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Vincent
Founding Partner, Gota Ventures

Written by Vincent Kuiper, founder of Gota Ventures, an international angel syndicate investing in seed-stage European FoodTech and consumer brands. Gota invested in 9 startups in the last 12 months.

Contents

• The Setup: Ferrero has agreed to acquire ‘healthy’ granola brand Purely Elizabeth, seventeen years after Elizabeth Stein started the business with $5,000 from her savings.

• Why This Category / Why Now: A $1.3 billion granola category growing while the cereal base underneath it shrinks, and a buyer making its fourth better-for-you acquisition in eighteen months.

• The Winner’s Playbook: Seven decisions behind the run from $200,000 in 2011 to a targeted $300 million in 2026, on $53 million of outside capital.

• How Others Are Playing It: What strategics have recently paid for better-for-you pantry brands, why this one cleared the top of that range, and what it changes for General Mills, Post and every independent brand on the shelf.

• What Went Wrong: Bear Naked sold for over $60 million in 2007 and is now a supply chain footnote inside the same portfolio Purely Elizabeth is joining.

• Is There Room for New Entrants: Why the European granola shelf still has no equivalent brand, although I am very enthusiastic about a Dutch rising star

• Takeaways: Six things worth carrying forward.

  

The Setup

Granola is a category I pay close attention to as a buyer before I pay attention to it as an investor. Low sugar, high protein, ingredients I can read on the back of the pack: that is a shelf I stand in front of most weeks. So when reports came out in April that Purely Elizabeth had hired bankers and was seeking above $600 million, the brand went straight onto my watchlist.

The process closed out on Friday. Ferrero has signed an agreement to acquire the Boulder-based breakfast brand, with completion expected in the coming months subject to regulatory approval. Terms were not disclosed, and Elizabeth Stein declined to comment on them. What exists publicly is a range. Axios Pro reported in April that the process was targeting above $600 million. Forbes now estimates the price at above $850 million and describes it as more than 4x sales. One clarification on the arithmetic, because Forbes also puts trailing twelve month revenue at roughly $250 million: $850 million against that base works out to about 3.4x, and the 4x characterisation holds against the roughly $200 million of calendar 2025 revenue instead. Depending on the denominator, this deal priced somewhere between 3.4x and 4.3x sales. The two figures are four months apart, and the gap between them is itself part of the story. Stein remains CEO and the brand will operate on a standalone basis.

Here is what makes the timing interesting. Ferrero closed its $3.1 billion acquisition of WK Kellogg Co in September 2025, taking on Frosted Flakes, Froot Loops, Special K and the rest of the American cereal aisle. That business posted $2.71 billion in net sales in fiscal 2024, down 2 percent, and first-half 2025 sales fell 7.5 percent. Eleven months later Ferrero has bought the kind of brand that has been quietly pulling volume out of that aisle for a decade.

Something that caught my interest: Granola sits in one of the most crowded, most private-label-exposed corners of the store, and the product is not hard to make. Purely Elizabeth also breaks the pattern I usually study here. There was no viral launch moment and no venture-fuelled sprint toward an exit window. Stein started in 2009 with $5,000 from her savings in a New York apartment kitchen and took $3 million of outside capital in the first thirteen years. Her mantra throughout, as she told Forbes, has been to “feel the fear and do it anyway.” The question I want to answer is what a buyer like Ferrero is actually paying for at the end of a run like that.

Why This Category / Why Now

Start with the shelf itself, because the granola numbers floating around are easy to misread. Granola in a box competes inside the ready-to-eat cereal category in scanner data, and granola bars sit in a separate snack category entirely. The US ready-to-eat cereal category recorded $11.02 billion in dollar sales in the 52 weeks to 6 October 2024, roughly flat year over year with units down 2 percent, according to Circana. Volume tells the sharper story: Americans bought close to 2.5 billion boxes of cereal in the 52 weeks to July 2021 and 2.1 billion in the same period of 2025, a decline of more than 13 percent, according to NielsenIQ data cited by the Associated Press.

Granola is roughly $1.3 billion of that aisle in SPINS multi-outlet data, or something close to one-eighth of the category. That is the part growing while the other seven-eighths loses households. The scale of the shift is easier to see from Stein’s own starting point: when she began, US granola was around $300 million in retail sales, and it is more than four times that today. Purely Elizabeth says it holds the number one position in granola in both dollar and unit sales, ahead of Quaker Oats and Kind, and Forbes reports the brand growing at close to four times the pace of the category. The trajectory supports the claim: roughly $150 million in 2024 (Forbes), an estimated $250 million trailing twelve month revenue at signing (Forbes), and a target above $300 million for 2026.

Three forces put this deal on the table now.

The first is the structural split inside breakfast. Ready-to-eat cereal in the United States has been losing households for years, which is precisely why Kellogg separated the business in 2023 and why Ferrero was able to buy it at $23 per share. Granola has moved the other way, because it functions as a topping, a snack and a yoghurt component rather than only a bowl of cereal with milk. Occasion breadth is doing the work, but also the taste and usually a healthier ingredient list.

The second is protein. Purely Elizabeth launched Protein Oatmeal in June 2025 alongside a reported 62 percent year-over-year portfolio increase, then entered protein granola in May 2026 with 10 grams per serving from pumpkin seeds, almonds, cashews and chia rather than isolates or powders. The company cites its own research showing 74 percent of consumers find protein from nuts and seeds appealing, with materially lower interest in pea protein or whey. Again, company-cited. What is externally observable is the distribution: Target nationwide at launch, then Kroger, Sprouts, Whole Foods, Publix and select Costco locations.

Count the deals and the dates.

• Eat Natural, the UK cereal bar, muesli and granola maker, in 2020

• FULFIL, the Irish vitamin and protein bar business, in 2022, at a reported value around 150 million euro

• Power Crunch in North America, announced January 2025

• Bold Snacks, the Brazilian protein snack company, in March 2026

• Purely Elizabeth in August 2026

The first two built the European base. The last three are the recent run: three better-for-you acquisitions in nineteen months, on three continents, with the $3.1 billion WK Kellogg deal landing in the middle of them. Six years of steady accumulation, accelerating sharply in the past two. A company buying on that cadence has decided better-for-you is a permanent category it intends to compete in globally. Ferrero’s own release positions Purely Elizabeth alongside Eat Natural, FULFIL, Power Crunch and Bold Snacks, which tells you the group sees these as one portfolio rather than five separate bets.

Ferrero already had cereal scale through WK Kellogg. What it lacked was standing with the shopper who has been quietly walking away from that aisle in favour of granola, oats and protein-forward formats. Purely Elizabeth arrives with that standing already built.

Think about what Ferrero would have faced trying to build this internally. This is the company behind Nutella, Kinder and Ferrero Rocher, sitting at the opposite end of the nutrition conversation from ancient grains and coconut sugar. Wellness brands are trusted because of who founded them, where the ingredients come from, and how many years a specific consumer has been buying them. None of that comes out of a confectionery R&D pipeline, however good the pipeline is. Ferrero used the phrase about preserving the brand’s distinct identity twice in its own release, which tells you the positioning itself is what got bought.

There is a defensive read too, though it needs stating carefully. Confectionery sits in the path of public health scrutiny, GLP-1 driven changes in how people snack, and a steady drift toward functional and protein-forward eating. The obvious response would be to concentrate on the growing end and let the declining one go.

Ferrero is doing something more specific than that. Cereal and confectionery decline slowly, and while they decline they produce cash, margin and retail relationships built over decades. The cash is what paid for Purely Elizabeth. The relationships are what will get it more shelf space, faster, than it could win alone. A pure-play wellness company has the growth rate and neither of the other two. Ferrero now holds all three, which is the actual argument for owning both ends.

The condition attached to that argument matters. This works only if the growth asset stays intact. A portfolio that runs the growing brand to defend the declining one ends up with two impaired assets, which is the failure mode covered later in this piece. Cash and distribution flowing toward the growth brand is the version that compounds. For European founders, the practical takeaway is that this buyer is active, has bought on three continents in nineteen months, and pays for brand equity.

The Winner’s Playbook

Seven decisions stand out to me from seventeen years of this business.

Decision 1: Take almost no outside money for the first eight years.

Stein pulled $5,000 out of her savings in 2009 to buy ingredients and set up a website selling muffin mixes. She pivoted to granola in 2011, having never eaten granola before making it. Revenue reached $200,000 that year and $1 million by 2013. The first outside round was $3 million in 2017, with backers including General Mills’ venture arm, and the $50 million Series B led by SEMCAP Food & Nutrition, joined by Swander Pace Capital and Fresh Del Monte, did not close until January 2022. Stein has said she never put pressure on herself to raise early and wanted to bootstrap.

The result shows up in the exit. Forbes estimates she still held around two thirds of the company at signing and will take approximately $400 million after taxes (Forbes). Roughly $53 million of outside capital across seventeen years produced founder ownership that almost no venture-backed CPG founder reaches. Capital raised late is worth a multiple of capital raised early.

Decision 2: Let one retailer prove the brand before chasing distribution breadth.

Stein’s mother cold called 40 shops across the mid-Atlantic and convinced Whole Foods to take the granola in its first year. Whole Foods expanded it to six regions by 2013, then took it into all 300 stores nationally in 2014. Walmart followed in 2017, the same year the brand became the top-selling granola in natural grocers. Distribution reached more than 10,000 retailers by the end of 2024 and over 30,000 stores today. The sequence is important. Ranging earned on velocity inside a credibility channel is very different from ranging bought with trade spend. The first compounds on its own while the second requires funding every quarter.

Decision 3: Reach profitability before pressing on growth.

Purely Elizabeth became profitable in 2023, fourteen years after launch, with about 50 employees. Sales then roughly doubled over two years, from about $150 million in 2024 to a target above $300 million this year. The cookie granola launched in 2024 and became the best seller. A brand that funds its own acceleration keeps optionality on both timing and buyer, which is exactly what showed up in the process this spring.

Decision 4: Own one occasion rather than collecting categories.

Granola, then oatmeal, then cereal, then protein versions of the first two. Every launch defends the same breakfast shelf and pulls from the same brand permission. Compare that to the more common pattern of a successful brand jumping into adjacent aisles to chase a bigger addressable market, where each new category resets the velocity conversation with a different buyer. Depth in one occasion does compound.

Decision 5: Merchandise by benefit, not by product.

Spend five minutes on the Purely Elizabeth website and the strategy becomes obvious. The Shop menu opens into two ways of browsing. One is the ordinary route: granola, cereal, oatmeal, variety packs. The other is a filter called By Benefit, and it runs Protein, Keto, Probiotic, Vegan, Paleo, Gluten-Free, Sugar-Free, Grain-Free, Certified Organic.

That second list is the interesting one, because it organises the catalogue around who the shopper thinks she is rather than around what the product physically is. A format-led site gives one bag of granola three or four ways to be found. A benefit-led site gives the same bag nine entry doors, and each door speaks to a dietary identity the shopper already holds. This is also how a company sustains 40 items across granola, oatmeal and cereal without the range collapsing into noise. The navigation carries the complexity that the shelf cannot.

The brand layer sits on top of that. The site runs an editorial hub with recipes, wellness, beauty, sustainability and a podcast, plus a cookbook available for pre-order. Beauty content on a granola website tells you the target is the wellness consumer in general rather than the cereal shopper in particular. Each piece builds a reason to visit the site when nobody is buying breakfast, which is how a brand stays present in someone’s head between purchases. My own read is that this is the actual asset Ferrero bought. A confectionery group can fund a website and commission recipes, but it cannot manufacture the fifteen years of accumulated trust that makes a reader open a Purely Elizabeth article about food waste.

One more detail worth noting for founders. Find Us In Store sits inside the Shop menu, alongside the direct purchase options. The site is built to convert online and to hand the shopper to the retail shelf, where the volume lives. Digital discovery does the persuading, while physical availability does the scaling.

Decision 6: Enter protein late, and enter it differently with a focus on quality

Protein granola was already crowded by May 2026. Purely Elizabeth entered at $7.99 with 10 grams of protein and a specific argument about where that protein comes from.

Most protein products begin with a food and then dose protein into it, using isolates and fillers selected to hit a number on the front of the pack. Purely Elizabeth builds the product out of ingredients that already contain protein: nuts, seeds and oats. The 10 grams is a property of the recipe. That is the whole claim, and the campaign behind it, Protein Product Madness, spends its time mocking the alternative.

The economics explain why few competitors will follow. Isolates run 80 to 90 percent protein, so a small amount of cheap powder buys a large number. Reaching 10 grams through nuts and seeds takes far more mass at far higher cost. Any manufacturer can buy almonds. What a $4.49 granola cannot do is carry that ingredient cost, and it cannot move to $7.99 without a consumer who already accepts the brand at that price. The price point is the moat, and the formulation is what it buys. The trade-off is real, because whole-food protein caps out near 10 grams while isolate brands advertise 20, so it only works with a consumer reading the ingredient list.

The key message here: protein quality matters. And apparently that message came through.

Decision 7: Run the process at the top of the curve.

Houlihan Lokey was hired in April 2026, seeking a valuation above $600 million according to Axios Pro. The protein granola line shipped in May. The agreement with Ferrero was signed on 14 August at an estimated price above $850 million (Forbes). That gap of roughly 40 percent between the April target (Axios Pro) and the August estimate (Forbes), opened in four months, is the single most instructive number in this deal. A buyer evaluating the business in April saw a doubling over two years and a number one category position, while a buyer evaluating it in August also saw a protein line already performing in national distribution. Sale processes get priced on the slope of the curve.

How Others Are Playing It

Because Ferrero disclosed no price, the comps set is what makes the estimated multiple legible. Drew Fallon at Iris Finance published one the day the deal broke. I have added the growth figures from each deal announcement, because the multiples alone do not explain much.

Simple Mills is the comparison that matters, because it controls for almost everything. Similar revenue scale, the same 30,000 doors, the same better-for-you positioning, and a wider product range covering crackers, cookies, bars and baking mixes. It cleared 3.31x, against roughly 3.4x on a trailing basis for Purely Elizabeth, and above 4x if measured on calendar 2025 revenue. If breadth of shelf were the driver, Simple Mills would have priced at least as high. The gap is modest on the conservative reading and wide on the other, but the direction is the same, and it needs explaining.

Two variables actually separate the set.

The first is growth rate. Simple Mills grew 14 percent into its exit. Purely Elizabeth roughly doubled over two years. Growth rate is one of the most important drivers of valuation.

The second is where the growth comes from. The two brands at the top of the range are the two where the acquirer was buying new households. Hershey disclosed that LesserEvil household penetration moved from 5 percent to 8 percent inside a year. Purely Elizabeth has the C&R finding that one in three of its buyers had never bought granola before. Siete, at the bottom of the range, was already in 40,000 doors selling tortillas to people who buy tortillas.

TRUBAR fills in the third variable. It was growing quickly and still losing money through 2025, and it cleared under 3x. Purely Elizabeth had been profitable since 2023. Growth without profitability gets discounted.

One caution on the table. The denominators are inconsistent, since Siete’s figure is retail sales rather than net revenue, and TRUBAR reported both gross and net. Treat the comparison as directional.

The public comparables make the same point from the other side. Simply Good Foods trades at roughly 0.91x revenue, Bellring at 1.02x, Hain Celestial at 0.42x. A strategic paying 3.4x for a private brand is paying a large premium to where the market values the platforms those brands join. That gap is the growth rate, and it closes the moment growth stops.

What this changes for everyone else

Three consequences follow, and they land on different people.

General Mills, Post and Kellanova now compete against a rival holding legacy cereal distribution and a credible premium challenger inside the same profit and loss statement. None of the traditional cereal majors has that combination at this scale today. Their options are to build a wellness brand from inside a legacy structure, which is the harder path, or to go shopping in the same aisle Ferrero just cleared.

Founders in better-for-you and wellness get a repriced benchmark. A banker went to market in April at above $600 million (Axios Pro) and a strategic paid an estimated $850 million four months later (Forbes), for brand equity rather than for factories or revenue alone. Every private-equity-backed wellness brand sitting on a stalled exit process now has a live comparable, and every founder in a sale conversation has a stronger number to point at.

Retailers face a consolidated supplier spanning both breakfast tiers. Ferrero can now negotiate mainstream cereal and premium granola shelf space from one position, which shifts leverage in the aisle. The brands that feel this first are independent challengers without a strategic backer, competing for the same shelf against a supplier who can trade one tier off against the other.

What Went Wrong

The cautionary tale here is already inside the building.

Bear Naked was founded in 2002 by two young entrepreneurs in Connecticut, built a following on natural positioning, and sold to Kashi, then a Kellogg subsidiary, for over $60 million in 2007. It is now a WK Kellogg brand, which means Ferrero has owned a granola business since September 2025. By September 2024 its parent was publicly discussing a Bear Naked rebound contingent on resolving supply issues. Ferrero bought a second granola brand anyway, at what appears to be several times that 2007 price.

That is the risk in one sentence. A challenger brand inside a large portfolio can lose the thing that made it a challenger, and the acquirer ends up buying the position again a decade later at a much higher price.

The structural mitigations in this deal are visible. Stein stays as CEO. The brand operates standalone. Ferrero’s release commits to preserving its distinct identity. Those provisions matter more than the headline number, and the pattern from the successful CPG integrations of the past few years supports that. In my opinion, it’s the only way how these brands can survive under the ownership of a Big Food company, as there have been too many examples how ingredient lists worsened after acquisition.

The second risk is the category itself. Whole-food protein granola is a formulation position, and formulation positions are copiable. Private label in premium granola is well developed, and every major cereal manufacturer now has protein SKUs in development. Purely Elizabeth entered protein with a point of difference, focusing strongly on the quality of protein instead of the quantity. Holding it for three years while sitting inside a portfolio with different incentives is the harder task.

The third risk is that no price has been confirmed. The $850 million figure is a Forbes estimate, and Stein declined to comment on terms. If the transaction closed materially lower, the read on what Ferrero is willing to pay for growth changes with it.

Is There Room for New Entrants?

In the United States, the granola position is taken. Purely Elizabeth holds the top spot, it now has a strategic parent with cereal manufacturing capacity, and the protein entry is already national.

Europe is a different picture, and this is the part I find most interesting for the founders reading.

The European breakfast cereal market is estimated at roughly $13 billion in 2026 by Mordor Intelligence, with granola and clusters among the segments growing while flakes stagnate. Germany has the highest per-capita cereal consumption in the EU and a deep muesli tradition. Independent estimates put European granola value growth in the 5 to 7 percent range annually through the early 2030s. Treat those as market research estimates rather than hard figures.

What Europe does not have is a brand occupying the position Purely Elizabeth built. The closest analogue is Deliciously Ella, founded in 2013, acquired by Switzerland’s Hero Group in September 2024 for an undisclosed sum, having sold over 100 million products since 2016. Deliciously Ella is a plant-based snacking platform that added a granola line along the way, and the difference shows up in how the shelf reads. Elsewhere the premium end is fragmented across national players, and private label holds a strong position in Germany and the Netherlands.

The brand I love from a consumer perspective is Holie’s, and I follow them closely. Finally a Dutch brand I’m really proud of.

Merick Schoute and Valentijn van Santvoort started it in Amsterdam in 2018, with Marc Veltman handling recipe development, after about twelve months of testing granola in their own kitchen. The positioning is tighter than most better-for-you cereal brands: no added sugars and no sweeteners, high protein, high fibre, vegan, B Corp certified since 2020. The range began with granola and crunchy muesli, runs past 20 SKUs, and added chewy bars in 2025. And: unique, excellent marketing campaigns.

The numbers have compounded quickly. Revenue reached 13.4 million euro in 2024 and 19.5 million euro in 2025, with a profit of 300,000 euro, and the company is targeting 30 million euro for 2026 on forecast volume of 17.5 million units against 11 million the year before. It has raised very little, roughly 1.85 million dollars per PitchBook, with about 36 employees. Production sits with partners in the Netherlands and Germany, and Holie’s has been co-investing in a dedicated line rather than building a factory of its own.

Distribution covers the Netherlands and Belgium, the UK through Ocado and a Morrisons listing in April 2026 at around 3.99 pounds for a 400 gram cluster pack, and Denmark through Salling Group, with France, Switzerland and Austria planned before year end.

One milestone deserves flagging, with the caveat that it comes from the founder rather than an audited source. Schoute has said Holie’s overtook Kellogg’s on sales value at Albert Heijn, the largest Dutch grocer. A bootstrapped Amsterdam brand outselling a global cereal company in its home market is the clearest evidence I have seen that the European version of this opportunity is real.

Put the two products side by side and something uncomfortable emerges for the American brand. Purely Elizabeth is positioned as the healthy choice of the US cereal aisle, and by American standards it is. The label tells a more complicated story. Its signature Original Ancient Grain Granola carries roughly 23 grams of sugar and close to 12 grams of saturated fat per 100 grams, both driven by the coconut sugar and coconut oil that sit second and third on the ingredient list. Coconut sugar reads wholesome on a US shelf. It is still sugar. Holie’s flagship Nuts & Seeds, by its own label, contains 2.1 grams of sugar, none of it added, 2.1 grams of saturated fat, more protein and roughly double the fibre, at nearly identical calories. On the numbers, the Dutch challenger is the far stricter product, and the $850 million brand would struggle to carry its “healthy” positioning onto a Dutch shelf unchanged. That gap says as much about the two markets as about the two recipes. American wellness branding is built on ingredient provenance, organic, gluten-free, ancient grains. Dutch retailers and consumers, trained by years of sugar-reduction campaigns, judge the back of the pack. A European granola brand meeting the stricter standard is playing the harder game, which is exactly why the position is defensible once won.

Takeaways

Seventeen years, roughly $53 million raised, and a business that took fourteen years to turn a profit. The Purely Elizabeth story argues against almost every assumption about how consumer brands are supposed to be built now, and it ended with a price Forbes estimates above $850 million and a founder still holding an estimated two thirds of the equity (Forbes).

• Ownership is the number that matters, and it is set years before the exit. Stein took $3 million in year eight and $50 million in year thirteen, and kept an estimated two thirds at signing (Forbes). A founder who raises the same total capital across four early rounds reaches the same headline price with a fraction of the proceeds.

• The $600 million target (Axios Pro) and the estimated $850 million outcome (Forbes) are four months apart. Timing a process to land after a major launch is in national distribution, rather than before, is worth real money.

• The multiple is a statement about shelf breadth. The 2.2x to 4.5x spread in this comps set separates brands acquired for one product from brands acquired for a platform. Forty items under one name is what puts a brand at the top of that range.

• Benefit-led merchandising is a growth lever hiding in the navigation bar. Nine dietary filters give every product nine ways to be discovered, and they let a brand carry a range that would otherwise confuse the shopper. Most CPG sites are still organised by what the product is.

• Occasion depth beats category breadth in packaged food. Granola, oatmeal and cereal share one shelf and one buyer conversation. That focus is what allowed a 50-person company to reach a quarter of a billion in sales.

• The acquirer already owning a brand in your category is a selling point rather than an obstacle. Ferrero has owned Bear Naked since 2025 and paid a large premium for a second granola brand. Owning a brand in a category and holding a live position in it are two separate things.

• Watch what Ferrero does next in Europe. A group that has now bought WK Kellogg, Power Crunch and Purely Elizabeth inside fourteen months, on top of Eat Natural and FULFIL, has a stated appetite for better-for-you breakfast assets. European founders in this category have a named buyer.

• The open question is integration. Liquid I.V. under Unilever shows the version where an acquirer adds distribution and leaves the brand alone. Bear Naked shows the quieter version. Velocity data over the next eighteen months will indicate which path this one is on.

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The Setup

Summer has always been the season of reflection for me. My inbox slows down, the deal flow takes a breath, and I finally get the time and space to look up from the week-to-week rhythm and think about the bigger picture. Call it “active thinking”.

Since January I have written 28 deep dives. Grüns, Huel, Graza, Chomps, Bachan’s, LMNT, Kettle & Fire, The Farmer’s Dog, Biotiful, the Finnish Long Drink, and a few special editions. Billion-dollar exits, a couple of IPOs, and bootstrapped sales.

As I like to reflect from time to time, I decided to use this summer to look at all 28 deep dives, aiming to distill what the key lessons are. After reading all articles again, I developed a list of 25 lessons, purely about building CPG brands, each one linked to the deep dive that I obtained the lesson from. Consider this the halfway report of my own education.

The behavioral core: why people buy

1. The biggest exits solved a behavioral failure.
Grüns did not have better greens than AG1, but it fixed the reason people quit greens in the first place: the chalky powder, the mixing, the daily friction that eventually wins. Consumer behavior is crucial, because the product gap is usually crowded already.

2. Health only scales when it stops demanding willpower.
Every winning bar, gummy, and meat stick in my archive tastes like a treat first. Bold Snacks has customers who microwave the bars and eat them as dessert. Another example is Grüns: the gummies get shared at run clubs, which is not something anyone has ever done with a supplement that tastes like medicine. Churn starts when a health product requires discipline.

3. Consumption frequency is the root variable.
If I had to keep only one lesson from the whole list, this is it. Retention, LTV, retail velocity, and eventually the exit multiple all sit downstream of a single question: how often does the product get used? Grüns, Huel, Liquid I.V., The Farmer’s Dog. Every premium outcome I studied this year was a daily or near-daily habit.

4. Brands that upgrade an existing behaviour acquire customers at a fraction of the cost.
Lisa Macfarlane of The Gut Stuff said it better than I could: “People are looking for swaps” A snack bar instead of a different snack bar, Kefir instead of a regular yoghurt drink. Ask consumers to adopt a new ritual and your whole budget goes to education. It is possible but it is more expensive and it takes much more time. Upgrade something they already do and you convert on familiarity.

Format and category economics: set on day one

5. The format decision is the business model decision.
Kettle & Fire’s shelf-stable carton looked like a packaging choice. In reality it was a distribution strategy that opened mainstream grocery, DTC, and Amazon all at once, in a category stuck in the freezer aisle. Nom Nom ships frozen, The Farmer’s Dog ships chilled, and that one difference shaped how much capital each needed, altough both were very successful. The format decision is highly underestimated in my opinion. Pick your format and you have picked your cost structure, whether you realise it or not.

6. The operational problem that kept a category empty becomes the moat once solved.
Chad Janis (Grüns Founder) contacted 20 co-manufacturers before finding one that could pack 60+ ingredients into a gummy sachet. The Farmer’s Dog approached 200 (!) factories before a single one agreed to make dog food to human-grade standards. The lesson: the search everyone else abandoned is exactly why the category stayed open.

7. Some categories are simply more attractive to build in.
I resisted this one, because I want to believe execution decides everything. It matters enormously. But the category you pick sets the terms execution has to work within. Biotiful executed brilliantly for 13 years and exited at roughly 2.5x revenue. Bachan’s exited at 4.6x. Chilled dairy carries cold-chain costs, therefore less attractive unit economics, and a small set of possible acquirers; shelf-stable condiments carries neither. Great operators lift their outcome within a category. The multiples, though, seem to reward the structurally attractive categories first, which is worth knowing before you commit years to one.

8. Category creation runs on trial and education. Category disruption runs on paid media.
Grüns could scale on Meta because everyone already knew what a greens supplement was. The Finnish Long Drink could not explain their product through an advertisement, as the experience of consuming the product was more important, so the founders built the category the slow way: tasting events, state by state. Founders who apply the wrong playbook to their situation burn the budget and blame the creative.

9. Authenticity is the only defense against better-funded copycats.
Boston Beer had the distribution, the manufacturing, and the marketing budget. Bevy Long Drink lasted under a year on shelf, because a malt-based long drink is a long drink in aesthetic only. When a giant copies you, the one thing it cannot replicate is the real recipe and the real story. Note that this is about the product being genuine, which is a different thing from being the oldest or the biggest, as the next lesson shows.

10. In new markets, the fastest cultural translation beats the deepest heritage.
Hartwall invented the long drink in 1952 and holds 70% of the Finnish market. It still lost the US market to 4 friends who arrived there 2 years before Hartwall and told the story in a language US consumers understood. Heritage is not the same as authenticity: Hartwall had both, and still lost, because being oldest counts for little if a newcomer translates the category faster. Funny detail: I drank Hartwall Originals during my student years in Amsterdam and had completely forgotten the brand existed until I researched the piece. That, in itself, is the lesson.

Distribution: availability wins

11. DTC is a proof machine.
Chomps sold online only for 4 years. Kettle & Fire spent years DTC before touching a shelf. The pattern repeats because DTC generates something more valuable than the revenue itself: data on who buys, how often, and why. That data is what you sell to retail buyers first and to acquirers later. Unilever paid for Grüns’ subscription data as much as for its sales. In addition, you build up brand awareness, which is valuable when you enter retail for the first time.

12. Retail is the amplifier of digital discovery.
Bold Snacks ran 700 influencers, and the reason it worked is that the product sat in 8,000 Brazilian points of sale at the same time. Someone sees the bar on Instagram in the morning and finds it at the pharmacy that afternoon. Digital discovery without physical availability is a campaign. Both together is a flywheel, omnichannel is powerful!

13. The durable moat is mental plus physical availability.
The insight that shows up most consistently across all 28 case studies. Community, format innovation, and founder story all serve a deeper purpose. They are tools for building the 2 things that actually endure: being thought of at the moment of need, and being available at the moment of purchase. Once I started reading every case study through that lens, a lot of confusing strategy decisions suddenly made sense.

14. Depth beats breadth in retail.
Chomps spent 2 full years growing inside Trader Joe’s before adding a second retailer. Rashid Ali calls it depth versus breadth. Dominating velocity in a few doors generates the data that opens the next doors on your terms. Spreading thin generates weak numbers everywhere and leverage nowhere.

15. Incrementality is the master key to shelf space.
81% of Chomps’ growth came from buyers new to the meat snack aisle. Grüns told retail buyers that most of its customers had never bought a greens supplement before. Prove you grow the aisle rather than steal share within it, and the buyer’s risk disappears. It might be the single most powerful number a brand can bring into a retail meeting.

Growth and focus: stay on the core

16. Your first audience finances the education phase. Build for the customer who comes second.
Justin Mares has a line I think about a lot: “I always think I am selling to people like me, and it always turns out it is 45-year-old women buying the product. Kettle & Fire launched through the paleo community and scaled through the health-conscious mainstream. The early adopters fund the learning. The mainstream funds the outcome.”

17. Your most enthusiastic customers reveal the growth lever before your strategy does.
Bold Snacks’ biggest inflection came from a customer who posted that she microwaved the bars and ate them warm as dessert. The company put it on the packaging. One person’s habit became the brand’s main acquisition hook. Watch what your best customers already do, then build around it.

18. A product surprising enough to share is itself a distribution channel.
Grüns reviews kept using the word shocked. People expected medicine and got something they wanted to eat, and that gap drove sharing at run clubs and beaches, which became free distribution. Worth noting: the surprise was engineered through a full year of formulation work before launch. Word of mouth is a product decision long before it is a marketing outcome.

19. Focus is a growth strategy in a young category.
90% of Chomps’ revenue comes from 3 SKUs. Kettle & Fire launched with 1 product and stayed close to it for years. When the category is still teaching consumers what it is, every additional SKU dilutes a message they have not yet learned. Saying no to extensions is what lets the core compound.

20. Expand along the same ingredient, consumer, and occasion.
When Kettle & Fire finally did expand, it went into bone broth soups, keto broths, and tallow. Same supply chain, same consumer, adjacent occasions. Graza went from olive oil into mayonnaise, a product that is roughly 65% oil. Adjacency to the core compounds. Adjacency to whatever is trending fragments the brand and the operation at the same time.

Capital and exit: what buyers pay for

21. Raise against proof.
Julian Hearn bootstrapped Huel to £18M in revenue before his Series A and still owned 49% at a EUR 1 billion exit. Chomps took its first institutional money at a $300M valuation, a decade in. Capital raised after traction costs a fraction of the equity, and the ownership discipline pays out at every later negotiation, including the final one.

22. Own manufacturing only once revenue has earned it.
Huel built its Milton Keynes factory after proving the model, and gross margins climbed from 55% to 59%. Kettle & Fire opened KettleWorks after a decade of co-manufacturing. Bold built its plant on revenue it had already generated. The sequence is everything here. Too early and the factory is a capital trap. At the right moment it becomes margin, quality control, and acquisition value all at once.

23. Supply chain control is invisible until it is existential.
Huy Fong built the most recognized hot sauce in America on a single jalapeño supplier, ended that relationship, and lost the category in under 2 years while competitors’ sales jumped 200 to 400%. Nobody notices supply chain resilience when things work. The brands that survive treat it as strategy long before the crisis arrives.

24. Acquirers pay for what they cannot build internally.
Hero Group already knows how to make snack bars. What it bought with The Gut Stuff was 8 years of category authority and consumer trust. Mars bought Nom Nom’s fresh-DTC capability and its factory. Unilever bought Grüns’ habit data. Revenue is the one thing every acquirer already has plenty of. The premium goes to the asset they cannot replicate in-house.

25. Exits price proof, and there are only 2 accepted forms of it.
My H1 M&A tracker surfaced a pattern I did not expect: brands exit young or old, almost never in between. Grüns at 32 months and Four Roses at 138 years both cleared premium prices, because a young brand proves durable margins with retention data and an old one proves it by having survived every cycle. The 15-to-50-year-old brands in the middle, too old to sell a promise and too young to have completed the proof, traded at distress. If you are building today, the premium window is early, while your retention data is fresh.

What comes next

Writing this edition clarified something for me about the second half of the year.

The weekly deep dives continue. They are the core of The Food Stack and the reason most of you are here. One brand, deal, or category pulled apart every week, through an investor lens.

But I am adding a second track: operational playbooks. The SARAL edition on influencer marketing showed me how much value sits one level deeper, in the mechanics of how these brands actually get built. So in the coming months I will go deep on specific areas of expertise, one at a time. Supply chain and logistics. DTC versus retail go-to-market. LTV vs CAC. Influencer marketing. Finance and fundraising. Each one grounded in a real brand, with the operational detail I usually only get to hint at.

If there is an operational area you want me to cover, or an expert I should talk to, hit reply. If you are a service provider to CPG and want to partner, DM me. This newsletter gets better every time someone does.

Enjoy the summer, and see you next Thursday.

Written by Vincent Kuiper, founder of Gota Ventures, an international angel syndicate investing in seed-stage European FoodTech and consumer brands. Gota invested in 4 FoodTech startups and 4 consumer brands in the last 12 months.

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Contents

• The Setup: nine days in which Unilever explained the entire food industry

• What H1 Actually Looked Like: 45+ deals, over $55 billion, and a valuation multiple ladder that runs 0.34x to 4.6x

• The Four Assets: Habits, flavor, infrastructure, and annuities

• The Words They Paid With: what the acquirers’ own press releases reveal when you read them side by side

• The Proof Problem: why a 110-year-old hot dog brand out-priced a cottage cheese brand that quadrupled its sales

• What Nobody Bought: foodtech traded, but only through the bankruptcy courts

• The Pet Food Time Machine: the category that shows where food multiples are heading

• Where the Exits Happen: eleven European buyers, one European premium exit, and what that asymmetry means

• Takeaways: the H2 watchlist I will be grading in December

The Setup

Back in February I wrote about the week that priced the food industry. Five deals in seven days, and a valuation spread that told you exactly what capital markets reward. That post found more readers than anything I had published before, and it left me with a question I could not put down: was that week an anomaly, or the start of a pattern?

So I did what any curious investor with a spreadsheet problem does. I spent the past weeks building a tracker of every food-related acquisition announced in the first half of 2026. CPG, beverage, petfood, supplements, foodtech, ingredients. Buyer, target, price, revenue, multiple, and the age of the company at exit. Over 45 deals made the list, worth more than $55 billion in disclosed and estimated value.

The full H1 2026 M&A dataset: 45 deals, with buyer, target, price, revenue multiple, and a source for every number.

One company ended up explaining the whole dataset, and it did so in nine days.

On March 31, Unilever announced it would merge its entire food business with McCormick in a $44.8 billion transaction, exiting the category that built the company. On April 9, Unilever announced the acquisition of Grüns, a greens gummy brand that had existed for 32 months, at a price Axios estimates at $1.2 billion. I deeply analysed this deal and wrote about it here, which became the most read article since the beginning of The Food Stack.

Read together, those nine days are the clearest statement any company has ever made about what food is now worth, and to whom. This edition is my attempt to read that statement properly, with the full half-year of data behind it.

What H1 Actually Looked Like

H1 2026 deal timeline, January through June, coral nodes for the five deals above $1 billion, gray for the rest]

The verified multiple ladder, from bottom to top. Hain Celestial’s legacy snack brands went to Snackruptors at 0.34x revenue. Calavo Growers went to Mission Produce at roughly 0.7x. Del Monte’s broth brands went to B&G Foods out of bankruptcy at roughly 1.0x. SunOpta went to Refresco at 1.4x. Good Culture took a majority investment from L Catterton at roughly 2x its projected 2025 revenue, on a valuation The Wall Street Journal and Reuters put above $500 million. Nathan’s Famous went to Smithfield at 2.8x. Huel went to Danone at approximately 3.4x. Grüns lands around 4x its last publicly confirmed run rate, if the Axios price estimate is right. And Bachan’s, at $400 million on $87 million of net sales, tops the ladder at 4.6x.

Nine deals on one axis. The spread between the top and the bottom is thirteen to one. The McCormick and Unilever Foods combination deliberately sits outside this ladder: at $44.8 billion of enterprise value, revenue multiples stop being the honest yardstick, and the deal was struck at 13.8x calendar 2025 EBITDA for both companies. Worth pausing on the top of the ladder, though: a six-year-old sauce brand and a three-year-old gummy brand out-multiple everything else in the dataset, including deals a hundred times their size.

My first instinct was to read this as a category story. Sauces are hot, snacks are cold, that kind of thing. The data refuses that reading. Sauce appears at the very top of the ladder with Bachan’s and also in the unglamorous middle with Tapatío, a 55-year-old brand that changed hands at an undisclosed price with private equity logic behind it. Dairy sits mid-ladder. Produce sits near the bottom. The category on the jar tells you almost nothing about the multiple on the deal.

What does explain the ladder is the question I now believe every acquirer asked in H1: what kind of asset is this, really?

The Four Assets

Sort the 45 deals by what the buyer believed it was purchasing, rather than by what the target sells, and every single transaction falls into one of four buckets. I have tested this against each new deal as it printed, and so far it has not broken.

Health habits. Grüns, Huel, Good Culture, OZiva in India, Bold Snacks in Brazil, Ollie in fresh pet food. Daily or near-daily consumption, recurring revenue, first-party customer data, a health claim at the center of the brand. These are the deals clearing 2x and above, and the destination is telling: Grüns did not join Unilever’s food portfolio, but it literally joined the Wellbeing division, next to Liquid I.V., Nutrafol, and Olly.

Flavor. Bachan’s at 4.6x revenue multiple, Tapatío as a platform play, and the McCormick and Unilever Foods combination itself. The thesis is not my interpretation; it is McCormick’s stated strategy. The company’s own annual report says it does not compete for calories, it flavors them, and its 10-K states that demand for flavor is growing globally. The behavioral proof sits in the filings too: McCormick reported a fifth consecutive quarter of volume-led growth in late 2025, meaning consumers are buying more flavor product, not just paying more for it, while its B2B flavor systems arm grew even faster as manufacturers reformulate. Layer GLP-1 on top, one in eight American adults on drugs that dull taste, and the demand looks structural. Regular readers will recognize this thesis from my sauces deep dive in March. In H1 it graduated into a $45 billion transaction.

Infrastructure. Refresco paying $1.1 billion for SunOpta. CVC paying approximately $4.3 billion for IFF’s food ingredients arm. Puratos, a century-old Belgian family company, agreeing to buy Dawn Foods, a century-old American family company, and picking up the clean-label nut specialist Vör Foods in the same half. Lesaffre acquiring fermentation IP. These deals rarely make headlines, they trade at 1 to 1.5x where prices are disclosed at all, and together they are quietly deciding which co-manufacturers and ingredient partners the next generation of founders will be able to work with.

Annuities. Four Roses at up to $775 million after 138 years. Calavo after 102. Farmer Brothers after 114. Nathan’s Famous after 110. Nobody bought these for growth. They were bought because they have survived every cycle since before television, and their cash flows are as proven as cash flows get.

My observation: Capital was paid for habits, for flavor, for the machinery that makes food, and for cash flows old enough to have outlived their founders twice over. For a founder, this converts into unusually direct advice. “We are a food company” carries no value in a pitch. The only question that matters is which of the four assets you are building, because each one has a different buyer, a different multiple, and a different burden of proof.

The Words They Paid With

If the four-asset framework is right, it should show up in the language acquirers use when they explain themselves. So I did something slightly obsessive: I pulled the announcement statements for every brand deal in the tracker and read them side by side. Executives reveal their real acquisition criteria in the sentence where they justify the price. It turns out the deals are written in four distinct dialects, and each dialect maps onto an asset class.

The habit dialect. Unilever’s Wellbeing CEO singled out Grüns for products that people “enjoy, trust, and consistently use”, and coverage of the release noted the rationale centers on solving chronic supplement nonadherence through habit formation. The headline justification for an estimated $1.2 billion purchase is consistency of use. Danone speaks the same language about Huel, citing its “best-in-class digital capabilities” in nearly every statement, alongside its engaged community and brand advocacy, and even saying it looks forward to learning from Huel. A EUR 27 billion company, saying in an official release that it wants lessons from a GBP 250 million one! Ferrero fits the same pattern: its CFO framed Bold Snacks, a digital-first protein brand, as the group’s “first foray into the better-for-you segment” in South America. When the Nutella company buys protein bars and describes them in wellness vocabulary, the dialect has become the industry standard.

The flavor dialect. Marzetti's CEO called Bachan's "GLP-friendly" on the acquisition call, and gave Reuters the demand mechanism in nine words: chicken tastes like chicken, so it begs for flavor. On its most recent earnings call, the same company said its future acquisitions will target "authentic flavor" segments, a buyer naming the aisle it intends to keep shopping in. What separates flavor buyers from habit buyers is specific: they talk about the plate rather than the person. The rationale is an eating occasion that demands taste, not a community that needs serving, and in H1 it priced at the very top of the ladder anyway.

The infrastructure dialect. Refresco’s CEO called SunOpta an addition that strengthens its ability to serve customers across more “categories, channels, and packaging formats” and supports a more balanced geographic footprint. Read the full statement and notice what never appears: no consumer, no habit, no community, no brand. The operative nouns are capabilities, categories, channels, footprint. Infrastructure buyers talk about capacity, and the consumer never enters the sentence.

The heritage dialect. Gallo’s release on Four Roses leads with the brand returning to American family ownership for the first time in 83 years and commits to “continuity across liquid, production, traditions, and people”, with the Master Distiller staying in place. For a habit brand, the acquirer promises to scale what the founder built. For an annuity, the acquirer promises the opposite: nothing will change.

Private equity, for completeness, has its own accent within the habit dialect. L Catterton grounded the Good Culture deal in the “durability of the tailwinds” driving the category. No digital talk, no community talk. PE buys tailwind durability and a bottleneck it can fund away.

