CPG Week Podcast: The Frozen PB&J Wars Heat Up; FDA Cracks Down on Caffeine Labeling

[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. If you're enjoying the show, please subscribe on your listening platform of choice. Here is the latest in food and beverage industry news. Organic drink mix maker Fave has raised a $1 million seed round led by Supernatural Ventures to support its retail debut and expansion plans. The funding arrives as the California-based brand makes its retail debut exclusively at nearly 500 Sprouts Farmers Market stores nationwide. The brand launched online earlier this year with its drink mixes in lemonade, fruit punch, strawberry lemonade, and tangy orange flavors. The products focus on nostalgic flavors rather than functional benefits and have aimed to carve out a space in the saturated drink mix market with a formulation that does not include artificial colors, flavors, or preservatives. The company raised a small pre-seed round last year as it worked to establish proof of concept and validate consumer interest. The team spent nearly two years refining the product, packaging, and supply chain. It invested the proceeds from its pre-seed round into online channels like Amazon, Thrive Market, and QVC to help further validate the business. Those efforts gave the business the proof points it needed to launch into brick and mortar retail and attract investors for Seed Round. The Angel Group, Great Circle Ventures, and leaders and founders from brands including Popchips, Perfect Bar, and Brainiac also invested in the Seed Round. Insiders can read more about the funding and go-to-market strategy on BevNET.com.

[00:01:40] Brad Avery: Fave is a small brand and this is a small round but they're targeting a strong growing category. When you look at trends in the powder beverage mix space the water talk trend was explosive for this category. We saw companies like Dyla Brands and Gelsert really innovate around those opportunities. There's also a whole categories worth of functional better for you brands that are like Fave. So the challenge ahead of them of course is differentiating and setting themselves apart in a very crowded set as you mentioned but they're absolutely on trend and on point with the type of product they're presenting and how they're presenting it.

[00:02:25] Monica Watrous: Absolutely. And when I talked to Ryan Raich, the founder at Expo West earlier this year, he had mentioned that there aren't a lot of organic options in this category. And so that is one key point of differentiation for Fave as well as using non-GMO project verified ingredients. The lack of a functional benefit sets it apart in that it's just simply used for flavor and getting people to drink more water. And I think that's a pretty powerful and compelling benefit.

[00:02:53] Brad Avery: And when you think about how big something like crystal light is, there's plenty of room for a non-functional option. So many people just want something that tastes a little different or better or sweeter than water.

[00:03:05] Monica Watrous: And something they can give to their kids. I think a lot of parents would be concerned about their kids over consuming certain vitamins and minerals and electrolytes and things that their smaller bodies don't necessarily need.

[00:03:17] Brad Avery: Or artificial ingredients.

[00:03:19] Monica Watrous: Yes, definitely.

[00:03:21] Brad Avery: Moving on, it's showtime for the Everycompany's signature animal-free egg white protein product. The food tech business has partnered with ADM for commercial-scale production of its OvoPro Precision Fermented Egg White protein, which will use ADM's Iowa facility to begin amping up B2B and consumer-facing sales. This deal comes on the heels of a new partnership with a rich products corporation for every company to sell OvaPro for use as an ingredient in that company's baked goods and every also launched consumer facing OvaPro products into Walmart and Target last month. Now the context of course is that this accelerated production comes as high protein products continue to see heightened consumer demand while whey concentrates and isolates the most common protein enhancing input face widespread shortages. An alternative on the market is timely, and with that excess interest and constraint supply, whey protein prices have spiked over the past two years. That means there's certainly opening for alternatives, though we've also seen these types of fermented animal-free products struggle to carve out their own space in the market in the past.

[00:04:30] Monica Watrous: I was just at IFT, the Institute of Food Technologists show earlier this week and I'm seeing several interesting novel alternatives to whey protein including watermelon seed protein, yeast protein. There's a protein that is derived from leaves.

[00:04:49] Brad Avery: What kind of leaves is the question?

