The Checkout: HighKey Partners With Ryan Reynolds’ Maximum Effort; Mondelēz Launches Startup Program
Welcome to The Checkout: an express lane for the weekly news you need to know, always 10 items or less.
HighKey Announces Partnership and Minority Investment from Maximum Effort
Keto snack maker HighKey yesterday unveiled a new partnership with Maximum Effort, the marketing firm owned by actor Ryan Reynolds. As part of the partnership, which kicked off with two online ads, Maximum Effort also placed a minority investment in HighKey.
The ads, “Sugar Panda” and “HighKey Romantic,” introduce Sugar Panda, a sugar addicted animated spokesperson voiced by Reynolds. The videos feature HighKey’s Chocolate Chip Mini Cookies, which the brand says are currently the best-selling chocolate chip cookie on Amazon, and features the tagline “Cancel Sugar, Not Cookies.” HighKey confirmed that Maximum Effort will be producing more ads featuring Sugar Panda in the near future.
“Maximum Effort is not a traditional marketing agency, and HighKey is not a typical food company,” HighKey co-CEO Joe Ens said. “We believe we can eliminate 10 million pounds of sugar from the American diet this year, and the platform that Ryan and Maximum Effort provides will help us do that.”
The company registered a trademark for Sugar Panda last year, covering several food and beverage categories, but declined to not confirm whether it had plans to launch products under the Sugar Panda name itself.
The new ads come after a slew of new products launched from the brand last month. HighKey, which employs a “digital incubator model” focused on rapid innovation, started the year by launching several new low sugar keto-friendly products including new cookies and brownies along with Caramel Clusters, its first move into candy.
Price Chopper/Market 32 and Tops Markets Merge
New York-based independent grocery chains Price Chopper/Market 32 and Tops Markets announced a merger agreement this week, a deal which will double the Northeast presence of the newly created and yet-to-be named parent company. Financial terms of the deal were not disclosed, and the transaction is expected to close in the coming months.
The new company, based in Schenectady, New York, will control nearly 300 retail locations across New York, Vermont, Connecticut, Pennsylvania, Massachusetts and New Hampshire, and employ over 30,000 team members.
The company will maintain the two separate business units underneath the new parent company, with stores retaining their names and local management. Price Chopper/Market 32 president and CEO Scott Grimmett will serve as CEO and join the board of directors of the new parent company, while Tops chairman and CEO Frank Curci will join the board of directors and serve as a consultant to aid in the merger. The Price Chopper/Market 32 business will be led by EVP of merchandising Blaine Bringhurst, while Tops president and COO Persons will head Tops’ business.
Grimmett said in a press release that the merger is a “a major step forward and collectively elevates [the retailers’] ability to compete on every level.”
“It leverages increased value for our customers; advances shared opportunities for innovation; fortifies the depth of our workforce, community and trade partnerships; and ultimately accelerates our capacity to deliver a distinctively modern and convenient shopping experience,” he said.
Mondelēz SnackFutures Launches CoLab Startup Program
Snack giant Mondelēz’s innovation and venture arm SnackFutures announced this week the launch of CoLab, a new accelerator for health and wellness-focused early stage snack brands.
According to Mondelēz, the 12-week program is aimed at driving “mutual growth” between the company and entrepreneurs. The program, set to begin in June, includes one-on-one mentorship, workshops and access to expertise and resources from the company’s leadership team, and will be conducted through both virtual and in-person activities. Mondelez will choose up to 10 startups to participate in CoLab, each of whom will receive a $20,000 grant. At the end of the program, startups will also be given the opportunity to pitch to “key stakeholders,” according to the company.
To participate in CoLab, startups must be based in the U.S. and have a minimum of $500,000 in revenue, “have high growth potential” and “align with the Mondelēz International innovation priorities.”
“SnackFutures is in a unique position of both creating our own brands and investing in start-ups, so we can offer participants empathy and understanding from our own experiences along with the rigor, discipline and insights of global snacking leader,” Brigette Wolf, Global Head of SnackFutures, said in a press release. “It’s even more important for programs like CoLab now as these small brands try to recover and grow out of the challenges presented by the COVID-19 pandemic.”
Launched in 2018, SnackFutures invests in snack brands as well as creates and develops brands internally. SnackFutures has launched brands such as CaPao, Dirt Kitchen Snacks and Ruckus and Co., and has placed minority investments in Uplift Food, Torr and HU, the latter of which the company acquired last month.
Kellogg’s Reports Q4 and Full Year 2020 Earnings
Kellogg’s reported 8% net sales growth for the fourth quarter and 1% growth for the full year 2020 in its earnings call this week. For the full year, the company reported sales growth across several categories in retail including snacks, cereal and frozen, despite reduced away-from-home and on-the-go eating occasions as a result of the pandemic.
The company also reported 3% organic net sales growth on ecommerce for snacks, its largest business, and a 7% ecommerce growth for cereal. The company also increased its market share in several categories in retail, including frozen veggie and vegan foods, where MorningStar Farms saw 26% retail sales growth.
Looking ahead, the company aims this year to “resume a full flight of innovation” which was slowed or halted due the pandemic, with new launches including new Incogmeato chicken alternatives. It will also focus on continuing to increase household penetration while sustaining growth in categories like crackers that saw an increase in sales in 2020.
“We enter 2021 with solid momentum, andI remain confident that Kellogg will emerge from this pandemic a stronger company,” Kellogg’s chairman and CEO Steve Cahillane said. “We’ve enhanced capabilities, reached incremental households, invested in our supply chain, and improved our financial flexibility. We are on sound footing for continued balanced financial delivery.”
Lotus Bakeries Reports 2020 Results
Belgium-based international snack company Lotus Bakeries reported 8% net sales growth for the full 2020 year in an earnings report published earlier this week. In the report, the company also discussed its focus on expanding its presence in the U.S. as well as growing its portfolio of better-for-you and sustainable food brands.
The company announced plans to increase its investment in U.S. capacity, following significant growth from the Biscoff brand. In August, the company opened a new Biscoff factory in North Carolina, its first in the U.S., and it aims to scale operations in 2021 with additional hires and production lines over the next three years. The company said this move will also improve its ecological footprint by reducing the need to import products from other continents. This investment, combined with similar expansion of capacity in Belgium, is estimated at EUR $150 million (approximately $181 million).
In 2020, the company also placed heavy focus on its Natural Foods business. In May, it acquired the majority of the remaining shares of Natural Balance Foods, a British company whose portfolio includes low sugar kids snack brand BEAR. In order to unite the natural foods team and optimize supply chain and sales strategy, the company unveiled plans to establish a Natural Foods International headquarters in Switzerland which Lotus said will “allow multiple synergies to be achieved.”
The company invested in two U.S.-based brands last year, Love Brands and Partake Foods, through its corporate venture fund Fast Forward 2032, which focuses on better-for-you food and beverage brands. Beyond CPG food brands, the company said its venture arm will focus on sustainable packaging and food tech.
