CPG Week: SlimFast Gets A New Owner, Slate Gets $23M

[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. After nearly five decades since its founding, Ben & Jerry's co-founder Jerry Greenfield has stepped down from the ice cream brand amid ongoing tensions with parent company Unilever. In an open letter posted to X, formerly Twitter, last week Greenfield said he can no longer in good conscience remain an employee of Ben & Jerry's. He and Ben Cohen sold the mission-driven brand to Unilever in 2000 for $326 million. As part of that deal, the brand was guaranteed the, quote, independence to pursue our values. The unique merger agreement included a clause allowing the brand to maintain its own independent board of directors with authority over its social mission. Within the last four years, the relationship between Ben & Jerry's and Unilever began to sour. The ice cream brand attempted to halt sales of its products in Israel-only settlements in the West Bank, prompting Israeli businessman Avi Zinger to sue the company. Unilever ultimately granted Zinger a license to sell the products with different branding. Most recently, Ben & Jerry's filed a breach of contract lawsuit against Unilever, claiming it has repeatedly blocked the brand's attempts to take a public stance on the crisis in Gaza. Greenfield's departure comes as Unilever readies to spin off its ice cream business into a separate, standalone publicly traded company known as the Magnum Ice Cream Company. Just prior to Greenfield's departure, he and Cohen penned a letter to the Magnum Ice Cream Company board requesting that Ben & Jerry's be allowed to operate once again as an independently owned company.

[00:01:56] Lukas Southard: This all comes after the former CEO of Ben & Jerry's, Dave Stever, was let go in the spring by Unilever and Ben & Jerry's at the time called out their parent company for ousting Stever as a result of the brand's opposition to the Gaza war. So it's just kind of a carry-on for this brand that has been a kind of mission-based, values-driven brand for so long, and coming to opposition with its parent company over differing political views.

[00:02:31] Monica Watrous: Yeah, it's been messy for a while, and of course, we will continue to follow any new developments on Nosh.

[00:02:37] Lukas Southard: Monica, on last week's episode, you and Brad talked about if we are hitting peak protein, and Brad called out one of the brands that has really leaned into this trend of high-protein, Slate Milk. Late last week, Slate Milk announced it had closed a $23 million Series B round, bringing the brand's total investment to around $50 million since launching six years ago. Now the round was led by Foundership Ventures, a new fund launched by the Greek frozen yogurt brand Yasso's co-founders, Drew Harrington and Amanda Klain. This is one of the first investments for Foundership, but Harrington and Klain had previously invested privately in Slate. Foundership was joined by a host of new celebrities to the brand, including hip hop artist Ice Spice, actor Jonah Hill, and DJ and producer Diplo, among many others. Initially founded as a lactose-free canned chocolate milk brand, Slate has found its footing by repositioning as a, quote, strength and energy brand, building a portfolio of flavored milks and iced coffees with various amounts of protein in them. Their latest portfolio extension brought a line of drinks with. a whopping 42 grams of protein in it. So if you like some chocolate milk after you go to the gym, then this is your brand. Now, as part of this series B, the brand is expanding its pack size in grocery retail from primarily single cans to now four packs. It's also launching a new cookies and cream SKU, which will be exclusive to Target. And Slate is also bringing its online exclusive classic strawberry flavor into retail launching in sprouts.

[00:04:25] Monica Watrous: Insiders can read more about that deal at BevNET.com. Moving on to a different transaction, Heartland Food Products Group, the manufacturer of Splenda brand low-calorie sweetener and drink mixes, has acquired Slimfast's U.S. operations from nutrition supplement maker, Glanbia, for an undisclosed sum. Glambia, which acquired Slimfast for $350 million in 2018, announced plans earlier this year to sell the business after recording a non-cash impairment charge of $91.4 million in its 2024 financial results to reflect the brand's struggles amid, quote, continuing challenges in the diet category. For decades, Slimfast was a leading brand in the multi-billion-dollar weight loss industry, slinging meal replacement shakes, snacks, packaged meals, and more to calorie-conscious consumers. I was one of them. In 2000, Unilever bought the company for $2.4 billion, then sold it to Kano's Capital in 2014 for a slimmed-down valuation. After Glambia acquired it from Kainos four years later, promising a turnaround of the business, sales seemed to stabilize for a bit. But then the pandemic delivered a crushing blow, and the brand has since faltered in the face of ozempic and similar appetite-suppressing medications transforming the diet market. Heartland Food Products Group is a contract manufacturer based in Indiana, and that company acquired Splenda from Johnson & Johnson in 2015. It has since expanded the portfolio to include Stevia, Monk Fruit, and Allulose sweeteners under the brand name, in addition to coffee creamers, sweet teas, and diabetes care shakes.

