Oatly Fibermaxxes & Mondelēz Goes Undercover

Episode 198

Hosted by:

Nov. 5, 2026 at 11:00 am

In this episode:

This week, BevNET and Nosh senior reporters Brad Avery and Lukas Southard question whether or not better-for-you candy is impacting trick-or-treat bags. Then the CPG Week podcasters discuss Oatly’s newest innovation, a not-so-undercover majority investment from one of the largest chocolate companies and how Simply Good Foods is attempting to right the ship for Atkins.

Show Highlights:

2:30 - Oatly is answering cost pressure with innovation, including a Fiber line announced last week. Brad and Lukas discuss how Oatly is positioning for future growth as macroeconomic headwinds persist.

6:30 - Lukas explains why Mondelēz took a majority stake in chocolate-covered quinoa brand Undercover Snacks and its relation to the broader price fluctuations happening in the cocoa supply chain.

11:15 - Simply Good Foods continues to struggle with its challenged portfolio brand, Atkins. Brad describes how the parent company is attempting to turn around the diet-based brand and its other protein snack and shake brands, Quest and OWYN.

Episode Transcript

Note: Transcripts are automatically generated and may contain inaccuracies and spelling errors.

[00:00:05] Speaker 1: Welcome to the CPG Week podcast by BevNET and Nosh. On this week's episode, we take a look at the latest functional plant milk launch from Oatly, and why the company believes turning up the notch on innovation will help it to offset mounting price pressures. Then, we uncover what Mondelez's acquisition of Undercover Snacks says about the state of the cocoa industry. Plus, can Simply Good Foods make Atkins cool again? We'll dig into the conglomerate's ambitious turnaround plans. Hello, hello, I'm Brad Avery, and here with me as always is my co-host, Lukas Southard. Hey Brad. So before we get into the news, Lukas, last weekend was Halloween. I think you took your kids trick or treating. Low sugar and better for you candy has been one of the biggest innovation stories of the past year. Did you see anything in your kids' Pumpkins, while out and about that was low sugar, or was it all the

[00:01:02] Speaker 2: classics? To be honest, it was a lot of the classics, a lot of Sour Patch Kids, a lot of assorted Hershey chocolates, there wasn't a lot of rotten being given out.

[00:01:15] Speaker 1: Well, according to Spins, volume sales of Halloween branded candies are down 20% year over year. So, maybe you were just in an outlier, like, because the better for you candy segment is worth around $1.7 billion and grew 17% over the same time period we're talking about. Now, that's still just a drop in the bucket for the $41.5 billion dollar US candy category, which as a whole was up 4%. But as consumers focus more on health and wellness, it does seem like those classics are taking a bit of a hit when it comes to the spooky season. Yeah,

[00:01:51] Speaker 2: and we'll get into this a little bit more about how chocolate pricing is affecting that, but at least from my point of view, it seemed like the better for you candy aisle or category hasn't made it fully into the rotation out here. For Halloween, but I happily like to eat it or give it to my kids as opposed to some of the stuff they received.

[00:02:14] Speaker 1: Yeah, unfortunately, I don't have kids at the moment, don't have any anecdotal evidence either way for myself. We just stayed in and watched Blade 2. Well, let's turn to the week. Swedish oat milk leader Oatly is betting on fiber for its latest innovation drive. During its Q3 earnings last week, the company went into detail about its new functional offerings, which included an international launch during the quarter, and an upcoming US rollout in Q1 2027 of fiber oat milk. These oat milks will debut in original and low calorie varieties in North America, touting 6 g of fiber per serving. They're the latest in a very active innovation pipeline from the plant-based brand this year, which previously introduced funky flavors like popcorn and churro barista milks back in the spring. Remember trying those out at Expo West.

[00:03:04] Speaker 2: Yeah, those don't really seem like something I'd be interested in, but we did talk about that. I mean, churro, I, I could see churro popcorn. It might be above the pale for me. We have talked about trends recently, just last week, we're going through Whole Foods 2027 prediction report. What stands out to me here is that fiber seems to be having a renewed spotlight on it. We heard a lot about fiber when prebiotic, modern sodas were beginning to take off a couple of years ago. And then the discourse shifted a little bit more towards protein everywhere all the time, max out. Is fiber having a moment again? Is, is fiber

[00:03:48] Speaker 1: back? You know, if I had to offer my own opinion on this, I'd say fiber makes a lot more sense for a commodity product like milk or plant-based milk. And, and in particular, oat milk is already a health decision-based purchase over dairy milk. So, it works a lot more, at least in my mind. For a product like oat milk than it does for a soda. So, looking at Oatly's financials, what's significant about this functional launch is that this heightened innovation strategy ties part and parcel into the company's cost-saving strategies. And in particular, fiber is a way for them to leverage their processing and manu. Facturing capabilities. Oatly is also looking at increasing prices. Although, to quote President and CEO Daniel Ordonez, they're taking a surgical approach line by line rather than a quote, wide canvas price increase. These innovations are part of this strategy, and CEO Jean-Christophe Platin said that higher pricing will offset increased input costs.