And then there is the pattern across every announcement I pulled, which I find more revealing than any single deal. Not one acquirer’s stated rationale is indulgence, pleasure, or taste for its own sake. Nobody says “clean label” in a headline quote either, which tells you it has become assumed rather than paid for. The confectionery giant bought protein bars. The yogurt company bought powdered meals. The press releases of H1 2026, read together, describe an industry that has stopped talking about food as enjoyment and started talking about it as a health habit, a capability, or an annuity.

For founders, the practical translation: the words in these releases are the acquisition criteria. If a buyer cannot one day write “consistently use” or “category-defining” or “digital capabilities” about your brand in a press release, you are not yet building what they are buying.

The Proof Problem

Sort the same targets by age at exit and something strange appears. One cluster is young: Grüns at 32 months, Bachan’s at seven years, Ollie at ten, Good Culture at eleven, Huel at twelve. The other cluster is ancient: Tapatío at 55, Calavo at 102, Dawn Foods at 106, Nathan’s at 110, Farmer Brothers at 114, Four Roses at 138. The band in between, brands aged roughly 15 to 50, is nearly empty. Where it does trade, it trades in distress: Hain’s declining snack portfolio at 0.34x, Miyoko’s Creamery through an insolvency process, AeroFarms out of bankruptcy.

For a while I called this the age barbell and left it there. Then Nathan’s broke my explanation.

Nathan’s Famous has no momentum story. Revenue of $162 million in its fiscal year 2026, growing modestly, in hot dogs. And it commanded 2.8x, a higher revenue multiple than Good Culture received while quadrupling sales in a booming category. That should not happen if acquirers were simply paying for growth or for heritage.

It happens because of what sits underneath the revenue. Nathan’s earns roughly $20 million of net income on that $162 million, because since 2014 Smithfield has manufactured the products under an exclusive license and Nathan’s largely collects the checks. What Smithfield bought is a royalty stream it already operates, and it paid a royalty multiple for it.

So my working theory, and I frame it as exactly that: acquirers in 2026 are paying for proof that margins are durable, and there are only two accepted forms of proof. A young brand proves it with data. Grüns could show 95% of customers using the product four to six times per week. Huel could show a subscription base and a referral loop that Companies House filings back with a decade of accounts. An old brand proves it by survival. A century of cycles is the one credential no pitch deck can fake. The brand in the middle can offer neither. It is too old to sell a promise and too young to have completed the proof, and the market prices that gap without mercy.

If you are building today, this reframes the exit question. The premium window is early, while your retention data is your proof. Miss it, and the next window opens roughly eighty years later. Or is it not that simple?

What Nobody Bought

A tracker teaches you as much through its gaps as through its rows.

Here is what did not achieve a premium exit in the first half of 2026: any plant-based meat company, any cultivated meat company, any vertical farm, any foodtech platform of any kind. The technology side of the dataset traded exclusively through distress or through small strategic combinations. AeroFarms found a new owner via an affiliate of Palm Ventures, after its 2023 bankruptcy. NovoNutrients’ gas fermentation assets sat on the market for a year before Biosphere took them. Upside Foods’ move on Believer Meats is a $50 million stalking horse bid inside a bankruptcy process. Miyoko’s, the plant-based dairy pioneer, went through an assignment for the benefit of creditors before Prosperity Organic Foods stepped in. NotCo retreated to licensing its AI platform and sold its Argentine and Uruguayan operations to Molinos Río de la Plata. PTX and Seedtrace sold intellectual property rather than companies. And BettaF!sh, the Berlin plant-based seafood brand, sold to Bayou Best Foods in June at an undisclosed price, in a deal both sides framed around complementary capabilities.

My tracker only captures the deals large enough to surface in filings and trade press. The census underneath is bleaker. A Green Queen analysis published on July 9 counts at least 82 alternative protein companies acquired, merged, made insolvent, or shut down since September 2024, with 54 of those in the past twelve months, a 35% acceleration. The same piece cites GFI data showing total investment into alternative protein fell to $881 million in 2025, below $1 billion for the first time since 2018, with plant-based companies accounting for 72% of the consolidation.

Meanwhile, on the consumer side, an unprofitable company IPO’d successfully. Once Upon a Farm raised $198 million in February and reached a first-day market capitalization of roughly $847 million, twelve times oversubscribed, while losing $52 million a year. The market forgave the losses because the company could show 60% compound growth and coolers in thousands of stores. Proven consumption behavior, again.

I invest in foodtech myself, so let me say the uncomfortable part plainly. Right now, consumption proof is worth everything. The foodtech companies that will break this pattern are the ones that cross over into being revenue-generating ingredient businesses, selling real volumes to real customers, at which point they get priced as infrastructure rather than as science. Investors inside the category read it the same way: in that same Green Queen piece, Steve Simitzis of Replicator VC observes that European fermentation companies are “finding traction as ingredient plays” that sell into large food producers, while cultivated meat companies pivot toward adjacent industries like biopharma and beauty.

The Pet Food Time Machine

One corner of the tracker behaves differently from everything else, and I think it is a preview rather than an exception.

Pet food deal volume nearly tripled in the first months of 2026, with 18 announced transactions against eight in the prior-year period, according to Capstone Partners. Agrolimen, the Spanish family group, bought Ollie, the fresh direct-to-consumer dog food brand, for USD 600 million. France’s Nasta bought Canada’s FirstMate, financed by a EUR 120 million credit package, targeting roughly EUR 200 million in combined revenue. Advisory estimates put premium pet food platforms at 12 to 16 times EBITDA, with category-defining brands higher still, which would make pet the most expensively priced corner of food.

Why does pet food clear multiples that human food brands can only dream about? My read: because pet food has already completed the transition the human side is just beginning. The entire category converted into the health-habit asset class. Fresh, subscription-delivered, vet-endorsed, humanized. Ollie is, structurally, Grüns with a cold chain. There is no “commodity kibble premium” anywhere in these deals; the premium is entirely for daily habits with recurring revenue and health positioning.

Watch pet food if you want to see what happens to a food category’s valuations when it finishes becoming wellbeing. That is the direction of travel for human food, and pet is simply a few years ahead on the same road.

Where the Exits Happen

The tracker has a geography column, and it tells its own story.

Roughly three quarters of the disclosed deals involve a North American target. Europe appears mostly through carve-outs and infrastructure: Unilever Foods heading into a Maryland-headquartered combination, Natursoy changing hands in Spain, Amadori picking up a plant-based brand in Italy. India shows up three times in a single category, supplements, with Hindustan Unilever, USV, and Marico all buying wellness brands in one quarter. Australia appears once, through Danone’s agreement to buy Made Group. Africa appears exactly once, a South African pet food deal. The premium exits, the ones clearing 2x and above, happened almost entirely in the United States.

Now look at the buyer column, and the map inverts. Refresco is Dutch. Puratos and Lesaffre are Belgian and French. Agrolimen is Spanish. Nasta is French. Ferrero and Amadori are Italian. Danone appears twice. Unilever, still headquartered in London when it announced the deal, bought Grüns. Eleven European buyers in a single half-year, and one premium European brand exit: Huel, at approximately EUR 1 billion, currently under review by the UK competition authority.

So the honest description of H1 is this: Europe exported capital and imported almost nothing. The acquirers, the manufacturing base, and the deepest food culture on the planet are here. The sellable brands, with one billion-euro exception, are elsewhere. After Huel, and YFood before it, the proof exists that European brands command real prices when they exist. What is missing is volume, a brand-building gap rather than a capital or demand gap, and for founders on this continent I struggle to think of a more encouraging problem to have.

One detail from the McCormick transaction sharpens the point. The combined flavor company will keep its global headquarters in Maryland but establish its international headquarters in the Netherlands, with a European listing alongside. The largest flavor acquirer in history is about to sit in Europe’s backyard, with a mandate to consolidate sauces, spices, and condiments globally, and a stated $100 million innovation budget on top of $600 million in targeted synergies. My bet is that the first European brand to do what Bachan’s did in the United States, a focused, culturally rooted flavor brand with clean ingredients and real velocity, will find that buyer waiting within driving distance of Rotterdam.

The honest caveat belongs here too. The market so far dislikes the McCormick deal. Both share prices fell on announcement, Unilever trades well below its pre-rumour highs, and Terry Smith, one of its most prominent long-term shareholders, sold his entire position in protest. The strategy is coherent. The execution risk is real, and the food industry’s record with mega-mergers gives the skeptics plenty of material. Whether the deal closes as planned in mid-2027 is one of the things the second half will start to answer.

Takeaways

Rather than restating the half, here is what I will be watching in H2, ahead of the full-year version of this analysis in the State of European Food Investment whitepaper this winter.

• The four assets are a lens, and H2 will show how far it stretches. Deals will surely print in other corners too, beverage M&A was quiet this half and is unlikely to stay that way, and exits outside the framework would be just as instructive as the ones inside it. What I will be watching is where the premiums land.

• Pet food is the sector to watch. Cascadia Capital reports that Open Farm is exploring a public listing and names Honest Kitchen, Nulo, Stella & Chewy’s, and Weruva as brands expected to attract acquisition interest. If those trade at the rumored premium pet multiples, the time-machine thesis gets meaningfully stronger.

• The Huel CMA review is the most important open file for European founders. A clean approval keeps the EUR 1 billion benchmark intact. A complication would chill strategic appetite for European DTC brands at exactly the wrong moment.

• The flavor consolidation window likely narrows before it widens. A merger with synergy capture running into 2029 consumes deal capacity, so I expect the new McCormick to pause bolt-ons while it digests, then return as the most acquisitive flavor buyer in history. Sauce founders should plan runway around that timing rather than against it. But there are other potential buyers of course.

• The structural spins are the supply side of 2027’s deal flow. The Kraft Heinz separation, the rumored Barry Callebaut cocoa spin, and the reported sales of Costa Coffee and Blue Bottle will all create both divested assets and newly focused acquirers. Every one of them fits the same shedding-complexity logic that produced the Unilever deal.

• And in my own pipeline: the pasta sauce category, where Sauz is compounding and the Rao’s acquisition set the benchmark, is exactly the kind of setup this half rewarded. That deep dive is coming.

Zoom out from the deal table one last time, because the forces underneath it all push in the same direction. Supply chains are more fragile than they have been in decades. Consumers change their behavior faster than at any point in the industry's history, with GLP-1 only the most visible example. A new generation of brands builds direct relationships with those consumers at a speed and depth that a century-old organization cannot replicate internally. And big food, watching its legacy categories flatten, is left with one realistic response: buy what it could not build. That is the machine that produced 45 deals and $55 billion in six months, and nothing about it looks temporary.

The week that priced the food industry turned out to be a rehearsal. The half that followed priced something bigger: it told us that food, as an M&A category, is quietly ceasing to exist, dissolving into habits, flavor, infrastructure, and annuities. I find that more exciting than alarming. Categories that dissolve leave their best positions unclaimed, and most of the unclaimed ones are sitting right here in Europe.

The full H1 2026 tracker

Every deal in this analysis, and quite a few that did not make the cut, sits in one spreadsheet: 45 transactions across CPG, beverage, petfood, supplements, foodtech and ingredients. Buyer, target, country, category, deal value, target age at exit, revenue multiple, and a source for every single number. Where a figure could not be verified, the cell says so rather than guessing.

[Download the H1 2026 Food M&A tracker.]

It is free, and it is the working draft of the annual State of European Food Investment report I am building for December. If you spot a deal I missed or a number that looks wrong, reply to this email. The tracker gets better every time someone does.

See you next week!

Written by Vincent Kuiper, founder of Gota Ventures, an international angel syndicate investing in seed-stage European FoodTech and consumer brands.

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Contents

• The Setup: Two brands, the same insight, the same window, two billion-dollar outcomes

• Why This Category, Why Now: A quick recap of why fresh pet food is exploding

• The Many Faces of Humanization: The formats and health angles reshaping pet food

• The Winner’s Playbook: How Nom Nom built a $1B brand and sold to Mars

• Same Path or Different? Where Nom Nom and The Farmer’s Dog actually diverged

• What Went Wrong: Did Nom Nom leave money on the table?

• Is There Room for New Entrants?: What this means for Europe

• Takeaways: key takeaways for founders, investors and operators

The Setup

Three weeks ago I went deep on The Farmer’s Dog, the fresh pet food brand that built $1.2B in revenue, profitably, entirely through a DTC subscription. What fascinated me most was that the whole thing was built in a category nobody thought of as a place to build a billion-dollar consumer business: dog food.

Then I started digging, and I found something that surprised me. The Farmer’s Dog was not the only one. At almost exactly the same time, in almost exactly the same way, another brand was quietly building the same business. Nom Nom. Fresh, human-grade, vet-formulated meals, portioned to the gram for each dog, delivered by subscription. Founded in 2015, the same window as The Farmer’s Dog. Same insight. Same model.

And it also reached a billion-dollar outcome, but it got there very differently. In January 2022, Mars acquired Nom Nom, in a deal Bloomberg reported at around $1 billion.

So now I had two brands, founded in the same window, chasing the same insight, both reaching a billion-dollar outcome. That raised the question I want to answer this week: did they follow exactly the same playbook, or are there real strategic differences underneath two stories that look almost identical from the outside? Because the differences are where the lessons live.

Why This Category, Why Now

I covered the full case three weeks ago, so I will keep this short for anyone who missed it.

Pet food is following human food, roughly a decade behind. Every trend that reshaped what we eat, clean labels, the rejection of ultra-processed products, premiumization, and DTC brands that build a direct relationship with the customer, is now playing out in the bowl on the kitchen floor. FEDIAF, the European Pet Food Industry Federation, names the humanization of pets as the single biggest trend driving the market, with 99% of owners now viewing their pet as part of the family.

The opportunity is the cognitive dissonance. The same consumer who reads their own ingredient labels and avoids seed oils looks down at a bowl of brown kibble of unknown origin and asks why their dog eats something they would never touch. In 2024, US households spent an estimated $150B (!) on their pets, and the fresh, premium segment is growing far faster than the category as a whole.

That is the wave both Nom Nom and The Farmer’s Dog caught. Now to the playbook.

The Many Faces of Humanization

Before getting into Nom Nom specifically, it is worth mapping the landscape, because humanization has not produced one type of product. It has fractured into a whole spectrum of formats and health angles, each solving the same underlying problem (kibble is processed and generic) in a different way. Understanding this map matters, because the format a brand chooses determines its cost structure, its logistics, its margins, and its whole business model.

On the format axis, there are roughly five camps:

Fresh, gently cooked. Human-grade ingredients cooked at low temperatures, shipped chilled, never frozen. This is The Farmer’s Dog, Freshpet, and Open Farm’s Gently Cooked line. The strongest premium perception and the cleanest brand story, but the hardest and most expensive to ship and store because it demands a refrigerated cold chain.

Frozen. The same fresh, gently cooked food, but frozen for transport and thawed by the customer. This is Nom Nom and Ollie. Operationally easier and cheaper than chilled fresh, with a longer spoilage window, but it asks more of the customer and competes for freezer space.

Freeze-dried raw. Raw meat, organ, and bone with the water removed, shelf-stable and lightweight. This is Stella & Chewy’s, Primal, and a wave of newer brands. It captures the raw-feeding trend while solving raw’s shipping and safety problems. Spot & Tango’s “UnKibble” is a hybrid version: gently cooked, then freeze-dried.

Air-dried. Gently dried to preserve nutrients while staying shelf-stable, popular for toppers and complete diets alike.

Premium kibble and toppers. The incumbent format, reformulated with whole-food ingredients, bone broth coatings, and visible inclusions to ride the same trend at a lower price point.

On the health positioning axis, the differentiation is just as varied. Some brands lead with gut and microbiome health, the closest parallel to the human wellness trend. Nom Nom even sold pet microbiome testing kits. Others lead with protein density for muscle and energy, with one study finding 42% of pet parents prioritize high-protein foods. Others focus on joint and mobility support, sensitive stomach and digestion, weight management, or skin and coat. The newest wave is healthspan and longevity, positioning fresh food as a way to extend a pet’s healthy years, a direct echo of the longevity conversation in human health.

The takeaway for a founder or investor is this: “fresh pet food” is not one market. It is a set of overlapping bets on format and health angle, each with different economics. The US refrigerated and frozen dog food category alone grew 17.8% to $1.6 billion in the year to August 2025, and the broader fresh category is projected to grow at over 20% annually through 2029. Nom Nom and The Farmer’s Dog made nearly the same bet inside that spectrum, both gently cooked and personalization-led, differing mainly in how the food reaches you: The Farmer’s Dog ships truly fresh-chilled, while Nom Nom, though it markets itself as fresh, ships frozen. Where they landed on this map is exactly what we are about to pull apart.

The Winner’s Playbook

The story starts in 2013, when brothers Nate and Zach Phillips adopted their first dogs as adults and were struck by how little the pet food aisle had changed in twenty years. Kibble and cans, unpronounceable ingredients, industrial filler, with almost no way to tell which product was actually good for a dog’s health. The dog equivalent of microwave dinners. When Zach’s dog Harlee, an Australian Shepherd, came down with a skin condition that a vet linked to diet, Zach started cooking fresh food at home. Within days, Harlee’s condition cleared up.

Alex Jarrell, Wenzhe Gao, Nate Phillips, Zach Phillips.
Source: NomNomNow, Inc.

That was the spark. In 2015, the Phillips brothers teamed up with Alexandria Jarrell and Wenzhe Gao, a former Google engineer, to launch NomNomNow. What made the team unusual was its makeup: alongside the founders, they brought in Dr. Justin Shmalberg, a board-certified veterinary nutritionist, as Chief Nutrition Officer to formulate the recipes. A serious technologist building the platform and a serious vet scientist designing the food: that combination became the company’s entire identity. Where The Farmer’s Dog led with the founders’ personal story, Nom Nom led with the science.

2013: The spark. Brothers Nate and Zach Phillips adopted their first dogs and hit the same wall that launched a dozen brands in this category. When Zach’s dog Harlee developed a diet-linked skin condition that cleared up on home-cooked food, the idea was born.

2015: The launch. NomNomNow launched out of the founders’ own kitchens in the San Francisco Bay Area, with the four co-founders cooking, packing, and personally delivering the meals. It was DTC-only, subscription-based, and personalized from day one: customers filled in a profile of their dog, and Nom Nom portioned each meal to the dog’s weight and needs. The recipes were formulated with Dr. Shmalberg.

2018: Scaling and infrastructure. Nom Nom raised $10M in Series A funding (bringing total funding to around $13M including an earlier seed round), moved out of the founders’ kitchens into an Oakland headquarters and East Bay production kitchen, and announced a 180-job production facility in Nashville, Tennessee. Because the model was made-to-order, producing each week against actual orders rather than to stock, the company could run with very little inventory and minimal food waste, a structural advantage of the subscription approach.

2021: Microbiome science and a $34M Series B. Nom Nom leaned harder into its science positioning than any competitor, even launching pet microbiome testing kits, a sharply differentiated move that fit its data-and-nutrition identity. In April 2021 it raised a $34M Series B backed by Anchor Capital, Coefficient Capital, and Greycroft, one of the largest raises from a Nashville-area company that year. By this point Nom Nom had delivered over 3 million boxes. Total venture funding raised across its life is most commonly cited at around $47M, though the exact figure is hard to pin down across sources.

January 2022: The exit to Mars. On January 14, 2022, Mars acquired Nom Nom, folding it into the Royal Canin division as an autonomous brand alongside Royal Canin and Eukanuba. Bloomberg reported the deal at around $1 billion. Mars declined to disclose terms, so the figure is not officially confirmed, but the billion-dollar number is the one that has stuck and gets cited to this day. At the time, Nom Nom had only five products, four for dogs and one for cats. Its exact revenue at acquisition is not publicly available. The figures that circulate on startup databases look too low to square with a deal of this size, so rather than lean on a number I cannot stand behind, I will say plainly that we do not know it, and focus on everything we can verify.

That last detail is very interesting to me. Mars paid a reported billion dollars for a brand with just five products. Looking at the current website, I see that there are still ‘only’ 6 meals, 4 treats and 2 probiotics.

Whatever the exact revenue was, the price makes clear that Mars was paying for more than sales. In its own statement, Mars described Nom Nom as “a science-forward technology company” and said the deal would support its “success in the fresh category.” That is the tell. Mars was buying a proven fresh-DTC model, the technology and personalization platform underneath it, the vet-science credibility, and, by several accounts, the Nashville manufacturing facility itself, which sat in a category facing a serious shortage of such plants.

Lesson one: A strategic buyer like Mars is often paying for more than a P&L. If you are building something a big incumbent cannot easily build itself, the technology, the model, the manufacturing, that capability can be worth far more than your revenue suggests.

The capital efficiency here is striking, and it is the sharpest contrast with The Farmer’s Dog. Nom Nom raised roughly $47M in total venture funding and delivered a reported billion-dollar outcome to its shareholders. The Farmer’s Dog raised over $100M through its growth rounds and stayed independent. Both reached a unicorn valuation. One did it on a fraction of the capital and handed the return to its investors in 2022. The other is still compounding, now reportedly worth far more on the secondary market. Same kind of destination, very different routes.

Lesson two: Capital efficiency and the timing of your exit are strategic choices, not just outcomes. Nom Nom optimized for a clean, early, capital-efficient exit. The Farmer’s Dog optimized for compounding.

Same Path or Different

On the surface, these two brands are almost indistinguishable. Founded in the same window, the mid-2010s. Same insight about an outdated category. Both DTC-only, both subscription, both personalized to the individual dog, both human-grade, both vet-formulated, both reaching billion-dollar outcomes. If you squint, they are the same company.

But the differences are real, and they matter.

Fresh-chilled versus frozen. This is the biggest operational divergence, though it is subtler than it first appears. The Farmer’s Dog built its model on fresh food, gently cooked and shipped chilled, never frozen, kept cold through a refrigerated cold chain and stored in the customer’s fridge. Nom Nom markets itself as fresh too, and the food is gently cooked the same way, but in practice it ships frozen, packed in insulated boxes with dry ice, and customers are told to keep most packs in the freezer and thaw them in the fridge as needed. Frozen shipping is operationally easier and more forgiving, with a longer window before spoilage. True fresh-chilled is harder, but it carries a stronger premium perception and a cleaner brand story. The Farmer’s Dog chose the harder, more capital-intensive path, and it is part of why it raised and spent more.

Science-led versus founder-led. Nom Nom built its identity around Dr. Shmalberg, the board-certified veterinary nutritionist, and around data: microbiome testing, nutrient science, a former Google engineer building the platform. Its pitch was credibility and personalization backed by experts. The Farmer’s Dog led with the founder’s personal story and an emotional, relationship-driven brand, culminating in the Super Bowl ad that sold love rather than nutrition science. Two different routes to trust: one through the lab, one through the heart.

Pricing and personalization. Both used the same core mechanic: a discounted trial (Nom Nom offered up to 50% off the first order, the same lever The Farmer’s Dog used), a quiz-driven personalized plan, and recurring full-price billing. Nom Nom’s pricing landed in a similar band, roughly $40 to $50 a week for a medium dog across all recipes. The personalization engine was near-identical in concept. This is where they most clearly converged.

The exit. The clearest divergence of all. Nom Nom sold to Mars in 2022, in a deal Bloomberg reported at around $1B. The Farmer’s Dog turned down the acquisition path, kept raising, kept scaling, became profitable, and is now reportedly valued around $4.2B on the secondary market against $1.2B in revenue. Which decision was right? That is the question worth sitting with, and it is the heart of the next section.

What Went Wrong, or: Did Nom Nom Sell Too Early?

I covered the category’s structural risks in detail three weeks ago, cold-chain economics, the incumbents, the premium price ceiling, so I will not repeat them here. Instead I want to focus on the one question this comparison forces: did Nom Nom leave money on the table?

The case that it sold too early is straightforward. In January 2022, Nom Nom exited in a deal Bloomberg reported at around $1B. In the years since, the fresh pet food category has continued to grow at pace. The Farmer’s Dog, its near-twin, went on to reach $1.2B in revenue and is now reportedly worth around $4.2B. If Nom Nom had stayed independent and executed even half as well, the founders and early investors might have been looking at a multi-billion-dollar outcome rather than the one they took. On paper, they may have sold near the bottom of the curve they helped create.

The case that it sold at exactly the right time is just as strong. A billion dollars in 2022, in cash, from Mars, is a guaranteed, de-risked, life-changing outcome. Staying independent is not free: it requires raising more capital, surviving the 2022 to 2023 funding winter that crushed DTC valuations, building cold-chain infrastructure at enormous cost, and competing head-on with The Farmer’s Dog’s $100M-plus annual ad budget. Many brands that chose to stay independent in 2021 and 2022 are now worth a fraction of what they were once offered. Nom Nom took the certain outcome. The Farmer’s Dog took the risk, and it happened to pay off, but it could easily have gone the other way.

My honest read: this was not a mistake, it was a different risk appetite. The Farmer’s Dog founders made a bet on themselves and the category and won. Nom Nom’s founders and investors chose certainty over optionality and locked in a generational outcome on a modest amount of invested capital. From a pure return-on-invested-capital standpoint, Nom Nom’s exit may actually be the more efficient of the two: a reported billion dollars on roughly $47M raised, returned in cash, in about seven years. A roughly 20x return on invested capital. That is extraordinary.

The lesson for founders: there is no single right answer to when you sell. There is only your risk appetite, your conviction in the category, and your read on whether the next chapter is worth the capital and the risk it demands.

Is There Room for New Entrants?

Everything I said last week about Europe still stands: the continent is earlier, more fragmented, and structurally harder to build in than the US, and no brand has yet locked up continental Europe the way these two locked up America. Butternut Box is building hardest, across six countries, but it has consumed far more capital to reach a fraction of US revenue.

What the Nom Nom story adds to that picture is a second viable endgame. Last week the implicit model was the The Farmer’s Dog path: raise, scale, stay independent, compound toward an IPO. Nom Nom shows the other route, and arguably the more realistic one for most European founders: build a sharp, capital-efficient, science-differentiated fresh brand, prove the model, and sell to a strategic acquirer who needs the capability.

And the strategic acquirers are clearly active. Mars bought Nom Nom. Just months ago, the Spanish food group Agrolimen acquired Ollie, a US based fresh pet food company in a deal valued over $600 million. Nestlé, General Mills, and the other giants are all watching. For a European founder, the question is not only whether you can build the next billion-dollar independent brand. It is whether you can build something sharp enough that Mars, Nestlé, or a large European group decides it is cheaper to buy you than to build you.

My bet remains that the next major fresh pet food brand will come from Europe. The Nom Nom story just widens the range of ways it could win.

Takeaways

Two brands, the same window, the same insight, two billion-dollar outcomes, two different routes there.

• The same playbook can produce different endings. Nom Nom and The Farmer’s Dog were nearly identical in strategy: DTC, subscription, fresh, human-grade, vet-formulated, personalized. The outcomes diverged not on the model but on the choices around it: fresh versus frozen, science versus story, sell versus scale.

• Strategic acquirers buy more than only revenue. Mars paid a reported $1B for a brand with just five products, because it was buying a proven fresh-DTC platform, the personalization technology, and a scarce manufacturing facility it could not build fast enough internally. If you are building something an incumbent structurally cannot, you are building acquisition value far beyond your P&L.

• Capital efficiency is a strategy in itself. Nom Nom returned a reported $1B on roughly $47M raised. That is a return on invested capital most “winners” never come close to. Raising less and selling clean is a legitimate path, not a consolation prize.

• When you sell is a bet, not a formula. Nom Nom took the certain outcome in 2022. The Farmer’s Dog bet on itself and is now reportedly worth several times more. Both were rational. Your answer depends on your conviction and your appetite for risk, not on a spreadsheet.

• Europe’s most realistic path may be the Nom Nom path. Given how capital-intensive and fragmented Europe is, building a sharp, differentiated, acquirable brand may be a more achievable goal for most founders than building the next independent billion-dollar compounder. The acquirers are already shopping.

Two friends in a New York kitchen built The Farmer’s Dog. Two brothers, a partner, and a former Google engineer built Nom Nom in the San Francisco Bay Area. The same window, the same idea, two major outcomes in a category barely a decade old. It has already produced one independent brand racing toward an IPO and one clean exit to a global giant. A third fresh pet food brand got acquired for $600 million last month. In Europe, it has produced neither yet.

If you are building in this space, this is a category we are watching closely at Gota, and I would love to hear from you. Hit reply or find me on LinkedIn.

Written by Vincent Kuiper, founder of Gota Ventures, an international angel syndicate investing in seed-stage European FoodTech and consumer brands. Gota invested in 4 FoodTech startups and 4 CPG brands in the last 12 months.

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Contents

• The Setup: why I wanted to understand influencer marketing from the inside

• Why This Channel, Why Now: the data behind creator-led growth in CPG

• The Brand: Spacegoods and the mushroom wellness category

• The Playbook: how a team of two built 1,000+ creator partnerships

• The Numbers That Actually Matter: what to track and what to ignore

• What Goes Wrong: the traps most brands fall into

• European White Space: what this means for founders building here

• Takeaways: key lessons for founders, operators and investors

The Setup

After writing more than twenty deep dives on CPG brands, I have developed a bad habit.

I look at the outcome first. A $1.2B exit, a $240M valuation, a brand that went from a kitchen to a billion-dollar acquisition. Then I work backwards, trying to understand the decisions that produced that result. It is a useful way to extract lessons, but it has a blind spot: you only ever see the playbook once it has worked. You miss the part where someone figured it out in real time, made mistakes, and built something that compounded.

Influencer marketing kept appearing in almost every story I told. Grüns built a micro-creator network of 250,000+ individuals before their $1.2B Unilever exit. Chomps used it. Bachan’s used it. But I was always describing it from hindsight, from the outside, from the vantage point of a finished result.

I wanted to understand how it actually works when you are in the middle of it. What does a creator program look like when you are a small brand with a lean team and a limited budget? What are the real decisions? What breaks? What compounds?

So for this edition of The Food Stack I did something different. Rather than pulling apart a brand with a headline exit, I went deep on a brand that is actively building its creator program right now. To research it properly, I partnered with SARAL.

SARAL is a company that built an operating system for influencer marketing. Their platform helps consumer brands find creators, automate outreach, manage gifting, track affiliate codes, and measure what is actually driving sales, all in one place rather than scattered across spreadsheets and manual email threads.

This is a special edition. The format is different from my usual deep dives. It is more operational, more specific, and more focused on one channel than I would normally go. If you are building a CPG brand and have ever wondered whether influencer marketing is worth it and how to actually make it work, this one is for you.

This post is produced in partnership with SARAL. To research the mechanics of creator-led growth properly, I used their platform and data. All analysis and conclusions are my own. Food Stack readers get $500 off SARAL, plus white-glove onboarding and monthly strategy sessions included. Book your free demo call here and let the SARAL team know The Food Stack sent you so they can give you the VIP treatment + the $500 discount,

Why This Channel, Why Now

Most CPG founders I speak to have a complicated relationship with influencer marketing. They know it works. They have seen the brands that built it well. But when they try it themselves, they get stuck in a cycle that goes nowhere: send product, wait for posts, measure nothing, repeat.

The data behind creator-led growth is compelling enough to take seriously. SARAL has helped hundreds of brands build influencer and affiliate programs driving over $59M in revenue. The average incremental revenue per brand on the platform is approximately $2M. These metrics reflect a consistent pattern across brands of different sizes and categories.

The reason influencer marketing works so well for CPG specifically comes down to a simple insight that most paid media frameworks miss. At any given moment, only three to five percent of your addressable market is actively in-market and ready to buy. Paid media is excellent at finding that three to five percent. But the brands that scale fastest are not just converting the in-market buyers. They are warming the other ninety-five percent first, so that when paid finds them, they already know the brand. They click faster. They convert without a discount. Your ROAS looks like you got better at paid, when really you got better at building familiarity before the ad ever ran.

The shift from one-off influencer campaigns to a systematic creator program is what separates the brands that compound from the ones that spin their wheels. Most brands treat influencer marketing as a campaign, but the brands that win treat it as a channel.

Understanding how to build that channel was exactly what I wanted to learn

The Brand: Spacegoods

To understand how this works in practice, I dived deep into Spacegoods, a brand that worked with SARAL, giving us insight information about how successfull influencer marketing strategy actually works. Spacegoods is a London-based wellness supplements brand founded in April 2022 by Matthew Kelly, a seasoned e-commerce entrepreneur. The product is mushroom-based supplement drinks, specifically functional blends built around adaptogens and nootropics like lion’s mane, chaga, and ashwagandha. The hero product is Rainbow Dust, a mushroom-powered coffee alternative that tastes like chocolate and is positioned as a cleaner, calmer way to start the day.

The brand sits at the intersection of two trends that have been compounding for several years in European CPG: the rejection of stimulant-heavy coffee culture by a younger, health-conscious consumer, and the mainstream arrival of functional mushrooms as a credible wellness ingredient rather than a niche supplement category. The global adaptogenic mushroom market was valued at approximately $10.9B in 2022 and is projected to grow at roughly 10% annually through 2032, according to Global Market Insights.

Spacegoods launched DTC and built fast. By the time it went out to raise in late 2023, the company reported £4M in revenue in its first seventeen months of operation, with a subscription model, 5,000+ active subscribers, and nationwide retail presence in Holland & Barrett. In February 2024, it closed a €2.9M seed round led by Five Seasons Ventures, with Redrice Ventures, Slingshot Ventures, and G-FUND participating. At the time of the raise, founder Matthew Kelly publicly forecast £12M+ in revenue for 2024. That forecast has not been independently verified and should be treated as a founder projection rather than a confirmed figure.

What makes Spacegoods interesting for this analysis is not its scale. It is its trajectory and the specific problem it had to solve: how do you build a creator program that compounds when you have a lean team, a real product that requires genuine belief from the people promoting it, and a category that is just starting to cross into the mainstream?

The Playbook: How a Team of Two Built 1,000+ Creator Partnerships

In early 2024, Spacegoods had an influencer marketing problem that will be familiar to a lot of CPG founders.

An external agency was shipping 200 to 300 free products every month. Posts trickled in. Awareness spiked briefly. Then nothing. No ongoing relationships. No way to measure what was working. No content that could be repurposed. The approach had a name: mass gifting. And it was producing exactly what mass gifting always produces: surface-level visibility with no compounding value underneath it.

When Dan Stevenson joined as Influencer Marketing Lead in March 2024, he came from a role where managing 300 affiliates and 40 to 50 paid partnerships required a team of four people. At Spacegoods, the ambition was bigger but the budget was smaller. The brief, stripped to its essentials, was to build something that could scale without scaling the team proportionally.

The first decision was to stop seeding entirely.

This sounds counterintuitive. Most brands, when their influencer program is not working, increase the volume of product they send out. The Spacegoods team did the opposite. They recognised that the company had already moved past the discovery phase. They did not need more awareness. They needed conversion and content at scale, and mass gifting could not produce either.

The strategic shift: from seeding to affiliate community

The move was from the base of the creator pyramid to the second tier: structured affiliate partnerships with commission attached.

The logic was clean. An affiliate code attached to every partnership solves the measurement problem immediately. Every redemption tracks to a specific creator. Revenue attribution becomes visible rather than invisible. And critically, the relationship changes: a creator with an active commission structure has a financial reason to keep posting, which transforms a one-off collaboration into an ongoing relationship. Incentives are aligned.

But the Spacegoods team made a positioning decision that turned out to be as important as the structural one. They deliberately avoided the word affiliate.

The framing became community. Rather than “join our affiliate program and earn commission,” the pitch was “join our community of wellness creators.” No mandatory posting requirements. No contracts. No deliverable expectations. Just: here is your code, post when it feels authentic, earn when you do.

This positioning matters more than it might seem. Creators do not want to feel like contractors. They want to belong to something they believe in. Removing the transactional language changed who said yes and how they showed up once they joined.

The operational reality: 100 emails in an evening

The community framing solved the recruitment pitch. It did not solve the operational problem of managing a program at this scale with two people.

At his previous job, Dan spent a minimum of twelve hours per week on influencer partnerships with a team of four. At Spacegoods, the ambition was to manage more than three times as many partnerships with a fraction of the headcount. The only way to close that gap was automation.

Dan describes the shift bluntly:

“I can sit there at nine o’clock at night and pump out 100 emails without having to think about it.”

The discovery process moved from manual keyword searches to lookalike tools. Rather than hunting for creators one by one, Spacegoods takes their best-performing paid influencers and uses them as a template to find 100+ similar creators in minutes. The outreach runs on automated sequences with follow-ups that fire without human input. The affiliate codes generate automatically through Shopify integration. Commission tracking and payment reconciliation happen in the background.

The result: 100+ new affiliates signed every month, through a process that requires almost no manual work per individual creator.

Here is a step by step approach how to find the creators:

Step 1: Find niche influencers on Instagram or TikTok

Step 2: Use the ‘influencer assistant’ to find lookalike influencers in seconds

Step 3: Setup your email drip campaign and never forget a follow-up

Step 4: Manage influencers without manual work

The self-funding flywheel

The most operationally interesting part of the Spacegoods model is what happens to the affiliate revenue.

Most brands treat affiliate revenue as a standalone performance channel. Spacegoods treats it as a funding mechanism. Whatever the affiliate program generates each month gets reinvested directly into paid influencer partnerships, without touching the core marketing budget. The affiliate revenue offsets paid spend rather than sitting in a separate bucket.

This creates a flywheel that is genuinely self-sustaining. Affiliates generate revenue. That revenue funds paid partnerships. Paid partnerships produce higher-quality content and case studies that make the affiliate program more attractive to join. More affiliates join. More revenue. More paid partnerships.

Dan frames this precisely:

“We see our partners as a way to offset some additional paid spend rather than as performance on their own channel. The idea of the affiliates is to try and de-risk the paid spend.”

The affiliate program is therefore more of a risk management mechanism for the paid budget, instead of a revenue channel on its own.

The paid media dividend

The final piece of the flywheel is the one that connects creator marketing to performance marketing in a way that most brands miss entirely.

Spacegoods runs significant Meta budgets. And increasingly, their best-performing ads are not branded shoots. They are creator content. According to their paid media agency, partnership content now makes up their highest Meta ad contribution.

Why does this work? Creator content does not look like an ad. It is someone real, in their kitchen, making their morning routine, talking about a product they actually use. The authenticity is visible in a way that no amount of production budget can replicate in a branded shoot. Spacegoods takes that content, puts paid spend behind it, and watches it outperform everything else in the account.

The implication for anyone building a CPG brand is significant. The creator program is not a separate marketing channel from paid media. At Spacegoods, it is the content engine that feeds paid media. The two channels are integrated, not parallel.

The Numbers That Actually Matter

Most influencer programs are measured on the wrong things. Reach. Impressions. Engagement rate. These metrics look good in monthly reports and tell you almost nothing about whether the program is working.

Spacegoods tracks three numbers.

1. New customer volume from influencer codes. This is direct attribution: how many new customers came in through a specific creator’s code in a given period. It is the clearest signal of whether a partnership is converting, not just generating views.

2. CAC from organic influencer activity. This is harder to measure but more important. It captures the customers who discovered the brand through a creator, did not use a code immediately, but converted later through a paid or direct channel. The creator primed the customer. The paid ad closed them. Attribution models that only look at last click miss this entirely.

3. Meta contribution from partnership content. The percentage of Meta ad spend going to creator content versus branded content. At Spacegoods this is now their highest-performing category. Tracking it tells you whether the content engine is working, not just whether individual creators are posting.

The number Spacegoods deliberately ignores is engagement rate. A creator with 50,000 followers and a 12% engagement rate on a post about Spacegoods is less valuable than a creator with 10,000 followers whose code drove forty new subscribers last month. Conversion is what pays the bills.

For investors evaluating a CPG brand’s influencer program, the question worth asking is not “how many influencers do you work with?” It is: what is your CAC from creator-driven acquisition versus paid, what percentage of your Meta creative is coming from creators, and does your affiliate revenue offset any of your paid spend? A brand that can answer all three with real numbers has built something worth understanding.

Where influencer marketing can go wrong

Seeding products to creators is the obvious first move when you want visibility. It is low cost, requires no relationship infrastructure, and produces results that look good in the short term: posts, mentions, reach. The problem is that it produces nothing that compounds. The creator has no reason to post again. You have no data on what worked. You have no relationship to build on. You have spent product and time and generated awareness that evaporates within days of the post going live.

The trap deepens because the solution looks like more of the same. If ten posts drove a traffic spike, surely a hundred posts would drive a bigger one. So brands scale the seeding, spend more on product, ship more packages, and wonder why the results do not improve proportionally. The answer is that they are optimising the wrong layer of the pyramid.

The second failure mode is hiring before building the system. The instinct, when influencer marketing starts to look promising, is to hire a dedicated person and let them figure it out. But a person without infrastructure is just a more expensive version of manual. Dan at Spacegoods describes his previous role as managing 300 affiliates with a team of four. That is not a scalable model. The infrastructure has to come first, or the headcount just grows in proportion to the volume.

The third failure mode is tracking vanity metrics and reporting them as proof of success. A brand that shows up to a board meeting with reach and impression numbers but cannot answer questions about CAC or customer volume from creator codes has not built a real program. It has built a reporting system that makes the program look more valuable than it is. This is particularly dangerous in early-stage brands where investor confidence can be misallocated based on misleading metrics.

European White Space

The mechanics of creator-led growth that Spacegoods has built are not US-specific. But the European context adds a layer of complexity that is worth thinking through separately.

The European creator economy is less mature than the US equivalent. The density of creators with real, commercially relevant audiences in specific wellness niches is lower. The infrastructure for managing affiliate programs at scale is less developed. And the cultural relationship between brands and creators is different: European audiences tend to be more sceptical of overt brand partnerships than US audiences, which means the authenticity question matters even more.

All of this is an argument for doing it properly rather than not doing it at all. A brand that builds a genuine creator community in Europe, with real relationships and a systematic affiliate structure, will face less competition for those creators than a US brand operating in the same niche. The first-mover advantage in European creator communities is real, and most brands are not claiming it.

The category angle matters too. Functional mushrooms, adaptogens, and clean-label wellness drinks are less developed in Europe than in the US. The consumer who is already buying these products is early-adopter, health-conscious, and likely to be disproportionately active on the exact platforms where creator content travels fastest. That is a favourable audience profile for a creator-led acquisition strategy.

My bet is that the next meaningful European wellness brand will be built with a creator community at its core from day one, not as an afterthought once the paid channels start getting expensive.

Takeaways

• Treat influencer marketing as core infrastructure instead of only a marketing campaign. A one-off gifting push produces a one-off traffic spike. A structured affiliate community produces compounding revenue, content, and brand familiarity. The brands that win on this channel make the decision to build infrastructure early, before the paid channels get expensive.

• The affiliate program should fund itself. If your affiliate revenue is not offsetting a meaningful portion of your paid influencer spend, you are leaving the flywheel half-built. Spacegoods turned monthly affiliate revenue into a self-sustaining content and acquisition engine. That is the model worth understanding.

