CPG Week: Nutrabolt in Bloom and Money For Magic Mind

[00:00:05] Monica Watrous: Welcome to the CPG Week podcast by BevNET and Nosh. I'm Monica Watrous, here with my co-host, Lukas Southard. Now here is the latest in food and beverage industry news. Nutribolt has taken a majority stake in Bloom Nutrition, positioning the parent company as a major platform across wellness categories, including energy drinks and powdered supplements. The Texas based company best known for its C4 brand of energy drinks and pre-workout supplements led a $90 million investment round in Bloom last year for a 20% stake. That served as the springboard for the successful launch of Bloom's first ready to drink beverage, Sparkling Energy in 2024, with a second line, Prebiotic Soda Bloom Pop, added this summer. Both products are distributed through Nutribolt's partnership with Keurig Dr. Pepper. Nutribolt did not confirm its ownership in Bloom, but verified its total investment as over $200 million, which would bring its stake to over 50%. Amidst a wave of digital native wellness supplements that have emerged over the past decade, Female-focused Bloom has found staying power thanks to, in part, its active social media following and organic support from TikTok creators.

[00:01:19] Lukas Southard: One thing that I'll be tracking as a result of this news from Nutribult is how that affects their partnership and the investment that KDP has taken in Nutribult. A couple weeks ago, KDP announced it was acquiring J.D.E. Peet's for $18 billion and would in the process separate its coffee business from its refreshment soft drinks. KDP is refreshing and soft drinks include not only the legacy brands like Dr. Pepper Snapple seven up, but also a lot of distribution partnerships with various brands like electro lit neutral bolt and black rifle coffee. So how KDP works with these brands that it is aligned with. both with investments and as a distributor through its DSD network, will be really interesting to track now that Nutribolt is the majority owner of one of the higher growth next-gen brands out there.

[00:02:22] Monica Watrous: Insiders can read more about that deal at BevNET.com.

[00:02:27] Lukas Southard: It's not sober October yet, but the adult non-alcoholic category has established that alcohol reduction is a year-round exercise these days. One of the early trailblazers of the category, Toast, has secured over $1 million in bridge funding. In the next few weeks, the round will close and will total somewhere closer to $1.5 million, according to Toast founder and CEO Brooks Addington. The Vermont-based wine alternative brand launched in 2017 and has taken a slow and steady approach to innovation up until this past year. At the beginning of the year, Toast launched canned RTDs of its sparkling wine alternative in white tea and rosé varieties. And it followed that launch up in May with a sangria option in its signature 750 milliliter glass bottle. Toast received a minority investment from Constellation Brands in 2023, further proving that non-ALC alternatives were more than a passing fad, but a growing subcategory of adult beverages. At the beginning of the year, non-ALC RTD maker HYO also received a minority investment from Constellation Brands, solidifying the Bev-ALC company's interest in alcohol alternatives. Just this week, the Stoli Group led a $3.6 million round for NA Spirits maker The Pathfinder. All of these investments back up recent Gallup polling that reported that only 54% of U.S. adults consume alcohol, representing an all-time low in Gallup's 90-year history. Piling onto the data, TBD Ventures founder Trevor Haig wrote on LinkedIn that according to NIQ BrandBank data, NA spirit sales just hit $925 million, representing a 22% year-over-year growth. As part of that data, about 92% of NA alternative shoppers are also buying alcohol, showing that this isn't really about abstinence, but trading out some alcohol drinks for adult non-alcohol alternatives.

[00:04:34] Monica Watrous: Well, that makes sense. And you could draw parallels to the flexitarian movement. There's a lot of people who eat meat and they also buy plant-based meat alternatives as they look to reduce their consumption. And here's our similarities in this burgeoning adult non-ALC market. What'll be interesting to see is who the winners and losers are and how it shakes out because I expect there'll be a lot of consolidation in the future like there was in the plant-based meat alternative category. Speaking of evolving categories, the meal kit market is in transition. This week, ready to eat meal delivery business Factor announced its largest menu overhaul as it works to elevate science-backed nutrition via more than a hundred new weekly offerings designed to appeal to a variety of consumer demands, including high protein, GLP-1 support, and globally inspired flavors. Alongside the overhaul, the company appointed registered dietitian, influencer, and cookbook author, Kylie Cicada, to the newly created role of no BS officer. And BS, in this case, stands for bad science. The menu realignment comes five years after Factor, formerly Factor 75, sold to German-owned HelloFresh for $277 million. The updates will double the brand's high-protein options, extend its existing GLP-1 support line, and bring additional Mediterranean-diet-inspired recipes into the fold. These changes come on the heels of competitor Blue Apron's unveiling of a, quote, major evolution that includes a new identity, expanded product lineup, and subscription-free shopping options. Nearly two years after its $130 million acquisition by Wonder Group, Blue Apron has more than doubled its assortment to more than 100 meals, most of which can be customized. In addition to its signature meal kit offering, the menu now includes pre-made meals and one-pan meals featuring pre-chopped and prepared ingredients.