[00:04:55] Speaker 2: Brad, this seems similar to what we were talking about last week with Vitacoco, somewhat hedging in terms of the forecast for pricing ahead and how supply chains might impact that. Yeah,

[00:05:07] Speaker 1: I would agree. It certainly seems similar. We talked about Vitacoco last week. They also released their earnings last month, and everyone, especially companies that rely heavily on international shipping, are seeing these increased freight costs that are eating into margins. They have to take pricing action. And I think innovating within their realm, the way that Vitacoco is done with its streets lines and the like, is a good way to introduce some of these higher prices. They certainly see a chance. To get consumers more on board with a higher price point, if it's coming from a product that has some add-in.

[00:05:46] Speaker 2: And you brought up innovation, we're just talking about the fiber line from Oatley. One thing we didn't bring up with Vitacoco last week, I don't think was their launch into kids' drinks, so just diversifying further into all these kind of adjacent categories or adjacent innovations within the category maybe that can yield to driving a little bit more volume. Maybe building some velocity in places that they didn't have much visibility, and that can also help when pricing and these macroeconomic headwinds can make things a little bit more challenging.

[00:06:27] Speaker 1: Well, speaking of challenged commodity prices, I think the chocolate market has been one of the most volatile in recent years. But there's some positive sign with the recent acquisition. Lucas, you took a look at the acquisition of undercover snacks.

[00:06:43] Speaker 2: All Hallows' Eve might be over, but chocolate snacking is year-round, and that seems to be the approach Mondelez is taking after it took that majority stake in the New Jersey-based chocolate covered quinoa bite brand. Undercover Snacks was founded in 2012 and has lined up deals with a variety of different grocery and drugstore chains. Undercover joins recognizable names like Oreos, Clif Bar, and Perfect Bar, among many others in the Mondelez portfolio. What stands out to me about this deal are two things. The first is that Undercover operates its own manufacturing facility, which it expanded with an ingredient processing arm of the business earlier last year. And and this is something we've discussed before. But it, it seems like it's a common thread among some of the recent deals that we've been tracking. Larger strategics are seeing vertical integration and brands that do their own manufacturing and have the means of their production as significant. value adds to acquiring the brands into the portfolio. The second aspect I wanted to dig into was how this relates to elevated cocoa prices. This is a story we've been covering for years, and Mondelez is definitely no stranger to managing the swings of the chocolate supply chain.

[00:08:08] Speaker 1: First off, I was absolutely going to say the same thing about vertical integration. I mean, that's been a theme again and again. Across all of these acquisitions we've been talking about this year. But on cocoa prices, absolutely. I mean, we've been talking to brands for the past 23 years who are pivoting, reformulating. We've seen it on the high end as well. I mean, Reese's reformulating because of cocoa prices. So, I wrote a story even a couple weeks ago about a new cell-cultured cocoa brand, Wonder House, launching. And this is an area that's getting a lot of momentum as well, because I think companies are struggling to have some sense of stability, and an alternate way to produce cocoa or chocolate is ideal at the moment.

[00:09:03] Speaker 2: I've been tracking and and writing about Voyage Foods for a while, which You know, launched as a nut butter alternative, and then did a cocoa-free chocolate ingredient, and, and really leaned hard into becoming an ingredient provider and Has devoted all of its business and expanded into a bigger manufacturing facility to support its partnership with a big strategic like Cargill, where they're in Cargill's portfolio of ingredients uh with a cocoa-free chocolate alternative. But, you know, going back to the cocoa prices, it, we have seen those prices moderate in the last year. They, they peaked in kind of late 2024, early 2025. But that being said, they have been steadily increasing all year with future prices going up 2% in October. According to a recent Jeffrey's report, they're predicting that the supply risk is building and will continue to be a headwind. 2027, cacao farmers in West Africa are contending with uneven average rainfall, and with the record breaking El Nino weather, harvest could be impacted significantly and the capacity could be strained. I think a lot of these big chocolate makers were caught off guard a little bit when prices spiked a couple years ago, and so they have been preparing for these kind of price fluctuations in recent years. They have been diversifying their supply chain into other areas, stockpiling, as Mondelez said, they've been doing. Hershey posted, uh, recently organic egg sales up 3% in its Q3 earnings. And during that call, uh, CEO Kirk Tanner reported that it has also been keeping a close eye on the cocoa supply chain, but it feels confident that it's diversified its supply chain and is a little bit more optimistic that the producing regions that it's sourcing from are more agile and can support even some capacity constraints that might be coming next year.