• Creator content is your best paid ad creative. The most underappreciated insight in the Spacegoods story is that their highest-performing Meta ads are not branded shoots. They are creator posts with paid spend behind them. Building a creator program feeds your paid media strategy.

• Track CAC, not engagement rate. A creator whose code drove 40 new subscribers is more valuable than a creator with a higher engagement rate who drove none. The measurement framework you build determines what behaviour you incentivise. Build it around conversion from the start.

• The authenticity premium is real and getting larger. Consumers are getting better at identifying branded content. The brands that built genuine creator communities, where creators actually use and believe in the product, will have a structural advantage in the years ahead over brands that are paying for reach.

I went into this edition wanting to understand influencer marketing from the inside rather than from the vantage point of a finished outcome. What I found is a channel that rewards operational discipline in the same way that the best CPG brands reward product and distribution discipline. The system has to be built before the scale can follow.

If you are building in this space and want to understand whether the model could work for your brand, I am happy to connect you directly with SARAL or just talk. Hit reply or send me a DM. See you next Thursday!

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This post is produced in partnership with SARAL. To research the mechanics of creator-led growth properly, I used their platform and data. All analysis and conclusions are my own. Food Stack readers get $500 off SARAL, plus white-glove onboarding and monthly strategy sessions included. Book your free demo call here and let the SARAL team know The Food Stack sent you so they can give you the VIP treatment + the $500 discount,

Written by Vincent Kuiper, founder of Gota Ventures, an international angel syndicate investing in seed-stage European FoodTech and consumer brands.

Contents

• The Setup: Why pet food is following human food, roughly a decade behind

• Why This Category, Why Now: Humanization, premiumization, and a $150B market

• The Winner’s Playbook: How The Farmer’s Dog built a $1.2B subscription business from a New York kitchen

• How Others Are Playing It: Butternut Box, Freshpet, Ollie, and the European picture

• What Went Wrong: Cold chain economics and the risks nobody talks about

• Is There Room for New Entrants?: Where the opportunity sits in Europe

• Takeaways: key takeaways for founders, investors and operators

The Setup

I grew up with dogs. For about twenty years there was always one in the house, and I have been thinking about them a lot lately for a different reason: at Gota we have been looking more and more closely at the pet food category, trying to understand whether the premiumization story everyone is talking about is real or just a wave that will flow away.

The more I dig into it, the more convinced I am that pet food is following the exact same arc as human food, roughly a decade behind. Everything that happened in human food over the past fifteen years, the shift to clean labels, the rejection of ultra-processed products, the premiumization of everyday categories, the rise of DTC brands that build a direct relationship with the customer, is now happening in the bowl on the kitchen floor. The brands that spotted it early are already worth billions.

The clearest example is The Farmer’s Dog. Founded in 2014 by two friends with no pet food experience, the company hit $1.2B (!) in annualized revenue in 2024 and is now generating more than $10M in profit every month. It did this not by getting onto supermarket shelves, but by convincing hundreds of thousands of dog owners to subscribe to fresh, human-grade food delivered to their door on a recurring schedule.

This week I went deep on how they built it, why the subscription model works so well for pet food specifically, and what it means for anyone building in this category in Europe.

Why This Category, Why Now

The numbers behind pet spending are staggering. In 2024, US households spent an estimated $150B on their pets, according to the American Pet Products Association. Pet food is the largest single slice of that, and the premium and fresh segments are growing far faster than the category as a whole.

The driver is humanization. This is not just my framing, it is the explicit consensus of the industry itself. FEDIAF, the European Pet Food Industry Federation, names the humanization of pets as the single key trend driving the entire pet food market. Their data points to a striking figure: 99% of owners now view their pet as part of the family. As FEDIAF puts it, premium, luxury, healthy, and functional foods are moving steadily into the mainstream as owners become more focused on their pet’s diet, with natural, raw, and organic products all on the rise.

Dogs and cats are no longer treated as animals that live in the house. They are family members, and increasingly they are treated as children. People who feed themselves organic, high-protein, clean-label food experience cognitive dissonance when they pour brown kibble of unknown origin into a bowl twice a day. That dissonance is the entire commercial opportunity.

The parallel to human food is precise. Kibble is the pet equivalent of ultra-processed food: shelf-stable, extruded at high temperatures, formulated for cost and convenience rather than nutrition or taste. For decades it was the only option, marketed with pictures of fresh meat and vegetables on the bag while the product inside bore no resemblance to any of it. The Farmer’s Dog co-founder Jonathan Regev described exactly this when he launched: pet food companies had beautiful ingredient imagery on their packaging, but nobody had ever actually changed the product. Everything smelled the same, looked the same, and was processed the same way.

That is the gap. The same consumer who reads ingredient labels on their own food, who has moved to grass-fed beef and avoids seed oils, is now asking why their dog eats something they would never touch. Fresh pet food answers that question directly. FEDIAF notes that the industry has moved from basic foods that simply provide the right nutrients in the right quantities to far more sophisticated foods that do much more, and that specialist products focused on specific health benefits have shown some of the strongest growth in the category.

The third force is the same one reshaping human food: the willingness to pay a premium for perceived health. Fresh dog food costs significantly more than kibble, often three to five times more per meal. The fact that millions of households are paying it anyway tells you everything about where the category is going. It is also worth noting where the geographic weight sits. Europe generates roughly 30% of total pet food and pet care sales worldwide, which makes the relative absence of fresh, premium, DTC brands across most of the continent all the more striking.

The Winner’s Playbook

In 2014, Brett Podolsky had a problem. His Rottweiler, Jada, had suffered from severe digestive issues for the first two years of her life. He had tried every commercial dog food he could find with no success. Eventually a veterinarian gave him simple advice: take the ingredients off the dog food bag and cook them yourself at home. He did. Within weeks, Jada’s symptoms disappeared.

That experience sent Podolsky and his friend Jonathan Regev down a path that would take them from a rented New York City kitchen to a $1.2B business in ten years.

Timeline

2014: The insight. Podolsky and Regev, who met on a trip to Israel, spent over a year researching pet nutrition, recipes, regulatory standards, and canine health before spending a single dollar on infrastructure. Regev has been explicit that this discipline was a competitive advantage: by figuring out exactly what they wanted to build before raising money, they designed a supply chain and technology infrastructure that gave them better unit economics from day one.

2015: Bootstrapped beginnings. The company launched out of a production kitchen for rent in New York City. Every bag was labeled by hand with the customer’s dog’s name. Regev and Podolsky personally delivered the orders, funding the operation themselves. By the end of the first year, demand was strong enough that they had to start a waitlist and begin speaking to investors.

2016: Seed round, $2M. Forerunner Ventures led the seed, with Collaborative Fund and SV Angel participating. The capital funded the first real infrastructure and the move toward a large-scale commercial kitchen built for human food. Forerunner, known for backing modern consumer brands like Warby Parker and Glossier, was an early signal that serious consumer investors saw what was happening here.

2017: Series A, $8.1M, and the manufacturing breakthrough. The founders wanted to scale by manufacturing in a facility regulated at the same standard as human food. This was unheard of in pet food. They approached more than 200 factories. Almost all refused, not wanting to be associated with making dog food regardless of how it was produced. Eventually one agreed, and The Farmer’s Dog became the first pet food company to manufacture in a human-grade food facility. Shasta Ventures, the firm behind Dollar Shave Club and Warby Parker, led the $8.1M Series A, with the seed investors all returning. By this point the company had delivered over one million meals, bringing total raised to $10.1M.

2019: Building the engine, $39M Series B. Insight Partners led the Series B at a reported $209M valuation. The capital funded the infrastructure that would define the business: temperature-controlled distribution centers and a real-time meal-plan engine that adjusted portions based on each dog’s weight changes and customer feedback. This was the moment the company stopped being a food brand and became a technology-enabled subscription business that happened to sell food.

2020: Series C, $51M, and a fortunate moment. A $51M Series C closed, with Insight, Forerunner, and Shasta participating. The timing proved fortunate. Within weeks, COVID lockdowns drove a 20 to 40% surge in pet food subscription signups as consumers shifted to home delivery and adopted pets at record rates. Across all these rounds, the company raised roughly $103M through Series C, which is of course pretty significant.

2021: Scale capital. A further round valued the company at $1.46B. By this point the model was proven and the focus shifted entirely to growth.

2023: The Super Bowl and the inflection. The Farmer’s Dog ran its first Super Bowl ad, an emotional 60-second spot called “Forever.” It won the USA Today Ad Meter, scoring highest of all 51 commercials that aired. Revenue for 2023 hit approximately $800M, up 60% year over year.

2024: Profitability at scale. Annualized net revenue reached $1.2B, up 50% from the prior year. More importantly, the company crossed into profitability, generating more than $10M per month. For a DTC subscription business, profitable growth at this scale is rare. By early 2025 the company had delivered over 1 billion meals.

The full revenue trajectory tells the story better than any single number. The Farmer’s Dog went from approximately $4M in 2017 to $15M in 2018, $45M in 2019, $143M in 2020, $313M in 2021, $500M in 2022, $800M in 2023, and $1.2B in 2024. Independent estimates put 2025 on track for roughly $1.6B. That is a near-perfect compounding curve sustained over eight years, the kind of trajectory that is far more common in software than in physical consumer products that have to be cooked, refrigerated, and shipped.

Why the subscription model works so well here

The heart of The Farmer’s Dog story is not the food. It is the business model. To understand why this company is worth more than its publicly traded competitor Freshpet despite being younger, you have to understand the economics of subscription pet food.

Two numbers govern any subscription business: how much it costs to acquire a customer (CAC, customer acquisition cost) and how much that customer is worth over their entire relationship with the company (LTV, lifetime value). The ratio between them determines whether the business works. A healthy DTC subscription business targets an LTV/CAC ratio of at least 3:1, meaning each customer is worth at least three times what it cost to bring them in. The best subscription businesses reach 5:1 or higher.

Pet food is one of the strongest LTV categories in all of consumer subscription, for a simple reason: dogs eat every single day, and they eat the same thing. Once an owner has switched their dog to a food the dog tolerates well and enjoys, the switching cost is enormous. Changing a dog’s food risks digestive problems and the hassle of a fussy animal refusing to eat. So owners do not switch. They stay subscribed for the life of the dog, which can be ten years or more. Pet care is also one of the more recession-resistant categories in all of consumer spending. People cut their own discretionary purchases long before they downgrade their dog’s food.

Compare this to kibble. A kibble buyer purchases whenever they happen to run out, with no predictable cadence, no relationship with the brand, and no data flowing back to the manufacturer. The Farmer’s Dog flipped this entirely. The subscription gives them complete visibility into each dog’s consumption, recurring predictable revenue, and a direct line to the customer that no shelf-based brand can replicate.

Lesson one: The best subscription businesses are built on products customers cannot easily stop buying. A dog that thrives on your food is the highest-retention customer in consumer goods.

The personalization is what makes the subscription stick. A new customer answers a detailed quiz about their dog: breed, age, weight, activity level, health conditions. The Farmer’s Dog uses that to build a custom meal plan with precisely portioned packs labeled for that specific dog. This does two things. It makes the product feel tailored rather than generic, and it creates a data relationship that improves over time as the dog’s needs change. The same quiz also feeds the acquisition engine: site visitors who start the quiz but do not buy get re-engaged by email with a discount larger than the one on the website, personalized to the answers they already gave.

The pricing mechanic underneath all of this is worth understanding, because it is the lever that makes the whole funnel work. The Farmer’s Dog standardized a 50% discount on the first subscription box as its primary acquisition tool. A new customer signs up at roughly $3 to $5 per day for that first trial delivery, then rolls onto full-price renewals of $6 to $15 per day depending on the size of the dog. That first-box discount lowers the barrier to trying an expensive product, the trial period lets the dog and the owner experience the difference, and the recurring billing does the rest. It is the same playbook Dollar Shave Club and dozens of subscription businesses have used, applied to a product with far higher natural retention.

Lesson two: Personalization is a retention mechanism, a data moat, and an acquisition tool all at once.

The acquisition engine is enormous and worth understanding in detail. The Farmer’s Dog spent over $100M on advertising across digital and national TV in the past year, running campaigns across more than 250 media properties. That is a staggering number for a company of its size, and it points to the central tension in the business: customer acquisition is expensive, and getting it efficient is everything.

The numbers reveal both the strength and the weakness of the model. On the strength side, the company became expert at squeezing efficiency out of paid channels. On TikTok alone, by following platform best practices and scaling spend deliberately, it reduced its cost per acquisition by 62% while lifting conversion by 5% in two months. That discipline is what separated The Farmer’s Dog from the DTC casualties of the same era. While Allbirds and Warby Parker watched their margins get eaten alive by rising digital ad costs, The Farmer’s Dog kept its acquisition economics under control and scaled into profitability.

On the weakness side, even the category leader leaves money on the table. The Farmer’s Dog attracts roughly 36.8 million site visits, but converts them to customers at only about 0.7%. Butternut Box, with a fraction of that traffic, converts at 2.11%, three times higher. That gap is the single most interesting number in this entire analysis. It means the leader is winning on the sheer scale of its top-of-funnel spend rather than on conversion efficiency, and it means there is room for a more efficient operator to compete without matching the $100M ad budget.

Lesson three: At scale, paid acquisition is a treadmill. The Farmer’s Dog wins by spending more and converting better than the DTC brands that died. But a 0.7% conversion rate shows even the leader has not solved the hardest problem in DTC.

Underneath all the paid spend sits the real engine: word of mouth. The founders have consistently said it is their most powerful acquisition channel, and the Super Bowl ad in 2023 was its clearest expression. Rather than explaining the product, the ad told an emotional story about a girl and her dog across a lifetime, designed to make millions of dog owners feel something and then go look up the brand. It was psychographic marketing, selling the relationship rather than the ingredient list.

Lesson four: In a category built on love, emotion outperforms information. The cheapest customer is the one your existing customer brings you for free.

The final pillar is the human-grade manufacturing decision. By being the first to produce in a human food facility, The Farmer’s Dog earned a credibility claim that competitors could not easily match, and it aligned perfectly with the humanization trend driving the entire category. The decision to approach 200 factories until one said yes was the foundation of the brand’s entire positioning.

Lesson five: The hardest operational decision early on is often the one that becomes your deepest competitive moat.

How Others Are Playing It

Butternut Box is the European equivalent and the brand I watch most closely from an investment perspective. Founded in 2016 in the UK by Kevin Glynn and David Nolan, the company followed a strikingly similar origin story: Nolan’s rescue dog Rudie had health problems that improved on fresh food. Butternut Box is now Europe’s largest fresh dog food brand, operating in the UK, Ireland, the Netherlands, Belgium, Germany, and Poland. It has raised over £380M in total, including a £280M round from General Atlantic and L Catterton, and £65M in debt financing from Liquidity Group in 2025 to build a second manufacturing facility in Poland. The company acquired Polish fresh pet food brand PsiBufet in 2023 and launched a fresh cat food brand, Marro, in 2024. Butternut Box is doing in Europe what The Farmer’s Dog did in the US, with the added complexity of operating across multiple countries, languages, and regulatory regimes.

One number is worth pausing on. Butternut Box has raised over $550M in total funding, including debt, against roughly £127M ($161M) in 2023 revenue, and it is still operating at a loss. Compare that to The Farmer's Dog, which raised around $103M through its growth rounds and reached $1.2B in revenue while turning profitable. The European leader has consumed several times more capital to reach a fraction of the revenue. That is not necessarily a knock on the business. It might be just a reflection of how much harder Europe is to build in: six fragmented markets, each with its own logistics, language, and regulation, versus one large homogeneous market in the US. But it does show the capital intensity that anyone building fresh pet food in Europe has to be ready for.

Nom Nom is the clearest proof of how much strategic value the incumbents place on fresh, DTC pet food. Founded in 2014 in a tiny San Francisco apartment kitchen by two pet parents, Nom Nom built the same model as The Farmer's Dog: fresh, human-grade, vet-formulated meals, custom-portioned and delivered by subscription. It raised a modest $47M in total venture funding, including a $34M Series B in 2020, and delivered over 3 million boxes. Then in January 2022, Mars acquired it for a reported $1 billion, folding it into the Royal Canin division while letting it run as an autonomous brand. The detail worth sitting with: Nom Nom had only five products at the time of the acquisition, four for dogs and one for cats. Mars was buying a proven fresh-DTC model, the technology and data behind it, and a foothold in the fastest-growing segment of pet food. For a category incumbent that could not build this fast internally, a billion dollars to acquire the capability outright was the easier path.

Freshpet is the closest public comparison and a useful reality check. Founded in 2006, Freshpet took the fresh pet food concept to retail rather than DTC, installing branded refrigerators in supermarkets and pet stores. It generated approximately $975M in revenue in 2024 with a market cap around $2.8B. The contrast with The Farmer’s Dog is instructive. Freshpet proved fresh pet food could work at retail scale, but its retail model carries lower margins and no direct customer relationship. The Farmer’s Dog, younger and DTC-native, reached comparable revenue with a fundamentally more valuable business model.

Ollie took the same DTC fresh approach as The Farmer’s Dog, founded in 2016 in New York with veterinary-backed nutrition and a national cold-chain network. It reached approximately $61M in revenue and was acquired in early 2026 by Agrolimen, the Spanish food group that also owns Affinity Petcare. Ollie is a useful signal: the strategic acquirers are circling, and European food groups are buying American fresh pet food brands to build category expertise.

What Went Wrong

The striking thing about fresh pet food is that no major brand has gone bankrupt. The category has been unusually kind to its entrants, which is itself worth examining, because the risks are real and mostly hidden beneath the surface.

The first and largest risk is cold-chain logistics. Fresh pet food must be refrigerated or frozen from production through delivery. Every step of that chain costs more than the ambient, shelf-stable economics of kibble. Temperature-controlled warehousing, insulated packaging, dry ice, refrigerated last-mile delivery: all of it compounds. A fresh pet food brand that scales its marketing faster than its logistics infrastructure will burn cash at an alarming rate. The Farmer’s Dog spent years and significant capital building temperature-controlled distribution centers before it could scale profitably. Brands that skip that step pay for it later.

Even Freshpet, the most established fresh player, has felt this. In 2021, during the pandemic, the company missed earnings expectations due to supply chain challenges and labor shortages, and its stock fell more than 15% in a single day. Fresh pet food manufacturing at scale is operationally complex and margin-sensitive in a way that kibble simply is not. The product is the easy part, the infrastructure is where companies live or die.

The second risk is the incumbents. The legacy pet food giants, Mars (Pedigree, Royal Canin, Whiskas), Nestlé Purina, and Hill’s, have not been disrupted in their core kibble business. What they have done instead is buy the insurgents. Mars acquired Nom Nom, the fresh DTC brand, for a reported $1B. General Mills bought Blue Buffalo for $8B in 2018. These companies have enormous distribution power, manufacturing scale, and the patience to wait. A new entrant has to assume that success will eventually mean competing with, or being acquired by, a company with effectively unlimited resources.

The third risk is the premium price ceiling. Fresh pet food costs three to five times more than kibble per meal. That works beautifully for the affluent, dog-obsessed consumer in a strong economy. It is more fragile in a downturn, when pet food is one of the easier places for a household to trade back down. The category has not yet been tested by a serious recession at scale. That test is coming eventually.

Is There Room for New Entrants?

Europe is the most interesting question in this category right now. The US fresh pet food market is maturing fast, with The Farmer’s Dog, Freshpet, Ollie, and Nom Nom all established and well-capitalized. Europe is earlier, more fragmented, and structurally harder to build in, which is exactly what makes it interesting.

Butternut Box has the first-mover advantage and is building aggressively across six countries. But Europe is not one market. It is dozens of markets with different languages, retail structures, regulatory regimes, and cultural attitudes toward pets. That fragmentation is a barrier to entry, and it is also an opportunity. No single brand has locked up continental Europe the way The Farmer’s Dog has locked up the US.

The harder truth is that this is a capital-intensive category. Cold chain, manufacturing, and customer acquisition all demand significant funding before profitability. This is not a category a founder can bootstrap the way you can with a shelf-stable product. A new entrant needs serious capital and serious operational discipline. But the prize, a recurring-revenue subscription business with best-in-class retention in a growing market, is large enough to justify it.

My bet is that the next billion-dollar pet food brand will come from Europe, and it will look a lot like The Farmer’s Dog: DTC-first, subscription-based, human-grade, emotionally branded, and built market by market rather than all at once.

One more thing worth watching on the US side. The Farmer's Dog last raised primary capital in 2021, a $65M round at a $1.46B valuation, when revenue was roughly $313M. It has not raised a priced round since. In the years after, revenue nearly quadrupled to $1.2B and the company turned profitable, yet the only signal on its current worth comes from the secondary market, where shares now trade at an implied valuation of around $4.2B (per PitchBook and secondary-market trackers). That puts it at roughly 3.5x revenue, in line with where its closest public comp, Freshpet, trades at around 4x. For a profitable business growing 50% a year, those are conservative multiples, which is exactly why an IPO looks likely. Freshpet, the closest public comparable, trades at around 2.5-3x sales. Apply a similar multiple to The Farmer’s Dog at $1.5B-plus in revenue and you land somewhere in the $4 to 6 billion range. Several analysts now expect the company to file for an IPO in the near future. If it does, it would be the clearest signal yet that fresh pet food has graduated from insurgent category to mainstream consumer staple. I will be watching that filing closely, because it sets the valuation benchmark every European brand in this space will eventually be measured against.

Takeaways

The Farmer’s Dog is a masterclass in building a subscription business in a category nobody thought of as a subscription business.

• Pet food is human food, ten years behind. Every trend that reshaped what we eat is now reshaping what we feed our pets. The clean-label, anti-ultra-processed, premiumization wave has a decade left to run in the pet bowl. That is the single most important frame for anyone building or investing here.

• The product is the easy part. The infrastructure is the moat. The Farmer’s Dog spent years building cold-chain logistics and human-grade manufacturing before it scaled. That unglamorous infrastructure is what competitors cannot easily replicate, and what lets the company grow profitably where others burn cash.

• Dogs are the highest-retention customers in consumer goods. A dog that thrives on your food does not switch. The lifetime value of a fresh pet food subscriber, sustained over a dog’s ten-plus-year life, is extraordinary. Build a product customers cannot easily leave, and the unit economics take care of themselves.

• In categories built on love, sell emotion. The Super Bowl ad did not explain the product. It made millions of people feel something about their own dog. The brands that win in pet food understand they are selling a relationship, not a nutrition profile.

• Europe is the next frontier and it will not be easy. The opportunity is real, but the category is capital-intensive and the continent is fragmented. The brand that solves cold chain and subscription for an underserved European market the way The Farmer’s Dog solved it for the US has a credible path to the next billion-dollar exit.

The Farmer’s Dog proved that a category as old and commoditized as dog food could be rebuilt from scratch around a direct relationship with the customer. No shelves, no middlemen, just a better product delivered on a schedule to people who love their dogs. That model is now coming to Europe, and the brand that executes it best across this fragmented continent has a very large prize waiting.

I grew up with dogs, and I would have fed them this in a heartbeat. If you are building in pet food in Europe, this is a category we are watching closely at Gota, and I would love to hear from you. Hit reply or find me on LinkedIn.

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Contents

• The Setup: Why bone broth never got its kombucha moment, and why that might be about to change

• What Bone Broth Actually Is: How it is made, why it costs what it costs, and how it differs from everything else in the broth aisle

• Why This Category, Why Now: Collagen, GLP-1, healthy ageing, and a $2B global market still in its early innings

• The Winner’s Playbook: How Justin Mares built Kettle & Fire from a DTC experiment to a $200M category leader

• How Others Are Playing It: Freja, Cooldo, WholyBones, and the European picture

• What Went Wrong: Boring packaging, local ambitions, and the powder problem

• Is There Room for New Entrants?: Where the real opportunity sits in Europe

• Takeaways

The Setup

I drink bone broth several times a week. I have been doing it for a while now, and what keeps me coming back is simple: it tastes really good, and my body feels better when I drink it consistently. The brand I drink in Madrid is Cooldo, a Spanish brand with a clean ingredient list and a flavour profile that tastes like it came directly from a farm kitchen rather than a factory.

What has always surprised me is how niche this category still feels. Kombucha went mainstream. Kefir found its moment. Oat milk went from health food store curiosity to Starbucks staple in three years. Bone broth, which has been consumed across almost every culture for centuries, has never had that breakout.

I think that is about to change. And the company that has done the most to build the category in the US, Kettle & Fire, crossed a $200M valuation in a secondary buyout last year. They are not finished. The category is not finished. And in Europe, almost nobody has even started.

This week I went deep on how Kettle & Fire built the dominant bone broth brand in the world, what the product actually is and why it costs what it does, and where I think the next chapter of this category gets written.

What Bone Broth Actually Is

Before getting into the brand story, it is worth spending time on the product itself. Most people have a vague sense of what bone broth is. Very few understand what makes it different from the cartons of stock sitting next to it on the shelf, or why a 500ml carton can cost €6 to €9 when a litre of vegetable broth costs €1.

How it is made

Bone broth starts with bones and connective tissue from animals: typically beef, chicken, or fish. The bones are slow-simmered in water, usually with a splash of apple cider vinegar (which helps draw minerals out of the bone), organic vegetables, and herbs. The simmer time is what separates bone broth from everything else in the category. Most recipes call for 12 to 24 hours. Kettle & Fire simmers for 14 to 20 hours. Freja in the UK simmers for up to 24 hours.

That long simmer does something specific. It breaks down the collagen in bones and connective tissue into gelatin. When bone broth cools, it sets like jelly. That is not a defect. It is the signal that the broth was made correctly and contains meaningful amounts of collagen. A broth that stays liquid when cold almost certainly does not contain real bone broth in any meaningful quantity.

How it differs from stock, broth, and vegetable broth

Regular stock is made from bones, but simmered for a short time, typically one to three hours. It extracts flavour but very little collagen. Regular broth is made from meat and skin, not bones at all. Short simmer, low collagen, low protein, mostly flavour and sodium.

Vegetable broth contains none of the above. No bones, no collagen, no animal protein. It offers hydration, some electrolytes, and a small amount of carbohydrates from the vegetables. It is a useful cooking ingredient. It is not a nutritional product in the same category as bone broth.

Bone broth is the only one of the three that contains meaningful amounts of collagen, gelatin, amino acids (particularly glycine, proline, and hydroxyproline), and bioavailable minerals extracted directly from the bone. A cup of properly made bone broth contains 6 to 10 grams of protein and 8 to 10 grams of collagen.

The difference between beef and chicken bone broth is also worth understanding. Beef bones are larger and denser, producing more collagen per serving, specifically Types I and III, which support skin, gut lining, and connective tissue. Chicken bone broth contains Type II collagen, better for joints and cartilage, and 45% more leucine than beef broth, the amino acid most directly linked to muscle synthesis. Neither is better in absolute terms. They serve different purposes.

Source: Kettle & Fire

Why it is expensive

This is the question I get asked most when I tell people I drink bone broth regularly. The honest answer is that quality bone broth is structurally expensive to produce, for four reasons.

First, the bones. Grass-fed, pasture-raised animal bones cost significantly more than commodity bones. Demand from the bone broth boom has also driven up the price of quality bones: NPR reported as early as 2017 that butchers who once struggled to sell bones were suddenly charging premium prices because broth producers were competing for the same supply.

Second, the time. A 14 to 24 hour simmer requires energy, equipment, and production capacity that a regular soup or stock manufacturer does not need. The cost per litre of production is meaningfully higher than a product that simmers for two hours.

Third, the packaging. The shelf-stable RTD format, the carton you pick up at a supermarket that does not require refrigeration, is technically complex to produce. It requires aseptic hot-fill packaging: the broth is sealed steaming hot in an oxygen-free environment to prevent contamination without preservatives. That machinery and process costs more than standard packaging.

Fourth, the ingredient standard. Premium brands use certified organic vegetables, sea salt, and herbs alongside their bones. None of that is cheap at scale.

A word on the powdered format: I have tried powdered bone broth, specifically Mattisson, and the experience was disappointing. The blending is uneven and the taste profile is a pale imitation of a good RTD. The appeal of the format is obvious: convenient, portable, long shelf life, no packaging weight. But no brand has yet cracked the powder version in a way that delivers the taste and texture of a properly made RTD. That gap will close eventually. Whoever solves it first will have a genuinely interesting product.

A 2025 review study from the Mayo Clinic, published in Digestive Diseases and Sciences, concluded that the amino acids and minerals in bone broth, including glutamine, glycine, proline, and arginine, support gut barrier integrity, reduce intestinal inflammation, and improve nutrient absorption, based on a comprehensive review of animal and human studies. The authors noted the evidence substantiates bone broth as a potential remedy for conditions including inflammatory bowel disease. And don’t forget it tastes great. Not a bad product, right?

Why This Category, Why Now

Three forces are converging to give bone broth its moment.

The first is protein. As I covered in last week’s post on Bold Snacks, 71% of Americans were actively trying to increase protein intake in 2024, up from 56% just two years earlier. Bone broth delivers 6 to 10 grams of protein per cup with virtually no carbohydrates, no sugar, and a clean ingredient list. It fits the protein trend better than most products specifically designed to fit the protein trend. For anyone trying to increase daily protein without adding a meal, a cup of bone broth is a more useful choice than almost anything else in the hot drinks aisle.

Cooldo (Spain): grass-fed beef bones, chicken carcasses, ham bones, apple cider vinegar, ginger, sea salt, turmeric. Seven ingredients. Zero additives. 5.7g protein per 100g. This is what a clean bone broth label looks like

The second is GLP-1. People on Ozempic and its successors eat significantly less overall. Every nutritionist advising GLP-1 users is telling them the same thing: prioritise protein to prevent muscle loss. Bone broth, sipped as a daily ritual, is one of the easiest ways to add clean protein to a diet that is already calorie-restricted. It is also deeply satiating in a way that a protein shake is not, because it is warm, flavourful, and consumed slowly.

The third is the anti-ultra-processed movement. The MAHA conversation in the US, the growing consumer scepticism of ingredients lists that read like chemistry experiments, is landing directly on products like bone broth. We see a similar trend in Europe. Nothing in a properly made bone broth is ultra-processed. The ingredient list is bones, water, vegetables, salt, and herbs. That simplicity is increasingly a marketing advantage.

The fourth force is the broad functionality of the product itself. Most functional food trends ride one benefit. Bone broth rides several simultaneously: it is high protein, clean label, collagen-rich, and gut-friendly in a single cup. As the lines between food and wellness continue to blur, that combination becomes increasingly rare and increasingly valuable. GLP-1 users need protein. Healthy ageing consumers want collagen. The anti-ultra-processed movement rewards clean ingredient lists. Gut health is now mainstream rather than niche. Bone broth sits at the intersection of all four. That is a big deal. It is why I think this category has more runway than most people currently give it credit for.

The US bone broth market exceeded $300M in 2024 and is still growing. Europe is a similar size, estimated at $300-400M in 2024 depending on the source, with the UK and Germany as the largest markets. The consistent signal across research firms is a global CAGR of 6-9% over the next decade, with Europe growing slightly faster than North America. That is steady, compounding growth driven by fundamentals rather than a single trend. A category that grows 6-9% annually without a viral moment behind it is a category being pulled forward by daily habit. Southern Europe barely registers in any of these reports. Spain, Italy, and the Netherlands are not mentioned as significant markets by any analyst covering the space. That absence is itself a signal.

The Winner’s Playbook

In 2014, Justin Mares’ brother Nick tore his ACL playing football. Justin heard that bone broth could help with recovery and went looking for a quality shelf-stable version he could buy online. It did not exist. The good bone broth was either homemade or sold frozen by small local producers, with no way to ship it conveniently. Justin and Nick decided to make it themselves.

2015: Launch. Justin and Nick Mares launched Kettle & Fire in August 2015 with a single product: a grass-fed beef bone broth in a shelf-stable aseptic carton. No refrigeration needed, two-year shelf life. They found their first customers through PaleoHacks, an online community of 800,000 health-focused members, interested in ancestral nutrition and real-food eating. DTC only, no retail, no outside capital. Month one showed immediate traction, far beyond what Justin had expected.

2016: First capital, first retail. A small angel investment of under $1M gave the brothers the runway to build out their product range and begin approaching retailers. Kettle & Fire entered its first retail accounts, including early Whole Foods and Sprouts placements, while maintaining a strong DTC business that gave them direct customer data and unit economics that most retail-first brands never develop.

2018: Series A and category validation. CAVU Venture Partners led an $8M Series A in August 2018. At the time of the raise, Kettle & Fire was already in 6,500 stores including Whole Foods, Wegmans, HEB and Sprouts, and on a path to “triple revenue that year”. The company used the capital to expand the product line beyond pure bone broths into bone broth-based soups: Miso, Thai Curry, Tomato, and Grass-Fed Chili. This was the category expansion moment, from a single-format product into a broader platform. A crucial decision!

2018-2020: Scaling retail. In the 18 months following the CAVU raise, Kettle & Fire expanded from 3,000 retail locations to 10,000. Revenue crossed $35M. The keto product line launched, opening a new consumer cohort beyond the original paleo audience. Justin Mares’ observation that his customer turned out to be “45-year-old women” rather than the performance-focused men he had originally imagined shaped the brand’s evolution during this period: packaging became warmer, messaging became more accessible, the product moved steadily toward the mainstream.

2020-2024: Mainstream retail dominance. Kettle & Fire expanded into Walmart, Target, Costco and Amazon alongside its existing specialty retail base. Revenue grew toward $100M in FY2024, double what it was in FY2022. The brand brought in a new CEO, Brian Hack, to manage day-to-day operations as Justin Mares moved into a Chairman role. By 2024, Kettle & Fire was confirmed as the category leader in bone broth in the US by SPINS data, with some of the highest repeat purchase rates across the entire soup aisle, a metric that signals genuine daily habit rather than one-time trial.

Early 2025: Secondary buyout and new chapter. Colter Ventures led a $43M secondary buyout, buying out early investors and valuing Kettle & Fire at approximately $200M, roughly 2x revenue. Justin and Nick Mares retained minority stakes. The investor base described itself as having a long-term time horizon, open to profit distributions rather than a forced exit. The acquisition narrative is explicitly off the table for now. The focus is on growing the category further, deepening supply chain investments, and exploring international expansion. Canada is already live. Other markets are being evaluated.

May 2025: KettleWorks opens. Kettle & Fire opened its first company-owned manufacturing facility, KettleWorks, in Lancaster, Pennsylvania. After a decade of co-manufacturing, the company now controls its own production. The same move Bold Snacks made in Brazil in 2023, which I covered last week. The same logic: at a certain scale, owning the factory is not a capital decision, it is a strategic one.

Over the years, Kettle & Fire expanded into several categories. From Bone Broths, to Keto Broths, Cooking Broths, Regeneratively Made Broths, Soups, Keto Soups, Low Sodium and Tallow.

Source: website Kettle & Fire

The timing of its latest product expansion, beef tallow, not coincidental. Beef tallow is having a real cultural moment. The anti-seed oil movement, driven by growing consumer scepticism of processed vegetable oils and amplified by public health figures and food influencers, has repositioned animal fats as a return to real food after decades of being labelled dietary villains. Restaurant use of beef tallow is projected to grow 54% in the next two years as chains look to replace seed oils. Kettle & Fire's grass-fed beef tallow landed at Costco in late 2025, where shoppers were treating it like a badge of clean-ingredient cooking pride. The total beef tallow market is large but dominated by industrial applications: biodiesel, soap, and oleochemicals. The consumer cooking fat segment is a small fraction of that, and still early. The cultural momentum is real. The market size comparison to bone broth is not meaningful.

The key decisions made

The origin story matters less than the decision embedded in it. In 2015, almost every bone broth producer sold frozen. Frozen broth is a different product category in disguise: it requires cold-chain shipping, cannot sit on a shelf next to a protein bar or a kombucha, and makes DTC economics nearly impossible once you factor in dry ice and insulated packaging. The format confined bone broth to local producers, farmers markets, and specialist health food stores. It was never going to scale.

Kettle & Fire changed the format. They moved bone broth into a shelf-stable aseptic carton, the same format you see on oat milk or Tetra Pak soup. To do that, they had to crack the manufacturing process behind it: sealing the broth steaming hot in an oxygen-free environment, in a BPA-free carton lined with heat-resistant polymer. No preservatives. Two-year shelf life. No refrigeration.

The packaging change was visible to the consumer. The manufacturing change made the packaging change possible. Together they moved bone broth from the freezer aisle into mainstream grocery, DTC, and Amazon. It is structurally similar to what Chomps did with meat sticks: a format shift that looked like a packaging decision but was actually a distribution strategy.

Lesson 1: A format change is a distribution strategy. Solve the format problem and the channels open up.

Kettle & Fire launched with one product: a grass-fed beef bone broth in a shelf-stable carton. That focus was not accidental. In a category where most consumers did not yet know what bone broth was, a single exceptional product was easier to explain, easier to merchandise, and easier to build word-of-mouth around than a range.

The expansion came in stages, and each stage stayed close to the core. Chicken bone broth came first, a natural adjacent SKU for the same consumption occasion. Then bone broth-based soups: Miso, Thai Curry, Tomato, Grass-Fed Chili. These were not a pivot into a new category but they were the same ingredient, the same consumer, the same shelf, applied to a slightly different use case. Then a keto line, targeting a cohort that was already buying bone broth for its protein and fat profile. Then beef tallow in 2025, the most logical extension of all: same supply chain, same grass-fed sourcing philosophy, same clean-label consumer.

At no point did Kettle & Fire chase a trend that had nothing to do with their core. No protein bars, no collagen powders and no functional beverages unrelated to the bone broth thesis. Every new product either deepened the consumption occasion or expanded the use case for the same ingredient.

The lesson is not that you should expand slowly. It is that in a nascent category, product focus is a growth strategy. When the category is still teaching consumers what it is, every new SKU that dilutes the core message costs more than it gains. Kettle & Fire grew the category by staying inside it.

Lesson 2: Product expansion works when it is done with focus

Justin Mares had a clear mental model from the start for how to find category opportunities. He used Google Trends and keyword data to identify products people were searching for that did not yet exist in convenient, high-quality form. Bone broth was one of the clearest signals he had ever seen. The searches were there. The product was not.

He has described his core insight about consumer brands this way: “I always think I’m selling to people like me and it always turns out it’s 45-year-old women buying the product.” That observation, made early, shaped Kettle & Fire’s marketing, packaging evolution, and channel strategy. The brand was not built for the paleo CrossFit community that discovered it first. It was built for the health-conscious mainstream consumer who had never heard of bone broth but would drink it daily once they understood what it was.

This reminds me of my Chomps deep dive: Chomps discovered that roughly 70% of its customers are women, in a category that had always marketed exclusively to men. By building a brand that resonated with health-conscious parents, fitness enthusiasts, and busy professionals, Chomps unlocked a much larger addressable market than anyone in the category assumed existed.

Lesson 3: Your first audience is your launch vehicle, not your destination. Build for the customer who comes second.

Kettle & Fire spent years building its DTC business before moving seriously into retail. The DTC channel gave them direct customer data, tight feedback loops on product and packaging, and the unit economics to invest in the brand without taking on significant outside capital. They raised ‘only’ $10.3M in institutional funding across two rounds from CAVU Consumer Partners, a fraction of what comparable CPG brands were raising in the same period.

By 2025, the brand was in over 22,000 retail locations. The DTC foundation meant they arrived in retail with a proven product, an established brand, and a customer base that was already pulling the product off shelves. Retail was an expansion, not a lifeline.

In May 2025, Kettle & Fire opened KettleWorks, their first company-owned manufacturing facility in Lancaster, Pennsylvania. This mirrors a pattern that keeps appearing in the brands that reach real scale, Bold Snacks did the same thing in 2023. Owning the factory gives control over quality, cost, and capacity. It requires capital and confidence. It is not the right move for an early-stage brand. It is exactly the right move for a brand that has proven its product and needs to protect its margin at scale.

Lesson 4: Own your supply chain when the business has earned it. Not before.

The secondary buyout in early 2025, $43M led by Colter Ventures at a $200M valuation, roughly 2x revenue, is the current chapter. Justin and Nick Mares are minority shareholders in the new structure. The investors describe themselves as having “a long-term time horizon” and being open to returns from profit distributions rather than a forced exit. There is no acquisition on the horizon. What there is: a category leader, a proven product, a new factory, and a market that is still growing.

Lesson 5: A $200M valuation in a $300M US market is not a ceiling. It is a starting point.

How Others Are Playing It

Freja is the most interesting European brand in this category and the one I watch most closely. Founded in 2020 in the UK by husband-and-wife team Jess Higgins and Ed Armitage, the brand rebranded from Take Stock Foods to Freja in May 2023 to reflect its Scandinavian sourcing and positioning. All Freja broth is sourced, manufactured, and packaged in Norway, where animal welfare standards are among the highest in the world. That origin story is a genuine differentiator in a category where ingredient quality is the whole argument.

The growth numbers are striking. Revenue grew from £600K in 2021/22 to a forecast £10M in 2024/25, a 200% compound annual growth rate sustained over four years. The brand has raised £3.5M in total, backed by a roster of investors who understand both the food industry and the consumer: Paul Polman (former Unilever CEO), Giles Brook (former Vita Coco EMEA CEO), and celebrities like Harry Kane, and Alistair Brownlee. Freja recently hired Pete Joubert as Managing Director, a former senior leader at Moma Foods who oversaw the brand’s sale to AG Barr in 2021. That hire signals that Freja is preparing for a serious retail expansion phase.

The CEO Ed Armitage estimates the UK retail bone broth market at £20M in 2025, of which Freja holds approximately 60%. Bone broth is growing at 10x the rate of the overall £130M bouillon category in the UK. Freja’s stated ambition is to become Europe’s number one bone broth brand. Based on what I can see, nobody else is yet close to building a pan-European challenger.

Cooldo (Spain) and WholyBones (Netherlands) are two smaller brands I follow personally rather than analytically. Cooldo is the bone broth I drink in Madrid. What strikes me every time is the ingredient list and the taste: clean, direct, nothing you would not recognise, a flavour that genuinely tastes like something made slowly from real ingredients rather than a functional product engineered to be drinkable.

Their ingredients: Water, beef bones 22%, chicken carcasses 20%, ham bones 2.3%*(organic pork ham bone and sea salt), apple cider vinegar, ginger, sea salt, turmeric.As they write on their website: drink Cooldo bone broth to:

• improve skin hydration and elasticity

• improve bone and joint health

• improve your energy levels

• improve your digestive health

WholyBones, based in the Netherlands and available online, has a similar positioning: RTD, real ingredients, accessible to consumers who want quality without the clinical packaging that most bone broth brands still rely on. Neither has the public data to analyse in depth, but both are worth watching as the category builds in Southern and Northern Europe respectively.

What Went Wrong

Most bone broth brands fail before they reach any meaningful scale. The reasons follow a consistent pattern.

