CPG Week: Once Upon An IPO. Plus, Will A Food Health Score Influence Shoppers?

[00:00:05] Monica Watrous: Welcome to the CPG Week podcast by BevNET and Nosh. I'm Monica Watrous, here with my co-host, Brad Avery. Now here is the latest in food and beverage industry news. Once Upon a Farm has filed for an initial public offering. The Next Generation Childhood Nutrition brand was believed to be valued at nearly $1 billion, yet the number of shares to be offered and the price range for the proposed offering have not yet been determined. Founded in 2015 by Cassandra Curtis and Ari Raz, Once Upon a Farm markets a broad assortment of refrigerated pouches and oat bars, frozen meals, and pantry snacks for a variety of ages. In 2017, the company welcomed actress Jennifer Garner and industry veteran John Foraker as co-founders, and Foraker also serves as the CEO. Raz has since stepped down to lead vegan yogurt brand Coconut Cult. Once Upon a Farm has raised over $100 million to date, which includes a $52 million Series D funding round led by Cavu Venture Partners in 2022. According to a Form S filed this week with the U.S. Securities and Exchange Commission, the company has surpassed more than $285 million in in-store retail sales, and its products are sold in more than 20,000 retail doors nationwide. proceeds of the IPO will primarily be used to repay outstanding borrowing under a revolving credit facility and purchase new equipment.

[00:01:37] Brad Avery: Now, it feels like it's been a minute since we've seen a big independent company IPO like this. There was a lot of hype several years ago. We saw a number of brands get into it, but it went on pause a little bit around the pandemic or so. And this seems to be one of the biggest ones that's come out since.

[00:01:55] Monica Watrous: That's right. And we saw a little bit of SPAC activity a few years back and then that kind of went away. And certainly a lot of roll ups and M&A. But you're right. There really hasn't been a lot of food and beverage brands going public in recent years. And so maybe this is the start of a new trend.

[00:02:12] Brad Avery: But why Once Upon a Farm? Why is this the company that makes sense to go public? Have they said what their reasoning is?

[00:02:19] Monica Watrous: It sort of makes sense. This is the route that this company would take. We know John Foraker has been in this position before. He previously took Annie's public before it sold to General Mills. I think the company has expanded to the point where it's ready for its next chapter and remaining a private company maybe won't get it there.

[00:02:39] Brad Avery: And as we know, your close personal friend Jennifer Garner is involved. That's right. You can go back and watch Monica's on stage session from last year's Nosh Live, where you interviewed Jennifer Garner on stage. And the point being is that you don't see a lot of these big celebrity brands coming to an IPO or an exit like this. We've seen a lot of these celebrity brands build up and build up. A handful have sold, but this is a big moment for one that has had a very public face in Jennifer Garner.

[00:03:11] Monica Watrous: Yeah, and I think that it's important to note that Jennifer Garner is a lot more than the public celebrity face of this company. She's in the trenches working in operations and very involved in a lot of the strategic decision making at the company. So kudos to her and also to John and everybody else in that team and congrats on this exciting next step.

[00:03:35] Brad Avery: Well, turning to the grocery store, grocery chain Hy-Vee has announced a partnership with nutrition intelligence platform Food Health Company, becoming the first retailer to bring a color-coded numerical nutritional score system directly to its 300 stores and online. So what is this nutrition score system? It's a consumer-minded listing next to each product's price and shelf tags showing a corresponding red, yellow, green, 1 to 100 score about a product's nutrient density and ingredient quality. Its methodology, quote, synthesizes principles from the Mediterranean diet and also the U.S. dietary guidelines for Americans. So this is an algorithm and it bases the assessment on nutrients per calorie in order to account for product to product variability in serving size, energy density, and water content. What I think the impact of this may be is you're going to have consumers in stores, and they may be looking at two competing products. One has a green light with a score of 85, and the one next to it has a yellow light with a score of 55. And they're most likely to want to go for the healthier product. It's fitting into this overall health and wellness trend that the industry has been pushing. And it seems like a big step forward. potentially, I would imagine, highly impact consumer behavior.

