Patrick Mahomes' head? As you know, I'm our resident Kansas City Chiefs fan as a Kansas City girl, and my guy Patrick Mahomes is continuing a multi-year partnership with Coors Light. And that involves the Patrick Plunge, a cold plunge experience that is shaped like Pat's head and is touching down in my hometown on July 19th.

[00:07:50] Lukas Southard: Well, good luck with that one, Monica. While you're taking cold plunges into Patrick Mahomes head, and that's a weird sentence to say, I will be hopefully eating a new high protein, low sugar creatine cereal called man cereal. It's formulated specifically for men, but I will, I will get a box and see if my wife wants to have some with me.

[00:08:18] Monica Watrous: How romantic. Speaking of manly cereal. Cinnamon Toast Crunch and Hormel have teamed up to launch a limited edition cinnamon sugar bacon flavored cereal that will be available exclusively at Walmart. I see your face. I know what you're thinking. But previously those two brands partnered on a cinnamon toast crunch flavored bacon that seemed to have been such a success that they wanted to continue the partnership with this new cereal. I don't know, meat flavored cereal is just a bridge too far for me.

[00:08:53] Lukas Southard: Yeah, there are certain collaborations that work both ways. This one I feel like works better on the meat side than it does on the cereal side. But maybe that's just me. I don't know. Bacon flavored cereal isn't really a bowl that I would take a cold plunge into.

[00:09:13] Monica Watrous: So this is where you draw the line.

[00:09:16] Lukas Southard: This is where I draw the line.

[00:09:19] Monica Watrous: Here are some other notable bits of news from the week. Del Monte Foods, one of the country's largest producers and distributors of branded food products, has filed for Chapter 11 bankruptcy protections and is seeking a buyer. Healthy snack maker Sunny has secured $1 million in funding from Santa Terra Capital to support retail expansion, strategic hires, and food service channel development. And finally, Republic National Distributing Company is laying off more than 1,700 employees as it winds down operations in California. For these stories and more, become an insider at BevNET and Nosh. And if you're enjoying the show, please subscribe on your listening platform of choice. That wraps up this edition of CPG Week by BevNET and Nosh. Thank you to our audio engineer, Joshua Pratt, our director is Mike Schneider, and our designer is Aaron Willette. If you enjoyed the podcast, please subscribe on your listening platform of choice, and we will see you next time.