The most common is packaging that looks like a medical supply. Walk into any health food store in Europe and you will find bone broth products in brown glass bottles or plain clinical cartons with ingredient lists in small grey type, looking like something a hospital dietitian would prescribe. The category spent its first decade marketing itself exclusively to the already-convinced: paleo devotees, CrossFit athletes, nutritionally educated early adopters. That is a fine launch market. It is not a mass market. The brands that reach real scale, Kettle & Fire, Freja, are the ones that invested in packaging and brand identity that could sit on a mainstream grocery shelf without apology. Most brands never make that investment.

If you look at the landing pages of Freja and WholyBones side by side, the strategic difference is immediately clear.

Freja leads with “Nourish yourself with food, not formulas.” Warm photography, a woman sipping broth in a kitchen, wellness-friendly colours. The product is almost secondary to the lifestyle it represents. It could sit on a shelf at Whole Foods tomorrow without changing a single pixel.

WholyBones leads with “buy bone broth, locally made, good for your gut.” Glass bottles photographed in a Dutch field. The message is: we are local, we are natural, we are close to the source.

Both are honest and both reflect real choices. But they point toward very different futures.

Freja is positioning for a consumer who has never heard of bone broth and needs to be seduced into trying it. WholyBones is positioning for a consumer who already knows what bone broth is and values local provenance above everything else.

One of these positioning strategies scales across borders. The other does not. That is not a criticism of WholyBones. It is a pattern that repeats across almost every food category: the brands that reach pan-European scale are the ones that build around a universal benefit, not a local story. I bet on the wellness positioning.

This brings us to the second problem: only having local ambition. The bone broth category in Europe is almost entirely composed of small, fragmented, local producers with no intention or infrastructure to expand beyond their home market. This is not unique to bone broth, it is a structural feature of European food more broadly, but it is particularly acute here. A bone broth brand in Spain competes in Spain. A brand in Germany stays in Germany. Nobody is building the pan-European infrastructure. Kettle & Fire proved that a bone broth brand can scale nationally. Freja is attempting to prove it can scale across borders. The category needs more founders with that level of ambition.

The third problem is the format. The convenience argument for bone broth powder is real: no liquid to carry, infinite shelf life, mix anywhere. But the execution has consistently disappointed. I have tried several powdered bone broths, most recently Mattisson, and the experience is poor. The powder does not blend evenly, the texture is wrong, and the taste profile loses the depth and warmth that makes a good RTD worth drinking in the first place. Brands that have moved into powder have often done so because it scales more easily than RTD, not because it is a better product. The result is that the category’s most scalable format is currently its least compelling. That gap will close. The brand that cracks a powder that actually tastes like bone broth will have something genuinely interesting.

Is There Room for New Entrants?

Europe is wide open in this category. Freja is building seriously in the UK and has clear European ambitions, but the continent beyond the UK is essentially uncontested at any meaningful scale. There is no bone broth brand with real distribution in Germany, France, Spain, or Italy. No brand has done what Kettle & Fire did in the US: crack shelf-stable RTD, build DTC first, then move into mainstream retail with a product that can sit next to a protein bar or a kombucha without looking out of place.

The opportunity is specific. A brand that can build the following combination does not yet exist in Europe: clean-label ingredient list, shelf-stable RTD format, packaging designed for mainstream grocery rather than health food stores, and a brand identity that speaks to the GLP-1 and healthy ageing consumer rather than the paleo athlete. Kettle & Fire built that for the US. Freja is building it for the UK. The rest of Europe is an open field.

The honest caveat: bone broth is not an easy category to build in. The manufacturing complexity is real, the ingredient costs are high, and the consumer education requirement is still significant. Most people in Europe still do not know the difference between bone broth and stock. That is a challenge, and it is also an opportunity. The brands that do the education work now will own the category when awareness tips.

My bet is that the first brand to own bone broth in Europe will look more like Cooldo than like a supplement brand: farm-origin story, outstanding taste, clean packaging, priced as a premium food rather than a functional health product. But at some point the products will converge. Grass-fed bones, 24-hour simmer, clean label: every serious brand will get there. What separates the winner is not the broth. It is the ability to own the wellness narrative around it, to sell the daily ritual, the nourishment, the lifestyle. The electrolytes category built itself the same way, as I explained in my deep-dive: LMNT and Liquid IV are not meaningfully different products. The brand that made the strongest case for why it belonged in your routine every day won the shelf. Bone broth will follow the same logic. Freja is building that brand for the UK. The rest of Europe is still open.

Takeaways

Kettle & Fire is a ten-year case study in what it looks like to build a category from scratch, own it, and then grow into the market you created.

• The format unlock was the business model. Shelf-stable RTD solved the distribution problem that was keeping bone broth local and frozen. Before Kettle & Fire, quality bone broth could not sit on a shelf. That one technical decision made everything else possible.

• DTC is a feedback machine. Kettle & Fire spent years learning from direct customers before moving into 22,000 retail locations. They arrived in retail knowing exactly who was buying, why, and how often. Most brands skip this step and pay for it.

• The $200M valuation is the beginning of the story, not the end. The US market is $300M and growing. The global market is $2B and growing. Kettle & Fire is the category leader in one market. The category is still in its early innings internationally.

• Europe needs a Kettle & Fire. Freja is building it for the UK. The rest of the continent is open. The brand that cracks shelf-stable RTD with mainstream positioning in a major European market in the next three years will have a very clean run at category leadership.

• The powder format is an unsolved problem worth solving. Every RTD bone broth brand has thought about powder. Nobody has executed it in a way that matches the taste and texture of a good RTD. Whoever does will unlock the convenience channel, travel retail, and foodservice at a scale that RTD cartons cannot reach.

Bone broth took ten years to find its Kettle & Fire. In Europe, that brand has not been built yet. I am watching closely, and if you are building in this space, I would really love to hear from you. Hit reply or find me on LinkedIn.

Written by Vincent Kuiper, founder of GOTA Ventures, an international angel syndicate investing in seed-stage European foodtech and consumer brands.

Contents

• The Setup: The protein craze is real, but most brands building in it will not survive. What brands survive, get acquired, and why?

• Why This Category, Why Now: You already know this one. A quick summary of where the category stands.

• The Winner’s Playbook: How Gabriel Ferreira built Bold Snacks from a failed pivot to a Ferrero acquisition

• How Others Are Playing It: FULFIL, Barebells, and the European template

• What Went Wrong: Why most protein bar brands die before they scale

• Is There Room for New Entrants?: What the European landscape actually looks like

• Takeaways: 5 takeaways for CPG founders and investors

The Setup

The protein category has never had more momentum behind it. I have been watching it closely for most of this year, trying to understand which companies are actually building durable businesses and which are just surfing a macro wave that will eventually recede.

What strikes me about the category is the gap between how many brands enter it and how few survive long enough to matter. Every health food store in Madrid has a refrigerator full of protein bars I have never heard of. Most of them will not be there in three years. What is the actual difference between the brands that scale and the ones that disappear?

This week I found the clearest answer I have seen in a while. In March 2026, Ferrero Group announced the acquisition of Bold Snacks, a Brazilian protein bar company founded in 2018 by Gabriel Ferreira. The financial terms were not disclosed. What was disclosed told a more interesting story: a bootstrapped brand, no external capital raised, approximately $35M in revenue by 2023, a factory built on the founder’s own balance sheet, and a Ferrero CFO describing it as the company’s “first foray into the better-for-you segment in South America.”

A specific set of decisions, made in a specific sequence, that most founders in this category never make.

Why This Category, Why Now

If you have been reading The Food Stack for a while, you already know this one. I have covered the protein bar category before, through RXBAR’s $600M exit, Peter Rahal rebuilding it with David at a $725M valuation, and Barebells quietly becoming the European market leader inside Vitamin Well Group, even with an ugly ingredient list but with strong macros. The fundamentals have not changed. If anything, they have strengthened.

The short version for anyone joining recently:

Protein has become the dominant macro in consumer food culture. The International Food Information Council reported in 2024 that 71% of Americans were actively trying to increase protein intake, up from 56% just two years earlier. GLP-1 drugs are accelerating this further. People on Ozempic and its successors eat less overall but need more protein per meal to prevent muscle loss, which is a direct tailwind for high-protein, convenient formats. Healthy ageing is considered one of the 5 mega trends in the industry right now, and is bringing an entirely new cohort of consumers into the category too. People in their 40s, 50s, and 60s who have never counted a macro in their lives are now buying protein bars the way they used to buy calcium supplements.

Brazil’s snack bar market was valued at $579M in 2024 and is projected to reach $2.3B by 2033, a compound annual growth rate of 16.4%. Brazil also has the second-largest influencer creator market in the world, behind only the United States, and a consumer culture where peer recommendation converts at unusually high rates. 80% of Brazilian consumers report having made a purchase after a product recommendation from an influencer.

Let’s uncover why Bold Snacks became a successful acquisition target among the hundreds of ‘similar’ brands in the market.

The Winner’s Playbook

Gabriel Ferreira was a crossfit enthusiast who took a trip to the United States and came back frustrated. What he found in American supplement stores, the range, the flavour quality, the branding, simply did not exist in Brazil. His first attempt to bring it there failed. He launched a supplements company focused on whey and creatine. It went nowhere.

What he did next is the first decision that separates Bold from most of its competitors: he pivoted completely, without preserving the original framing. He dropped the performance supplement positioning, moved into protein bars, and rebuilt the brand from scratch. Not performance. Not bodybuilding. Healthy eating made accessible, tasty, and colourful. The target was not the committed gym-goer. It was anyone who wanted to eat better without suffering for it.

Before going into the decisions, the timeline is worth reading carefully. What stands out is the sequencing. Bold started DTC, built brand equity and a loyal customer base online, and only pushed hard into physical retail once the product had proven itself. How many times have we seen that before? ;) By 2022, that retail push triggered a revenue triple in a single year, from ≈$4.5M to ≈$14M, as Bold entered major national supermarket and pharmacy chains across Brazil. The factory investment followed in 2023, once the revenue justified it. Then the acquisition. Each step funded the next. That is a founder who understood the difference between building a brand and scaling a brand, and refused to do both at the same time.

The new Bold bars used a maximalist, vibrant aesthetic: large wordmark, saturated colours, nothing that looked like a supplement product. The bars contained 10 to 21 grams of protein depending on the format, no added sugar, and were designed to taste like something you would want to eat every day.

Lesson one: Repositioning only works if it is total. A new logo on the same product is not a pivot.

The product quality then generated an unexpected moment. A customer posted on Instagram that she was heating Bold bars in the microwave and eating them as a warm dessert. The company leaned in completely. The microwave use case went on the packaging, got promoted across social channels, and became part of the brand’s core story. It expanded the consumption occasion beyond snacking into dessert and post-workout treat territory. One customer’s behaviour became the brand’s primary acquisition hook.

Lesson two: Distribution is not just channels. It is also occasions. Adding one new consumption occasion can transform purchase frequency.

By 2023, Bold was running a network of approximately 700 influencers across Brazil. Brazil has the second-largest influencer creator market in the world, and a consumer culture where 80% of consumers report making a purchase after an influencer recommendation. Bold built inside that context deliberately, at a time when most Brazilian CPG brands were still spending on television and out-of-home advertising. The 700-influencer network was not a celebrity endorsement model, but it was a distributed reach model: a smaller number of macro influencers in fitness and lifestyle for broad awareness, and a much larger base of micro and nano creators in specific communities, gyms, and regional cities driving conversion closer to the point of purchase. The microwave moment originated in exactly that second layer: an ordinary customer with a social following, not a paid celebrity. The brand recognised it and built a system to make that kind of discovery repeatable.

Critically, the influencer network did not operate in a vacuum. By 2023, Bold was also in approximately 8,000 physical points of sale across Brazil, covering supermarkets, pharmacies, supplement stores, and convenience stores. 75% of revenue came from retail. The remaining 25% came from more than 150,000 e-commerce customers. A consumer who sees a Bold bar on a creator’s Instagram story can find it at the pharmacy on the corner that same afternoon. That feedback loop between digital discovery and physical availability is what separates a marketing campaign from a growth engine.

Lesson three: Influencer reach compounds when it connects to physical availability. One without the other is a campaign. Both together is a flywheel.

That retail footprint required capital. Ferreira funded it himself. Bold never raised external money. In 2023, the company invested approximately $6M in a new 23,000 square metre factory in Divinópolis. That decision meant Ferreira kept full control of the cap table, the brand decisions, and the exit timing. When Ferrero came, he negotiated from a position of independence.

Lesson four: Capital discipline is leverage. Bootstrapping to $35M in revenue is (also) a negotiating story.

The final number worth sitting with is the one that never appeared in any press release. Ferrero did not disclose what it paid. What we do know: Bold came with an owned factory, 300 employees, approximately $35M in confirmed revenue, a clear upward trajectory, and zero outside investors to satisfy. Deals where the acquirer gets full operational control with no prior shareholder complexity tend to attract a meaningful premium. The absence of a price tag is itself a signal… Seeing all other valuation multiples, I bet this could have been a >3x or even 4x revenue multiple.

Lesson five: Building without investors does not just preserve dilution. It simplifies the acquisition. Buyers pay for clean structures.

How Others Are Playing It

Bold is not the only brand that built a meaningful protein bar business and attracted a strategic acquirer. Two European examples show variations on the same playbook, at different scales and with different structural choices.

FULFIL Nutrition was co-founded in Dublin in 2016 by Tom Gannon and Niall McGrath. FULFIL’s core differentiation was nutritional: each bar contained 100% of the recommended daily allowance of nine vitamins alongside more than 20 grams of protein. The taste strategy mirrored confectionery, with flavours like Chocolate Salted Caramel and Chocolate Peanut Butter, rather than the chalky taste profile of earlier-generation bars. The bet worked immediately. FULFIL sold approximately 15 million bars in its first year, roughly €30M in retail sales. Revenue doubled the following year.

Following a disagreement over the pace of international expansion, Gannon and McGrath exited the business in 2018. Barry Connolly took majority control and scaled the business further, with Hershey taking a minority stake in 2019 to support North American distribution. By the time Ferrero acquired the non-North American business in April 2022 for a reported €160M, FULFIL had reached approximately €40M in annual revenue. That is a 4x revenue multiple, paid by the same acquirer that would go on to buy Bold four years later.

The structural lesson from FULFIL is what exit complexity looks like when multiple stakeholders are involved. The Hershey minority stake created the joint venture structure that eventually required FULFIL’s global business to be carved out from its US business at exit. Connolly received two paydays as a result, but the deal architecture was far messier than what Ferrero got in Brazil. Bold had none of that complexity. On the other side, they still received a 4x revenue multiple…

Barebells is the European market leader by volume, built inside the Vitamin Well Group, a Swedish company with €650M in total group revenue across more than 40 markets. Launched in 2016, Barebells has leading market positions across all Nordic countries, the Netherlands, and Estonia, and is now expanding in the US. The strategic bet is identical to Bold’s and FULFIL’s: taste parity with confectionery, no added sugar, high protein. Products designed to feel like indulgent snacks, not functional supplements. Barebells is a strategic asset inside a larger group, with distribution muscle that most independent brands cannot replicate. They focus completely on macros, as they are definitely not ‘clean-label’.

Both FULFIL and Barebells validate the same underlying insight: protein bars that taste like treats rather than products that demand willpower are the ones that earn daily repurchase at scale. For now. As written before, my bet is that clean-label becomes more important and the ‘brand of the future’ has to combine nutritional value with a clean ingredient list.

What Went Wrong

For every Bold or FULFIL, there are dozens of brands that launched with similar ambitions and either folded or stalled well short of scale. The same mistakes keep appearing.

The most common: solving for nutrition credentials before taste. The protein bar category was built on products that delivered functional value at the cost of eating experience. Health usually doesn’t win from taste.

The second mistake is raising capital before the product has earned it. The protein bar category has attracted significant venture investment, much of it deployed into brands that burned through inventory budgets, marketing spend, and retail placement costs before finding a foothold worth defending. ALOHA is the most instructive example: founded in 2013, the company burned through early venture capital and required a near-complete operational rebuild, confirmed by CEO Brad Charron across multiple interviews. Charron, who joined in 2017 and describes himself as the company’s “re-founder,” stripped the business down to its product core, narrowed the category focus, improved the taste profile, and rebuilt distribution from scratch. The rebuild worked, with ALOHA surpassing $100M in revenue by 2024. But it required years and the right leadership arriving at the right moment. Most brands in that position do not get the second chance.

The third mistake is building for the supplement channel and staying there. Gyms and specialist supplement retailers are a useful launch market: buyers are educated, the format resonates, repurchase is reliable. It is also a ceiling. Bold at 8,000 retail points. FULFIL at supermarkets and impulse locations across Ireland and the UK. Barebells in Costco and mainstream grocery. The brands that reached real scale all made a deliberate decision to compete on taste in mainstream retail. Staying in supplement stores limits the addressable market to a fraction of what the category can deliver.

The brands that die are not always the ones with the worst formulations. They are the ones that never made protein feel like a natural daily choice rather than a disciplined one.

Is There Room for New Entrants?

Honestly, I am not sure I would build here. FULFIL and Barebells are well-capitalised, well-distributed, and already occupying the confectionery-taste positioning that the category rewards. Grabbing shelf space and consumer attention against two entrenched incumbents with real marketing budgets is a different challenge than it was in 2016.

That said, there is one gap I genuinely cannot find anyone filling. There is no clean-label, high-protein, high-fibre bar with meaningful scale in Europe. FULFIL and Barebells win on taste, brand, protein levels, vitamins and low-sugar levels, but neither leads on ingredient quality. A brand that combines real-food ingredients, a strong protein and fibre profile, and packaging that does not look like a supplement could own a distinct position that neither incumbent has claimed.

If I were building here, that is the only angle I would potentially back. Not another confectionery-taste bar. Something that makes the ingredient story the product.

Takeaways

The Bold Snacks story is ultimately about sequencing. Gabriel Ferreira made the right decisions in the right order, and the compounding effect of each made the next one cheaper and faster to execute.

A few things I am watching closely as this category develops:

• Good taste is now the entry ticket, not the edge. The next winners will be separated by manufacturing discipline and distribution architecture, not flavour. Most founders underestimate how much value is locked in the supply chain.

• Ferrero is not done. Four better-for-you acquisitions across four geographies in six years, each one bootstrapped or lightly funded with a clean cap table. If you are building in this space in Europe, Ferrero is a realistic exit path.

• Influencers without shelves is just a campaign. Bold’s network worked because the product was already in 8,000 locations. A consumer who sees it on Instagram finds it at the pharmacy that afternoon. Digital discovery and physical availability are one system, not two strategies. Think mental and physical availability.

• The European ‘gap’. The only gap I see is high-protein, high-fiber AND clean-label.

• Listen before you optimise. The biggest inflection in Bold’s growth came from a customer behaviour the company had not planned for. The brands that win in food are the ones that notice what their most enthusiastic customers are already doing, then build around it.

Bold earned its exit. The pivot, the packaging, the influencer network, the factory investment, the refusal to take outside capital: each decision compounded into the outcome.

If you are building in this space or thinking about where the next European protein bar exit comes from, I would love to hear from you. Hit reply or send me a DM!

Contents

• The Setup: My siblings became parents, and I learned how hard it is to find healthy convenient kids food.

• Why Now: A baby food category being rebuilt around fresh, and a CPG IPO window that just reopened.

• The Timeline: Eleven years from a single recipe to the first major CPG IPO of 2026.

• The Winner’s Playbook: The four decisions that built a $240 million brand, starting with putting baby food in a refrigerated cooler.

• How Others Are Playing It: Cerebelly, Serenity Kids, and Little Spoon went different directions in the same category.

• What Went Wrong: Plum Organics, Sprout, and the long history of kids food brands that scaled and then stalled.

• European White Space: Where the refrigerated, premium kids opportunity still sits open in Europe.

• Takeaways: Six things founders and investors should take from how this category is being rebuilt.

The Setup

My two older brothers and my sister all became parents in the last five years. That changed the conversations we have when the family is together.

We now talk about baby food. Specifically, we talk about how hard it is to find baby food that is actually good. They want organic, minimally processed options without a list of additives they cannot pronounce. They also want something they can grab on a Tuesday morning when one kid is crying and the other has lost a shoe. Those two wants pull in opposite directions. Healthy usually means fresh, fiddly, and inconvenient. Convenient usually means a shelf-stable pouch, full of sugar, that has been cooked at high heat until most of the nutrition and all of the character is gone.

Multiple sugar sources disguised under different names in baby food

What struck me watching them is how much they want to spend money on this and how often they cannot find the product they are looking for. The demand is real and the supply is thin. That gap is exactly the kind of thing I find worth studying.

So I went looking for the company that has done the most to close it, and the answer was a brand most American parents already know: Once Upon a Farm. It built a $240 million business by doing one deceptively simple thing. It put fresh, organic, cold-pressed baby food in a refrigerated cooler, in a category that had sold nothing but cooked, shelf-stable pouches for decades. That single move is what this post is about: how a brand rebuilds an aisle, and why almost nobody has done the same thing in Europe.

The timing is not an accident either. In February, Once Upon a Farm became the first major consumer packaged goods company to go public in 2026, listing on the New York Stock Exchange at $18 a share and closing its first day at $21.05, a market capitalization of roughly $847 million. The category had grown up enough to carry a public company. Whether the market believes it can stay there is a separate question I will come back to, because the story since the debut has been more complicated than the debut itself.

Why This Category / Why Now

Start with the category, because the category is the reason any of this works.

US baby food is roughly a $9 billion market, and it grows slowly, in the low single digits. Organic is the exception. Globally, the organic baby food segment is already worth around $5.9 billion and is growing at roughly 12 percent a year, several times the pace of the conventional category it keeps taking share from. The same pattern holds in the US, where organic and clean-label is the one part of the aisle expanding quickly. Parents are the most label-conscious shoppers in the entire store. They will pay a premium, they buy on a fixed schedule for a defined period, and they research obsessively. The structural demand my siblings represent is not a niche. It is the fastest-growing part of one of the most defensive categories in food.

For decades that category was static. Baby food meant a cooked, shelf-stable pouch or jar, sold in the dry aisle, made by a handful of legacy players. The product had barely changed in a generation. The opening Once Upon a Farm found was not a new flavor or a cleaner label. It was a new physical state for the product: fresh instead of cooked, refrigerated instead of ambient. When a category has been frozen in place for that long, the brand that changes its fundamental format can rewrite the rules faster than anyone expects.

The conventional way of selling baby food

That category maturing is also what reopened a door that had been shut for years. Consumer food IPOs went quiet after the 2021 peak. Founders who built strong brands had no public exit available to them. 2026 is the year it started to crack open again, and Once Upon a Farm was the brand that walked through first.

Last week I wrote about Suja Life, the cold-pressed juice company that Paine Schwartz took public in May. Suja priced at $21, the low end of its range, and dropped 14 percent on its first day. If you missed it, the full piece is here, and the short version is that the private equity flip worked beautifully for the sponsor while the public market gave the listing a cool reception.

Once Upon a Farm is the other side of the same coin. It is a founder-led brand story rather than a PE engineering story, and it got a much warmer debut, up 17 percent on day one. Yet three and a half months later, both stocks sit below their issue price. Two CPG IPOs, two very different paths to the public market, and the same skeptical verdict once the initial excitement faded.

That is the signal worth sitting with. A category can be strong enough to take a brand public, and the market can still doubt that any single brand will convert the category tailwind into the kind of margins and durability a premium valuation requires. That is what is being tested in real time, and it is the question the rest of this post circles.

The Timeline

Before the decisions, the sequence. The arc from a single recipe to a public company took eleven years, and each step set up the next.

In 2015, Cassandra Curtis and Ari Raz launched with a single product. In 2017, John Foraker and Jennifer Garner joined as co-founders and took over scaling it. The years that followed brought a rapid distribution push, a move beyond baby food into older kids, conversion to a Public Benefit Corporation, and a climb to $240.7 million in net sales by the end of 2025. In February 2026 it listed on the NYSE, the first major CPG IPO of the year.

The chronology is clean. The interesting part is why each of those moves worked, which is where the playbook comes in.

The Winner’s Playbook

The story behind those dates comes down to four decisions, and each one carries a lesson worth taking.

The first decision was the format itself. Traditional baby food is cooked at high heat to kill bacteria, which is what makes it shelf-stable and what strips out flavor and nutrients. Curtis, a holistic nutritionist who wanted better food for her own daughter than she could find in her supermarket, used high-pressure processing instead, the same cold-pressure technique behind premium juice. The product stays raw, keeps its nutrition and taste, and lives in the refrigerator rather than on a dry shelf. The cost is that you now have a cold-chain product in a category built entirely around ambient shelf life. That single choice created the brand and created its hardest operating problem at the same time. Format is positioning when the incumbent category has none.

The second decision was who to put in charge of scaling it. Foraker had run Annie’s for nearly fifteen years, taken it public, and sold it to General Mills for $820 million in 2014. He understood organic food, retail, and exits at a level very few operators do. Garner (an American actress) is the part that is easy to dismiss and wrong to dismiss. She is not a logo on the box. Foraker has said directly that her global recognition opened retail doors the company could not have opened on its own, and she has been active in the brand and product side throughout. The lesson is not that you should find a celebrity but that a celebrity who actually works is a distribution asset, and one who only lends their face is a liability waiting to surface.

The third decision was to break the standard better-for-you playbook on distribution speed. The conventional wisdom is to build demand slowly, prove velocity in a handful of stores, and expand carefully so you do not get delisted for slow turns. Once Upon a Farm went from roughly 300 stores to 8,500 in about a year, landing in Target, Walmart, Kroger, Sprouts, and Whole Foods. Foraker has said roughly 90 percent of that distribution stuck, because the products were already performing on shelf and because Garner could open doors fast. Speed only works when the product is ready for it. Distribution before velocity is how brands get delisted, not how they scale.

The mechanism that made all of it work at retail is the cooler, and it is the decision that still defines the economics today. Baby food traditionally sits in the dry aisle. A refrigerated product has nowhere to go unless the retailer gives it cold space, so Once Upon a Farm pays slotting fees to place branded coolers directly in stores. This is expensive and it shows up as a drag on gross margin, but it does three things at once. 1) It creates a dedicated home for the product, 2) it physically separates the brand from the shelf-stable competition, and 3) it builds a moat, because a competitor now has to convince the same retailer to install a second cooler. The brand ended Q1 2026 with about 3,700 coolers and is targeting roughly 5,000 by year-end. Owning the cold space is the durable advantage. Paying for it is the near-term cost.

The fourth decision was moving beyond babies. A pure baby food brand has a brutal structural limit: your customer ages out in about eighteen months and you have to acquire a completely new one. So the company extended into older kids with smoothies, applesauce, oat bars, soft-baked bars, and refrigerated protein products. That turns a roughly eighteen-month customer window into a potential relationship that lasts until a child is twelve, a huge difference. The economics of a kids food brand are set by how long you keep the customer, not by how good the first product is.

The numbers show the model working on the top line. Full-year 2025 net sales reached $240.7 million, up 53.5 percent year over year. The company is now in more than 25,000 retail doors. Q1 2026 net sales grew 43.7 percent to $72.7 million, and the baby segment alone grew 112 percent to $38.6 million as the cooler rollout accelerated. Gross margin in the quarter was 40.8 percent, and adjusted EBITDA, while still slightly negative at a $3.1 million loss, has been improving steadily. Full-year 2025 adjusted EBITDA was positive at $2.1 million, the first time the company crossed that line. Management raised its 2026 sales guidance to a range of $313 to $323 million.

And yet the stock has fallen. After closing day one at $21.05 (+17%!), it trades around $15 to $16 as of mid-May, roughly 25 percent below that close and below the $18 IPO price. The company keeps reporting good numbers. The market keeps marking it lower.

So why is the stock down. Because growth is being bought with trade spend? The slotting fees that fund the cooler rollout suppress gross margin today against a promise of productivity tomorrow. The company is guiding to roughly breakeven adjusted EBITDA for 2026 even as sales grow 30 percent plus. The market is being asked to pay a premium multiple for a brand that is still spending nearly every dollar of new gross profit on growth. Since 2021-2022, we see investors focus more on profitability than growth, both among large public listed companies and in smaller venture rounds. Therefore, the high ‘growth expenditures'’ are reasonable things to be uncertain about. The proof that it converts to profit is not yet clear.

How Others Are Playing It

The early-stage kids nutrition category has several brands attacking the same parent with different bets.

Cerebelly took the functional angle. It positions around brain development, with blends built on a survey of a child’s recent diet to flag nutrient gaps, and it sells primarily as shelf-stable pouches. The company raised somewhere in the $26M to $33M range in VC funding. It reached Target, Walmart, and Whole Foods and raised meaningful venture funding on the science-forward positioning. The contrast with Once Upon a Farm is instructive. Cerebelly competes on what is inside the pouch. Once Upon a Farm competes on where the pouch lives in the store. Both can work, but only one builds a physical moat.

Serenity Kids went after the protein and fat thesis, building savory pouches with meats and vegetables aimed at parents who follow lower-sugar, paleo-leaning diets. The company raised roughly $64M to $67M across several rounds. It grew largely through direct-to-consumer and Amazon before pushing into retail, and it carved out a real niche among a specific, committed parent segment. The lesson it surfaces is that ingredient positioning can win a passionate core, but a narrow dietary stance also caps how broad the brand can go.

Little Spoon built the subscription model, delivering fresh baby food and toddler meals directly to the door. It raised substantial venture capital (between $83M and $173M) and proved that a segment of parents will pay for convenience delivered to the home. The company reached a $200M valuation as of its July 2021 Series B. The structural problem is the one that haunts all fresh DTC: cold-chain shipping is expensive, and the unit economics fight you at every order. It is the clearest illustration of why Once Upon a Farm chose to make the retailer absorb the cold-chain cost through in-store coolers rather than shipping fresh food itself.

What Went Wrong

The history of kids food is littered with brands that scaled and then stalled, and the failures are as instructive as the wins.

Plum Organics is a good example of “orphan risk”. Plum was an early organic baby food leader, sold to Campbell Soup in 2013 for $240M. Campbell eventually sold it to Sun-Maid in 2021 for an undisclosed amount. The sale was explicitly part of CEO Mark Clouse's strategy to refocus on Campbell's core categories of soup, sauces, and beverages, and to unwind acquisitions made by former CEO Denise Morrison. Food Dive's own assessment was that Plum's organic-baby-food focus "doesn't appear to mesh with the majority of Campbell's portfolio."Plum had the category and the head start. Brands often don’t decline because the category turns against but because the organization behind them stops investing or changes their core strategic focus.

The clearest risks are the ones Once Upon a Farm names itself. Growth has not yet meant profit. Net loss widened from $19.3 million in 2022 to $48.1 million in the twelve months ended June 2025, and even after a strong year the company still lost $17.2 million in 2025. The cooler strategy that builds the moat is also a margin tax: full-year gross margin slipped from 43.6 percent to 42.3 percent in 2025, which the company attributes directly to higher trade spend from new-store slotting and cooler placements. Operating costs remain heavy, with selling, general and administrative expenses reaching 63 percent of net sales in the first quarter of 2026. The IPO repaired the balance sheet, clearing roughly $60 million of debt and leaving the company with about $100 million in cash and no debt, but that cash is the runway to prove the model converts to durable profit, not a sign that it already has. And the single largest structural risk is one the company flags at the top of its own prospectus: a product contamination or recall event. For a fresh, refrigerated brand whose entire premium rests on trust, a safety failure would do more damage than any competitor could. This is a business that has earned its growth and still has to earn its profitability, in a category where one bad headline can undo years of brand-building.

European White Space

Before betting on a European version of this model, it is worth understanding what is already here. The picture is not what most American investors assume.

Europe does not have a single pan-European champion. It has national champions that grew into their neighbors. The clear number one is HiPP, the German family business founded in 1932. It generates roughly 950 million euros in worldwide turnover and holds around 45 percent of the German baby and infant food market. It is still owned and run by the Hipp family, four generations in. That scale puts it in a category of its own.

The UK leader is Ella’s Kitchen, founded in 2006 by Paul Lindley, who left a job at Nickelodeon and launched the brand with his own savings. It became the UK’s largest baby and kids food brand, with turnover of about 87 million pounds in its 2024 financial year. That figure came with a notable asterisk: it was a slight decline, the first break in a 17-year run of unbroken growth. Below those two sit smaller recognizable names like Holle and Organix, plus a long tail of regional organic brands and the baby lines of the multinationals, Nestle and Danone.

In The Netherlands, the baby food leader is Olvarit, with about a 30% market share. It’s owned by Nutricia, a subsidiary of Danone. Danone was the leading baby food company in the Netherlands with brands such as Olvarit, Nutrilon and Bambix. Note that this is not specifically ‘organic’ baby food, and that there doesn’t seem to be a clear market leader that is specialized in organic baby food. The organic shelf is mostly served by foreign-owned brands such as HiPP (German), Ella’s Kitchen (UK, US-owned), Holle (German/Swiss) and Organix (Swiss Hero Group). Hero baby has a strong Dutch presence as well, owned by Hero, a Swiss multinational.

For scale, the European baby food and infant formula market was worth around 9.75 billion dollars in 2023, growing close to 5 percent a year. The organic part is growing by 7-9% per year.

The competitive pressure here is coming from an unexpected direction. It is not insurgent challenger brands, but private label. Ella’s Kitchen lost market share across 2023 and 2024 as cost-conscious parents traded down to cheaper supermarket own-label pouches, and branded packs in the category fell around 6 percent in 2024. The squeeze on the premium brands is being applied by the retailers themselves.

This is where Europe and the US diverge most sharply. The American playbook I keep studying, venture funding, rapid scaling, an IPO or a strategic exit, barely exists here. Europe’s leaders are old, family-owned, and built patiently over decades. HiPP has been run by the same family since 1932. The one landmark exit, Ella’s Kitchen selling to America’s Hain Celestial in 2013 for a reported 66 million pounds, has since looked less like a triumph, with the brand losing share and most of its management team inside its US parent.

The deeper difference is the one that matters for the thesis. European organic baby food is overwhelmingly shelf-stable, jars and ambient pouches. The fresh, refrigerated, cold-pressed model that Once Upon a Farm built its entire business on has no equivalent at scale anywhere in Europe. The organic fight here was fought and won years ago, on the ambient shelf. The fresh fight has not started.

That is the gap. My bet is that the European opportunity is not another organic pouch competing with HiPP and Ella’s on a shelf where private label is already winning on price. It is the brand that brings genuine innovation to a category that has not seen much of it in years.

I think a model like Once Upon a Farm could actually work in the Netherlands. The freshness is the wedge. More and more parents here are focused on clean-label food, and they are not being offered a fresh, refrigerated option at all. The demand, as my own family keeps reminding me, is real and underserved. A brand that brings the cold-pressed, refrigerated model to a market that has never had it, and solves the cold-chain economics for a more fragmented European retail landscape, has an open lane. That is harder here than in the US, where grocery has more cooler space to give and a single national market to scale into, but the structural opening is there.

The other bet I have is the functional angle. This is what Cerebelly does in the US, building its products around specific nutrient gaps and brain development rather than just clean ingredients. European organic baby food has competed on purity for two decades. It has not really competed on function. A brand that gives parents a clear reason to believe a product is actively better for their child’s development, not just free from the bad stuff, could open a different kind of premium that private label cannot easily copy.

Both bets share the same logic. The way to win in Europe is not to fight HiPP and Ella’s on their own terms. It is to change what the category competes on, the way the best American brands already have.

Takeaways

• The most valuable asset in this category is owned shelf space, not the recipe. Once Upon a Farm’s coolers are a physical moat a competitor has to dislodge one retailer at a time. But that moat has a price: full-year gross margin slipped from 43.6 percent to 42.3 percent in 2025 on the trade spend funding new-store slotting and cooler placements. The brands that earn a premium multiple will be the ones that prove the cooler converts to durable margin, not just distribution.

• Changing a product’s physical state can reopen a category that looked closed. Baby food was static for a generation because everyone accepted it had to be cooked and shelf-stable. Fresh and refrigerated was the unlock. The next move in a stale category is often not a new recipe, it is a new format.

• Growth and profit are not the same milestone, and the market is watching the gap. Once Upon a Farm grew net sales 53.5 percent in 2025 and still posted a $17.2 million net loss, with adjusted EBITDA only just crossing into positive territory. The stock has fallen below its IPO price because investors are pricing the distance left to travel, not the distance already covered. The 2026 CPG IPO window is open, but it funds the listing and then demands proof of profit fast.

• The biggest risk in fresh kids food is the one the company flags itself: a contamination or recall event. For a brand whose entire premium rests on trust, a single safety failure would do more damage than any competitor could. In a category this sensitive, brand equity is both the moat and the exposure.

• Europe’s organic baby food fight is already settled, and it was won by incumbents, not insurgents. HiPP leads with roughly 45 percent of the German market, Ella’s Kitchen leads the UK, and even an organic-friendly market like the Netherlands has no homegrown organic champion and no fresh option at all. The opening in Europe is not another organic pouch, but more likely a brand that changes what the category competes on.

• The two bets worth making in Europe are freshness and function. A cold-pressed, refrigerated model like Once Upon a Farm’s could work in a market that has never had it, if someone solves the cold-chain economics. And a functional, nutrient-gap positioning like Cerebelly’s could open a premium that private label cannot copy. European organic has competed on purity for twenty years. It has barely competed on either of these.

If you are building in fresh or refrigerated kids food in Europe, or you have found the convenient healthy option my siblings keep searching for, I would love to hear from you. This is a category I am going to keep watching closely.

Contents

• The Setup: a $1B IPO, a PE flip done right, and what Suja Life tells us about CPG public markets in 2026.

• Why This Category / Why Now: three liquidity events in functional beverage in 14 months, and why the strategic acquirer set has been rewritten.

• The Winner’s Playbook: 14 years from a beach bungalow in San Diego to a $1B IPO, including the nine-year founder era and the five PE moves that produced last week’s offering.

• The Numbers That Explain the IPO: what the public market is actually paying for, and how to read the gap between Suja’s two financial stories.

• What Went Wrong (or: The Risks): sugar content, GLP-1 demand shift, and structural cold-chain economics.

• How Others Are Playing It: Buda Juice, So Good So You, and what the comparators reveal about category appetite.

• Is There Room for New Entrants?: why the European cold-pressed juice story looks nothing like the US PE playbook, and where the functional opportunity sits.

• Takeaways: what founders and investors should remember, and a teaser for next week.

The Setup

On Thursday May 7, 2026 Suja Life priced its initial public offering at $21 per share, the low end of its $21-$24 range. The company raised approximately $187M and shares dropped 14% on day one. By Monday May 11, the stock was trading around $17.75 and by Tuesday, May 19, its price declined to $16.02.

Suja Life is the leading, vertically integrated manufacturer & marketer of plant-based, better-for-you cold-pressured juices and related beverages.

The deal mechanics tell two stories at once. The first is what makes this IPO genuinely unusual. Consumer packaged goods companies almost never go public in 2026. The last major CPG IPO before Suja was Once Upon a Farm in February 2026. Before that, you have to go back several years to find another. The combination of high capital intensity, slow growth relative to tech, and structural margin compression in food and beverage makes the public market a difficult home for CPG brands. Most of them sell to strategics. A few sell to PE. Almost none list publicly. Suja is the first PE-flipped functional beverage brand to reach the Nasdaq.

The second story is the financial reality. Paine Schwartz Partners (PSP), a “private equity firm specializing in sustainable food chain investing” acquired Suja in July 2021 from Goldman Sachs Asset Management and co-investors. Five years later, they took the company public at a valuation that delivered a strong multiple on the original investment, but at the floor of the marketed range, with the stock under pressure through the first week of trading. Notably, PSP took almost no money off the table at the IPO. Of the 8.89 million shares offered, only ~200,000 (roughly 2%) were secondary, and Bloomberg reported that PSP further tweaked the offering pre-pricing to remove its own shares entirely.

After the IPO, PSP retains 60.4% of the voting power. This is uncommon for a PE-led IPO and signals two things at once:

1. PSP believes the company has further upside under public ownership, and

2. The firm did not want to send a “selling out” signal to public market investors at debut. The cash from the IPO flows almost entirely into Suja, primarily to pay down debt.

What follows is a walkthrough of both eras: the nine-year founder build from 2012 to 2021, and the five-year PE chapter that produced last week’s IPO.

Why This Category / Why Now

Three forces are converging on functional beverage in 2026.

1. Category proof. Suja did not exist before 2012. By 2025 it generated $327M in revenue, up 26% year on year, with $66M in adjusted EBITDA across the core business. Cold-pressed juice is an established category.

Before going further, a quick definitional note. “Functional beverage” is the umbrella category, and it covers everything from electrolyte drinks (LMNT, Liquid IV) to wellness shots (So Good So You, Vive Organic) to better-for-you sodas (Olipop, Poppi, Slice) to kombucha (Health-Ade, GT’s) to cold-pressed juices (Suja Organic, Buda, Plenish). Within that umbrella, each subcategory has its own consumer occasion, ingredient model, and economics. Suja’s namesake brand sits squarely in the cold-pressed juice subcategory. Its bolt-on brands (Vive Organic and Slice Soda) extend into wellness shots and better-for-you sodas respectively. This subcategory distinction matters when reading the numbers later.

2. A liquidity wave. Buda Juice priced its IPO at $7.50 on January 7, 2026, raising approximately $23M including the over-allotment. So Good So You was acquired by Bansk Group in March 2026, with co-founder Eric Hall confirming the company had crossed $100M in revenue in 2025. Suja followed in May. Three liquidity events in the same broad category in less than five months. The category has reached the maturity threshold at which institutional capital recycles back to LPs.

3. Demand shift. GLP-1 adoption in the US has reshaped beverage consumption. The Arkansas Agricultural Experiment Station’s 2025 national study found that GLP-1 users specifically report reduced consumption of fruit juice, alongside soda, processed foods, and refined grains. AlixPartners flagged juices as among the most disrupted beverage categories. At the same time, GLP-1 users gravitate toward higher-protein, lower-sugar, satiety-driving formats. That dynamic creates a structural headwind for traditional fruit juice and a structural tailwind for the wellness shot and functional shot subcategories where Slice Soda, Vive Organic, and So Good So You compete.

The acquirer set has also been rewritten. Coca-Cola, the obvious legacy buyer for premium juice, shut down Odwalla in 2020 and exited its 30% Suja stake by 2021.

Campbell sold Bolthouse Farms in 2019 for $510M, less than a third of what it paid for the brand seven years earlier. The legacy strategic buyers have stepped back. The new acquirer set is private equity firms with food and consumer focus: Paine Schwartz, Bansk, the firm-of-record buyers who can take a brand from $100M revenue to public-market scale.

The Winner’s Playbook

The Timeline (2012-2021)

2012. Suja was founded in May 2012 in San Diego by four people from very different backgrounds. Annie Lawless, 27, was a law school dropout turned yoga instructor who had grown up with celiac disease and had been juicing since her teens. Eric Ethans, 31, was a surfer and raw food chef. The two met in San Diego and started selling homemade cold-pressed juice to fellow yoga students out of a beach bungalow.