[00:06:14] Lukas Southard: As you laid out, Monica, SlimFast has been through a number of owners and valuations over the years, but this recent acquisition comes as the legacy diet industry kind of scrambles to adapt to the changing trends amid GLP-1 use and generally consumers changing how they eat and how they prioritize their diets. The question is, will another new owner be able to breathe new life into SlimFast or is this just another stop on SlimFast's slow decline?

[00:06:49] Monica Watrous: Well, it seems like a really good fit when you think about how both Splenda and Slimfast are competing with GLP-1 and positioning these products as cheaper alternatives to the very high priced injectables that aren't accessible to most American consumers. Over the years, we've seen Slimfast keep pace with changing diet trends. It launched a keto centric line a few years back. And a lot of its marketing is around positioning it as an alternative to GLP-1s. So I'll be curious to see what its new owner does and how it continues to market the brand as an alternative or even a complement to Ozempic and all of these other drugs that are gaining popularity.

[00:07:37] Lukas Southard: We definitely have seen a lot of success in brands positioning as a GLP-1 companion. And I think that is something we'll see a lot more of going forward.

[00:07:48] Monica Watrous: I think brands that are looking to appeal to consumers that are interested in losing weight will see the most success if they position the products as both an alternative and a companion to GLP-1. And what it comes down to at the end of the day is products that are offering nutrition that consumers need, including more protein that's going to help with appetite suppression and fewer calories, which is going to help with weight loss.

[00:08:13] Lukas Southard: While GLP-1 diet trends and high-protein products continue to dominate the conversation, one beverage category continues to grow, energy drinks. The $25 billion category shows no sign of slowing, and new brands seem to be launching every day. One new addition to the caffeinated drink set is Motion, developed by a former brewmaster of White Claw, Tony Vieira. Vieira, with his son Christian co-founding the brand and leading its go-to-market strategy, saw an opportunity in adultifying the energy set. The younger Vieira got the idea to bring a more grown-up version of an energy drink to market while he was waiting for his daughter to be born at the hospital. He went to the concessions looking for an energy drink and found that the only options were candy flavors that did not fit the life stage he was at. So fast forward a couple of years and the Vieiras have formulated a taurine and sugar-free energy drink that adds in immunity benefits from shiso leaf, echinacea, and elderberry. The formulation is a nod to the Vieira's Filipino roots and is expected to resonate with Asian consumers. While there has been a shift in energy beverages from heavily sweetened and highly caffeinated options, Motion is not the only brand that is targeting the over-30 demographic with better-for-you ingredients. The majority of brands positioned towards this subset of young professionals have mostly skewed towards the fitness community. Along with leading brands, Alani New, its new owner Celsius, and even Bloom Nutrition, there's FitAid, ZOA, and NOCO, all going after the health-minded consumers in that 30 to 45-year-old age range.

[00:10:16] Monica Watrous: On a lighter note, cottage cheese maker Good Culture has partnered with apparel brand Stay Cool NYC to launch a branded sweatshirt that features a built-in spoon pocket. I gotta say, it looks really cozy, actually.

[00:10:31] Lukas Southard: It's a fit, and it's not just a sweatshirt. It's a whole, like, sweatsuit, like, you know, Juicy Couture style.

[00:10:38] Monica Watrous: I'd like to give a shout out to Freestyle Snacks and its founder and CEO Nikki Seaman for launching pickles this week. The brand is known for its snackable take on olives and now it's applying that playbook to the pickle category with a trio of grab and go pickle chips that are shelf stable and rolling out this week at Whole Foods Market.

[00:11:02] Lukas Southard: Perpetual party boy and one of Hollywood's most interesting characters, shall we say, Charlie Sheen is the latest celebrity who is wading into the non-alcoholic beer business. The Hollywood star has teamed up with Barrel One Collective's Harpoon Brewery and quote, innovation brand shop, The Silent Group to create Wild AF Brewing. I think you can imagine what the AF stands for. And I think, as Charlie Sheen would say, he is winning.

[00:11:34] Monica Watrous: Winning.

[00:11:35] Lukas Southard: Thank you.

[00:11:36] Monica Watrous: I think that AF stands for alcohol free, right? That's the only thing it could stand for. Here are some other notable bits of news from the week. Molson Coors named longtime Chief Strategy Officer Rahul Goyal as the company's new president and CEO, succeeding Gavin Hattersley, who announced in April plans to retire at the end of the year. After multiple attempts, Danone has withdrawn its interest in purchasing the Kefir category leader Lifeway Foods, according to a filing with the U.S. Securities and Exchange Commission. And finally, Khloe Kardashian's Cloud Protein Popcorn named former Poppy president and chief growth officer Jeff Rubinstein as its CEO, just five months after launch and amid a slate of distribution gains. 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 Bevhna 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.