[00:05:05] Monica Watrous: I'm going to play devil's advocate here and disagree with you. I think that people are brand loyal and I think that they're going to eat what they want to eat, whether they have intentions of eating healthier or not. I will be really curious to see how this moves the needle in terms of sales. I don't really know that it's going to encourage people to make healthier choices. I think if anything, the red light, green light is just fuel for disordered eating behavior. People are going to see red light and feel guilty or shame for choosing that product.

[00:05:34] Brad Avery: I can imagine brands that are scoring low on this can't be happy with it either. And I'll be curious to see how it plays out in action and whether this is just a test run or something that's going to continue for years and potentially expand.

[00:05:49] Monica Watrous: I will also be curious to see if more and more retailers adopt this system and whether brands feel pressure to formulate to try to have a higher or a more acceptable score on their packaging. Moving on, 7 Sundays revealed it has taken a step toward vertical integration with the acquisition of its longtime manufacturing partner, Birch Packaging, formerly Chippewa Packaging. That transaction closed in June, and financial details were not disclosed, but the deal adds more than 50 new employees and a facility located in St. Peter, Minnesota to 7 Sundays operations. 7 Sundays is based in Minneapolis and recently added 10,000 new doors, including Target, Walmart, and Kroger, essentially doubling its door count to 20,000 stores nationwide. By bringing this portion of its manufacturing in-house, the brand said it can meet the growing demand for its products, maintain product quality and transparency, and move new innovations to market more quickly. Specifically, the company is now equipped to innovate across its protein oats line, expand price pack assortment, and with added packaging and kitting capabilities, offer more on-the-go snackable formats. 7 Sundays is a certified B Corporation and offers breakfast foods including muesli, grain-free granola, oatmeal, and cereal crafted with no refined sugars, flavors, dyes, or preservatives. Several of its products incorporate upcycled ingredients. such as oat and sunflower protein.

[00:07:25] Brad Avery: And Beckett Industries is taking its investing expertise in real estate development in order to launch a $50 million venture capital fund targeting early stage food and beverage businesses. The venture arm of the Grand Rapids, Michigan firm has already made some small dollar investments this year in beverage companies like Liquid Death and instant espresso brand Diamond Brew, as well as low calorie wine brand Libby, and most recently prebiotic RTD maker Waku Tea. But these initial investments are just stage setting for a $50 million fund that Beckett is currently raising and expects to start deploying in Q1 2026. Now, again, Beckett has been largely real estate focused in the past, founded in 2023. Its previous partnerships include the Catholic Church through Notre Dame University, building 150 plus unit multifamily and mixed-use projects. So this step into CPG investment is a sign of the continued opportunity in this space.

[00:08:22] Monica Watrous: On a lighter note, frozen sandwich slinger Uncrustables is on the protein bandwagon with everybody else introducing a new line of higher protein PB&Js that contain 12 grams of protein per sandwich coming from peanut butter.

[00:08:39] Brad Avery: Well, speaking of mainstream brands jumping on trends, PepsiCo's Mountain Dew is getting dirty. The brand is launching a dirty Mountain Dew cream soda following the TikTok friendly trend of dirty sodas that rose out of the Utah market. And it's moving into cans and bottles.

[00:09:02] Monica Watrous: Well, it is now October and we are closing in on Nosh Live 2025 in Marina del Rey, California, December 4th and 5th. And we're starting to announce our exciting lineup of speakers, including Jenny Britton of Jenny's Splendid Ice Cream and her new fiber brand, Flora. Hayley Swartz, the co-founder and co-CEO of Actual Veggies, Jason Perasco, the CEO of Insignia International, Katie Wilson, co-founder of Ballywally, and Kristen Piper, vice president of merchandising wellness at Walmart US, among others. We'll continue to announce as we get closer to the event, and we hope you consider joining us. You can register at Nosh.com slash events slash Nosh live. Here are some other notable bits of news from the week. Starbucks announced it is shuttering hundreds of stores and cutting around 900 non-retail jobs in search of around $1 billion in cost savings. Prebiotic drink maker Waku Tea is set to close a $1.5 million seed round by the end of November, backed by venture firm Beckett Industries. And finally, Traktor Beverage is expanding its reach in the on-premise through a new multi-year alliance with live entertainment giants AEG that grants Traktor exclusive rights across key beverage categories at music venues owned and operated by AEG nationwide. For these stories and more, become an insider at BevNET & 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 & 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.