Source: Forbes (2014): “The Suja quartet: James Brennan, Annie Lawless, Eric Ethans and Jeff Church”

James Brennan, a successful San Diego restaurateur, tasted Ethans’ juice and wanted in. He brought in Jeff Church, a Harvard MBA and serial entrepreneur best known for founding Nika Water, a social enterprise. Church became CEO. The four co-founders incorporated Suja Life LLC, moved the operation into a 100-square-foot ice closet in Brennan’s nightclub, and shortly afterward into a 2,000-square-foot facility. Church got bottles of Suja in front of Whole Foods buyers in Southern California within months. The brand made its debut in Whole Foods stores in September 2012.

2013. The first full calendar year of operation. Suja generated $18M in revenue, a figure I want to pause on because it is genuinely extraordinary. Most CPG brands take three to five years to reach $10M in revenue. Some never get there. Suja did $18M in twelve months from a standing start. The combination of Whole Foods national distribution, the cold-pressed category timing, and Jeff Church’s operational execution produced one of the fastest first-year revenue ramps in CPG history.

Celebrity investors including Leonardo DiCaprio, Jared Leto, and Sofia Vergara had come in through a round, alongside Boulder Brands ($8.8M) and ACG ($17.5M).

2014. Revenue more than doubled to $45M. In April, Suja won the Whole Foods Supplier of the Year award, one of only two recipients out of 60,000 suppliers that year. Forbes called Suja “the country’s fastest growing beverage company.” Target, Costco, and Kroger came on quickly.

2015. Forbes ranked Suja the second most promising company in America (behind Instacart). Revenue forecast climbed to $70-80M for the year. By mid-2015, the company had attracted serious institutional interest. In August, Coca-Cola purchased a 30% stake for $90M, valuing the company at approximately $300M. Goldman Sachs’ Merchant Banking Division simultaneously took 20% for $60M. Coca-Cola’s investment included an option to acquire Suja outright after three years. The two transactions brought in $150M of growth capital and gave Suja access to Coca-Cola’s Odwalla direct-store-delivery network (DSD, the distribution model in which a beverage company delivers product directly to retail stores rather than going through a third-party distributor, particularly valuable for chilled juice that needs frequent restocking).

2017. Suja became one of the most recognized cold-pressed juice brands in the US, available in 13,000 retail outlets. Coca-Cola upped its stake by 3%.

2018. Coca-Cola’s three-year option to acquire Suja outright lapsed without being exercised. The Atlanta giant was pivoting away from premium juice. CNBC reported that Suja had enlisted Evercore to explore a sale. No deal closed.

2019. Jeff Church left to start Rowdy, an energy drink brand. Eric Ethans and Annie Lawless both moved on around the same time. Only James Brennan remained from the four co-founders. Bob De Borde, a former Coca-Cola executive, became interim CEO.

2020. Coca-Cola shut down Odwalla entirely and exited the DSD network. Brennan later described this to BevNET as “a signal to the markets and to the community at large that it wasn’t a category that Coke was potentially interested in.” De Borde was made permanent CEO.

2021. Goldman Sachs led the buyout of Coca-Cola’s combined ~33% stake. With the strategic anchor divested, the board began exploring a sale in early 2021. In July, Paine Schwartz Partners acquired Suja Life from Goldman Sachs Asset Management. Terms were not disclosed, but Suja was projecting approximately $185M in sales and the purchase price was likely in the $300M-$500M range.

The Five PE Moves (2021-2026)

Five strategic decisions separated the PE chapter from the founder chapter.

Move 1: Acquire a category leader at category scale, not category infancy. When PSP bought Suja in 2021, the company was already the largest independent producer of cold-pressed juice in the US. Revenue was approaching $200M. The thesis was that the brand had structural advantages (distribution, manufacturing, supplier relationships, retail velocity) that a fresh operating team and a clean cap table could unlock. That thesis required patience. It reminds me of Unilever’s acquisition of electrolyte brand Liquid IV (who also generated around $200M revenues in 2021). Liquid IV has reached $1B in revenues today.

Move 2: Build a platform through bolt-on acquisitions. In 2022, Suja acquired Vive Organic, pushing into the refrigerated wellness shot subcategory where So Good So You dominated. In 2024, Suja acquired Slice Soda, entering the better-for-you carbonated segment that Olipop and Poppi had built. By 2025, Suja was a three-brand platform across three functional beverage subcategories. A single-brand juice company would have struggled to defend a $1B valuation. A three-brand functional beverage platform has a more defensible story. A small buy-and-build, core to most PE’s business model and value creation programs.

Move 3: Invest in vertical integration. Suja’s 270,000 sq ft Oceanside, California facility was expanded by more than 50% under PSP ownership. The farm-to-table cycle is eight days. CEO Maria Stipp specifically named this on the roadshow: “having integrated manufacturing is a significant pillar of strength for our company, and really not having over-reliance on any type of co-manufacturing capabilities.” The capital intensity that vertical integration created (~$28M annual depreciation, significant leverage) is also the structural reason consolidated GAAP net income remains negative. PSP made a deliberate trade-off between margin and capital intensity in favour of operational control.

Move 4: Build for public market readiness from the start. PSP positioned the company so it could exit through either channel. The dual-track M&A/IPO process Suja ran with William Blair through late 2025 reflects this. The five-bank syndicate (Goldman Sachs, Jefferies, William Blair, BofA, Evercore ISI) is the kind of group you assemble when you want the IPO to be taken seriously by institutional investors. Maria Stipp was hired with the exit in mind.

Move 5: Time the exit to the category wave. PSP went public in May 2026, four months after Buda Juice’s January IPO and two months after the So Good So You acquisition. Three liquidity events in the same category in 14 months. Each one gave Suja’s roadshow more comparable data to point to. The Vita Coco public market comp at ~30x EBITDA gave the marketing an aspirational ceiling. Once Upon a Farm’s strong February 2026 IPO showed that consumer food could clear at premium multiples in 2026. The window was open and PSP took it.

The Numbers That Explain the IPO

This is the section that matters most for investors trying to read the IPO. Two financial stories sit inside the Suja “S-1” (the SEC filing that companies submit when going public, disclosing audited financial data and business risks). Which one you believe determines whether the IPO is cheap or expensive at today's price.

Let me walk through it carefully.

Two financial stories inside the S-1

The first story is the core business. Suja Organic (the namesake cold-pressed juice line) and Vive Organic (the wellness shots line acquired in 2022) together generated $319M in revenue in 2025, up 24% YoY. Adjusted EBITDA on the core business was $66M, a 21% margin, up from $35M in 2023. That is high-quality CPG: nearly 2x EBITDA growth in two years, with the YoY growth rate accelerating from +30% in 2024 to +46% in 2025. On its own, the core business could justify a $1B valuation at roughly 15x EBITDA.

Suja Organic

Vive Organic

The second story is consolidated. Adding Slice Soda’s $10M emerging-brand revenue plus the corporate cost structure that supports the platform, the company generated $327M in revenue with a GAAP net loss of $(23)M in 2025, slightly worse than the $(21)M loss in 2024. Operating cash flow was approximately $8M. Adjusted EBITDA on a consolidated basis is closer to $40M. At a $1B IPO valuation, that implies 25x consolidated EBITDA. That is very rich on a trailing twelve-month basis.

Slice Soda

The market is pricing the consolidated story, not the core business story. That gap is what the 14% day-one drop reflects.

A note on “adjusted EBITDA”

Worth pausing here as well, because the word “adjusted” is doing a lot of work.

Adjusted EBITDA is a non-GAAP metric, which means companies have discretion over what they exclude. Having done a Master’s degree in both Quantitative Finance and Accountancy & Control, I know how subjective EBITDA and these adjustments are.

For Suja specifically, the S-1 adjustments include: stock-based compensation expense (typical CPG adjustment but debatable), restructuring and severance costs (typical), management fees paid to PSP under the leveraged buyout structure (less typical, harder to defend), acquisition and integration costs from the Vive and Slice deals (typical for PE-backed companies), and certain non-recurring legal and consulting expenses (case by case).

In my read, the core business adjusted EBITDA of $66M is reasonably defensible. The Vive and Slice acquisitions are real costs and removing them gives a cleaner read on what Suja Organic itself produces operationally. The PSP management fees are more questionable because they will continue post-IPO under the long-term services agreement disclosed in the S-1, just at a lower rate. The investor needs to model the post-IPO run-rate, not the historical adjusted figure.

The cleaner comparison, for what it’s worth, is the consolidated GAAP loss of $(23)M against the consolidated adjusted EBITDA of $40M. The difference between those numbers, roughly $63M, includes ~$29M in interest expense, ~$28M in depreciation, and ~$6M in stock-based comp and other items. Strip out the interest expense (which the IPO proceeds will materially reduce) and you get a post-IPO operating picture that looks meaningfully better than the trailing financials.

The debt structure

The bigger structural item is the debt load. PSP’s 2021 acquisition was financed through a leveraged loan structure. The S-1 shows ~$29M in annual interest expense, which implies $300-340M in outstanding debt at typical leveraged loan pricing. The use of proceeds from the IPO prioritizes paying down the first lien credit facility, which means the $187M raised will go toward reducing interest expense rather than funding growth.

Bull case vs bear case

The bull case is that deleveraging pulls GAAP net loss closer to break-even, Slice scales toward contribution-margin positive, and consolidated EBITDA converges with the core business over 18-24 months. The bear case is that public market investors do not pay for upside scenarios two years out. They pay for the financials in hand. The financials in hand are $40M consolidated EBITDA at 25x. That is the trade the 14% day-one drop and the c. 25% drop since IPO reflects.

What Went Wrong (or: The Risks)

Three structural risks sit underneath the IPO valuation, and they are worth taking seriously.

1. The sugar content ceiling. Cold-pressed juice carries 20-35 grams of sugar per bottle in most formulations, even when the source is organic and the label is clean. The consumer who built the cold-pressed juice category over the past decade is increasingly the same consumer reading sugar content panels in 2026. I recognize this dynamic in my own life. People I know who used to drink cold-pressed green juices regularly now check the ingredient list before buying, and if apple is the first ingredient, they put the bottle back on the shelf. They know it means the drink is sweetened primarily with apple juice, which is essentially fructose with marketing on it. The shift from sugar to functional positioning is real and accelerating. Suja’s response has been deliberate: Slice Soda is positioned around functional benefits with low sugar, and Vive Organic operates in the wellness shot category where the sugar load per serving is much smaller. But the namesake Suja Organic line, which still represents the majority of revenue, is structurally exposed.

2. The GLP-1 demand shift. GLP-1 users, now approximately 12.4% of US adults per Gallup, consume meaningfully less fruit juice. The Arkansas Agricultural Experiment Station’s national study confirmed reduced consumption of fruit juice alongside soda and refined grains among GLP-1 users. AlixPartners flagged juices as among the most disrupted beverage categories. At the same time, GLP-1 users gravitate toward higher-protein, satiety-driving formats, which benefits the wellness shot and functional shot subcategories. The dynamic is bifurcating the broader functional beverage market: the traditional fruit juice segment faces a structural headwind, while the wellness shot and functional shot segments face a structural tailwind. Suja’s three-brand portfolio is partly hedged (Vive and Slice both benefit), but the core Suja Organic line sits on the wrong side of the trade.

3. The structural cold-chain economics. Cold-pressed juice is a chilled product. Refrigerated logistics, short shelf life, produce input volatility, retailer pricing power on premium SKUs, and capital intensity in vertically integrated production all compress margins compared to ambient categories. This is the structural ceiling that kept Vita Coco trading at 1.5-2x revenue for much of its history.

The Bolthouse Farms history is the cautionary case worth understanding in detail. Madison Dearborn Partners owned Bolthouse from 2005 to 2012, then sold it to Campbell Soup Company for $1.55 billion in 2012. Campbell positioned the acquisition as the cornerstone of its “Campbell Fresh” division, intended to expand the soup giant into refrigerated organic produce and premium beverages.

The strategy did not work. Bolthouse faced a voluntary recall due to spoilage, weather-driven supply disruptions, retailer pricing pressure, and the operational mismatch between Campbell’s ambient legacy operations and Bolthouse’s refrigerated supply chain. Campbell wrote down the Fresh division four separate times between 2016 and 2019, reducing its book value by $1.35 billion in total. In April 2019, Campbell sold Bolthouse to Butterfly Equity for $510M, less than a third of what Campbell had paid seven years earlier. Bolthouse was losing money at the time of the sale. Butterfly subsequently separated the business into two distinct platforms in 2024 (Bolthouse Fresh Foods for carrots, Generous Brands for beverages and dressings) to recover value. The lesson: cold-chain beverage economics are unforgiving. Suja’s vertical integration mitigates these economics. It does not eliminate them.

The 14% day-one and 25% in total drop is, in my read, the public market pricing all three of these risks simultaneously. The PE playbook executed cleanly. The category fundamentals are what is being repriced.

How Others Are Playing It

Three comparators help frame the Suja outcome.

Buda Juice, IPO’d January 2026. Buda is a Texas-based, asset-light, founder-led cold-pressed juice company with $11.2M revenue in 2024 (41.8% CAGR from $5.6M in 2022). It IPO’d on January 8, 2026 at $7.50, the low end of the $7.50-$9.00 range, raising approximately $23M including the over-allotment. Implied market cap was approximately $90M. A different profile from Suja entirely, but the relevant data point is the public market appetite and the rich valuation. Buda priced at the floor of its range, just like Suja. Institutional investors are willing to take the category public, but not at the asking price.

So Good So You, acquired by Bansk Group in March 2026. The US wellness shot category leader, founded in 2014 by Eric Hall and Rita Katona in Minneapolis. Crossed $100M revenue in 2025, growing 5x over four years. Bansk Group acquired a majority stake from minority investor Prelude Growth Partners. Terms not disclosed. This is the M&A track Suja could have taken. PSP ran a dual-track process and ultimately chose the public market. The Bansk deal is the relevant counterfactual: a strategic PE acquisition at scale, private market, no daily price action.

Vita Coco, public market benchmark. Vita Coco is the closest public market comparable to Suja by category and scale, trading at approximately 30x EBITDA in 2026. It is the ceiling Suja is being marketed against. But here, I would push back on the comparison. Coconut water has structural advantages over fruit juice that the multiple reflects. Coconut water is a near-perfect fit for two of the strongest demand trends in beverage today: hydration and natural electrolytes. It is one of the few products consumers can reach for that delivers electrolytes without artificial ingredients, added sugar, or sweeteners. The category overlaps directly with the LMNT and Liquid IV consumer occasion (hydration before, during, and after exercise) while carrying the credibility of being a single-ingredient natural product. Fruit juice, by contrast, sits on the wrong side of the same demand trends: high sugar, no hydration positioning, declining among GLP-1 users. In my view, Vita Coco’s 30x multiple is still very rich, but at least it’s fair that the company deserves a higher multiple than Suja. It is not a multiple Suja can credibly target without a different product mix. The two are functional beverages in name only. They serve different consumers with different needs.

The three comparators together suggest a clear pattern. Public market appetite for cold-pressed juice exists, but at the floor of the asking price. Strategic PE acquisitions at scale are still active, with Bansk leading the new acquirer set. Public market multiples are aspirational rather than achieved.

Is There Room for New Entrants?

The two most relevant European comparables are Innocent and Plenish.

Innocent was founded in 1999 by three Cambridge graduates and built into the dominant European premium juice and smoothie brand. Coca-Cola took an initial 18% stake in 2009 valuing the company at ~£320M, then increased to 58% in 2010, and finally moved to 90% ownership in 2013. By the time Coca-Cola consolidated control, Innocent was generating ~£200M in annual revenue, growing into the £400M+ range under Coca-Cola ownership over the following decade. It is the largest European juice exit on record. The story is also more recently a cautionary one: Innocent announced significant layoffs in 2023 and 2024 as it lost ground to better-for-you alternatives, and Coca-Cola has been quietly reducing investment in the brand. Innocent shows both that European cold-pressed juice can reach $400M+ revenue scale, and that even the category leader is vulnerable to the same structural risks (sugar content, GLP-1 demand shift, cold-chain economics) that compressed Suja’s IPO multiple.

Plenish was founded in 2012 in West London by Kara Rosen, a native New Yorker who moved to the UK and could not find cold-pressed juice free of sugar. She started hand-making organic juice in her kitchen. By 2017, the brand had attracted institutional capital from the Richardson family office and Pembroke VCT. By 2020, the DTC business was growing at 100%+ per year, and Plenish had expanded into plant-based milks and functional shots. In May 2021, Britvic, the FTSE 250 soft drinks company behind Robinsons and J2O, acquired Plenish for an undisclosed sum.

The two trajectories together tell a clearer European story than either does alone. Innocent built to £400M+ in revenue and exited to Coca-Cola in stages between 2009 and 2013, becoming the largest European juice exit on record. Plenish followed a tighter founder-led playbook similar to Suja’s: DTC origin, organic and clean-label positioning, retail expansion through major grocers, eventual sale to a strategic acquirer. Both ended at strategic acquirers, not at PE platform builders. Both stories illustrate the same structural truth: the European cold-pressed juice exit ends at a strategic, not at the public market.

This is where the European opportunity sits today. Regular fruit and green juices are increasingly insufficient as a category proposition in 2026. The market wants functionality. The same consumer who five years ago would have bought a cold-pressed green juice for the wellness signal now wants the juice to do specific work: gut health, immunity, post-workout recovery, sleep support, cognitive function. And critically, that consumer wants the drink to be low sugar, and preferably free of artificial sweeteners as well. The “apple as the first ingredient” red flag is a global one, not just a US one. EFSA’s regulatory framework rewards brands that can prove substantiated health claims, which means the winning European brand will lead with what the product actually delivers nutritionally rather than what it suggests aesthetically. I’ve spoken to start-ups that developed ‘sugar reduction technologies’ for fruit juices. This could be a surprisingly strong solution for the problems these companies are facing, depending on costs and implementation hurdles.

The brand that captures the European functional juice opportunity will likely operate in the wellness shot or functional shot subcategory, lead with EFSA-substantiated health claims, anchor in a specific functional benefit rather than broad wellness positioning, keep sugar content low (ideally under 5g per serving), avoid artificial sweeteners entirely, and build on a clean ingredient platform that aligns with European clean-label preference.

The acquirer set in Europe is broader than the UK story suggests. Britvic, Coca-Cola Europacific Partners, Danone Waters & Other Beverages, Lactalis, FrieslandCampina, and Arla are all active in functional beverage and have manufacturing scale to absorb a category leader. A European functional juice brand reaching €30M-€50M in revenue with strong unit economics has multiple credible exit paths.

I do not yet see the brand that wins this opportunity. None has yet built the combination of category leadership, multi-format extension, and functional positioning that would justify a serious strategic exit. The white space is open. The playbook is visible. The question is who executes.

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Takeaways

Suja Life is the cleanest CPG public market debut of 2026 by data quality and the most informative by what it reveals about the new acquirer set, the new public market appetite, and the new structural risks facing the category.

• Suja IPO’d on May 7, 2026 at $21 per share, raising approximately $187M against an implied IPO market cap of approximately $850M-$1B. It is the first PE-flipped functional beverage brand to reach the Nasdaq, and one of only two major CPG IPOs of 2026 so far. CPG public market exits are structurally rare. Suja’s debut matters as a category signal regardless of the day-one price action.

• Paine Schwartz acquired Suja in July 2021 at an estimated $300M-$500M valuation when revenue was approximately $185M. Five years and three bolt-on acquisitions later, PSP took the company public at roughly 2x-3x the acquisition valuation. PSP took almost no money off the table at the IPO and retains 60.4% voting control. The PE playbook in CPG is now about platform building and operational moats, not financial engineering.

• The Suja founder era from 2012 to 2021 produced a $185M revenue business with strategic capital from Coca-Cola and Goldman Sachs ($150M combined in 2015). $18M in Year 1 revenue and $45M in Year 2 is one of the fastest first-two-year ramps in CPG history. But the partnership ultimately fragmented when Coca-Cola exited the category in 2020. The lesson worth remembering: strategic minority investors are not the same as committed long-term partners.

• The IPO valuation reflects two distinct financial stories. The core business (Suja Organic + Vive Organic) generated $319M revenue at 24% YoY growth with $66M adjusted EBITDA. The consolidated business including Slice Soda and the corporate cost structure generated $327M revenue at GAAP net loss of $(23)M and adjusted EBITDA closer to $40M. The market is pricing the consolidated story. That gap is the structural risk the IPO has yet to resolve.

• Three category-level risks frame the post-IPO trade: sugar content as a structural ceiling (the “apple as the first ingredient” red flag is real), GLP-1 demand shift away from fruit juice, and cold-chain economics that limit margin upside. The Bolthouse Farms precedent ($1.55B Campbell acquisition in 2012, $510M sale to Butterfly in 2019, $1B+ of value destruction) is the cautionary case for the category as a whole.

• Vita Coco’s ~30x EBITDA multiple is a category-specific exception, not a benchmark for cold-pressed juice. Coconut water sits on the right side of every demand trend in beverage today (hydration, electrolytes, single-ingredient transparency). Fruit juice sits on the wrong side of most of them. The two should not be valued the same way.

• The European cold-pressed juice story ends at the strategic acquirer stage, not the public market stage. The opportunity in Europe is functional juice and wellness shots with EFSA-substantiated claims, low sugar (under 5g per serving), no artificial sweeteners, and clean ingredient platforms. €30M-€50M revenue with strong unit economics likely produces a strategic exit at €100M-€300M, not a public listing.

• Next week I will look at Once Upon a Farm, which went public in February 2026 at a ~$847M valuation through a very different path. Founder-led, Series-funded, kids food positioning, debuted at a premium to revenue and traded up on day one. Two CPG IPOs four months apart, two very different stories. I will pull both apart and what they tell us together about the public market for consumer food in 2026.

Contents

• The Setup: in 2016 the Dragons rejected Biotiful as uninvestable. In 2021 Müller tried to build the same category internally and failed. In 2025 Müller paid £115M for the company the Dragons had passed on.

• Why This Category / Why Now: how kefir went from unknown UK product to £100M+ category in a decade, and why the strategic acquirers are circling.

• The Winner’s Playbook: the seven moves that took Biotiful from one founder in West Sussex to a 70% UK market share at exit, including the £4M share buyback that locked in the founder’s full upside.

• How Others Are Playing It: The Collective and Lifeway, two functional dairy comparators that show why cap table cleanliness might matter more than revenue scale.

• What Went Wrong (or: The Risks): why 70% market share commands only ~2.5x revenue, the structural ceiling on dairy multiples, and the post-acquisition execution risk.

• Is There Room for New Entrants: where the next functional dairy winner might come from, and three specific gaps in continental Europe.

• Takeaways: what founders and investors should remember.

The Setup

Please watch this video, it makes the story even more fascinating. Huge respect to Natasha

In 2016, Natasha Bowes walked into Dragons’ Den asking for £250K at a £2.5M valuation. Four of the five Dragons passed. Peter Jones told her she had made herself “uninvestable” and called her valuation “ridiculous”.

Deborah Meaden called even a 50% discount to that valuation “crazy” and was the only one who made an offer: 45% equity for £250K investment.

Natasha looked strong, determined, and rejected.

Nine years later, Müller paid £115M for her kefir brand, while Natasha still owned 100% of the company at signing.

Müller is the German dairy giant behind Müller Rice, Müllerlight, and Müller Corner, with operations across the UK at scale (Market Drayton, Telford, and Yew Tree Dairy among them). Biotiful is the London-based kefir brand that, in the year ending March 2025, generated £46.8M in revenue with £4.8M of pre-tax profit, on the back of 44% revenue growth and 111% profit growth in a single year. The company sells a range of kefir products, such as kefir drinks, shots, yoghurts, high protein drinks, and more recently also ‘gut health meal boosters’. By the time the deal closed, Biotiful held approximately 70% of the UK kefir category.

Founder Natasha Bowes with a selection of Biotiful products

This is the deal I have been most curious to pull apart since the gut health M&A wave started landing. A few things make it sit differently from the other UK functional food acquisitions of the past 18 months. First, the financial data is the cleanest of any deal in the queue. Companies House filings published in December 2025 give us a fully audited picture of FY2025 just months after the deal closed. Second, the founder kept majority control of the cap table all the way through to exit, then bought out the remaining minority holders in a £4M share repurchase 12 months before the deal. That is not how most CPG founders structure their journey, and it is worth understanding why.

What I find most interesting about Biotiful is the gap between how the brand is usually described and what the numbers actually show. Biotiful is sometimes positioned in the press as the British kefir success story, with Natasha Bowes as the founder who turned a niche Russian fermented drink into a £100M+ category. Müller paid £115M for a brand at the exact peak of its standalone growth curve.

Bowes had built a cap table that let her capture nearly all of the upside. All details I found out point to a founder whose instinct and discipline served her at the right moment.

I want to walk through this one because there is a sharper investor lesson here than the headline number suggests, and because I think it changes how European founders should think about the trade-off between bootstrapping and venture capital in functional food.

Why This Category / Why Now

UK kefir is a category that did not exist commercially before Biotiful launched in 2012. By the time Müller acquired the brand in April 2025, the category was worth roughly £100M at retail and growing in double digits in both volume and pricing terms (per Kantar). This is the structural backdrop for the deal, and three numbers anchor it.

First, kefir specifically. The UK kefir category has grown from effectively zero in 2018 to nearly £100M in retail value by 2024 (per Bowes, citing Nielsen data). Biotiful holds roughly 70% of that category. The Collective, which was acquired by Yeo Valley in March 2025, holds another meaningful slice through its kefir-yogurt range. The remaining share is split across smaller challengers and own-label products. This is a tightly concentrated category at the leadership end, and a fragmented one at the tail.

Second, the broader functional dairy space. The UK functional yogurt and dairy drinks segment was estimated at over £400M in 2024 by IRI/Circana. Probiotic and gut-supporting products are the fastest-growing subsegment. Globally, the digestive health products market is now valued at roughly $116.92B and growing at 8.74% per year (Precedence Research, cited in FoodNavigator). The European gut health supplements segment alone is projected to grow from $4.35B in 2024 to $8.15B by 2033, a 7.1% CAGR. Functional dairy sits inside this broader macro trend and benefits directly from it.

Source: Lifeway

Third, the M&A cadence has accelerated. In the past 24 months, the UK gut health and functional food M&A wave has produced four meaningful transactions: Hero Group’s acquisition of Deliciously Ella (September 2024, estimated £40M+), Yeo Valley’s acquisition of The Collective (March 2025, undisclosed but on £26.6M turnover), Müller’s acquisition of Biotiful (April 2025, £115M), and Hero Group’s acquisition of The Gut Stuff (April 2026, undisclosed), which I covered 2 weeks ago in The Food Stack. Across the Atlantic, Danone is actively pursuing Lifeway, the US kefir leader, with the company posting around $200M revenue and trading at high single-digit revenue multiples on the public market. The acquirer set is fully formed and actively buying.

The behavioural driver behind all of this is consistent. Consumers are pulling functional health into everyday food categories, and dairy is one of the cleanest places to express that. Kefir specifically benefits from a unique combination of advantages: it carries a recognisable health claim (live cultures and gut health), tastes familiar to consumers used to yoghurt drinks, sits at the same price point as premium yoghurt, and fits naturally into existing breakfast and snacking occasions. It does not require behaviour change. It is a small swap, not a lifestyle change, which is exactly the formula that wins in functional food today (a point Lisa Macfarlane made in my Gut Stuff piece two weeks ago).

For Müller specifically, the strategic logic is even sharper. Müller had previously launched its own kefir line (smoothies) in 2021 in the UK and discontinued it in 2023. The acquirer’s failed organic attempt is what made the deal economics work for Bowes. When an incumbent’s internal build does not succeed, the cheapest path to category presence is acquiring the leader. Müller’s offer reflected that. So did Bowes’s negotiating leverage.

A note on funding

There is no clean public funding history for Biotiful. PitchBook lists Tesco as an investor, but the underlying relationship is the 2019 Tesco Incubator Programme, which provides mentorship and retail relationships rather than equity capital in most cases. Tracxn says Biotiful raised no funding rounds at all. Crunchbase has the company listed but no investors. The Companies House filing also shows no SH01 filings consistent with a venture round.

Kefir continued to be part of Bowes’ diet and health regime as she trained as a figure skater, competing for her country up until the age of 13

What I can piece together from primary sources is that Biotiful was almost entirely founder-funded for 13 years. Bowes self-funded the early production phase from her finance career savings (KPMG, then Barclays Capital, both in the credit and risk side), making the first production-quality drinks herself in a small organic dairy in West Sussex during the founding year. The cap table appears to have been Bowes plus a handful of small individual minority holders (Natalia Levin, Kevin Moore, Rachel Phillips, and a holding entity called Kefir Limited, all visible in earlier confirmation statements).

That structure was tidy enough for Bowes to consolidate cleanly when the time came.

On 24 April 2024, almost exactly 12 months before the Müller deal, Biotiful executed a £4M share buyback that left Bowes as the sole shareholder of the company.

The buyback ended with Bowes holding 100% control of a business that would sell for £115M roughly 350 days later.

This sequence is significant. Buying out minority holders before a strategic exit is a classic founder move when you know the deal is coming. It increases the founder’s take of the proceeds, simplifies the negotiation, and ensures the acquirer is buying a clean cap table. At a £115M deal value with full ownership at exit, the proceeds to Bowes net of the £4M buyback are approximately £111M. That is one of the cleanest founder outcomes in (UK) CPG in recent memory, and it is the result of a decade of avoided dilution.

The Winner’s Playbook and Timeline

13 years. Approximately zero outside equity capital. £115M exit. The most striking thing about reading through the Biotiful story is how few major strategic decisions there actually were. Bowes did the same thing for 13 years, with discipline. This section walks through the timeline first, then the seven decisions that made the outcome possible.

The timeline

2012: Bowes incorporates Biotiful Dairy Limited. Self-funded from her finance career savings (KPMG, Barclays Capital). Spends the first nine months making the first production-quality drinks herself in a small organic dairy in West Sussex, with a consultant helping on technique.

2013-2015: First stockists are Selfridges, Harrods, and Fortnum & Mason. In-store tastings done personally to gather direct consumer feedback. Bowes works alone for nearly three years.

2016: Walks into Dragons’ Den asking for £250K at 10% (£2.5M valuation). Four Dragons walk away. Deborah Meaden offers the full £250K but demands 33%. Bowes caps her counter at 20% and leaves with nothing. Peter Jones calls her “uninvestable.” Meaden calls the valuation “crazy.”

2017: Sainsbury’s becomes the first major UK supermarket to list Biotiful. Rolls out to the full estate within six months on incrementality data. Revenue ~£5M.

2019: Selected for the Tesco Incubator Programme. Mentorship and buying-team access, not equity capital. Revenue ~£15M.

2020-2021: Aggressive format extension. Spreadable kefir cheese pots, shots, full-sized yoghurt pots, and the plant-based oat kefir line. Nielsen retail sales reach £17.9M in 2020.

2021-2023: Müller launches a UK kefir smoothie range with a multimillion-pound marketing campaign featuring Dina Asher-Smith as brand ambassador. Distribution across Tesco, Sainsbury’s, Asda, and Morrisons. Two years later, the range is discontinued.

In the same year, Biotiful launches a dedicateds kids kefir range.

April 2024: Biotiful executes a £4M share buyback. Bowes consolidates from majority shareholder to sole shareholder. Companies House filings (SH03 Purchase of Own Shares, SH06 Cancellation of Shares) confirm 100% ownership.

In the same year, Biotiful launched their first ever ambient Gut Health products.

FY25 (year to 31 March 2025): Revenue hits £46.8M, up 44%. Pre-tax profit reaches £4.8M, up 111%. Gross margin at 43%, up from 38% five years earlier. Tesco doubles its Biotiful range and launches a dedicated kefir bay. Aldi adds a Biotiful-produced own-label line.

April 2025: Müller acquires Biotiful for an estimated £115M. Richard Williams (CEO of Müller Yogurt & Desserts) joins the Biotiful leadership team. Bowes stays in an advisory capacity through the transition.

The seven decisions

Underneath the chronological story sit seven strategic decisions. Each one was a choice made differently than most UK CPG founders would have made it.

Decision 1: Bootstrap, and hold the line on valuation. Bowes did not raise outside equity capital across 13 years of building Biotiful. The most visible test of that discipline came at Dragons' Den in January 2016. Four of the five Dragons declined to invest. Deborah Meaden countered with £250K for 45% equity. Bowes capped her counter at 20% and walked away with nothing. The bootstrap discipline preserved her cap table for an exit she could not yet see. The lesson: bootstrap is not about avoiding capital. It is about avoiding the wrong kind of capital at the wrong moment, and holding the line on valuation even when an offer is on the table.

Bowes at Dragons Den in 2016

Decision 2: Specialty grocery first, mainstream retail second. Selfridges, Harrods, and Fortnum & Mason before any supermarket conversation. The lesson: the right early channel is the one where the consumer needs no education. Specialty grocery shoppers know what kefir is and accept higher price points.

Decision 3: Wait for incrementality before scaling retail. Sainsbury’s full-estate rollout in 2017 happened only after the brand could prove it was expanding the category rather than cannibalising existing dairy. The lesson: in a category with no shopper recognition, incrementality data is what unlocks supermarket-wide rollout.

Decision 4: Take corporate access, not corporate capital. The Tesco Incubator gave Biotiful mentorship and buying-team access without diluting the cap table. The lesson: corporate incubators provide real value when the value is access, not equity.

Decision 5: Format extension within a single category. Kefir cheese pots, shots, yoghurt pots, oat kefir. New SKUs compounded the existing brand equity rather than splintering into adjacent categories. The lesson: in a category with a strong founder brand, extending into adjacent formats is more capital-efficient than launching new brands.

I got the chance to talk to Natasha after publishing the article, which made me rewrite decision 6:

Decision 6: Consolidate the cap table, even when the timing feels risky. In April 2024, Bowes executed a £4M share buyback that left her as sole shareholder. She took on leverage to do it in a market that did not look favourable, which piled additional risk on her at exactly the wrong moment. The fact that Müller signed 12 months later was timing luck, not strategic sequencing. But the buyback created the cap table cleanliness that let her capture nearly all of the £115M outcome. The lesson: cap table consolidation is one of the highest-leverage moves a founder can make, even when it feels risky in the moment. The reason most founders never do it is precisely because the timing never feels right.

Decision 7: Sell at peak growth, not at peak revenue. A FY26 deal would have priced in a slowing growth curve. A FY24 deal would have missed the profit inflection. April 2025 was the optimum. The lesson: peak growth is when acquirers pay the highest multiple, not peak revenue.

One thing worth naming before the analysis goes further. Reading these seven decisions in sequence, it is tempting to conclude that Bowes operated from a deliberate 13-year playbook. She did not. When I shared an earlier draft with her, she pushed back on exactly that framing.

The reality, in her words, was passion, opportunism, grit, and timing luck.

The £4M buyback was nudged rather than planned, executed with leverage in a market that did not look good, and the fact that Müller signed 12 months later was timing rather than design. The seven decisions are real, but the sequencing is something the analyst sees in retrospect, not something the founder followed prospectively. That distinction matters. Business building does not always follow a formula. It follows a founder with conviction, instinct, and the willingness to make moves before the path is clear, with luck doing a meaningful share of the work. Extremely valuable, honest feedback. Thank you Natasha.

This is also one of the reasons why early-stage investors, including myself focus so much on the founders. We want to see someone who is obsessed, who has grit, who has “fire in the eyes”. It’s extremely important and Natasha just explained why.

Why Müller acquired Biotiful

Müller is buying the missing piece in its own UK functional dairy strategy.

Müller had tried to build kefir internally and failed. The cheapest path to a 70% market share position is to buy the brand that already holds it. The deal multiple (~2.5x revenue, ~24x pre-tax profit) reflects this structural logic. It is not a premium multiple by venture exit standards, but it is a clean strategic fit at a price both sides could justify.

Müller CEO Richard Williams said at the time:

“Biotiful Gut Health is a business we have long admired: it is one of the fastest growing brands in the sector, has great tasting products and a real focus on consumer and innovation. This is a business which fits really well within our existing portfolio of brands. We are already growing and optimising our range of health and nutrition products and Biotiful Gut Health will really help us expand into new growth areas to meet changing consumer needs.”

That language is measured. Williams is not framing the deal as transformational. He is framing it as fitting. Müller is buying capability it could not build internally, at a price that lets the integration be a steady margin contributor rather than a gamble.

How Others Are Playing It

Biotiful is not an isolated event. Three other deals tell the broader story.

The Collective, acquired by Yeo Valley in March 2025. Founded in New Zealand in 2008 and brought to the UK in 2011, The Collective was a private-equity-backed gourmet yoghurt and kefir brand with £26.6M turnover in FY24 (the year before the acquisition). Yeo Valley, a £750M-revenue family business that has been producing organic dairy in the UK since 1976, paid an undisclosed sum. The Collective’s post-deal accounts (published at Companies House) show revenue rising 16% to £31M in the 14 months to June 2025, with profits up from £362K to £1.3M. Yeo Valley CEO Rob Sexton framed the move as portfolio expansion into premium yoghurt and kids’ SKUs, not a gut health bet. Different acquirer, different rationale, lower multiple. The Collective sold for less than Biotiful despite a comparable revenue base, because Yeo Valley was buying portfolio diversification, not category leadership.

The structural lesson sits in the post-deal P&L. Yeo Valley’s group gross margins slipped from 14.1% to 13.6% in the year of the acquisition, and its long-term target of 5% pre-tax profit margin slipped further from 2.2% to 1.7%. I was really surprised when I read about these gross margins, they seem extremely low compared to ambient food and beverage brands (where 30-50% gross margins are standard) but they are typical for UK dairy producers who carry the full chilled supply chain on their books: volatile milk pricing, refrigerated logistics, short shelf life, and retailer pricing power.

Biotiful, by contrast, expanded gross margin from 38% to 43% over five years because it operates as a brand on top of a contract manufacturing relationship with First Milk rather than vertically integrated dairy production. The 25-30 gross margin point difference between Biotiful and Yeo Valley group is the structural reason brand-only functional dairy operators are attractive acquisition targets: the acquirer absorbs the brand into manufacturing it already runs at scale, and the brand’s gross margin profile improves the consolidated group’s product mix. This is the same logic Müller applied when acquiring Biotiful.

Lifeway Foods, the US kefir leader still resisting Danone’s acquisition attempts. Lifeway is a publicly listed Nasdaq company with FY25 revenue of $212.5M (up from $186.8M) and net income of $13.9M (up from $9M). Danone has owned approximately 23% of the stock since 2013 through a partnership agreement. The Smolyansky family controls another 30% on the founder side.

The pursuit started in September 2024, when Danone bid $283M ($25 per share). Two months later it raised to $307M ($27 per share). Lifeway’s board rejected both offers, calling them “opportunistic” at a multiple of 7-8.5x expected EBITDA. Danone sued in March 2025, alleging the Smolyansky family had improperly transferred shares between family members to consolidate voting control. Talks reopened under an NDA in August 2025, then collapsed in September. By October 2025, Danone had given up its board seat under a cooperation agreement and was reviewing options for its 23% stake. As of May 2026, the deal remains unclosed and Danone is widely expected to exit its position.

The pattern across the two comparators is consistent. Strategic acquirers in functional dairy are paying clean multiples for category leadership, founder-led discipline, and clean financial profiles. They are not paying premium multiples for revenue alone, and they will not pay any premium at all when the cap table is contested. Yeo Valley got The Collective at a discount because it was a portfolio play, not a category bet. Danone cannot close Lifeway because the cap table is contested even with 23% strategic ownership. Biotiful sits between the two: clean cap table, category leadership, strategic acquirer with a failed organic attempt behind it. That combination is what produces a premium multiple.

The deeper insight is who gets paid most. Biotiful at £46.8M revenue exits at ~£115M. The Collective at £26.6M exits at less than Biotiful despite a comparable revenue base. Lifeway at $212M cannot get a deal closed at all. Revenue scale is a poor predictor of exit value in functional dairy. Cap table cleanliness, founder control, and acquirer-specific strategic fit are the variables that actually determine the multiple.

What Went Wrong (or: The Risks)

This is the section I find most interesting to write because Biotiful is an unambiguous success, but the deal economics raise a question worth sitting with.

Why didn’t 70% market share command a richer multiple? At ~2.5x revenue, the Biotiful deal is a clean strategic exit but not a category-defining multiple. By comparison: Bachan’s exited at 4.6x revenue and Grüns at roughly 4-5x trailing revenue. What is happening is that kefir is structurally a lower-multiple category than ambient or premium-positioning consumer brands. Three reasons.

First, kefir is a chilled dairy product, which means it carries the supply chain economics of dairy. Margins are thinner than ambient categories because of cold chain logistics, shorter shelf life, and dependence on milk pricing volatility. Even with strong gross margins on the Biotiful brand specifically, the category ceiling on multiples is structurally lower than for shelf-stable functional brands.

Second, kefir is a defined category with a finite ceiling. Once the category reaches mainstream awareness (which it has in the UK), the growth shape changes. Biotiful grew 44% in FY25, while the category overall grew at “double digits”. The brand is taking share within a category that is itself maturing. Acquirers price this in. Category leadership in a maturing category is worth less than category leadership in an expanding one.

Third, the acquirer set is concentrated. Müller, Danone, and Lactalis are essentially the only large dairy groups with the manufacturing scale and distribution to absorb a brand at Biotiful’s volume. That concentration limits competitive bidding. A more fragmented acquirer set (as exists in functional snacking or beverages) would have produced a higher exit multiple. Bowes likely got the best price the market was willing to pay, but the market itself was constrained.

The second risk worth naming is the post-acquisition execution risk. Müller has not historically been an active acquirer of challenger brands. Biotiful’s success depended on agility (rapid product launches, direct relationships with retailers, clean ingredient positioning). Inside a CHF 1.5 billion conglomerate, that agility tends to slow. The brand’s continued growth under Müller will depend on whether the dairy giant can resist the temptation to integrate Biotiful too tightly into its own operational model. Williams’s measured language at deal announcement (”fits really well within our existing portfolio”) is reassuring, but reassurance is cheap at announcement. The next 24 months of execution matter.

The third risk is regulatory drift around health claims. EFSA’s regime on functional food claims is strict, and post-Brexit the UK regulatory framework has not diverged meaningfully. Biotiful has been disciplined about staying within approved live cultures language. Müller’s operating culture may not have the same restraint. Brands that overclaim get pulled. Brands that change positioning post-acquisition lose category authority. Both are risks worth watching.

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Is There Room for New Entrants?

UK kefir is now structurally consolidated. Biotiful sits with Müller. The Collective sits with Yeo Valley. The remaining independent challengers (Bio&Me, Yeoboo, smaller regional players) are competing for the same shelf space against own-label products and the two major branded incumbents.

Continental Europe is a different story.

Three structural gaps stand out for European founders watching this category.