[00:04:53] Monica Watrous: It's a good question.

[00:04:54] Brad Avery: Wheat protein has also been very big.

[00:04:56] Monica Watrous: Of course, and certainly chickpea protein was also there. Obviously, consumer demand for protein is not going away, but the supply is constrained in some cases, and innovators are jumping to the challenge to deliver alternatives that can be as functional and have the same performance in applications as whey protein.

[00:05:21] Brad Avery: What does make OvoPro interesting is that it's being positioned as a, quote, pure ovalbumin protein, which is the primary functional protein in egg whites. And the company says that it offers critical binding, gelling, foaming, and whipping functionality, which can be huge for food formulation. I do wonder what that means as far as consumer facing sales go. But business to business there's big opportunity is food formulators and even beverage formulators perhaps will want to work with this type of product to get consistency in say you know baked goods where you need that kind of extra weight or that extra consistency without a product falling apart as you try to add more protein to it. It certainly seems to be a product very well geared for the B2B market.

[00:06:14] Monica Watrous: Certainly. And I also think that it probably is more of a cost effective and reliable solution than a lot of commodity based alternatives that formulators are relying on today.

[00:06:26] Brad Avery: Insiders, of course, can read more about the OverPro expansion on Nosh.

[00:06:32] Monica Watrous: I don't think that this product contains OvoPro. In fact, I'm certain it doesn't. But Welch's this week entered the frozen sandwich aisle with its own take on Smucker's Uncrustables. How many PB&Js do we really need? Welch's Real PB&Js, as it's called, is rolling out exclusively at select Walmart stores prior to a broader retail expansion next year. Available in Concord Grape Jelly, Strawberry Jam, and Mixed Fruit varieties, the sandwiches combine freshly baked bread, according to the marketing, peanut butter and Welch's fruit spreads with no artificial colors or high fructose corn syrup. The sandwiches are about 50% larger than Uncrustables, according to the company, and delivered 12 grams of protein, so about twice as much as an Uncrustables sandwich. The company said consumer research pointed to demand for a bigger sandwich for bigger appetites. Uncrustables dominates the category with sales approaching $1 billion, but more players have entered the frozen sandwich set in recent years. Last year, the dropout companies introduced Jams, a high-protein offering at Walmart and Target stores nationwide. And according to data cited by the company, Jams has begun to materially pressure incumbent players. In the third week of April, Jams' strawberry four-pack surpassed Smucker's Uncrustables on a same-item sales basis in Target. Kraft Heinz also unveiled a Lunchables twist on the category, featuring crustless peanut butter sandwiches with strawberry or grape dips. Other players include Rudy's, which uses Justin's nut butter, and Sun Butter, which has a sunflower seed butter alternative. Frozen burrito maker Red's launched its own range, but has since discontinued it, and Chubby Snacks, which also marketed a line of frozen crustless sandwiches, ceased operations following a lawsuit by the J.M. Smucker Company accusing the brand of false advertising, trademark violations, and disparagement. We're also seeing a lot of private label players getting into the game. I was at Target last weekend and noticed they have their own crustless sandwich option.

[00:08:37] Brad Avery: You might also add in midday squares, peanut butter and jelly squares. They're breadless. They're a different product than these, but it does hit the same need as a gluten-free alternative or a health conscious lower carb alternative to some of these products. I've noticed them everywhere as well. In store, the distribution is continuing to grow. Certainly they're carried in Whole Foods, but they've been getting larger sets in mainstream grocery as well.

[00:09:04] Monica Watrous: I think you could even take a step further back and look at just the proliferation of peanut butter and jelly flavored snacks that have launched in the past couple of years. And it really leans into this nostalgic flavor trend that we're seeing everywhere with a lot of different things like Shirley Temple in beverages and Creamsicle and Rocket Pop in everything from baked beans to...