[00:06:38] Lukas Southard: Mental Performance Tost and Magic Mind raised $12.4 million of a nearly $16 million Series A round led by BFG partners with additional funding from existing investor Rokana Venture Partners. This is BFG partners, first investment in Magic Mind and brings managing partner of the firm Dayton Miller to the brands board. Magic Mind told me at the beginning of the year that they had been raising new capital last year, and this appears to be a follow-on to that. Founded in 2020 by tech industry entrepreneur, James Beshara, the brand grew its base online until the beginning of 2024, when it launched into Sprouts, as well as high-profile grocers like Air One. In the last year and a half, the brand has opened up additional regions in the conventional and natural channels, spreading from its base in Southern California into the Southwest, Texas, and Florida. Magic Mind also launched a few new varieties of its matcha-laced energy shot. The two new SKUs bookend its OG focus shot with a higher caffeinated max variety and a quote, stimulant-free version, called free, that has no caffeine. In addition to the three shots that are available in retail, MagicMind also has a caffeine-free gummy and a sleep aid shot that are available online. The brand is a growing contender in a subcategory of energy and performance shots and drinks that use cognizant, L-theanine, B vitamins, and other plant-based ingredients to improve mental function. Many are using the trend towards caffeine reduction to bring new consumers to the category.

[00:08:24] Monica Watrous: On a lighter note, Liquid Death is dialed up to 11. The canned water brand unveiled a limited edition 11 pack signed by the members of the fake rock group Spinal Tap. There are 11 of these 11 packs in existence and they sell for a very reasonable $1,100.

[00:08:43] Lukas Southard: Wait, first of all, you're telling me Spinal Tap was not a real band? I thought the documentary that was made about them was about a real Hair metal band. I mean, that's one of my favorite documentaries. I thought it was all true story.

[00:08:56] Monica Watrous: It was a mockumentary, Lucas.

[00:08:58] Lukas Southard: Mockumentary. Didn't catch that bit. Well, either way, I am excited to watch Spinal Tap 2, but I don't think I'm ready to shell out $1,100 for a 11 pack.

[00:09:13] Monica Watrous: Just not a true fan of Spinal Tap or Liquid Death.

[00:09:17] Lukas Southard: No, but I am a true fan of 80s hair metal. I also wanted to shout out a brand that I'm quite fond of. I met them this past year at fancy food in New York called Valor Energy. I highlighted them as part of a feature I did this week about run clubs and Valor was one of the brands I talked to who has done activations with various run clubs as it has launched its nitrogen infused energy drink, which I found really enjoyable. And I plan to buy some for my running because what I like about it is it's an energy and hydration beverage, but it also is not carbonated, which is kind of the selling point for them. It doesn't give you that bloaty feeling.

[00:10:07] Monica Watrous: You and I are both endurance athletes or marathon runners. Uh, and I know I am a very brand loyal runner. Runners are sort of the best evangelists for things that we like. We want to tell everybody about what we love, including running. And not everybody wants to hear about it, but how do you know if somebody is a marathon runner? Don't worry, they'll tell you.

[00:10:31] Lukas Southard: Oh, I haven't heard that one.

[00:10:34] Monica Watrous: Here are some other notable bits of news from the week. After years of challenging earnings releases and high losses, the company behind beverage manufacturer and water brand Flow Water was foreclosed on last month by two of its creditors. Food and beverage innovation firm JPG Resources is expanding its capabilities and its West Coast presence with the acquisition of food product development consultancy, Kulinex. And finally, Celsius Holdings has appointed seasoned marketing executive Rishi Dayang as chief marketing officer. 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.