First, continental Europe has more functional dairy activity than the UK story suggests, but no single brand has yet built the category-defining position Biotiful holds in the UK. The category is dominated at the major brand level by five players. Danone leads with Activia, the world’s largest functional yoghurt brand, plus Actimel in the probiotic drinks segment. Lactalis, the world’s largest dairy company, holds a broad functional portfolio including Galbani and Siggi’s (acquired 2018). FrieslandCampina, the €11B+ Dutch cooperative, owns Vifit and Campina functional sub-brands across Northern Europe. Arla Foods carries the Nordic functional dairy position through its dominant Skyr range and kefir extensions. Yakult occupies the probiotic dairy shots subcategory almost alone at scale. Müller, now the owner of Biotiful, completes the major acquirer set. The challenger layer exists but is fragmented: Pastoret has built a credible premium kefir position in Spain since 1992 and exports across Europe, several Nordic skyr challengers (Isey, Smari) operate beneath the Arla canopy, and smaller regional players are scattered across most national markets. None has yet built the combination of category leadership share, multi-format extension, and premium positioning that Biotiful holds in UK kefir. The category-defining position at the European level is unclaimed.

Article published yesterday in Dutch newspapers about the huge rise in popularity for the “Skyr” brand in The Netherlands because of its high-protein / low-fat levels while still being creamy

Second, the EU functional food regulatory framework rewards brands that can prove substantiated health claims. EFSA-approved claims for live cultures and gut function exist but are tightly defined. A brand that leads with the approved claims (rather than aspirational marketing) has structural credibility that influencer-led brands cannot match. This is a defensibility lever, not a constraint. The same regulatory framework that makes life difficult for hype-driven US-style brands creates an opening for science-led European challengers.

Third, the strategic acquirer set is broader on the continent than in the UK. Danone, Lactalis, Bel, FrieslandCampina, and Arla are all active in functional dairy and all have active M&A pipelines. A continental European challenger brand that hits €30M to €50M revenue with strong unit economics has multiple credible exit paths, not just one. That competitive dynamic should produce higher multiples than the UK delivered for Biotiful.

There is one open question I do not have a confident answer to. Continental European supermarket structures are more fragmented than the UK’s. Listing in Carrefour does not translate automatically into Edeka or Mercadona. A category leader in one country may struggle to scale across borders even with strong product fundamentals. The brand that wins the continental opportunity will need to solve cross-border retail relationships in a way that Biotiful did not need to. That is a harder operational problem than building a single-country leader.

Honestly, I think this is one of the hardest categories to build in right now. Functional dairy in Europe is extraordinarily crowded. Danone, Lactalis, FrieslandCampina, Arla, and Yakult occupy the major positions, and the challenger layer is fragmented across dozens of regional players competing for the same shelf space. Any emerging winner will almost certainly have to do what Biotiful did: pick a niche format the incumbents are not building in, grow that niche into a category over a decade, and become the default brand by the time the category reaches mainstream awareness. That is the playbook. Kefir was an unknown product in the UK in 2012. Biotiful spent 13 years building both the brand and the category at the same time. Doing the same thing today in continental Europe requires identifying a format that is currently as unfamiliar as kefir was then, and most of the obvious candidates (skyr, viili, kvass, plant-based fermented drinks) already have credible challengers in market. The window is narrow.

That said, if I were placing the bet, I would look first at France or the Netherlands. Both markets have strong yoghurt drinking culture, smaller incumbents with limited challenger response, and proximity to the dairy supply chains that make scaled fermentation economically feasible. The brand that wins this will probably look something like Biotiful: founder-led, bootstrapped or lightly funded, anchored in a specific traditional fermented format (kefir, skyr, viili, or kvass-adjacent), launched through specialty grocery first, and built on a tight cap table. The exit, in 8 to 12 years, will probably be to Danone, Lactalis, or Müller again, for €100M to €300M.

I do not know which brand it is yet. If you are building it, my inbox is open, happy to talk.

Takeaways

The Müller acquisition of Biotiful Gut Health is the cleanest UK functional food deal of the past 18 months by data quality and the largest by absolute deal value. The story underneath is about founder discipline meeting a specific acquirer need at the right moment.

• Biotiful was acquired by Müller in April 2025 for an estimated £115M on FY25 revenue of £46.8M (44% YoY growth, 33% 5-year CAGR) and pre-tax profit of £4.8M (111% YoY growth). Gross margin expanded from 38% to 43% over five years. Bowes executed under pressure in a difficult market, with timing luck doing meaningful work in the eventual outcome.

• Müller’s 2021 attempt to build the kefir category internally failed and was discontinued in 2023. The deal economics worked because the acquirer had already proven that organic build was harder than acquisition. Future founders pursuing similar strategic exits should look for acquirers with publicly visible failed internal attempts in the target category.

• Bootstrap discipline was worth approximately £49M in additional exit proceeds compared to a typical venture-funded path.

• The deal multiple (~2.5x revenue, ~24x pre-tax profit) is clean but not extreme. Three structural factors explain the gap with 4-4.5x multiples we have seen in CPG before: dairy supply chain economics, category maturity, and a concentrated acquirer set. Future kefir exits will face the same ceiling.

• A clean private cap table commands more pricing power than a public listing with a strategic anchor. Lifeway at $212M revenue cannot close a deal with Danone holding 23%. Biotiful at £46.8M revenue closed at roughly a 71% multiple premium over Lifeway’s public market valuation.

• UK functional dairy is now structurally consolidated. The next opportunity is continental European, and the strategic acquirer set on the continent is broader than the UK’s.

If this was useful, share it with a founder or investor who would find it relevant, and leave a comment what topic you’d like me to dive in.

Contents

• The Setup: a Brooklyn-based brand built without a dollar of outside investment becomes The Wine Group’s first major non-alcoholic acquisition. The signal matters more than the deal value.

• Why This Category / Why Now: the structural numbers behind Europe’s drop in alcohol consumption, and why non-alc M&A is just getting started.

• The Winner’s Playbook: how three Italian-American partners built a non-alcoholic Negroni that actually tastes like a Negroni, and why the on-premise channel was the moat.

• How Others Are Playing It: Athletic Brewing’s $800M trajectory, Crodino as the European archetype, Curious Elixirs as the bootstrap benchmark, Lapo’s as the venture-funded fast follower, and Ghia as the French founder who built the European aperitif brand in America.

• The non-alc M&A and funding wave: where strategic capital is flowing, from Diageo and LVMH to Constellation and Asahi.

• What Went Wrong (or: The Risks): Boisson’s $17M bankruptcy, the on-premise concentration risk for Phony Negroni’s moat, and why EU regulation does not let the US playbook transfer cleanly.

• Is There Room for New Entrants: where the gap actually sits.

• Takeaways: what founders and investors should remember.

The Setup

Last week, The Wine Group acquired the Phony Negroni line and the rest of St. Agrestis’s non-alcoholic portfolio for an undisclosed sum. The Wine Group is the second-largest wine supplier in the United States, with operations across California, New York, and Australia, and a portfolio of 125+ brands including Cupcake, Franzia, Meiomi, and Robert Mondavi Private Selection. St. Agrestis is the Brooklyn distillery behind one of the most talked-about non-alcoholic cocktails in America. Phony Negroni launched in January 2022, sold one million bottles in 2023, two million in 2024 and reached 2.6 million in 2025.

This is the deal that confirms a category. A wine conglomerate buying a non-alcoholic cocktail brand is the kind of acquirer-versus-asset mismatch that signals a structural shift. The Wine Group’s CMO Helen Kurtz framed it directly to VinePair:

“There is huge growth in non-alc right now, whether it’s in spirits, in beer, or in wine. That is what’s growing, and we want to grow with that.”

The Wine Group does not need to learn how to make beverages. What it does not have, and what it cannot easily build, is a credible position in a category that is steadily eating into the alcoholic share of glass.

What I find most interesting about this deal is what St. Agrestis was before the acquisition. Three founders, zero outside investment, a Brooklyn distillery that previously made amaro for the New York cocktail scene. Phony Negroni was a side project that ate the parent business. By 2025, the company sold nearly 3 million bottles across 7,000+ retail and on-premise outlets in the US. They built a category leader without a venture round, without a celebrity founder, and without ever leaving Brooklyn for production.

I want to pull this one apart for two reasons. First, because it is a clean case study in how non-alc cocktail brands actually scale, and the answer is not the playbook most CPG founders assume. The non-alc segment is difficult, and I want to highlight a success case.

Second, because I think the European version of this brand has not yet been built, even though Europe leads the world in non-alc spirits market share and is sitting on the strongest structural tailwinds anywhere. As an aside, I tasted Phony Negroni in NYC earlier this year and was genuinely impressed. The product holds up against the original, which is the bar this entire category has to clear.

I took this picture at Meadow Lane in NYC, an incredible place to find emerging brands.

Why This Category / Why Now

The non-alcoholic beverage category has crossed from “interesting trend” to “structural shift” in the last 24 months. Three numbers anchor where we are.

First, Europe is moving fastest. Circana data presented at Beverage Forum Europe in October 2025 showed that 71% of European consumers across the EU6 markets (France, Germany, Italy, Netherlands, Spain, UK) are buying, stocking, or consuming less alcohol. Almost one in four 25-to-35-year-olds have stopped buying alcohol entirely. Total European alcoholic beverage sales fell 1.8% to €68 billion in 2024, while non-alcoholic beverage sales grew 5.1% to €97 billion. The headline ratio matters: non-alc is now 1.4x the size of alcoholic beverages by value across the largest European markets. That is the structural shift acquirers are pricing in.

Second, the non-alcoholic spirits subcategory specifically is small but compounding fast. The global non-alc spirits market was valued at roughly $356 million in 2025 and is projected to reach $762 million by 2034 at a 9.1% CAGR. Europe is one of the two largest regional markets for non-alc spirits alongside North America, with the two regions accounting for roughly two-thirds of global volume (per Market Growth Reports). Different research firms put either Europe or North America at the top depending on methodology. The growth story is more interesting than the rank.

The US non-alc spirits segment alone has grown more than 100% over the past five years according to The Wine Group’s own data, citing a Mintel benchmark. RTD cocktails are the wider container around this subcategory, and that market is forecast to grow from $44 billion in 2025 to $130 billion by 2035, with Europe growing at 14.2% CAGR.

Third, the demographic engine is more nuanced than the “Gen Z doesn’t drink” headlines suggest. IWSR’s December 2025 data shows that monthlong abstinence among Gen Z drinkers actually declined in the UK (from 33% to 24%), Italy (from 26% to 16%), and France (from 32% to 24%) in the year to autumn 2025. Gen Z drinking participation is now within 3% of the general adult population, the smallest gap IWSR has ever measured. What is happening is not “the sober generation” but something more interesting: consumers are choosing when to drink and when not to, and they want premium options for both moments. NielsenIQ frames it cleanly in their December 2025 analysis:

“However, when it comes to drink-led occasions, Gen Z do not follow the same shift. On average, they are going out to drink at similar times as before, with occasions peaking between 11pm and midnight. This creates a clear polarisation: late-night occasions remain critical for engaging Gen Z, while earlier daypart occasions highlight the need to focus on food-pairing opportunities for brands, both alcoholic and non-alcoholic. As a cohort, Gen Z may be complex to fully understand, but when the data is properly examined and interpreted, the potential for brands is undeniable”

This is exactly the consumer behaviour Phony Negroni built around. A bartender at an Italian restaurant whose customer is driving home, pregnant, or simply pacing their drinking can now serve a $12 non-alcoholic Negroni instead of a $4 soft drink. That is the unit economics shift on-premise. And the data confirms it: Phony Negroni sells for $10 to $15 per pour in restaurants, and the wholesale economics let bars hit their standard 25% ingredient cost ratio while still capturing higher margin than soft drinks. As Louis Catizone, one of the founders, told Inc. in 2024:

“The restaurants are not necessarily losing a person who would be buying a cocktail. The margin and average bill goes up so much when you don’t just get a glass of water or a soft drink.”

The Winner’s Playbook

The most interesting thing about St. Agrestis is that the company that became famous for non-alcoholic cocktails started as an alcoholic spirits business. The pivot is the playbook.

Pre-launch (2014 to 2017). St. Agrestis is founded in 2014 by two New York-based sommeliers, Nicholas Finger and Fairlie McCollough, after they discover amaro on a trip through Northern Italy. They produce New York City’s first contemporary amaro, a 30% ABV liqueur. By 2017, the original founders pivot back to wine, and the distillery is up for sale.

Year 1 (2017). Three new partners take over. Brothers Louis and Matt Catizone, sons of an Italian immigrant father, both raised on amaro at the Sunday dinner table. Their long-time friend Steven DeAngelo, who in 2012 had founded Greenhook Ginsmiths in Greenpoint and was already operating a fully-equipped distillery. The combination is structurally efficient: the Catizones bring the cultural authority and sales capability, DeAngelo brings the production infrastructure and the botanical sourcing relationships from his gin business. They relocate the distillery to Greenpoint and continue producing amaro.

The amaro business reaches meaningful scale by 2019. That is a meaningful detail. The non-alcoholic Phony Negroni was not built on top of a fragile parent business, but it was built on top of a brand and a distillery that had already proven product-market fit.

Year 2 (2019). Louis Catizone visits Berlin and notices something. Non-alcoholic drinks are everywhere in Europe, and many of them are good. Back in the US, he says, the non-alc category is “niche, and generally not very good.” The Catizones and DeAngelo decide to make a non-alcoholic Negroni. They are negroni purists. If they cannot make a version that holds up against the alcoholic original, they will not ship it.

Years 2 to 5 (2019 to 2022). Three years of R&D. The team breaks the Negroni down to its core flavours, which are botanicals rather than spirits. As DeAngelo explains, alcohol is the solvent in herbal spirits like amaro, which means each botanical’s flavour is extracted by soaking in high-proof liquid. Without alcohol, they had to find new extraction methods for each of the 30-plus botanicals they ended up using. The botanicals are sourced from five continents. The result is a mouthfeel that mimics alcohol’s bite, achieved through carbonation and ingredient selection rather than simulated burn.

The R&D length matters. Most non-alc brands compress this phase to under a year because investor pressure pushes them to ship. St. Agrestis had no investors. They could afford three years.

Year 5 (January 2022). Phony Negroni launches. The packaging is intentional: bright red liquid in a 200ml glass bottle with polka dots, designed to look like a premium adult beverage rather than a soft drink. The product tastes close enough to the original that early customers would sometimes send it back at restaurants, worried they had been served alcohol by mistake.

The team makes the most important strategic decision of the brand’s life: they go to bars and restaurants first, not retail. Most CPG brands in adjacent categories (Athletic Brewing, Ghia, Curious Elixirs) led with DTC. Phony Negroni led with on-premise. Louis Catizone, who had worked in the liquor industry before St. Agrestis, knew that bartenders and restaurant buyers were the highest-leverage gatekeepers in the cocktail category. If a bar program signs off on a non-alc cocktail, it gets seen by hundreds of customers who would not otherwise discover it through retail.

The unit economics worked because Phony Negroni let bars hit their standard 25% ingredient cost ratio while charging $10 to $15 per pour. That is a much better margin than the ginger ales and seltzers that bartenders were previously using as non-alcoholic options. Phony Negroni gave the bar a better margin, which is a strong value proposition.

On-premise distribution is the moat in beverage categories where the consumer needs to be educated. Retail tells you the product exists. On-premise lets a trained bartender hand it to a curious customer with full context. In a category where most consumers have never tried a non-alc Negroni before, that hand-off is the conversion mechanism. Athletic Brewing did the same thing with bars. Lyre’s did the same thing with hotel restaurants. The brands that win in non-alc are the brands that let bartenders sell their product for them.

Year 6 / 1 year after Phony Negroni launch (2023). One million bottles sold. Phony Negroni wins Double Gold at the San Francisco World Spirits Competition, an unusual achievement for a non-alcoholic product. The brand expands into select retail through Whole Foods and specialty grocery, but the on-premise channel still drives the volume.

Year 7 / 2 years after Phony Negroni launch (2024). Two million bottles sold. The product line expands to include Phony Mezcal Negroni, Phony Espresso Negroni, and Phony White Negroni. By the end of 2024, Phony Negroni is sold in approximately 4,000 bars and restaurants and 1,000 retail outlets across the US.

Year 8 / 3 years after Phony Negroni launch (2025). Nearly 3 million bottles sold. The retail footprint expands meaningfully, taking total outlets to 7,000+. The non-alcoholic Phony Negroni is now the number one ready-to-serve 200ml bottled beverage in the US non-alcoholic spirits segment, according to Mintel data cited by The Wine Group. The brand also launches Amaro Falso, a non-alcoholic amaro extension.

Year 9 / 4 years after Phony Negroni launch (April 2026). The Wine Group acquires the non-alcoholic portfolio for an undisclosed sum. Steven DeAngelo, Louie Catizone, and Matt Catizone remain involved in the business for six to 12 months. Production stays in Brooklyn for one year. Total time from non-alc launch to acquisition: approximately 51 months. Total outside capital raised: zero.

Phony Negroni’s revenue was not disclosed in the deal announcement. My estimate of $11M is reconstructed from publicly reported volume (2.6M bottles between October 2024 - October 2025), retail and on-premise pricing data, and standard CPG wholesale margins. A defensible range is $9-12M, with $11M as the midpoint estimate.

For comparison, here is what a similarly-positioned brand looks like with venture capital. Athletic Brewing started in 2017, raised more than $100 million across multiple rounds, and reached an $800 million valuation in 2024 with $50 million from General Atlantic. Athletic Brewing operates at a different scale (a 19% share of the US non-alc beer category, with 32% of category growth flowing through their products). But the key contrast is the capital intensity. Phony Negroni reached category leadership in non-alc spirits without taking a single outside dollar. That is a different kind of capital efficiency than the audience-first models we have covered before, and it has structural implications for how non-alc brands should think about funding.

Why did this work? Three reasons.

1. The on-premise channel has lower customer acquisition cost than DTC because bartenders do the marketing for you.

2. The Brooklyn distillery already existed, so the team did not need capital for production infrastructure.

3. And the wholesale margins on a $5 retail bottle were strong enough to fund inventory and growth from operating cashflow.

How Others Are Playing It

Phony Negroni is one move in a larger space, with incumbents and emerging competitors, and a broader non-alc M&A wave. Four brands that stand out:

Athletic Brewing, the venture-funded scale story. Founded in 2017 by Bill Shufelt, Athletic became America’s largest dedicated non-alcoholic brewer with a 19% share of the US non-alc beer category, accounting for 32% of all category growth. The company raised approximately $50 million from General Atlantic in 2024 at an $800 million valuation, roughly double its valuation 18 months earlier. Keurig Dr Pepper holds a minority stake from a $50 million investment in 2022. Athletic’s playbook is the venture-scale opposite of Phony Negroni’s bootstrap path: heavy capital deployment, lifestyle-brand marketing tied to fitness and music partnerships (Live Nation, Ironman, Arsenal), and aggressive retail expansion. The structural lesson: in non-alc, two paths can both lead to category leadership, and the choice depends on whether you have a manufacturing moat (Phony) or a brand-and-distribution moat (Athletic).

Crodino, the European archetype that has been hiding in plain sight. Italian non-alcoholic bitter aperitif, created in 1965, acquired by Campari in 1995. The recipe has not changed in 60 years. Crodino is the original non-alc spritz, sold in 100ml bottles and built around the same Italian aperitivo culture that Phony Negroni now exports to the US. Campari’s strategy with Crodino is instructive: the brand sat in Italy for decades before Campari took it to Austria, Switzerland, France, and finally the UK in 2021. Domenico Villa, Campari’s head of non-alcoholic strategy, told Just Drinks that “the building of the expansion of Aperol Spritz has opened the door, prepared the palettes to a bittersweet taste” that consumers are now ready for. Crodino is the proof that European non-alc bitter aperitivos can scale to massive category presence, but it has done so as a slow-burn brand under conglomerate ownership, not as an independent challenger. To be completely honest, I had never heard of the name 'Crodino' before researching this post. Which itself tells you something about the European challenger gap.

Curious Elixirs, the bootstrap benchmark. Founded in 2015 by JW Wiseman in Brooklyn, Curious Elixirs makes booze-free craft cocktails infused with adaptogens. Wiseman bootstrapped from a $176,000 first year to an estimated $50+ million in cumulative revenue over the trailing five years, with zero outside investment. The brand aims to reach $176 million in revenue by 2030. Curious Elixirs is the closest direct comparable to Phony Negroni in capital structure: same playbook, same Brooklyn origins, same bootstrap-to-meaningful-scale trajectory. The contrast is interesting: Curious Elixirs leans into adaptogens and “functional” positioning, while Phony Negroni leans into authenticity to a classic cocktail. Both work, and the divergence tells you something about the category. Non-alc winners can split into two positioning lanes: function-led (adaptogens, nootropics, wellness claims) and craft-led (replicating a classic with serious R&D). The brands that try to do both tend to do neither well.

Lapo's, the venture-funded fast follower making the same Italian aperitivo bet. Lapo's is the in-house brand of The Zero Proof, an Atlanta-based non-alc company that started as a U.S. importer for European brands (Sweden's Gnista, Denmark's ISH) before building its own portfolio on top of the distribution and consumer data it had accumulated. In January 2024, the parent company closed a Series A led by Asahi Group Beverages & Innovation, the venture arm of the Japanese beverage giant, with participation from Overline and Springdale Ventures.

The capital went primarily into Lapo's, which entered with a non-alcoholic Negroni positioned squarely against Phony Negroni's territory. The trajectory since has been fast: less than two years after launch, Lapo's reports 350% annual growth, 2,000+ stores including Whole Foods, Target, The Fresh Market, and Total Wine, plus on-premise placements at the Bowery Hotel and Michelin-starred restaurants. The product line has expanded to six SKUs covering Espresso Martini, Melograno Mule, Amaro Cola, Citrus Spritz, and Negroni Water. The contrast with Phony Negroni is the cleanest bootstrap-versus-venture comparison in the category: same Italian aperitivo positioning, very different capital structures. Phony Negroni had three years of zero-pressure R&D before launching. Lapo's had institutional capital and a parent company with existing distribution leverage, which compressed time to retail scale. Both paths have produced category-leading positions, and Asahi's presence on the cap table is itself a signal: another major beverage strategic is positioning to acquire in U.S. non-alc.

Ghia, the French founder who built the European aperitif brand in America. Mélanie Masarin grew up in Lyon, spent summers in the Mediterranean, and built her career across Goldman Sachs, Sweetgreen, Dig, and Glossier (where she ran retail and offline experiences) before founding Ghia in Los Angeles in 2020. The product is a bitter, herbal, no-sugar non-alcoholic aperitivo that explicitly references Campari and Martini Blanc, packaged in a design-led bottle that evokes mid-century Italian industrial design (the brand is named after Giacinto Ghia, the Italian car designer). Masarin’s funding trajectory is one of the cleaner stories in non-alc: $900K initial round at a $7.5M valuation, $3.5M follow-on, then a famously declined Shark Tank deal in October 2022 while simultaneously closing $6.5M at a $35M valuation. By 2024 the company was valued at $50M with revenue above $7M, distribution across 2,800 stores, bars, and restaurants in the US and Canada, and Pernod Ricard on the cap table as a strategic investor. Masarin retains majority ownership.

The structural insight worth pulling from Ghia is the customer profile. By Masarin’s own data, 85% of Ghia customers identify as drinkers, not abstainers. They are seeking moderation, not replacement, which is the exact consumer behavior NielsenIQ’s December 2025 research flags as the real driver of the category. Ghia did not win by selling to the sober-curious. It won by selling to people who still drink and who wanted a credible non-alcoholic option for the moments alcohol does not fit. That is the same insight Phony Negroni built around, expressed through a different format.

The harder question Ghia raises is why a French founder built this brand in Los Angeles rather than Paris. The answer is partly market readiness (US consumer demand was further ahead in 2020), partly capital availability (US venture and angel ecosystems funded non-alc earlier than European equivalents), and partly retail infrastructure (Whole Foods and specialty grocery in the US served as a faster on-ramp than European supermarket chains). Masarin’s path is the most direct evidence in the dataset that European founders had to leave Europe to build a category-defining non-alc brand. That is also a comment on what the European opportunity actually looks like, which we will return to in the next section.

The pattern across all five is consistent. Non-alc winners do not converge on a single playbook. They split along two axes: capital structure (bootstrap or venture) and positioning (function-led or craft-led). Phony Negroni and Curious Elixirs took zero outside capital. Athletic Brewing, Lapo’s, and Ghia took venture money. Crodino sat inside a conglomerate for 60 years before scaling internationally. Curious Elixirs and the function-led brands lean on adaptogens. Phony Negroni, Lapo’s, Ghia, and Crodino lean on classic European cocktail and aperitivo tradition. Each combination has produced category-leading positions in its own subcategory.

The deeper insight, and the one that matters more for founders, is who these brands are actually selling to. Ghia’s own data shows 85% of its customers identify as drinkers seeking moderation, not abstainers. The same pattern holds across the category. NielsenIQ’s research on European on-premise behavior found that 93% of non-alcoholic drink buyers also purchase alcoholic drinks. Phony Negroni’s bartender pitch was never “replace alcohol.” It was “give the customer a credible option for the moments alcohol does not fit.” Lapo’s, Ghia, and Athletic Brewing all built around the same assumption. The brands trying to position themselves as alcohol replacements have struggled. The brands positioning themselves as occasion-specific complements have compounded.

Two axes for capital and positioning. One consistent customer: the moderator. And one consistent loser: brands that try to occupy the middle (semi-functional, semi-craft, semi-bootstrapped) tend to do everything halfway.

Non-Alc M&A wave

The pattern is now consistent across the category. Every major non-alc subcategory has a strategic acquirer or a strategic-backed challenger sitting on it: spirits, beer, aperitif, RTD, wine, agave, hop water. Cocktails was the last open seat, and The Wine Group just took it.

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What Went Wrong (or: The Risks)

The non-alc category is in a strong moment. But three named failure cases tell a more complicated story about what happens after the M&A wave breaks, and it is worth sitting with these before assuming Phony Negroni’s outcome will compound.

The Boisson risk: even strategic backing does not save a structurally hard business. Boisson was the largest dedicated non-alc retailer in the US, with nine brick-and-mortar stores across New York, San Francisco, Los Angeles, and Miami. It raised approximately $17 million across two rounds, including a $5 million investment from Pernod Ricard’s Convivialité Ventures in September 2023. The brand reached $10 million in retail and e-commerce revenue in 2023. Six months after the Pernod investment, in April 2024, Boisson filed for Chapter 11 bankruptcy and closed all retail locations. Founder Nicholas Bodkins’s own framing: “A failed venture-backed startup that grew too quickly, made mistakes, and wasn’t able to find capital fast enough to continue to build three businesses at the same time, brick-and-mortar retail, e-commerce, and wholesale import and distribution.” The lesson cuts in two directions. First, the consumer category is real but the retail margin economics for dedicated non-alc shops are not yet there. Second, a strategic VC stake from a major drinks group does not function as a backstop. Pernod could have written a follow-on cheque and chose not to.

The on-premise concentration risk: what happens when the moat narrows. Phony Negroni’s primary moat is on-premise placement, and that channel has structural risks the brand has not yet had to face. Restaurant cocktail programs change quarterly. Bartenders move between accounts. New non-alc entrants are now arriving with venture capital and dedicated sales infrastructure: Lapo’s hit 2,000 stores in under two years on Asahi’s Series A capital, Ritual is now distributed by Diageo’s full North American spirits sales team, and a growing tail of regional brands is competing for the same bar program slots. Phony Negroni had a five-year head start when on-premise non-alc was uncontested. That window is closing. The on-premise customer acquisition cost is going to rise, the per-account volume share is going to compress, and category leadership built on bartender preference will need to be defended account by account. Whether The Wine Group’s distribution muscle is the right tool for that defense is the open question of the next 24 months.

The EU regulation risk: the playbook does not transfer cleanly across borders. Three rules shape the European launch path. EU Regulation 1924/2006 prevents health and functional claims without EFSA approval, which kills the adaptogen-and-nootropic positioning that powers Hiyo, Kin, and Curious Elixirs in the US. EU Regulation 2019/787 protects spirit category names like "gin," "vodka," and "amaro," restricting how a brand can label a non-alcoholic Negroni in many member states. And the alcohol-free threshold itself varies by country, from 0.5% ABV in some markets to below 0.05% in others. Phony Negroni's name and positioning would need legal review market by market before a European launch. UNDONE, JNPR, and French Bloom all operate within the rules. The US playbook does not transfer cleanly.

Is There Room for New Entrants?

The honest answer is yes, but the landscape is more crowded than most US observers assume, and the right way to think about the European opportunity is structurally different from what worked for Phony Negroni.

Three layers are already in the European market.

The first is the legacy aperitivo soda: Crodino, Sanbittèr, Gingerino, Cedrata. Crodino alone sells in 60+ countries and has been owned by Campari since 1995. These brands occupy the affordable everyday slot in European aperitivo culture and they have decades of distribution muscle. Any new brand pricing at €4 to €6 per single-serve bottle is competing directly here, and that competition is unwinnable on price.

The second is the premium non-alc spirits and aperitif lineup that has emerged since 2019. The serious players: JNPR Spirits in France (€1.1M raised, distributed at Gault & Millau-recognized restaurants), Rebels 0.0% in Switzerland ($3.3M raised across two rounds, served at Michelin-starred restaurants), UNDONE in Germany (founded 2019, recently expanded to the US), NietsCo in Belgium (Brussels-based, full range from London-style spirits to Italian aperitivo), and Pentire in the UK ($3.74M Series A in late 2023). This layer is real but fragmented. None has yet broken €10M revenue, and most operate within a single country.

The third is the major drinks group response. Bacardi launched MARTINI Non-Alcoholic Floreale and Vibrante. Pernod Ricard launched Ramazzotti Aperitivo Arancia 0.0% in March 2025. Diageo is pushing Gordon’s 0.0 and Tanqueray 0.0 across the continent. The conglomerates are not waiting for challengers to emerge before they fill the obvious slots.

The structural opportunity is therefore not “build a European Phony Negroni.” That door is partially closed because UNDONE, JNPR, and Rebels are already executing a version of that playbook with multi-year head starts. The real gap sits in three specific areas where no European challenger has yet established a defensible position.

First, a category-defining ready-to-drink product anchored in European cocktail tradition. Phony Negroni won by selling a finished cocktail in a 200ml glass bottle at a $5 retail price and a $10 to $15 on-premise pour. None of the European challengers has committed to that exact format. JNPR sells a 700ml spirit alternative. Rebels does the same. UNDONE sells dealcoholized spirits. The single-serve, ready-to-drink, on-premise-first format with European provenance is the empty quadrant. A French brand selling bottled non-alcoholic Pastis or a Spanish brand selling bottled non-alcoholic Vermouth Rojo would have no direct equivalent.

Second, a brand that solves European on-premise distribution at scale. US on-premise made Phony Negroni. European on-premise is more fragmented, more national-level, and harder to penetrate brand by brand. No challenger has yet built the equivalent of the bartender-and-restaurant-buyer relationship that Phony Negroni had through Louis Catizone’s industry network. The brand that solves this for Italy, Spain, and France specifically has a real moat. The investment thesis is not just product. It is channel.

Third, a brand that uses European regulatory rules as a feature rather than a constraint. EU labeling rules (Regulation 1924/2006) prevent the loose health claims that US functional non-alc brands have leaned on. That is widely treated as a constraint. It is also a defensibility lever. A brand that leads with EFSA-approved positioning, clean ingredient lists, and audited supply chain can build trust that adaptogenic-claim brands cannot match. Curious Elixirs and Hiyo would not work in Europe under their current marketing. That removes a category of competitors from the field before the brand even launches.

Takeaways

The Wine Group’s acquisition of Phony Negroni is relatively small in deal value (probably) but large in signal. A wine conglomerate buying a non-alcoholic cocktail brand confirms that non-alc is now a strategic category for traditional alcohol acquirers, not an experimental side bet. The deal sits inside a much larger M&A wave that has already swept through non-alc beer (Athletic Brewing), non-alc spirits (Seedlip to Diageo), and non-alc wine (French Bloom to LVMH). Non-alc cocktails was the missing piece, and now it is filling in. The takeaways:

• Phony Negroni was acquired by The Wine Group in April 2026 after eight years of building, with zero outside investment. The brand sold approximately nearly 3 million bottles in 2025 across 7,000+ outlets, and was the number one RTS 200ml bottled beverage in the US non-alc spirits segment at the time of acquisition.

• The on-premise channel is the moat in non-alc cocktails. Phony Negroni led with bars and restaurants because bartenders are the highest-leverage gatekeepers in cocktail-category education. Retail is downstream, not upstream.

• Bootstrap can compete with venture in non-alc. Athletic Brewing raised $100M+ to reach its position. Phony Negroni and Curious Elixirs both reached category leadership, although at smaller scale, without outside capital. The choice between paths depends on whether the founder has a manufacturing moat (existing distillery, supply chain expertise) or needs to buy one.

• “Non-alc” is occasion-specific, not abstinence-driven. The brands framing themselves as alcohol replacements overshoot consumer behaviour. The brands framing themselves as complements for specific occasions (driving, pregnancy, weekday evenings, GLP-1) land more cleanly.

• Continental Europe is the obvious next opportunity. The category education is done, the on-premise channel is bigger than in the US, and EU regulation rewards craft authenticity. My bet: the next $50M revenue non-alc cocktail brand will probably be Italian or French.

• Strategic acquirers are now operating on a clear template across all non-alc subcategories. Diageo bought Seedlip. Campari owns Crodino. The Wine Group has Phony Negroni. LVMH has French Bloom. Pernod Ricard has AF Drinks. Molson Coors partnered with Naked Life. The acquirer set is fully formed, and it is buying.

Contents

• The Setup: a small UK gut health brand becomes Hero Group’s third major UK functional food acquisition in 18 months. The pattern is hard to ignore.

• Why This Category / Why Now: gut health has crossed from wellness niche to mainstream consumer behaviour, and acquirers are pricing it accordingly.

• A note on funding: what the public record actually shows about how this venture was financed.

• The Winner’s Playbook: how Lisa and Alana Macfarlane built The Gut Stuff from a YouTube channel into a brand worth acquiring without a product for the first three years.

• How Others Are Playing It: Biotiful’s £115M kefir exit, The Collective’s sale to Yeo Valley, and what these tell us about acquirer behaviour.

• What Went Wrong: where supplement and functional brands have stumbled in this category.

• Is There Room for New Entrants: what the next gut health winner might look like, and why I think it will probably be a continental European brand.

• Takeaways: what founders and investors should remember.

The Setup

Last week, Hero Group acquired The Gut Stuff for an undisclosed sum. The brand was founded in 2017 by Scottish twins Lisa and Alana Macfarlane, started as a YouTube channel about gut microbiome research, and grew into a multi-channel business spanning high-fibre snack bars, canned fibre drinks, an app, a podcast, books, live events, and a corporate education programme.

It is a small deal by the standards of most M&A coverage. Iris Finance estimates revenue at around £10 million, which sounds plausible given everything else I know about the business. Lisa told Just Food in November 2025 that the company has “doubled revenue year-on-year since 2023” and was about to be announced as one of the 50 fastest-growing companies in the UK. My best estimate of total capital raised across the company’s life is roughly £3.5M to £4M, which I’ll break down in the section below.

This is a much smaller company than most of the brands I have covered in The Food Stack so far. Bachan’s exited at £87M revenue. Huel exited at £250M. Biotiful Gut Health was at £35.5M when Müller acquired it. The Gut Stuff is in a different revenue bracket entirely, and that is worth saying out loud. Smaller-scale exits are also a valid path.

The Gut Stuff did not need to be a £100M revenue brand to attract a strategic acquirer, and the deal is a useful reminder that the £400M Bachan’s-style exit or $1.2B Grüns is not the only outcome worth studying. A £10M revenue brand with the right educational moat and the right acquirer match is a genuinely good outcome for a founder, and it is the kind of outcome more European founders should probably be modelling toward.

What makes the deal worth a closer look is what Hero is actually paying for. Not revenue scale obviously. Not even product portfolio breadth. Hero is paying for category authority in a niche the group has decided is strategically important, and the founders’ eight-year audience build is the asset.

This is the third UK functional food acquisition Hero has been in or around in 18 months, sits inside a much larger pattern of gut health M&A across Europe, and the founder story almost perfectly inverts the standard CPG playbook. Lisa and Alana did not start with a product. They started with an audience. The product came three years later, and that sequencing is what made the brand acquirable in the first place.

I want to pull this one apart because the pattern keeps showing up in deals I find interesting, and because I think the next big European gut health winner has not been built yet. And because I think covering smaller M&A deals can also be full of insights.

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Why This Category / Why Now

The gut health category has gone from a wellness conversation to a mainstream M&A theme in roughly five years. Three numbers anchor the shift.

First, the global digestive health products market is now valued at around $116.92 billion, growing at 8.74% per year according to Precedence Research data cited by FoodNavigator. The Europe gut health supplements segment alone is projected to grow from $4.35 billion in 2024 to $8.15 billion by 2033, a 7.1% CAGR. Search interest is following the money: “gut health” searches rose 35% in 2024, “microbiome” 31%, and “probiotics” 8%, according to Magnitude Biosciences.

Second, fibre has become the next protein. The European dietary fibres market is forecast to grow from $2.23 billion in 2025 to $6.26 billion by 2034 at a 12.15% CAGR per Market Data Forecast. That is the kind of structural growth rate that makes acquirers move. Functional food and beverages account for 65.5% of that market by application, which means most of the value capture is happening on the food and drink shelf, not in supplement aisles. Lisa Macfarlane put it plainly to Just Food:

“Fibre really is the unsung hero of nutrition that I think is finally getting its moment.”

Third, the M&A cadence in UK functional food alone has been remarkable. In April 2025, Müller acquired Biotiful Gut Health, the UK kefir leader, for an estimated £115M ($150M) according to The Grocer. Earlier that year, Yeo Valley acquired The Collective, which had built a £26M turnover gourmet yoghurt and kefir business. Hero Group acquired Deliciously Ella in September 2024, with City sources telling The Grocer a multiple of “10x EBITDA would not be unreasonable” against £4M+ of underlying profit. And now Hero has added The Gut Stuff to that portfolio.

Stack the European gut health deal flow against the broader functional beverage wave (Pepsi’s $1.95B acquisition of Poppi, Olipop’s $1.85B Series C valuation in early 2025) and you get a clear signal. Strategic acquirers see gut health and fibre as one of the few defensible long-term consumer trends still in early innings. They are buying what they cannot build internally, fast enough.

The behavioural driver matters too. Lisa is direct on the GLP-1 angle: “Consumers are now looking for smaller formats when it comes to food, because they’re obviously eating slightly less but, also, more nutrient dense foods in smaller size portions. People are really starting to focus on fibre and protein. That’s where drinks really help with that as well, because you can still have functional, nutrient dense products that are drinks, and not just big portions and big meals.”

That last sentence is doing real work. GLP-1 users need fibre because the drugs reduce overall food intake while increasing risk of constipation and nutrient gaps. But they also need format innovation. A high-fibre canned drink is a much better fit for a GLP-1 user than a high-fibre meal, because the consumption barrier is lower at the same time as the nutrient density is higher. That is exactly the product The Gut Stuff is now bringing to market under Hero, and exactly the format other category entrants are moving toward.

There is a deeper insight inside Lisa’s interview that I think is worth pulling out separately, because it is one of the sharpest things she has said publicly about how this category actually works. The brands that win in gut health do not ask consumers to change their behaviour. They give consumers smaller, easier swaps inside behaviour they already have. Lisa: “I think snacking is an interesting place for that, because people are looking for swaps, essentially. The important thing about gut health is that it doesn’t have to be a complete lifestyle change. We’re thinking stuff like, can you swap something out that had a little bit more fibre? Can you add some more nuts and seeds onto your salad or soup? I think that hopefully that’s where consumers are going to go and that they’re going to stop focusing on magic bullets, detoxes and cleanses... It really has to be small habitual changes and you don’t have to completely revolutionise your lifestyle.”

This is structural for any consumer founder reading this. The brands that demand a behaviour change (a new ritual, a new aisle, a new daily habit) face a much higher acquisition cost than the brands that quietly upgrade an existing behaviour. The Gut Stuff is a snack bar instead of a different snack bar. A canned drink instead of a different canned drink. The fibre and the gut health framing are functional benefits layered onto behaviour the consumer already had. In a crowded category, format familiarity plus functional upgrade beats novelty plus education every time.

A note on funding: what the public record actually shows

There is no clean, public funding announcement for The Gut Stuff. PitchBook, Crunchbase, and Tracxn each report different totals, ranging from $669K to $4.6M. Companies House filings show share allotments but not headline round sizes, and the founders have not done press on their cap table. So what follows is my best reconstruction from primary documents, not a confirmed timeline. Treat it as informed estimation rather than fact.

Here is what I think the trajectory looked like:

2018 to 2019: two small angel rounds, around $565K combined. A first cheque of roughly $265K in March 2018, followed by a $300K seed round in December 2019. Likely a mix of friends, family, and early angels who knew the founders from their TV work. This is the capital that funded the YouTube years.

August 2023: Crowdcube round, £314,644 from 331 retail investors. The brand opened to retail investors on Crowdcube alongside a parallel institutional round.

December 2023: Astanor-led seed close, around £3M of additional equity. This was the headline round. Astanor Ventures led, converting from a £2.35M convertible note that had been outstanding since earlier in the year. The Tesco Accelerator participated. Direct angels topped it up. Companies House filings show seven separate share allotments between 19 and 22 December 2023, with Seed Preferred shares issued at prices between £3.24 and £4.32 depending on the tranche. That implies a post-money valuation somewhere in the £6.3M to £8.4M range, with the higher price band reflecting investors who paid full price (likely the Crowdcube tranche and direct angels) and the lower band reflecting the Astanor convertible conversion with discount. Crunchbase reports an £8.5M pre-money for the round, which aligns with the higher price band.

September 2024: accelerator participation. PitchBook logs this as a deal but no equity was issued, so this looks like programme membership rather than dilutive capital. Likely the Tesco Accelerator follow-on or a similar non-dilutive support arrangement.

No further equity raised between December 2023 and the April 2026 acquisition. That is 28 months of operation on the Astanor seed. The fact that they didn’t need a Series A is itself a signal: the corporate wellness arm, the media income, and the retail margin together generated enough cash to keep the company moving without further dilution.

Total raised across eight years: roughly £3.5M to £4M. Smaller than most of the brands acquirers have been buying in this category, and notable for how the founders kept the cap table tight enough to retain meaningful ownership through to the exit.

The Winner’s Playbook: how the Macfarlane twins built an audience first, then a product

Eight years. About £3.5M to £4M raised. The Grüns post earlier this month tracked a 32-month sprint to a $1.2B exit on $55M raised. The Gut Stuff is the opposite story: a slow build where each year compounded on the last, and the asset Hero acquired is the cumulative authority of all of it. What follows is a year-by-year walk through how that authority was built.

Pre-launch (2014 to 2016). Lisa and Alana Macfarlane work as DJs and TV presenters known as “The Mac Twins.” They volunteer as participants in Professor Tim Spector’s (Co-Founder of gut health company ZOE) TwinsUK study at King’s College London, the largest twin registry in the world. The study’s most striking finding for them personally: despite sharing 100% of their DNA, their guts share only around 30% of the same bacteria. Lisa frames it sharply: “If we can’t be sold the same diet, no one can.” That single data point becomes the founding insight of the business: gut health is not genetic destiny, it is something you can influence through diet.