[00:11:17] Speaker 1: Well, turning from sweets to dieting, long before paleo, keto, and GLP ones, there was the Atkins diet, the low carb, high protein craze that for a time was the top name in weight loss. And with weight control back in the spotlight, could it rise again? That's the hope for Simply Good Foods Company, the owner of the Atkins CPG brand, as well as two other notable but challenged protein brands, Quest Nutrition and OWYN. Simply Good reported net sales declines of 6.5% to about $1.3 billion during its fiscal year 2026 earnings report last week, and the Atkins brand was worse for the fair, falling 20.9%. In comparison, plant-based brand OWYN, only what you needed, which it acquired in 2024, was down 9.7%, and Quest Nutrition was slightly above flat at 0.7% growth.

[00:12:13] Speaker 2: This isn't necessarily new news though. I mean, in the last couple earnings reports from Simply Good Foods, they've been talking about how they've been trying to turn around the Atkins brand, and they've also Been fairly candid about the struggles with integrating OWYN into the portfolio and really getting it going the way that they hoped when they acquired it. Is there a plan for how Simply Good Foods is is gonna right the ship, shall we say?

[00:12:44] Speaker 1: They say there is. They're well aware, they've been in trouble for a while. And president and CEO Joe Scalzo called 2026 a year of decisive action. They're now rolling out overhauled marketing strategies for all three core brands, and Scalzo's thesis is simple. All three brands are as relevant to the market as ever when it comes to their product portfolios. The problem is that they've fallen behind when it comes to promotion and marketing support. So, They're putting new investment, new weight behind OWYN, which is a more modern, earlier stage product, and Atkins, which has been around for decades. In particular, GLP ones, he said, are a quote, meaningful opportunity. So, I do think it's an interesting challenge. Can you make the Atkins diet, or at least the Atkins name, top of mind again? It Truly does seem to have fallen off, and I think he's right when he mentions that there's really no marketing support behind it, at least until now.

[00:13:45] Speaker 2: I know in other earnings calls that I've been listening to with Simply Good Foods, they've really leaned into this idea of GLP ones being an opportunity. Obviously, people who are On GLP ones or looking for companion products, uh, for that that kind of dietary choice are looking for high protein, Quest Nutrition and Owen fit really well in in there. It will be very interesting to track how they are integrating a GLP one lens in their marketing and in their approach to new uh customer acquisition.

[00:14:28] Speaker 1: Yeah, the market responded well after this call. Their stock price actually went up, but I think the thing to keep in mind is that GLP ones are a meaningful opportunity for just about everybody right now. It's not just a matter of, you know, a few legacy brands getting on board with a new trend. They're still competing in a marketplace where just about anybody in protein, anybody in weight control, are all reformulating and readjusting their strategies around this. So, That's the challenge for Simply Good.

[00:15:02] Speaker 2: Well, as Halloween is behind us, Thanksgiving is ahead of us. You know what's coming at the beginning of the next month, Brad. Do we have any big events coming up that we can talk about?

[00:15:12] Speaker 1: Is it Nosh Live and BevNET Live? Yeah.

[00:15:15] Speaker 2: Oh my God, exactly.

[00:15:16] Speaker 1: Well, Lucas and I are both gonna be spending a week out in Marina del Rey. Nosh Live December 3rd and 4th. Bavnet Live, December 6th, 7th, and 8th. Come see us. And if you want, stick around for Brewbound Live as well later that week. Now, these events are gonna be great. We have Thrive Market, we have, we can now say we have Chrissy Teigen coming, we have Seth Green coming. We have major retailers, major brands on stage all week. Hope to see you out there.

[00:15:49] Speaker 2: I'm super excited for the shows. Uh, it'll be a lot of fun. It's always really nice to spend some time in LA when it's starting to get really cold out here on the east coast, but more importantly, we just have really good, uh, schedules and agendas lined up already, and have some exciting surprises, and just really looking forward to Seeing everyone in person and um learning a couple of things, I hope.

[00:16:12] Speaker 1: Yup, you can find out more on Bevnet.com. And for a closer look at the stories we talked about today, become an insider at Bevnet and Nosh. And if you enjoyed the show, like and subscribe on your listening platform of choice. It helps the show a ton to just do that little action. So, thank you for listening. We'll see you again next week.

[00:16:34] Speaker 2: See you later, everyone.

About CPG Week

CPG Week is the podcast that explores the latest happenings in the consumer packaged goods industry. Join our seasoned reporting team as they dish out the week’s stories in quick, easy-to-digest episodes. Catch up on the top headlines of the week, dive into exclusive insights with the BevNET and Nosh teams, and set yourself up to make more informed business decisions. Tune in to stay up-to-date on the latest developments in the dynamic world of packaged food and beverage.

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