[00:09:25] Brad Avery: I saw Rocket Pop scented dude wipes the other day at Star Market in Boston. Of course. There is a mix of childhood nostalgia going on here. I think there's also a convenient form factor. Recognizing that an Uncrustable or a sandwich in that vein of an Uncrustable is just a really easy grab-and-go snack. You know, no preparation required. You know, let it thaw out of the freezer a little bit. And I think that convenience factor has got to be a big driver. I know that personally that's, you know, what would drive me to that category.

[00:10:03] Monica Watrous: Absolutely. The other thing that's interesting to me about this press release is that Welch's is talking about wanting to create something for bigger appetites. And we're living in the GLP-1 era where everybody's appetite is a little bit smaller. And so to position a product that is meant to satiate older children particularly, but if you also look at the demographic of people consuming Uncrustables, it's professional football players. And like, you know, athletes who see this as a very viable source of quick carbs before they do a tough workout. So I think, you know, if you're thinking about that population of consumers, it makes sense to offer something a little bit bigger and more satiating.

[00:10:45] Brad Avery: I don't know if this is still the case, but in the NBA there was for a while a big peanut butter and jelly sandwich boom. Like the players after they would practice and work out, pretty much demanded peanut butter and jelly. Some nutritionist in the NBA system was pushing it. And the elements of protein and carb all together sort of made it a perfect post-workout snack.

[00:11:09] Monica Watrous: Yeah, I see a lot of runners eating them before and during a long run or a marathon. So I think it is, you know, probably the new chocolate milk as far as, um, athletic fueling options go. But I will be interested in seeing how this new Welch's product performs when Uncrustables has such a, a chokehold on the category. And they seem to be a little litigious when it comes to other brands that are sort of encroaching on their turf.

[00:11:36] Brad Avery: Well, we'll stay on top of it and follow how this innovation evolves. And the Food and Drug Administration wants caffeine content to be loud and clear on food and beverage labeling. The FDA published its 2026 Human Foods Program Guidance Agenda last week, listing new and revised suggestions for preventing foodborne illnesses, reducing diet-related chronic disease, and ensuring food is safe for consumption. Top of the agenda was labeling caffeine content in foods and beverages, though the federal agency has not elaborated on what that guidance might be. It does come at a time when caffeine is finding its way into more products, not just drinks, and while consumers are increasingly adjusting how they caffeinate, even in mainstay categories like energy drinks and soda, Those products are quickly being stacked with additional functions, meaning it will become imperative for the caffeine to not get lost in a jumble of creatine and L-theanine call-outs. It's also become increasingly common to find a milligram dosage on drink packages. The dosage of a standard 8-ounce coffee can be upwards of 140 milligrams. But we've also seen high dosages in energy drinks of upwards of 300 milligrams per can in the past 10 years. And this has led to major health concerns. There was, of course, a teenager in Texas who died recently, allegedly linked to the consumption of a high-caffeine energy drink. That case is under investigation from the Texas Attorney General's office, and they've targeted Celsius in marketing practices, alleging that there is a wrongful marketing and a deceptive marketing to minors for these drinks. So it's not surprising to see the FDA want to have some clearer standards for caffeine.

[00:13:26] Monica Watrous: Definitely. And to your point, there are a lot more edible products containing caffeine. We're seeing it in energy bars as well as gummies and chewing gum. And these are products that are embraced by younger consumers. They're part of the gamer culture. And so it is going to be really important for consumers to understand what they're purchasing. And it's a dangerous additive to overconsume, especially for younger consumers. Here are some other notable bits of news from the week. McCormick & Co. received $28 million in tariff refunds during its second quarter and expects an additional $3 million in the back half of the year, offering some relief as the company contends with mounting inflationary pressures. A collective of hemp beverage stakeholders and interest groups is attempting to unite the fractured industry under a new bill that could stave off the restrictions set to take effect in November and bring clarity to future regulation. And finally, Simply Good Foods reported a net loss in the third quarter as it announces its first results since restructuring efforts trimmed 15% of its workforce. For these stories and more, become an insider at BevNET and Nosh. 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.