Year 1 (July 2017). The Gut Stuff Limited is incorporated. The brand launches as an educational platform: a YouTube channel interviewing scientists, GPs, dietitians, and microbiome researchers. No product. The thesis is that gut health is poorly understood by mass consumers and the category needs translation, not new SKUs. This is the defining decision of the business. Most CPG founders with a strong nutrition thesis go straight to product development. Lisa and Alana spent the first three years building an audience instead.

Years 1 to 3 (2017 to 2020). The brand builds its audience through long-form content and live events. Pop-up activations include taking over Old Street Station for a week and running roadshows across schools, construction sites (Balfour Beatty), and corporate canteens. The corporate education programme begins to sign clients including Lloyds, Accenture, the RAF, and Aegon. Revenue comes primarily from corporate wellness contracts and media work, not products. The brand is described in editorial coverage from this period as “the global millennial thought leader” in gut health. It still does not sell a single product. The first small angel cheques (March 2018 and December 2019, totalling around $565K) cover overheads through this period.

Year 3 (November 2020). The first product launches. Good Fibrations bars contain 10 grams of fibre per serving, around a third of UK recommended daily intake, made from fruit, nuts, seeds, chicory root fibre, and inulin. Distribution starts DTC through the brand’s own website. The product is a vehicle for the educational mission, not the other way around. Lisa later put it to NutraIngredients: “If we had realized how much of a volume game it was, we may not have made snack bars. It was a big purpose versus profit game for a while, and it’s paid off now, but it was hard, and it was only really possible because we had so many different facets to the business which bought us time.”

That last sentence is the playbook here. The audience and the corporate education programme were the cash-flow engines that subsidised the product business while the product business found its footing.

Year 4 (2021). Tesco Accelerator Programme invests, alongside Astanor. The corporate wellness programme expands. The brand publishes its first book with HarperCollins, written with leading gut health experts. Channel 4 commissions “Know Your Sh!t,” a primetime documentary that draws nearly 10% of the UK population on its broadcast night. Lisa’s framing on the broadcast: “We were told that if you make a TV show about gut health, you’ll be on at midnight, on a channel that no one will watch. We had a prime-time slot that nearly 10% the UK population tuned into.”

Year 5 (2022 to early 2023). Retail listings expand. Bars enter Holland & Barrett, Boots, and selected independents. This is the “purpose versus profit” period: product margins are thin, but the multi-arm business model (FMCG, services, media) keeps the company funded.

Year 6 (2023). The seed round closes. A £2.35M convertible from Astanor and angels earlier in the year converts to equity in December, alongside a £314,644 Crowdcube tranche from 331 retail investors. Total round size is around £3M, at a post-money valuation somewhere between £6.3M and £8.4M depending on the tranche. Revenue doubling year-on-year begins, per Lisa’s interview with Just Food, driven mainly by retail. As Lisa describes it: “That growth is mainly in retail and I think that’s a combination of organic growth and brand awareness, as well as performing well in those retailers and getting increased distribution.” Tesco lists the bars at front-of-store, sitting next to confectionery rather than buried in dried fruit and nuts. The company explicitly does not pay slotting fees: “For us, it was important that we didn’t pay to play on those accounts. This is a new brand and I think the temptation is to do that to make them work. We knew that we had to really see that organic growth to know that the consumers were ready.” Front-of-store placement in UK grocery is the single hardest thing for a challenger brand to win, and they got it on the back of category expansion data rather than promotional spend.

Audience-first brands compress the cost of distribution, because retailers see proof of consumer pull before they take a punt on shelf space. That is harder to replicate than a clever product, because the audience takes years to build and cannot be acquired with a Series A.

Year 7 (2024). The Co-op lists the bars. Sainsbury’s follows. Revenue doubles again. The company publishes a second book. The consumer app launches with gut health trackers and educational content. The fibre challenge campaign on the app drives a measurable uptick in active users. No further equity round is needed. By now the business operates across three core pillars in parallel, plus the consumer app, and that integrated model is what we’ll come back to in the next section.

Year 8 (2025). The high-fibre pop drinks launch. Co-op and Tesco list them “straight off the bat” on the back of the brand’s bar performance. First wholesale listing for the drinks follows. The bars grow 90% year on year. The brand is named one of the UK’s 50 fastest-growing companies. The TV spin-off “Chat Shit” launches as a podcast. The drinks are reformulated for a Q1 2026 relaunch with three fibre types, addressing what Lisa flags as a category-wide credibility problem: “A lot of the drinks say they’ve got a lot of fibre in or make high-fibre claims, and there’s hardly any. We’re proud that we’re efficacious.” In a category built on health claims, ingredient honesty becomes positioning.

Year 8 (April 2026). Hero Group acquires The Gut Stuff for an undisclosed sum. The Macfarlane twins remain in operational leadership. The entire team transfers across. Total time from incorporation to acquisition: 105 months. Total estimated capital raised: £3.5M to £4M.

For comparison, Grüns sold to Unilever in 32 months on $55M raised. The Gut Stuff sold to Hero in 105 months on roughly $5M raised. Both founders ended with category authority an acquirer wanted. The path to that authority looked completely different. The Grüns playbook compressed everything: product, distribution, brand, exit. The Gut Stuff playbook deliberately did not. They spent three years before launching anything you could put on a shelf, and that patience is what made the eventual product business defensible. They also spent 28 months on the Astanor seed without raising again, which is itself a signal of operational discipline.

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The ecosystem question: why “too ambitious” became “exactly right”

The Gut Stuff did not operate as a single-product company. By the time Hero acquired it, the business was running across three connected pillars plus a consumer app:

• FMCG. Good Fibrations high-fibre snack bars (10g fibre per serving), the Pop high-fibre drinks line launching into Co-op and Tesco, with reformulated Q1 2026 drinks featuring three fibre types

• Services. A corporate education and wellness programme with clients including Lloyds, Accenture, the RAF, Aegon, and Balfour Beatty. This is a B2B revenue stream, not a brand-building exercise. Companies pay for gut health programming for their employees

• Media. Three published books (the most recent two are global), the Channel 4 documentary “Know Your Sh!t” and its podcast spin-off “Chat Shit,” plus a steady cadence of editorial appearances and a 172,500-strong “gut gang” community across social channels

• Consumer app. Educational content, gut health trackers, a fibre challenge campaign that drove measurable user activation, and direct community engagement

This kind of multi-pillar model is the sort of thing that would have looked badly unfocused to a CPG investor five years ago. Build one product, prove unit economics, then expand: that is the conventional CPG advice. The Gut Stuff did the opposite. They built a media and services business first, used it to fund the product business, and then layered the product business on top of an audience that already trusted them. That was unconventional in 2017. By 2024, it was exactly the configuration a strategic acquirer wants to buy.

Here is why. Hero already has the manufacturing capability, the supply chain, and the international retail relationships. It does not need to acquire a small UK brand to learn how to make snack bars. What Hero cannot build in-house, and what every legacy CPG group is now scrambling to acquire externally, is a defensible, ownable position in a high-credibility consumer wellness category. The Gut Stuff offers that in a way that a single-product brand never could. The bars are marketing for the books. The books are marketing for the corporate programme. The corporate programme is marketing for the bars. The whole thing compounds.

Hero’s own framing of the deal makes this explicit. Christian Schierbaum, CEO of Hero Group:

“The acquisition of The Gut Stuff is a fantastic opportunity for us to grow as a group and enter a small but fast-growing trend in better-for-you snacking around gut health and fibre.”

Note what he is saying. Hero is buying entry into a category, not a revenue line. The deal is about positioning and entering a new growth area. That is consistent with everything we have seen from the acquirer set in this category over the last 18 months.

Mita Sen, Hero’s Chief Strategy Officer, is even more direct about what the asset actually is:

“This is the perfect combination of a brand with strong positioning and connection to consumers coupled with Hero’s experience and know-how in developing high-quality snacks. Putting these capabilities together will result in faster growth and more impact with customers and consumers.”

That sentence is worth reading twice. “Strong positioning” and “connection to consumers” are euphemisms for everything that is hardest to build inside a CHF 1.187 billion food group. Hero already has the capability to develop and manufacture high-quality snacks, and Sen says so explicitly. What Hero is acquiring is the consumer relationship and the credibility, and the unstated assumption is that those two things, combined with Hero’s existing manufacturing and distribution muscle, will compound into a much larger business than The Gut Stuff could ever have built on its own.

The transferable lesson for founders: the multi-pillar model that looks too ambitious at seed stage can be exactly the model that looks defensible at acquisition stage.

The judgement call is whether the pillars genuinely reinforce each other or whether they fragment the team’s focus. In The Gut Stuff’s case, all four pillars reinforce a single thesis (gut health is approachable, evidence-based, and culturally accessible), which is what makes the model work as an acquisition target.

For founders building toward an exit, the takeaway is more specific. Acquirers in CPG today are paying for what they cannot build internally. Manufacturing, supply chain, retail relationships, and product development are commodities for a group like Hero. Trust and category authority are not. Building a brand that delivers what the acquirer cannot replicate in-house is the highest-leverage thing a founder can do, and Hero’s own words on this deal confirm it.

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How Others Are Playing It

The Gut Stuff is not an isolated event. Three other recent UK deals tell the same story from different angles.

Biotiful Gut Health, acquired by Müller in April 2025 for an estimated £115M. Founded in 2012 by Natasha Bowes, a former figure skater turned financier, Biotiful built kefir into a mainstream UK category and reached £35.5M in turnover with £2.3M pre-tax profit by FY2024. Müller had previously launched and discontinued its own kefir line in the UK, then bought the market leader instead. Biotiful held roughly 70% market share in UK kefir at the time of the deal. The structural lesson: when an incumbent’s organic attempt fails, acquisition is the cheaper path to category presence. Could be an interesting case study for a future deep dive?

The Collective, acquired by Yeo Valley in March 2025. Founded in New Zealand and brought to the UK in 2011, The Collective was a private-equity-backed gourmet yoghurt and kefir brand with £26.6M turnover in FY24. Yeo Valley, a £750M revenue business owned by the Mead family, paid an undisclosed sum that took its gross margin from 14.1% to 13.6% and its pre-tax profit margin from 2.2% to 1.7% in the year of the deal. Yeo Valley’s CEO Rob Sexton framed it as a strategic move into “indulgence and kids’ yoghurts” alongside the core natural Yeo Valley brand. Different acquirer, different rationale: this was not about gut health authority. It was about portfolio diversification.

Deliciously Ella, acquired by Hero Group in September 2024. This is the most relevant comparison for The Gut Stuff. Founded by Ella Mills in 2012 as a recipe blog documenting her recovery from chronic illness, Deliciously Ella scaled to £24M revenue, £1.8M pre-tax profit, 100M+ products sold, and 70 employees by the time of acquisition. The business followed almost the same audience-first playbook: blog and cookbook authority first, products second. Valuation at time of acquisition was around $35M according to AInvest. The brand has since been the centrepiece of Hero’s UK expansion.

The pattern across these three is sharper than any one deal. Strategic acquirers in UK functional food are paying premium multiples for brands that combine three things: educational authority with consumers, and clear category leadership in a defined niche with high growth expectations. They are not paying for revenue scale, because at this stage of the category, scale is something the acquirer brings. They are paying for trust.

What Went Wrong (or: The Risks)

The Gut Stuff itself has not gone wrong, but Lisa is direct about the two things she sees as the main challenges in this category. Both are worth sitting with, because they shape what the next winning brand will need to do.

The first is regulation. EFSA’s regime on health claims is strict, and rightly so, as Lisa puts it: “I think the main thing is regulation. A lot of the regulation around what you can and can’t say is very strict and rightly so.” The category attracts both genuine science and snake oil, and the regulatory line between them is fine. EFSA-approved claims exist for soluble fibres like beta-glucan from oats and barley, inulin, and oligofructose, but only at specific intake thresholds. Brands that overclaim get pulled, brands that underclaim get ignored. As Lisa frames it elsewhere: “There’s a lot of bullcrap out there. Some consumers still believe there’s a magic pill and that celery juice is going to cure them of x, y and z.” The regulatory environment is the single biggest filter on which brands survive long enough to scale.

The second is mass-market accessibility. Gut health started as a wellness trend for an educated, urban, affluent consumer. Lisa frames the next barrier explicitly: “How do we make this mass market? We’re from a working-class Scottish background and we always put everything that we do through the filter of would we have understood this when we were 14? Would we have got it? Would we have cared about this? I think that people coming into gut health if they’ve got a digestive issue is one thing but making it for everyone is probably the final barrier. Everyone’s got a gut and it’s linked to pretty much every health outcome.” The “would we have got it at 14” filter is a simple but smart way and it explains a lot about how The Gut Stuff has positioned itself: science-credible without being intimidating, B2B-credentialed without being academic.

There is also a structural risk that sits inside any acquisition. The functional snack bar category has become extremely crowded, and The Gut Stuff competes for shelf space with Deliciously Ella, Trek, Eat Natural, Nakd, and dozens of private labels. The differentiation is not flavour or even fibre content, it is the brand promise. When an acquirer like Hero buys the brand and integrates it into a portfolio, the operational pressure is to extend the format and lean on shared infrastructure. The Gut Stuff’s positioning depends on Lisa and Alana being visible, science-credible, and editorially active. If post-acquisition the brand becomes just another snack bar SKU on Hero’s roadmap, the moat erodes quickly.

Is There Room for New Entrants?

This is where I find myself most curious. The UK gut health category is now well-served at the entry level. Biotiful owns kefir. The Gut Stuff and Deliciously Ella own functional snacking. The Collective sits inside Yeo Valley’s portfolio. Müller, Hero, and Yeo Valley have effectively divided the high-credibility end of the market between them.

Continental Europe is a different story.

There is no equivalent gut health authority brand at scale in Germany, France, Spain, or the Nordics. The supplement segment is dominated by pharmacy-channel players like Bayer and Sanofi-CHC, and the food shelf is dominated by legacy yoghurt brands. The behaviour change happening in the UK (mainstream consumers actively seeking out high-fibre, prebiotic, microbiome-supportive food) is arriving in the rest of Europe, but the brands have not.

My bet is that the next The Gut Stuff equivalent in continental Europe will look different from the UK version. Three reasons.

First, the category education will not need to be built from scratch. UK and US media coverage has done a lot of the heavy lifting, and continental consumers are already arriving with category awareness. The brand that wins will not need three years of YouTube before launching a product. The Gut Stuff’s eight-year journey is unlikely to be the template. The next winner will compress.

Second, the regulatory environment is harsher in continental Europe than in the UK on health claims, but stronger on scientific provenance. A brand that can lead with EFSA-approved claims, ingredient transparency, and clinical-tier credibility will have an advantage that influencer-led brands cannot match. As Lisa noted, fibre is finally getting its moment, but the category is also full of products that overclaim. The brand that wins will be the one that pairs efficacy with verifiable claims.

Third, format innovation in fibre is genuinely open. The UK has bars and canned drinks. The white space sits in: ready-to-drink kefir extensions with measured prebiotic loads, fibre-forward breakfast formats that go beyond granola, and clean-label functional dairy that targets gut-brain axis claims rather than vague “wellness.” If anyone is building this in continental Europe, my inbox is open. Reach out ;)

What I keep noting is that the acquirer set is already in place. Danone, Nestlé, Müller, Hero, Lactalis, and Bel are all actively buying small, high-credibility brands in this space. A continental European gut health brand that hits €10M to €40M revenue with strong unit economics and a defensible educational moat will have a clear exit path within five to seven years. The Gut Stuff playbook is repeatable in the right hands, and probably in less than 105 months.

Takeaways

The Gut Stuff is small in deal size but large in signal. Hero Group is not buying revenue scale, it is buying category authority, and the acquirer set behind it is moving on the same logic. The question for European founders and investors is which brand owns gut health credibility on the continent before the consolidation reaches there.

• The Gut Stuff was acquired by Hero Group last week, 105 months after incorporation, on roughly £3.5M to £4M of total estimated funding and an estimated £10M revenue (per Iris Finance). Revenue has doubled year-on-year since 2023, per Lisa Macfarlane, putting the company among the UK’s 50 fastest-growing businesses. The Macfarlane twins retained majority control through to exit.

• This is a much smaller-scale exit than most of the brands we have covered, and that is the lesson. A £10M revenue brand with the right educational moat and the right acquirer match is a real outcome. Not every European founder needs to model toward £100M revenue to build something acquirable.

• Audience-first brand building is the structural advantage. Three years of YouTube and corporate education before product launch is what made the eventual product business defensible. Hero is buying trust, not bars.

• The winning behavioural insight is “small swaps, not lifestyle change.” The brands that ask consumers to upgrade an existing behaviour beat the brands that ask consumers to adopt a new one. Format familiarity plus functional upgrade is the formula.

• The multi-pillar model (FMCG plus services plus media plus app) compounds in a way that single-product brands cannot. What looked too ambitious five years ago is exactly what made The Gut Stuff acquirable today.

• The UK gut health M&A wave (Biotiful £115M, The Collective, Deliciously Ella, The Gut Stuff) shows that acquirers are paying premium multiples for credibility plus growth potential, not revenue scale. The pattern is set.

• Continental Europe has no equivalent gut health authority brand at scale yet. My bet is that the next category leader will be a clinical-tier, EFSA-credible brand built on format innovation, and will compress what The Gut Stuff did over eight years into three or four.

If this was useful, share it with a founder or investor who would find it relevant.

Contents

• The Setup: a 70-year-old national drink, an empty category in the U.S., and four friends who saw the opportunity

• Why This Category / Why Now: the RTD market, where it was heading, and why the timing was right

• The Timeline: 8 years of decisions, from a New York happy hour to a $325 million exit

• The Finnish Long Drink Playbook: the three decisions that built the category

• What Went Wrong: why Hartwall and Boston Beer both underperformed in the U.S.

• The Patterns: what this story tells us about category creation in CPG

• Is There a European Long Drink? the white space and what this story means for European founders

• Takeaways: six things worth remembering from this story

The Setup

Most consumer brands start with a product. They formulate something, figure out the category it belongs to, and then try to carve out a position within it.

The Finnish Long Drink started differently. The product already existed. The category did not, at least not in America.

Long drink, or “lonkero” in Finnish, has been Finland’s national drink for 70 years. It was created for the 1952 Helsinki Olympics, when the Finnish government needed a way to quickly serve the influx of tourists. Hartwall, one of Finland’s leading historical beverage companies, developed the recipe: gin, grapefruit soda, in a can. People fell in love with it and never stopped. Today long drink is one of the best-selling drink categories in Finland, available in every venue from dive bars to fine dining restaurants, drunk by every demographic, at every occasion. The Finnish equivalent of a Coca-Cola.

In 2017, four friends had a conversation that would eventually lead to a $325 million acquisition. Three of them were Finnish. One was an American entrepreneur named Evan Burns. Burns had visited Finland, been taken to every kind of venue by his Finnish friends, and noticed the same thing everywhere: long drinks.

His founding insight was not “let’s build a better gin cocktail.” It was something more specific: in America, nobody owned this story. There was a 70-year-old cultural institution with a government-commissioned origin story, universal recognition in its home market, and zero brand presence in the largest consumer market in the world. The category was completely open.

As Burns described it: just like tequila has its story of being made in Mexico, distilled from agave, or champagne in the Champagne region of France, what if we built a brand called The Finnish Long Drink and brought it to America?

That question led to a reported $325 million exit in 2026. The time from founding to signed acquisition: eight years.

I have spent this week trying to understand how a 70-year-old Finnish drink became one of the fastest-growing spirits brands in the world. What follows is what I found.

Why This Category / Why Now

The ready-to-drink (RTD) cocktail category was worth $13.9 billion in the U.S. by 2025, representing over 12% of total beverage alcohol sales. The category had been turbocharged by the pandemic, when at-home drinking surged and canned cocktails replaced bar visits for millions of Americans.

But the category was also shifting. Hard seltzer, which had dominated the RTD space from roughly 2018 to 2021 with White Claw leading on a malt base, was plateauing. Consumers were trading up. They wanted more flavor, more authenticity, and solid alcohol by volume (ABV). Spirit-based RTDs grew 53% in 2021, approximately double the growth of malt-based categories. By 2024, spirit-based RTD innovations had grown from 22% to 40% of all RTD launches, while malt-based launches fell from 75% to 59%.

The Finnish Long Drink launched in 2018, right at the beginning of the RTD boom, with a spirit base at a time when malt-based brands were still dominant. That timing, partly by design and partly fortunate, meant the brand was already established when the category rotated toward exactly what it had always been.

The U.S. also had no equivalent cultural touchstone in the gin-and-citrus format. Tequila had its Mexican heritage narrative. Bourbon had its Kentucky story. Gin had mixology culture but no casual, approachable RTD category of its own. The long drink format, refreshing, lower ABV than a straight spirit, more interesting than a hard seltzer, occupied a gap that no incumbent had claimed.

The Timeline

2017 (pre-launch). Evan Burns, an American entrepreneur who had previously founded digital media platform Odyssey, visits Finland with his Finnish friends Sakari Manninen, Mikael Taipale, and Ere Partanen. He is taken to every type of venue and observes the same thing everywhere: long drinks. The founding insight crystallises: nobody owns this category story in America. The four friends begin planning a U.S. launch.

Before a single can is sold, the most important product decision is made: the drink will use a gin base, not a malt base. However: this was not the easiest choice. Spirit-based RTDs face higher taxes and more complicated three-tier distribution in many U.S. states. The founders choose it anyway because it is the only authentic version of the product.

2018: Launch in New York. The brand soft-launches in Manhattan and the Hamptons with a deliberately simple product: four expressions of the original recipe, all gin-based, all citrus-forward. The early marketing strategy is almost entirely ground-level. Tasting events, customer education, point-of-sale materials. Because they are creating a category that Americans have never encountered, trial is the only path to purchase. You cannot explain what a long drink is through an advertisement. You have to taste it.

2019: 33,000 cases and Miles Teller. A few weeks after the Finnish Long Drink launched in a Manhattan store, actor Miles Teller walks into a tasting event hosted by the founders and tries the product for the first time. He becomes a co-owner in summer 2019. DJ Kygo joined in 2020 after tasting the drink at Teller’s wedding and also got Rickie Fowler on board. The founders are consistent on this point: they never had a celebrity strategy. These investors tried the product, loved it, and asked to invest. The brand accepted because the cultural credibility was additive. In 2019, the brand sells 33,000 cases.

2020-2021: Pandemic tailwind and lift-off. The RTD category surges during lockdowns. The Finnish Long Drink benefits disproportionately because it already has a distinctive product and a story, while most new entrants are chasing the White Claw formula with minor variations. Case sales reach over 200,000 in 2020 and 400,000-500,000 in 2021, a 6x increase in two years. In July 2021, the brand closes its largest funding round at $25 million, fueling national distribution expansion.

This is also when Hartwall, the original 1952 manufacturer, enters the U.S. market. Their soft launch begins in September 2020 across Pennsylvania, Maryland, West Virginia, and DC, expanding to eleven states by July 2021. They arrive two years after the Finnish Long Drink, with the stronger historical claim but without the head start.

2022: One million cases and the fastest-growing spirits brand in the world. From 2021 to 2022, case sales more than double from 400,000-500,000 to over 1.1 million, a 114% increase. The Spirits Business names the Finnish Long Drink the world’s fastest-growing spirits brand over one million cases.

This is also the year the malt-based competitive test arrives and is settled definitively. Boston Beer, owner of Samuel Adams and Truly Hard Seltzer, launches Bevy Long Drink. The critical difference: Bevy uses a malt base. It is pulled from shelves in less than a year after failing to gain traction.

January 2023: Miles Teller increases his stake. By this point the brand is distributed in 43 U.S. markets and is the fourth most popular RTD brand in the country. Off-premise retail sales are up 92% year-over-year, outpacing better-known brands from Bacardi and Jack Daniel’s despite having less distribution. Teller’s increased investment is a public signal of conviction from someone with direct visibility into the business.

2023: 1.8 million cases. The brand sells 1.8 million cases, up 80% from 2022. It is now the 8th highest-selling RTD in the U.S. according to 3 Tier Beverages and NielsenIQ. Available in over 34,000 locations and distributed across 43 U.S. markets

May 2024: Marcy Venture Partners invests. Jay-Z’s investment firm, which had previously built and sold a stake in D’USSE Cognac to Bacardi for $750 million, makes a significant investment in the Finnish Long Drink. The investment adds cultural credibility at the premium end and signals that serious capital allocators with deep alcohol industry expertise see a significant exit ahead. Total raised to date: approximately $41 million across multiple (14+) rounds.

2024: 2.6 million cases. Named the 10th fastest-growing spirits brand globally according to The Brand Champions 2025 report.

2025: 3.3 million cases. Roughly 20% year-on-year growth. The brand is available in over 50,000 locations across the U.S. and Canada. Mark Anthony Group, owner of White Claw, is already the Finnish Long Drink’s exclusive Canadian distributor.

April 13, 2026: Mark Anthony Group acquisition announced. The reported price: $325 million. Mark Anthony has not officially confirmed the figure. The deal marks Mark Anthony’s first major spirits-based RTD acquisition, a significant signal given that its portfolio has historically been built on a malt base. Evan Burns stays on as CEO.

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The Finnish Long Drink Playbook

Three decisions define this story. They are more fundamental than operational choices: a thesis, a product bet, and a cultural strategy that all turned out to be right.

Decision 1: Own the category, not just the product.

Most brands enter an existing category and try to win within it. The Finnish Long Drink did something different. Burns and his co-founders looked at a 70-year-old cultural institution and asked a specific question: why does nobody own this story in America?

The tequila analogy is the right one. Tequila is not just a spirit. It is a geography, a culture, a production method, and a set of regulations that together make the category defensible. You cannot make tequila outside of Mexico. The category ownership is structural. Long drink in Finland is the same kind of institution: a government-commissioned origin story from the 1952 Olympics, 70 years of cultural embedding across every demographic, a specific format that is distinct enough to be recognisable.

What the founders saw was that none of this heritage belonged to any single brand in the U.S. market. Calling the brand The Finnish Long Drink rather than something more creative was the right call precisely because of this: the name itself is the category claim.

Decision 2: Choose the harder product, because it was the right one.

In 2018, malt-based RTDs dominated the market. The tax and distribution logic was clear: spirit-based drinks faced higher excise taxes in 45 states, sometimes as much as 35 times the rate applied to a malt-based product with identical alcohol content, and in many states could only be sold through liquor stores rather than grocery and convenience channels. Most brands chose the malt base for exactly these reasons. The Finnish Long Drink chose gin anyway.

The reason was simple: the original recipe uses gin. A malt-based long drink is not really a long drink. It is a malt beverage with a long drink aesthetic, and consumers can eventually tell the difference.

Beyond the higher taxes, spirit-based distribution has limited shelf access through liquor-only channels, a thinner co-manufacturing infrastructure, and a retail price premium that made consumer education harder. All of which the Finnish Long Drink accepted because a malt base would have made the product inauthentic. Several market opportunities took longer to unlock, but the trade-off created the product quality and authenticity that drove word-of-mouth, the pricing power that malt-based competitors could not match, and the category defensibility that made the brand acquirable.

Decision 3: Build the category through experience, not advertising.

Because the Finnish Long Drink was creating a category rather than competing in one, the standard beverage marketing playbook did not fully apply. You cannot run a Meta campaign explaining what a long drink is to someone who has never heard of it. The message does not land without context.

The founders understood this early. The vast majority of their early marketing budget went on ground-level activities: tasting events, customer education, and point-of-sale materials. They built the brand state by state, market by market, with sales teams on the ground in each location.

The celebrity investors reinforced this strategy rather than replacing it. Miles Teller wearing a Finnish Long Drink hat, increasing his investment stake publicly, talking about the product in interviews, was not paid advertising. It was a real endorsement from someone with skin in the game. The same pattern appears in other brands we have studied this year: Grüns with Shaun White and Anna Kendrick, Olipop with the Jonas Brothers and celebrity backers. In each case the celebrity involvement was authentic because the investor came in as a fan first.

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What Went Wrong

The Finnish Long Drink did not arrive in an empty market by accident. Two larger and better-resourced companies tried to bring long drinks to the U.S. and underperformed in different ways.

Boston Beer: the malt-based shortcut. Boston Beer had the distribution, the production capacity, the retail relationships, and the marketing budget. What it did not have was authenticity. Bevy was malt-based, produced in the U.S., and marketed primarily as a refreshing RTD cocktail rather than as a cultural institution. It was pulled from shelves in under a year.

Hartwall: the stronger claim that did not win the U.S. Hartwall is the more revealing competitor, and the one that raises the sharpest question. If authenticity is the moat, why did Hartwall not become the dominant U.S. brand? They invented the recipe in 1952. They hold roughly 70% of the long drink category in Finland. They have been exporting Original Long Drink internationally since 2015, with distribution across 15 countries in Europe and Asia. By any measure of historical legitimacy, their claim to the category is stronger than the Finnish Long Drink's. The funny thing is that I actually know the product. During my student years in Amsterdam, we used to drink the "Originals" often. But I completely forgot about the brand and have not seen it anywhere in years, until I was doing research to write this post. That is itself a data point.

The U.S. outcome tells an interesting story. Hartwall has never publicly disclosed U.S. sales figures, and they do not appear in any of the U.S. RTD ranking reports I could find. Their U.S. distribution footprint, which had expanded to eleven states by mid-2021, had contracted back to six states (New York, California, Massachusetts, Connecticut, Rhode Island, Georgia) by early 2023. In the same period, the Finnish Long Drink scaled to 34,000+ locations across 43 U.S. markets and became the 8th highest-selling RTD in the country. Hartwall tried, expanded, and then pulled back. The Finnish Long Drink kept scaling.

Three reasons stand out for why the stronger historical claim did not translate into U.S. commercial success.

First, they were late. Hartwall soft-launched in the U.S. in September 2020, two years after the Finnish Long Drink. By that point the Finnish Long Drink already had Miles Teller, DJ Kygo, Rickie Fowler, national distribution momentum, and an emerging cultural position. In a category where consumer awareness is near zero, whoever arrives first gets to define the terms.

Second, their positioning did not translate. Hartwall’s U.S. marketing leaned on Finnish ingredients, the 1952 recipe, and partnerships with Finnish cultural figures like race car driver Kimi Räikkönen and regional assets like the Pittsburgh Penguins. Räikkönen is a global F1 star but not a mainstream U.S. celebrity. For U.S. consumers who had never heard of long drinks, the category story apparently lands harder than the ingredient story. You have to explain the what before you can sell the how.

Third, they sold a single product, not a brand platform. Hartwall’s U.S. range is essentially the original recipe. The Finnish Long Drink launched with four variants (Traditional, Zero, Cranberry, Strong) and expanded to seven, giving retailers more SKUs to merchandise and consumers more entry points into the brand.

The broader lesson is subtle but important. Historical authenticity is necessary but not sufficient. Hartwall had the better claim to the category story on paper. The Finnish Long Drink executed better on translating that category story into an American cultural context. In a category creation play, the first brand to make the story resonate with the target market captures the category position, even if a competitor has a stronger claim to the underlying heritage.

The Patterns

This story adds a different dimension to the patterns I have been building across posts this year. Where Grüns was about execution speed and DTC mechanics, this story is about how categories get created, defended, and won in new markets.

Historical authenticity is necessary but not sufficient. This is the most important lesson from the Hartwall comparison. A stronger heritage claim does not beat a better cultural translation. In category creation, the winner is whoever first makes the story resonate with the target market, not whoever has the deepest roots. This applies everywhere: European heritage brands that assume their history will carry them into new geographies tend to underinvest in local cultural translation and lose the category position to challengers who do the translation work.

Category creation requires a different go-to-market playbook than category disruption. Grüns could scale on Meta advertising because the greens supplement category was already familiar to consumers. The Finnish Long Drink had to educate before it could sell. Ground-level tasting events, state-by-state market building, and patient distribution expansion were the only paths to purchase when the category itself was unknown. Founders who apply a standard DTC growth playbook to a genuine category creation story typically underinvest in trial and education and wonder why conversion rates are low.

Authentic celebrity involvement compounds in a way that paid endorsements cannot. The Finnish Long Drink’s celebrity investors all came in as product fans before they came in as investors. A celebrity who invests because they love the product talks about it in interviews without being paid to, wears the merchandise, and increases their stakes. Over eight years, that compounding authenticity built cultural credibility that no advertising budget could replicate.

Mark Anthony’s acquisition is a signal about where the RTD category is heading. White Claw built one of the most successful beverage launches in history on a malt base. Spirit-based RTDs have been taking share consistently since. Mark Anthony buying the Finnish Long Drink is not a bet on a single brand. It is a hedge against the structural rotation in the RTD category from malt to spirits. For investors watching the beverage space, that rotation is the most important trend to track over the next five years.

Is There Room for European Founders?

The Finnish Long Drink story is directly relevant to European founders and investors, and not just as inspiration.

Long drink is already deeply embedded in Nordic culture, and the Finnish Long Drink’s success in the U.S. has validated that the format and the origin story travel internationally. Mark Anthony Group has explicit international ambitions for the brand under its ownership.

But the European opportunity for new founders is not to replicate the Finnish Long Drink directly. That category is now owned. The opportunity is to apply the same founding thesis to other underexplored cultural institutions that have not yet been exported.

There are dozens of regional European drinks with 50-plus years of cultural history, distinctive formats, and zero brand presence outside their home market. Aperitivo culture in Italy has been partially exported through brands like Aperol and Campari, but the category is far from saturated. Central European beer and cider traditions, Nordic functional drinks, and Southern European herbal liqueur categories all contain versions of the same opportunity Burns identified in Finland.

The question a founder should ask is: which cultural institution has a compelling origin story, universal recognition in its home market, and no dominant brand presence in Europe or globally? That is the white space the Finnish Long Drink playbook opens up.

I am watching this actively. The next version of this story is likely to come from a European founder with cultural access to an underexported tradition.

Takeaways

Six things worth remembering from this story.

• Category ownership beats product quality. Burns and his co-founders did not set out to build a better gin cocktail. They set out to own a cultural category that had no owner in the U.S. That is a different kind of ambition, and it produces a different kind of defensibility.

• Hartwall had the stronger claim and still did not win the U.S. Historical authenticity is necessary but not sufficient. The Finnish Long Drink translated the category story into American cultural context faster and better. In new markets, speed of cultural translation beats depth of heritage.

• Trial is the only path to purchase in an unfamiliar category. Tasting events, customer education, state-by-state market building. These are expensive and slow, but there is no shortcut when consumers have never heard of your category. Founders who apply a standard growth model here consistently underinvest in this phase.

• Fan-first celebrity investors compound over time in ways paid ambassadors cannot. The authentic sequence, fan first, investor second, produces a qualitatively different brand relationship. Eight years of Miles Teller wearing the hat is worth more than a hundred sponsored posts.

• The harder product decision was also the more defensible one. Gin over malt meant higher taxes, limited shelf access, thinner manufacturing infrastructure, and a price premium. It also meant a product that could not be credibly copied by a malt-based competitor. Boston Beer took the shortcut and failed within a year.

• Mark Anthony’s acquisition is a strategic signal about the RTD category shift. White Claw’s owner buying a spirit-based RTD tells you where the category is heading. The rotation from malt to spirits in RTDs is structural and has years left to run. Investors who position ahead of that rotation in European markets will find the best opportunities.

Contents

• The Setup: a category with a consumption habit problem nobody had solved

• Why This Category / Why Now: the greens supplement market, who was winning, and why the timing was right

• The Timeline: 32 months of decisions, from a chalky powder to a $1.2 billion exit

• The Grüns Playbook: the six decisions behind the fastest exit in CPG history

• What Went Wrong Before: why the category stayed empty for so long

• The Patterns: what this story tells us about how consumer health brands actually get built

• Is There Room for a European Grüns? the white space, the regulatory reality, and what a European version might look like

• Takeaways: seven things worth remembering from this story

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The Setup

The supplement industry has a problem that almost every founder in the category is aware of and almost none of them have solved.

People buy supplements, take them for two weeks, and stop.

Awareness is high. Distribution has never been easier. The formulations keep improving. None of that matters if the habit does not stick. And for most supplement formats, it does not. Powdered greens are the clearest example. Most people who try them believe the product probably works. They quit anyway, because mixing a scoop of green powder into water every morning, dealing with the chalky taste, the cleanup, the frothy sediment, is for most people a daily friction point that eventually wins.

Chad Janis experienced this himself in the summer of 2022. He was two days into a powdered greens routine, looked at his glass, and had a specific thought: there is no way I am keeping this up past 30 days.

He was right about himself. The more interesting question was how many other people had the same thought and simply walked away from the category entirely.

That question turned into Grüns. The company launched in August 2023 and last week Unilever acquired it for an estimated $1.2 billion. Time from first product to signed acquisition: 32 months!

To put that in context: Chomps has been building since 2012 and is only now approaching a $1 billion valuation. Huel took ten years to reach a €1 billion exit with Danone. Poppi took ten years to reach $1.95 billion with PepsiCo.

I have spent this week trying to understand how 32 months was possible. What follows is what I found.

Why This Category / Why Now

The vitamins and supplements category has over 90% household penetration in the U.S., meaning almost everyone buys supplements at some point. Yet specific subcategories remain surprisingly underpenetrated: general health supplements sit at 58% household penetration, and immunity supplements at just 29%. The gap between intent and consistent behavior is enormous.

The greens powder subcategory, where Grüns competes most directly, was a $10 billion global market in 2024 growing at roughly 8% annually. AG1 proved the premium end of that market over 15 years, reaching an estimated $600 million in annual revenue by 2024 through a high-price subscription model. AG1 demonstrated that serious demand existed for comprehensive daily nutrition. The powder format, which still requires mixing and cleanup, remained a friction layer, although AG1 is obviously a very successful example.

The gummy segment of supplements was already growing. By 2024, gummies represented 23% of total supplement sales. 38% of Gen Z and 30% of millennials said they preferred gummies over pills or tablets. The form factor had proven itself in children’s vitamins for decades. What had not been demonstrated was whether a gummy could carry the nutritional density and clinical credibility of a serious adult greens supplement.

That was the specific gap Grüns stepped into.

The Timeline

What follows is a month-by-month account of 32 months. I find it useful to read slowly, because the speed only becomes real when you see the sequence of decisions and how quickly each one built on the last. This is such an exceptional, fast execution story, that it is worth it to look into this timeline.

Summer 2022 (pre-launch). Chad Janis is a student at Stanford MBA and a former investor at Summit Partners, where he held board seats or observer positions at DTC brands including Chubbies, Brooklinen, Thuma, Ruggable, and Dr. Squatch. His founding insight arrives while attempting a powdered greens routine. He spends the next twelve months in product development: testing different formats and shapes, iterating on formulations, and interviewing 20 potential co-manufacturers before finding one capable of packing a dense, multi-ingredient gummy formula into individual daily sachets. No other brand is doing this format at the time. He raises a pre-seed round of $1.8 million from Sugar Capital, SilverCircle, Chubbies co-founder Kyle Hency, and Brooklinen co-founder Rich Fulop.

Month 1 (August 2023). Grüns launches direct-to-consumer at gruns.co. The product sells at $80 for 28 daily servings, roughly $2.86 per day. Within a couple of weeks, there are days when Grüns brings in $5,000 in revenue. Amazon launches in December 2023. All revenue in this phase is DTC, primarily subscription.

Months 1–12 (August 2023 – August 2024). The entire first year is DTC-only. The team makes five distinct changes to the product based on direct customer feedback. Over 20,000 reviews accumulate, averaging 4.8 stars. Janis hires two in-house R&D managers to maintain the pace of formulation iteration.

Month 6 (February 2024). Grüns closes a $6 million seed round from Vanterra Ventures, Selva Ventures, Able Partners, and Pltfrm Ventures, the firm that helped Feastables scale into retail. Celebrity investors including snowboarder Shaun White and actress Anna Kendrick come on through Plus Capital (no exact date is known when Plus stepped in, so I assume close to this seed round). Total raised to date: approximately $7.8 million.

Month 11 (July 2024). Grüns Cubs, a children’s supplement line, launches. The first product extension demonstrates that the gummy format can carry different nutritional profiles across different consumer segments.

Month 12 (August 2024). Grüns closes an $11.1 million convertible debt round from Vanterra Ventures and Selva Ventures, fueling inventory and distribution expansion ahead of the retail push. Total raised to date: approximately $18.9 million.

Month 14 (October 2024). Grüns reaches profitability. Still DTC-only, with no retail doors. At $80 per month per customer, with 95% of customers using the product four to six times per week, the subscription model generates the LTV required to make paid acquisition economics work without heavy capital deployment.

Month 16 (December 2024). Two things happen simultaneously. Nütrops, a nootropic mushroom gummy for cognitive support, launches. And Sprouts Farmers Market becomes Grüns’ first brick-and-mortar retail partner, launching with the adult low-sugar and no-sugar lines. By the time Grüns enters retail, the DTC business is already profitable with a clear product-market fit signal. Janis’ pitch to retail buyers is consistent: the vast majority of Grüns customers have never purchased a greens supplement before. Grüns is expanding the category, not competing for existing buyers (Sounds familiar to my post about Chomps last week). That argument gives buyers a category growth story rather than a market-share story.

Month 18 (February 2025). They enter Target with 1,600 stores nationwide. Velocities are strong enough that Target brings in Grüns Cubs within two months of the initial launch.

Month 20 (April 2025). They launch in 1,900 Walmart stores.

Month 21 (May 2025). Series B closes. $35 million led by Headline VC, at a $500 million valuation. Annual recurring revenue is confirmed in the nine-figure range. Total raised to date: approximately $54 million. The company is in fewer than 5,000 retail doors and already valued at $500 million, primarily on the strength of the DTC subscription business.

Month 24 (August 2025). Two-year anniversary. Grüns crosses $300 million annualized revenue rate, confirmed publicly by Janis. That figure implies $25 million in revenue in a single month. The company is shipping 4 million gummies per day. DTC remains the majority of revenue. Retail is growing but is additive to a subscription business that is already self-sustaining.

Month 25 (September 2025). Immün, an immunity-focused line with elevated Vitamin C and supporting minerals, launches. It sells out in one day. Gummy production scales to approximately 10 million per day, up from 4 million at the two-year mark.

Month 26 (October 2025). Sam’s Club launch. The first entry into club retail.

Month 28 (December 2025). Jüced, a pre-workout energy gummy, launches. Grüns now has five distinct product lines: the hero adult greens gummy, Cubs for children, Nütrops for cognitive support, Immün for immunity, and Jüced for energy.

Months 29–31 (January–March 2026). Launch in H-E-B, Hy-Vee, Wegmans, and additional regional grocers. Costco nationwide in March. The retail footprint reaches over 6,000 doors. Grüns is now the number one greens supplement on Amazon and in U.S. retail.

Month 32 (April 2026). Ulta Beauty launch. Acquisition by Unilever announced. Estimated price: $1.2 billion, per Axios. Unilever has not publicly confirmed the figure. Total capital raised across 32 months: $55 million, per Janis’s own post-acquisition statement.

The Grüns Playbook

Reading through that timeline, six decisions stand out. What made the speed possible was not any single insight, but how each decision set up the next one.

Decision 1: Ask a different question.

Most founders in the supplement category start by asking what nutrition people need. Janis started by asking why people stop taking nutrition they already know they need. That question points to a different problem and a different solution. The insight was that supplement consumption habits fail, not the awareness or formulation layer. Once you see that, the product design becomes clearer: make a format so convenient and enjoyable that stopping feels like the strange choice.

Each daily sachet contains 60+ ingredients, 30+ organic fruits and vegetables, 21 vitamins and minerals, and six grams of prebiotic fiber. But the pitch to consumers was always simpler: grab and go, no mixing, no mess. The nutritional density was necessary for credibility. The format was what actually drove the habit.

Decision 2: Spend a year on the product before spending a dollar on growth.

Janis did not rush to launch. He spent approximately twelve months in product development before August 2023, testing with over 25% of his Stanford cohort, working through 20 co-manufacturers, and iterating on formulations until the taste was genuinely good. His view was that taste was the single most important variable, because a supplement that tastes like medicine will fail regardless of what it contains.

The result was a product that consistently surprised people. Reviews in the first months used the word “shocked” with real frequency. Consumers expected something functional but unpleasant and got something they actually wanted to eat. That surprise drove organic sharing at a rate that most supplement brands never see. Janis noted that he could not think of another supplement format that people take to a run club or a beach to share with friends. Grüns became that product, and the sharing became free distribution.

Decision 3: Use the first year to build the feedback loop.

In the twelve months after launch, Grüns made five distinct product changes based on customer feedback. Being DTC-only during this period gave the team a direct, unfiltered signal on what was working. By maintaining a majority DTC business throughout the 32 months, even after entering retail at scale, Grüns preserved that feedback channel. The subscription model meant customers were using the product multiple times per week and had strong opinions about it. That relationship between brand and consumer is very hard to replicate through wholesale.

Decision 4: Build the marketing system before scaling distribution.

CMO Connor Dalt built the advertising approach around what he described as “narrative arcs and coordinated sprints.” Rather than testing individual ads, Grüns developed research-driven hooks around specific consumer problems: fiber deficiency, microbiome health, the inconvenience of powder formats. Each angle was tested on Meta. When one worked, it was scaled across dedicated landing pages, segmented emails, and creator partnerships.

The structural principle was avatar specificity. Grüns built multiple versions of its site, each tuned to a different customer profile. The product was the same; the positioning changed depending on who was reading. This approach drove both conversion rates and the retention that justified the $80-per-month price point.

Decision 5: Enter retail only after the DTC economics were proven, then move quickly.

Grüns did not enter a single brick-and-mortar store until month 16. By that point the business was profitable, the product had proven its velocity, and the team had real data on which customer profiles converted. The retail expansion that followed was fast: Sprouts, Target, Walmart, Sam’s Club, Costco, and Ulta Beauty across eighteen months, reaching over 6,000 doors. At retail, Grüns sold at 4.3x the category velocity average, according to Janis.

The sequencing matters. Brands that use retail to find product-market fit typically enter in a weak position, with limited leverage over buyers and limited data to support their claims. Grüns entered from a position of strength, with a proven product and evidence that its customers were net new to the category.

Decision 6: Build with the acquirer’s criteria in mind from day one.

Before founding Grüns, Janis had watched multiple DTC exits from the investor seat at Summit Partners. He had a clear understanding of what large consumer goods acquirers look for: a proven product, strong unit economics, high customer retention, a clean balance sheet, and a financial profile that justifies a premium valuation. He built Grüns toward that profile from the start, which is why $55 million in total capital was sufficient to reach an estimated $1.2 billion outcome.

As Janis himself noted, observing successful exits at Summit Partners gave him a blueprint for what global conglomerates look for in an acquisition target. He did not discover that blueprint while building. He arrived with it already in hand.

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What Went Wrong Before

The honest question to ask about any breakout brand is why nobody did it earlier.

The functional gummy space had predecessors, and most of them failed to solve the same underlying problem.

Children’s gummy vitamins, including Vitafusion and Olly, proved the format worked for habit formation. The challenge was that they were positioned for children with simple formulations that carried no clinical credibility for adult nutrition. Adults who tried them felt the products were not serious enough to justify the habit or the price.

Behave, the low-sugar gummy candy brand, came close to bankruptcy in the summer of 2024 after running out of cash. The company had built a product positioned as better candy rather than effective nutrition, which put it in an awkward middle ground: not convincing enough for health-focused buyers, not indulgent enough for candy buyers. Behave survived by going all-in on TikTok Shop in 2024, went viral with a sour gummy format, and eventually landed in nearly 2,000 Target stores in April 2026. Six years and near-extinction to reach that point.

What Grüns solved that others had not was the combination of genuine nutritional density and a format people actually enjoyed. The product needed to taste like something desirable or the consumption habit problem returned. But it also needed clinical credibility at $80 per month or the price point would not hold. Getting both right simultaneously required the formulation work, the manufacturing partnership, and the year of iteration that most founders cut short.

The manufacturing barrier is also worth acknowledging. Finding a co-manufacturer capable of producing a dense, multi-ingredient gummy in a consistent sachet format was genuinely difficult. Janis spoke to 20 partners before finding the right one. That search, which most founders would have shortened, turned out to be part of what kept the category empty long enough for Grüns to define it.

The Patterns

Studying Grüns alongside the other major CPG exits of the past eighteen months, a few recurring signals emerge that I think are worth naming for investors and founders.

Daily consumption is the foundation of every premium exit. Grüns, Poppi, Huel, Liquid I.V.: every brand that cleared at a significant multiple in the past two years had one thing in common. Customers used the product daily or near-daily as part of a ritual. This is not a coincidence. Daily consumption drives the retention metrics, the subscription economics, and the LTV-to-CAC ratios that justify premium valuations. When I look at a new consumer health brand at seed stage, one of the first question I ask is: is this a daily habit or an occasional purchase? The answer shapes almost everything else about the unit economics.

The best exits solved a behavioral problem, not just a product gap. Grüns did not win because it had better ingredients than AG1. It won because it solved the consumption habit problem that AG1 and every powder brand before it had left unaddressed. Poppi did not win because its prebiotics were superior. It won because it gave health-conscious consumers a socially acceptable alternative to soda, something they could drink at a party without explaining themselves. Dr. Squatch did not win on formulation. It won because it gave men a way to care about their grooming without feeling like they were doing something out of character. In each case the functional benefit was the entry point and the behavioral identity was the moat. At seed stage, I am looking for brands that understand which problem they are actually solving.

DTC-first is now a prerequisite, not a differentiator. Unilever explicitly cited Dr. Squatch’s first-party data as a core acquisition rationale. The same logic applied to Grüns, Liquid I.V., and Nutrafol. Large CPG acquirers are not just buying revenue. They are buying the customer relationship, the subscription data, and the ability to understand who is buying, how often, and why. A brand that went straight to retail without building a DTC foundation first is a much less interesting acquisition target, because the acquirer has to figure out the customer from scratch. This is one of the clearest structural shifts in consumer brand building over the past five years.

The M&A window is open right now, but it will not stay open indefinitely. Six major consumer brand deals worth nearly $9 billion closed in the eighteen months to April 2026, according to Sugar Capital. PepsiCo, Unilever, Hershey, and others are all operating under the same structural pressure: organic growth in legacy categories is broken, and buying established brands is faster than building them. That pressure creates a genuine window for well-built brands. But the standards have also moved significantly higher since the first DTC wave. The brands clearing at premium multiples now all share clean unit economics, real retention, and category leadership. Hype-driven brands with no profitability path are not clearing in this market. The window is open for the right assets, not for all assets.

The acquisition is not the finish line. The pattern in each M&A failure is the same: the cultural identity and DTC relationship that made the brand valuable were eroded by the acquirer. The brands succeeding post-acquisition, such as Liquid I.V. (Unilever) that grew revenues from $200 million to $1 billion within 6 years under Unilever’s ownership, are the ones where the acquirer added distribution without touching the brand. For founders, this means the terms of the acquisition, specifically the autonomy provisions and the commitment to the DTC channel, matter as much as the headline price. Janis staying on as CEO and Grüns continuing to operate as a standalone brand under Unilever are not incidental details, but they are the conditions under which the acquisition can succeed.

Is There Room for a European Grüns?

The short answer is yes, with important caveats.

The U.S. market had structural advantages that accelerated Grüns specifically. DTC infrastructure on Meta and Amazon is more mature and more cost-efficient than in Europe. Retail consolidation in the U.S. means that landing Target, Walmart, and Costco covers a large proportion of the addressable market quickly. European retail is much more fragmented with separate buying processes and ranging timelines.

The regulatory environment also differs. EU health claims regulation (Regulation 1924/2006) places strict limits on what functional food and supplement brands can claim on packaging or in advertising. The specific health language Grüns uses in the U.S. would require either reformulation of messaging or regulatory approvals in most European markets. This is not the biggest problem, but it adds time and cost.

That said, the core consumer insight translates directly. European consumers face the same problem with supplements that U.S. consumers do. The greens powder category is growing in Europe, and the same demographic of health-conscious millennials and Gen Z is just as reluctant to maintain inconvenient health routines.

The European opportunity will probably look different in positioning. The white space is likely in functional gummies built on European health credentials: clean-label, transparent sourcing, EU-certified organic ingredients, and health claims navigated carefully within the regulatory framework rather than pushed against it. A brand that can combine the format innovation Grüns demonstrated with European ingredient standards and regulatory compliance has a credibility advantage that a U.S. import trying to adapt does not.

Now that Unilever’s acquisition has validated the category at scale, European consumer investors will be watching this space closely. The founding insight behind Grüns, that the behavioral problem is more important than the formulation problem, is just as relevant in Europe as it is in the U.S.

Takeaways

The Grüns story is worth studying because almost every decision in it was a deliberate inversion of how the supplement category had always worked. Below are the seven things I think matter most.

• Janis asked a different question than everyone else in the category. Most supplement founders ask what nutrition people need. He asked why people stop taking nutrition they already know they need. That question led to a different product design, a different customer target, and ultimately a different financial outcome.

• The form factor carried more weight than the formulation. 60+ ingredients in a gummy sachet you can grab on the way out the door, share at a run club, and actually look forward to eating: that combination had not been done before at this level of nutritional density. The ingredients established credibility. The format created the habit. Both were necessary.

• Being a PE investor before being a founder was a structural advantage. Janis had watched the full DTC playbook execute across multiple companies before he ran it himself. He also understood exit criteria from the acquirer’s perspective before he started building. He did not discover what Unilever looks for while trying to sell to them. He built toward that profile from the first product decision.

• The subscription model funded the growth. At $80 per month with 95% of customers using the product four to six times per week, the unit economics generated enough margin to fund growth without aggressive capital deployment. Grüns raised $55 million and returned an estimated $1.2 billion. That ratio is a direct result of getting the subscription mechanics right before scaling anything else.

• Retail worked because DTC came first. Sixteen months of DTC-only operations answered every question a retail buyer would ask, before Grüns walked into a single buyer meeting. The retail expansion that followed, from zero to over 6,000 doors in eighteen months, was fast precisely because the groundwork had been laid.

• The manufacturing problem kept the category empty. Grüns was not the first brand to consider putting comprehensive nutrition into a gummy format. What kept the category open was that the co-manufacturing problem at clinical density in a daily sachet was genuinely hard. Twenty potential partners were contacted before the right one was found. That search was part of the moat.

• Unilever’s move is the signal, not just the deal. A company divesting $45 billion in legacy food brands to build a portfolio of DTC-native wellness brands with recurring revenue is making a clear statement about where it sees value in consumer goods. Liquid I.V., Olly, Nutrafol, and now Grüns: each acquisition follows the same logic. For investors, the question worth asking is which European brand could be the next entry in that portfolio.

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Contents

• The Setup: Chomps sells an estimated 2 million meat sticks a day and is on track for $900 million in revenue. How a $6,500 side hustle became the fastest-growing snack brand in America.

• Why Now: Sales in the category grew 6.6% in 2025 alone, outpacing the broader savory snacks market. This is driven by the same market tailwinds we’ve seen in other industries that were covered before.

• What the Winners Got Right: Chomps ($900M in revenue), Krave ($240M Hershey exit), Country Archer ($300M in revenue, 90% YoY growth), and what separates them from legacy brands.

• What Went Wrong: The incumbents had every advantage and still lost share to insurgent brands.

• The Patterns: Five lessons on building in meat snacks.

• Is There Room Left: Europe’s $3 billion meat snack market has no clean-label insurgent brand at scale.

• Takeaways: What founders and investors should remember.

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The Setup

Chomps sells an estimated 2 million meat sticks a day. Until recently, that was not enough.

For years, the company could only fulfill roughly 85% of its orders. It turned down requests from new retailers. It delayed entering new markets and developing new products until it could meet existing demand. This year, according to co-founder Rashid Ali, is the first where Chomps finally has enough infrastructure to keep up.

Founded in Naples, Florida in 2012, Chomps is on track to top $900 million in annual revenue this year, according to Forbes estimates, up from $660 million last year and $50 million in 2019. Its meat sticks, made with grass-fed and finished beef, venison, and antibiotic-free turkey, are now sold in some 50,000 retailers including Walmart, Target, Costco, Kroger, Publix, and H-E-B.

Forbes estimates Chomps is worth north of $1 billion. Co-founder Pete Maldonado holds an estimated 35% stake (worth at least $350 million) and Ali owns an estimated 20% (worth $200 million). They control the majority of the company.

The valuation implies roughly a 1x revenue multiple, or approximately 20x EBITDA. Forbes estimates Chomps’ 2025 EBITDA was about $50 million on an EBITDA margin of roughly 7%, with profitability limited by the cut its manufacturers take and rising beef prices.

“Just having Chomps getting to the level where it is right now, and then on top of it, understanding that we’ve only scratched the surface of where it can go is just mind boggling to me,” - Maldonado

Maldonado moved from the co-CEO role to chairman last year. “Now is the first time we’ve got all the capacity from a production standpoint, and so now we get to find out really how high is high.”

Why This Category / Why Now

Meat snacks have quietly grown to a huge market, with only the US market being a $5.5 billion ‘juggernaut’. Sales in the category grew 6.6% in 2025 alone, outpacing the broader savory snacks market, according to Bank of America Global Research. The global market today is projected to expand from $9.56 billion in 2024 to $16.57 billion by 2033, with a healthy 6.3% CAGR.

Three forces explain the acceleration.

The first is the protein obsession. Consumers are actively seeking high-protein snacks, driven by fitness culture, GLP-1 drug adoption (which increases the importance of protein intake to prevent muscle loss), and a broader shift toward macronutrient awareness. Meat sticks deliver 10-15 grams of protein per serving in a portable, shelf-stable format.

The second is the clean-label revolution reaching meat snacks. For decades, the category was defined by Slim Jim and Jack Link’s: high sodium, artificial preservatives, added sugar, MSG, and long ingredient lists. In my childhood, there was one, famous, meat stick: the ‘Bifi’. Very tasty and popular at least 20 years ago, but it has high salt (4.5g/100g), high saturated fat (14g/100g), nitrite preservatives linked to cancer risk, and it’s highly ultra-processed classification make BiFi a poor (nutritional) choice today.

A new generation of brands has rewritten the formula. Chomps is the clear winner nutritionally: cleaner ingredients, no synthetic nitrites, better protein density, and higher quality meat sourcing. In addition, Chomps is the only meat snack brand that is simultaneously Whole30 Approved, Certified Gluten-Free, Certified Paleo, Keto Certified, Non-GMO Project Verified, and Allergy-Friendly. It was also among the first to be Non-UPF (Ultra-Processed Food) Verified. The ingredient list has become the brand.

The third is a consumer base that is far wider than expected. Chomps discovered that roughly 70% of its customers are women, in a category that had always marketed exclusively to men. By building a brand that resonated with health-conscious parents, fitness enthusiasts, and busy professionals, Chomps unlocked a much larger addressable market than anyone in the category assumed existed.

Strategic acquirers have noticed. Hershey acquired Krave Jerky for $240 million in 2015. General Mills bought Epic Provisions in 2016. Conagra acquired Fatty Smoked Meat Sticks in 2024. PepsiCo entered the category with Good Warrior. Jack Link’s opened a $450 million processing plant in Georgia. The capital flowing into meat snacks mirrors what we have seen in sauces and spices, complete nutrition, and protein bars.

What the Winners Got Right

Chomps

Chomps is the defining case study of this category. Pete Maldonado grew up on Long Island eating gas station meat sticks. As a personal trainer, he watched clients struggle to find clean, high-protein snacks. In 2011, at a poker game, he pitched the idea to Rashid Ali, who was working in consulting and private equity. A few weeks later, they started Chomps as a side hustle with $6,500.

The original concept was shipping frozen, grass-fed beef directly to consumers. After six months with barely any sales, Maldonado had the idea to pivot to meat sticks, particularly because shipping dried meat instead of frozen products was less expensive and required far less capital. That pivot made bootstrapping possible, and the business became profitable within 30 days.

“We learned how to manage our cash, build the business properly, and make sure we price it the right way,” - Ali

For the first four years, Chomps products were sold only online, and both founders kept their day jobs: Maldonado selling commercial real estate in Naples, Ali working in consulting and private equity in Chicago. Revenue grew slowly. $35,000 in year one. $100,000 the next. They did not go full-time until revenue consistently hit $400,000.

Then came an early and important connection. Carter and Courtney Reum, investors who later co-founded the venture capital firm M13, had backed Krave Jerky and done well when Hershey acquired it for $240 million in 2015. Maldonado reached out to the Reums to see if they wanted to sample Chomps. The next year, they invested more than $500,000.

Around the same time, Chomps secured its first retailer: Trader Joe’s. The purchase order exceeded $1 million, a dramatic leap for a company doing $400,000 a year. Chomps ended 2016 with over $4 million in estimated revenue.

“We have always been focused on depth versus breadth,” - Ali

For the next two years, Chomps focused on growth at Trader Joe’s, then in 2018 added Albertsons, which helped bring revenue to an estimated $20 million. Then came Walmart, Meijer, Wegmans, and Whole Foods.

A critical format decision accelerated the growth. Chomps introduced multi-packs for retailers like Costco and Target. “It allowed us to get far more sticks in a home,” recalls Ali.

“It also allowed the product to not just be for the mom, but also for the full family. The dad’s now eating the product. The kids are now eating the product. And it didn’t cannibalize our single stick prices. We’ve always focused on unit economics.”

By 2021, Chomps had surpassed $200 million in revenue, still without institutional capital. At that point, Maldonado and Ali sold a minority stake to Boston-based Stride Consumer Partners for $80 million, in a deal that valued the startup at $300 million, according to PitchBook.

“There still are a lot of products out there that don’t check nearly as many of the boxes that Chomps does,” said Stride partner Juan Marcos Hill. “It’s really hard to put a ceiling on how far they can take it.”

Since then, Chomps has raised strategically: debt rounds with SG Stonegate Capital, and a $100 million line of credit with Wells Fargo in 2025, largely to fund production capacity.

What makes the growth story most compelling from an investor perspective is the incrementality. Last year, 81% of Chomps’ growth came from buyers new to the meat snack aisle. Before Chomps, most legacy brands were very masculine. Chomps brought in many new consumers through the stick format and basically enlarged their own market, instead of stealing share from competitors.

The company is now expanding into adjacent occasions. A Savory Breakfast flavor launched this month, targeting consumers who already eat Chomps in the morning. Chomps is also pushing deeper into convenience stores, now sold in 12,500 gas stations including Wawa, Love’s, and 3,000 7-Eleven locations. “We’re just cutting our teeth, easing into it to make sure we know what we’re getting into,” says Ali.

“In 10 years, when someone sees the Chomps logo, they’ll immediately recognize and trust it,” says Maldonado. “We’re not looking to build another better-for-you brand. We’re creating best-for-you.”

Krave Jerky

Krave Jerky set the original benchmark exit for meat snacks. Founded in 2009, Krave reached approximately $35 million in revenue before Hershey acquired it for $240 million in 2015. The Reum brothers’ early success with Krave directly led to their investment in Chomps, creating a through-line between the two defining companies in clean-label meat snacks.

Country Archer

Country Archer is the current fast-mover alongside Chomps, with estimated 2025 revenue of $300 million and 90% year-over-year sales growth. Country Archer is building a second plant in Los Angeles to nearly double capacity, and has pushed product innovation further with ancestral beef blend sticks featuring organ meats.

In 2017, Archer really took off when they introduced meat sticks. When they launched, the company started with jerky because it’s portable, it’s a snack and it’s high protein. However, the sticks were much easier to eat and have zero to low sugar, which made it an even more compelling, functionally driven snack.

What Went Wrong (or: The Risks)

The incumbents had every advantage: distribution, brand recognition, manufacturing scale, decades of shelf space. They still lost share.

Slim Jim (Conagra) and Jack Link’s ($2 billion in annual revenue) dominated the category but failed to respond to the clean-label shift. Their products were built for a different era. When the protein trend converged with the clean-label movement, these brands were on the wrong side of consumer expectations.

The risks ahead are real. Retailers are starting to compete directly. Costco and Target have both begun manufacturing their own private-label meat sticks. Jerky, which Jack Link’s and Archer sell in addition to sticks, is harder for retailers to replicate.

Manufacturing remains the biggest operational constraint. Chomps’ profitability is limited by its reliance on co-manufacturer Western Smokehouse Partners, which opened a new facility exclusive to Chomps in July 2025. A second plant in Nebraska is planned for 2027. Any potential acquirer would likely need to address the manufacturing question, possibly by acquiring Western or building a dedicated factory.

Insiders say Chomps has hired bankers to explore exit options, which could include an IPO or acquisition. Hill and Ali both say the company is not looking for a quick sale. Any acquirer would need to spend substantially at a time when many publicly traded food companies are under pressure. Conagra, maker of both Slim Jim and Fatty, has seen its stock slide over 10% in the past year.

“A lot of these brands are fly-by-night,” says Ali. “Maybe they get a big surge and then they just fizzle and I don’t want that to happen.”

The Patterns

Bootstrapping builds leverage. Chomps bootstrapped for nearly a decade before taking outside capital at a $300 million valuation. The founders kept majority control. The same pattern played out with Huel, where Julian Hearn bootstrapped to £40 million ARR before raising and kept 49% at exit.

Pivot early, then focus relentlessly. The original concept (shipping frozen beef) failed within six months. The pivot to shelf-stable meat sticks made bootstrapping possible. Since then, 90% of revenue comes from three SKUs. Country Archer pivoted to meat sticks, which was the moment they took off. The discipline to have strong focus while still being flexible enough to pivot if possible, and not expand the product line too early is a recurring trait of the best-performing brands we cover.

The ingredient list is the moat. In sauces (Bachan’s), protein bars (RXBAR), and now meat snacks (Chomps), the brands that won did so by making the ingredient list the core of their identity. Chomps’ certifications are structural commitments that legacy brands cannot easily replicate.

Win through incrementality, not share theft. 81% of Chomps’ growth came from consumers new to the category. That is the single most powerful data point a brand can bring to a retail buyer.

The real audience is not who you think. 70% of Chomps’ customers are women, in a category built for men. The brands that challenge assumptions about who the customer is tend to unlock significantly larger markets.

Is There Room for New Entrants?

The U.S. market is crowded. Europe is a different story.

Europe’s meat snack market is valued at approximately $3 billion and growing at nearly 9% annually, projected to reach $6.9 billion by 2033. The protein trend driving growth in the U.S. is arriving. Consumer demand for high-protein, low-sugar, clean-label products is increasing across the continent.

Europe has no Chomps. No clean-label, DTC-first, insurgent meat snack brand at scale.

Meat snacks are expected to become popular among European consumers and the trend is already visible. In fact, 48% of the growth foreseen is expected to be supported by Europe, according to the study. France, Germany, and Spain are the key markets for meat snacks in Europe, according to research firm Technavio.

The largest European producer, Meatsnacks Group (part of Valeo Foods), sells legacy brands. In 2024, the Sidemen launched “Sides” in 3,000 Tesco stores, but that is influencer-driven, not ingredient-driven. Small brands like Ember (UK biltong) remain early-stage.

Europe also has a structural advantage no one has exploited: a deep tradition of cured and dried meats. Spain has jamón. Italy has bresaola. South Africa’s biltong tradition has gained traction in the UK. The production expertise, cultural familiarity, and raw materials all exist. What is missing is a brand that repackages this tradition into a modern, clean-label, high-protein, convenient format with the DTC-first playbook that Chomps has proven.

The category has a demonstrated exit path. The Chomps playbook is transferable. The European market is large, growing fast, and wide open.

Takeaways

Meat snacks are one of the fastest-growing categories in food, driven by the same forces reshaping every category we cover on The Food Stack: protein demand, clean-label expectations, convenience, and a consumer base broader than the industry assumed.

• The meat snacks market is another example of a fast-growing, huge market that is driven by the current market tailwinds.

• There are several successful case studie: Krave Jerky, Country Archer and Chomps. Studying their playbook reveals insights for emerging brands in Europe.

• Key strategic decisions of these winners were pivoting when necessary (Country Archer) and having strong SKU focus (Chomps). When asked about their biggest innovation, one founder said it was not adding a new flavor. It was getting better at making the existing ones.

• DTC-first, then retail. From 2012 to 2016, Chomps sold exclusively through its own website, Amazon, and Thrive Market. The DTC phase built a loyal customer base and proved demand before the founders took the risk of retail expansion. This is the same sequence Huel, Graza, and every successful insurgent brand we have covered on The Food Stack has followed.

• Data-driven retail expansion. Chomps hired data analysts before it hired a sales team. When the company walked into retail meetings, it could demonstrate that it was bringing new customers to the category rather than stealing share from existing brands. That insight, backed by data, opened doors that would have stayed closed for a brand relying on pitch decks alone.

• Clean-label as brand identity, not marketing. Chomps is the only meat snack brand that is simultaneously Whole30 Approved, Certified Gluten-Free, Certified Paleo, Keto Certified, Non-GMO Project Verified, and Allergy-Friendly. It was also among the first brands to be Non-UPF (Ultra-Processed Food) Verified. The ingredient list is the competitive moat.

• The incumbents (Slim Jim, Jack Link’s) failed to anticipate the clean-label shift. Acquirers chose to buy insurgent brands rather than reformulate legacy products.

• There is no clear EU market leader that is following the Chomps of Country Archer playbook. Who is paying attention and dives into this gap?

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Contents

• The Setup: Last week, Danone acquired Huel for approximately EUR 1 billion. What that deal says about where food is heading.

• Why Now: The complete nutrition category is growing at 7-8% annually. GLP-1 drugs, convenience culture, and protein demand are converging.

• What the Winners Got Right: Huel (EUR 1B exit), YFood (EUR 430M valuation, sold 49.95% to Nestle), and what separates them from the rest.

• What Went Wrong: Soylent pioneered the category and lost the lead. What went wrong.

• The Patterns: Four lessons on building in complete nutrition.

• Is There Room Left: Where the next opportunity sits for European founders.

• Takeaways: What founders and investors should remember.

The Setup

Last week, Danone announced it has agreed to acquire Huel for approximately EUR 1 billion. The deal is the largest exit in the complete nutrition category to date.

Huel was founded in 2014 in the UK by Julian Hearn. Hearn left school at 16, worked in retail, and spent two years digging holes in roads before building a career in marketing at Tesco, Waitrose, and Starbucks. The premise behind Huel was simple but ambitious: create nutritionally complete, convenient, affordable food with minimal environmental impact. Powdered meals you mix with water. Every essential macronutrient and micronutrient in one serving.

Twelve years later, Huel generated £250 million (according to a Dow Jones source) in revenue in FY2025 (up 16% year over year), with pre-tax profit tripling to £13.8 million in FY2024. The brand has sold over 500 million meals to more than 4 million customers (o/w 1 million ‘active customers’ in 2023) across 100+ countries. It is available in over 25,650 retail stores globally, up from 11,250 the year before.

One detail that stands out: Hearn bootstrapped Huel to £40 million in ARR before raising his Series A. That single decision changed the entire economics of the company. When you raise at £40 million ARR, your pre-money valuation is based on real numbers, not projections. Hearn gave up approximately 20% in his Series A instead of the 20-25% a pre-revenue founder would give up at a fraction of the valuation.

Even after raising approximately $184 million across three rounds (Series A led by Highland Europe, Series B, and a growth round led by Morgan Stanley’s 1GT fund), Hearn retained 49% ownership at exit, netting roughly £420 million personally according to Companies House filings. For context, most DTC founders who raise that much end up owning 15-25% at exit. The difference in Hearn’s case was worth approximately £180 million in additional exit proceeds.

The investor returns were strong across the board. Highland Europe, which led the early rounds, generated an estimated 6-7x return. Morgan Stanley’s growth round generated approximately 2x. Celebrity investors including Idris Elba, Steven Bartlett, and Jonathan Ross held equity rather than endorsement deals, which meant their promotion of the brand was authentic rather than transactional. Employee option holders collectively received approximately £76 million.

Danone’s CEO Antoine de Saint-Affrique said Huel’s positioning “fully resonates” with Danone’s focus on health through food. Huel’s CEO James McMaster said the company has built “a brand with a positive impact on people’s health” with “a strong direct-to-consumer foundation, an expanding international footprint, and a retail business that’s scaling quickly.”

The acquisition multiple is roughly 3.4x revenue on the FY2025 figure. On an EBITDA basis, it depends on the exact FY2025 EBITDA number. Profitability was consistently improving and grew to a 8.5% EBITDA margin in 2024. Rumours say the EBITDA margin in 2025 was 10%, leading to an implied EBITDA multiple of 34x, which is very high but priced for margin expansion under Danone’s scale.

Danone is likely underwriting further margin expansion through its own manufacturing infrastructure, supply chain scale, and global distribution. The deal also includes a significant GLP-1 tailwind: analysts note that Huel is well positioned for users of weight loss drugs who eat less overall but need nutritionally dense, convenient options when they do eat.

What makes this deal significant is not just the number. It is what it confirms about where the food industry is heading.

Why This Category / Why Now

The global meal replacement market is valued at approximately $18 billion in 2025 and projected to grow at 7% annually. The European segment alone is worth over $4 billion and is projected to grow as well by c. 7% per year (Fortune Business Insights).

The meal replacement category has undergone a rapid transformation in recent years. Three forces are driving the category.

The first is convenience culture at scale. Modern consumers, particularly working professionals and urban populations, are increasingly replacing traditional meals with nutritionally optimized alternatives. Although this started as a niche behaviour, it has shifted to become mainstream. According to USDA data, Americans spend more than half of their food expenditure on convenient foods. The shift toward hybrid work, extended hours, and on-the-go eating has made meal replacement products a structural part of how a growing segment of the population eats.

The second is the protein and nutrition awareness wave. Consumers are paying more attention to macronutrients than ever before. The rise of tracking apps, the GLP-1 drug trend (which pushes users toward higher protein intake to prevent muscle loss), and the broader “protein-ification” of the food aisle are all driving demand for products that deliver complete, measurable nutrition in convenient formats.

The third is strategic acquirer interest. Danone buying Huel is not an isolated event. Nestle acquired a 49.9% stake in YFood in 2023, valuing the German complete nutrition brand at EUR 430 million. These are the two largest food companies in Europe, and both have made significant bets on the category within three years of each other. When Danone and Nestle are both moving into a space, the category has crossed from niche to strategic.

What the Winners Got Right

Huel

Huel built the category playbook for complete nutrition. The core insight was that a meaningful segment of consumers would trade the experience of eating a traditional meal for the efficiency of complete, measured nutrition. That sounds obvious now. In 2014, it was a contrarian bet.

Before we dive in, some background about Julian is important. In a 2019 interview with the Grocer, he said Huel was “constructed on a spreadsheet, not in a kitchen”. All decisions he made, including the key ones that led to success (see below) were based on financial discipline and analysis.

What Huel executed well:

1. DTC-first distribution. Huel built its business primarily through direct-to-consumer subscriptions, which created predictable revenue, high customer lifetime value, and direct access to consumer data. The subscription model offered a 20% discount, driving retention. The company built a community of “Hueligans” that became its most effective growth engine: 22% of customers refer friends, and 60% of those referrals convert. That referral loop drove a 12% year-over-year increase in referral revenue. Only after establishing a loyal DTC base did Huel expand aggressively into retail, doubling its store presence from 11,250 to 25,650 in a single year. The UK now generates £110 million+ annually, with supermarkets accounting for more than a third of UK revenue.

2. Strong focus on unit economics. He engineered the bag size and the £45 AOV so DTC economics worked directly. In addition: no returns, low shipping costs, no cold chain expenses / logistics, monthly consumption cycle. All very attractive for a DTC business.

3. Inventory efficiency through smart formulation. Huel uses neutral flavor bases with separate flavor boosts, meaning the same powder can taste like vanilla or banana without maintaining separate SKUs. This reduces inventory complexity and waste, a detail that matters significantly at scale.

4. Product range expansion beyond powder. Huel started with powdered meals but expanded into ready-to-drink shakes, hot and savoury meals, protein bars, snack bars, supergreens, and functional beverages. This turned a single-product company into a complete nutrition platform. Each new format brought in a different customer segment and a different use occasion. The hot and savoury launch alone boosted sales by 20%.

5. Smart fundraising strategy led to low dilution. Julian bootstrapped to £18m in revenue before raising from Highland Europe. When you raise at £18m revenue your valuation is 3-4x revenue, not 1-2x. Only then he raised the Series A (£20m at £60m pre - 25% dilution); series B: £75m at £140m revenue; and an aggressive growth round: £100m at £230m - 17% dilution).

   The result? Total raised: ~£200m. total dilution: ~45%.

6. Vertical integration. Huel opened its own manufacturing facility in Milton Keynes in 2024, giving it direct control over quality, margins, and innovation speed. Most startups in this category use contract manufacturers. Huel’s decision to build its own factory was a bet on long-term margin improvement, and the numbers support it. According to Huel’s annual reports, gross margins recovered from 55% in 2022 (when supply chain inflation hit) to 59% by 2024. EBITDA doubled from £9.8 million to £18.2 million in a single year. Marketing efficiency also improved as the brand scaled: Huel’s marketing spend as a percentage of revenue declined from 44% in 2021 to approximately 33% in 2024, even as revenue grew. That is the opposite of what most DTC brands experience at scale, where customer acquisition costs typically rise as the addressable market narrows.

7. Science-driven formulation with a mission wrapper. Huel’s products are plant-based, B Corp certified, and marketed as good for both the consumer and the planet. That combination of functional nutrition and sustainability positioning (“50% less CO2 impact than the average meal”) resonated with the health-conscious, environmentally aware consumer base that Danone is trying to reach.

8. Geographical focus: Huel sells in over 100 countries, but the revenue concentration tells the real story: the UK accounts for approximately 50% of revenue (£110 million+) and the U.S. contributes roughly 30% (£67 million). Rather than spreading resources thin across dozens of markets, Huel built deep penetration in two core markets before expanding. That focus allowed the company to achieve dominant retail presence (70% of UK supermarkets) and build a meaningful U.S. business worth over $100 million before using the Danone acquisition as the platform for broader international expansion.

So, what made Danone buy Huel?

Danone has been reshaping its portfolio around health-focused nutrition under its "Renew Danone" strategy. Huel gives Danone something it could not easily build internally: a DTC-first brand with nearly a million active customers, best-in-class digital capabilities, and a direct relationship with the health-conscious consumer that Danone's traditional retail model has struggled to reach. Moreover, it buys a fast-growing brand with many synergies identified to realize margin improvement and accelerate growth.

Source: DigitalFoodLab

YFood

YFood is the European validation story. Founded in Munich in 2017 by Ben Kremer and Noel Bollmann, YFood focused on ready-to-drink meal replacements with 34 grams of protein per bottle. The brand grew quickly across Germany and expanded into the UK and France.

In April 2023, Nestle acquired a 49.9% stake in YFood, valuing the company at EUR 430 million. What made this deal remarkable: YFood had raised only $22.6 million in outside funding before the Nestle deal. The founders retained majority ownership, keeping strategic and operational independence.

YFood proved two things. First, that the complete nutrition category can produce significant outcomes even at a relatively early stage (the company was only six years old at the time of the Nestle deal). Second, that a European brand can attract a global strategic acquirer without first needing to crack the U.S. market. YFood was primarily a European business when Nestle invested.

What Went Wrong (or: The Risks)

Soylent is the cautionary tale. Founded in 2013 in Los Angeles with backing from Andreessen Horowitz and GV, Soylent was the original complete nutrition brand. Total funding reached $74.5 million. It should have been the category leader.

Instead, repeated quality failures defined the brand. A product recall in 2016 due to a contaminated ingredient. Another in 2017 for undeclared milk. Heavy metal labeling concerns. Each incident eroded consumer trust in a category where trust is the product.

By 2023, Soylent was acquired by Starco Brands for a fraction of its peak valuation. Revenue was approximately $38 million. Compare that to Huel at £250 million. The company that invented the category was overtaken by a brand that launched a year later and built trust instead of losing it.

The lesson: in food, trust compounds and distrust compounds faster. Huel invested in its own manufacturing, maintained quality control, and earned B Corp certification. Soylent relied on contract manufacturers and suffered repeated quality lapses. The quality premium paid off at exit.

The Patterns

DTC-first, retail second is the winning sequence. As we have seen in olive oil (Graza), electrolytes (LMNT), condiments (Bachan’s), and protein bars (RXBar, David), Huel and YFood both built loyal subscription bases before expanding into physical retail. The DTC model creates predictable revenue and direct consumer relationships. Retail expansion works best when backed by a proven product and an existing customer base.

The category has moved from “weird” to strategic. In 2014, powdered meal replacements were a niche curiosity. In 2023, Nestle paid EUR 215 million for a 49.95% stake in YFood. In 2026, Danone paid EUR 1 billion for Huel. The two largest European food companies have validated the category with significant capital.

Complete nutrition is a platform, not a product. Huel’s evolution from powder to RTD to bars to hot meals to supplements demonstrates the expansion potential. The EUR 1 billion valuation reflects a platform.

Vertical integration and quality control separate the winners from the rest. Soylent relied on contract manufacturers and lost its position through quality failures. Huel invested in its own factory and earned B Corp certification. In a category built on nutritional precision, controlling your manufacturing is the clearest competitive advantage.

Is There Room for New Entrants?

Huel and YFood have demonstrated that the complete nutrition category can produce significant exits. The strategic acquirers are active. The consumer demand is real and growing.

But the category faces a fundamental tension. Consumers in 2026 are full of contradictions: they want convenience and health, but they also want “real” food. Concern about ultra-processed foods is rising (the FDA is actively working on a definition for the term), and the clean-label movement that is reshaping categories like protein bars and sauces is coming for meal replacements too. The category’s long-term growth depends on whether brands can deliver complete nutrition in formats that feel closer to food and further from supplements.

This tension is also the opportunity. The brands that will win the next phase of complete nutrition are those that solve for both convenience and ingredient quality.

Several format trends point the way:

1. Ready-to-drink is the fastest-growing format, expanding at over 10% annually. RTD products are attracting mainstream consumers beyond traditional supplement users, driven by taste improvements and grab-and-go convenience. YFood built its entire business around RTD, and it was compelling enough for Nestle to invest at a EUR 430 million valuation.

2. High-protein, high-fibre convergence is emerging as the next formulation frontier. Protein dominates the current generation. But fibre is the quiet gap: most consumers do not get enough of it, and the health evidence for fibre (gut health, satiety, blood sugar management) is strong. A complete nutrition brand that leads with both protein and fibre density has a differentiation opportunity.

3. Functional specificity is replacing one-size-fits-all. Rather than “complete nutrition for everyone,” the next wave may target specific outcomes: gut health, cognitive performance, energy, sleep, or recovery. Products that deliver measurable results for specific needs can command higher loyalty and premium pricing.

4. Hydration-nutrition crossover is blurring the line between drinks and meals. Functional beverages that combine hydration with meaningful nutrition are emerging as a format that fits naturally into daily routines without the “meal replacement” label that still carries stigma for some consumers.

The playbook is now visible. DTC-first, science-driven formulation, product platform expansion, retail as the second act. The Huel exit and the YFood deal have de-risked the category for investors. The question is no longer whether complete nutrition is a real category. It is who builds the next version of it, with formats and formulations that bridge the gap between convenience and real food.

Takeaways

Danone’s EUR 1 billion acquisition of Huel is the most significant exit in the complete nutrition category to date. It confirms that convenience-driven, science-backed nutrition brands can build billion-euro outcomes, and that the category has moved from niche to strategic.

• Huel: $184M raised, EUR 1B exit, founder retained 49% ownership. £250M revenue in FY2025, 25,650 retail stores. Bootstrapped to £18M before raising Series A. The ownership discipline and capital efficiency are as instructive as the exit itself.

• YFood: EUR 430M valuation on $22.6M raised. Nestle acquired 49.9% in 2023. European-focused, RTD-first. Proof that the category can produce exits at relatively early stages.

• Soylent pioneered the category but lost its lead through repeated quality failures. First-mover advantage means nothing if execution erodes trust.

• Both Danone and Nestle have now made significant bets on complete nutrition. When the two largest European food companies enter a category, it has crossed from niche to strategic.

• The category’s biggest tension is convenience vs. real food. Rising consumer concern about ultra-processed foods means the next generation of complete nutrition brands will need to deliver both convenience and clean formulations.

• The opportunity for new entrants is in format innovation: RTD, high-protein plus high-fibre convergence, functional specificity (gut health, cognitive performance), and hydration-nutrition crossovers that feel like food rather than supplements.

Contents

• The Setup: RXBAR launched the transparency wave in 2017. A decade later, a class-action lawsuit against the category’s fastest-growing brand signals the next shift.

• Why Now: Protein bars are a $15 billion global market growing at 6-7% annually. GLP-1 drugs, convenience culture, and rising protein awareness are accelerating demand.

• What the Winners Got Right: RXBAR ($600M exit), Trubar ($173M exit), KIND ($5B exit), David ($750M valuation), Fulfil (€150M exit). What they solved, and what they left on the table.

• What Went Wrong: ZonePerfect discontinued after failing to evolve. Raw Rev filed for bankruptcy. David faces a labeling lawsuit. The category’s risks are becoming clearer.

• The Patterns: Four lessons on where the category is heading.

• Is There Room Left: The biggest gap in protein bars is a bar that is actually clean. That position is unclaimed in Europe.

• Takeaways: What founders and investors should remember.

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The Setup

I spent the last five days in New York, and the CPG innovation on display was so inspiring to see. Every shelf, every Whole Foods aisle, every corner store in Manhattan (e.g. Meadow Lane, The Shelf) had something worth studying: new packaging formats, new ingredient stories, new ways of positioning familiar products.

But the moment that crystallized this article happened when I saw two brands that I’ve been following for a while now. I was standing in the snack aisle, holding two protein bars in my hand: an RXBAR and a David bar. The same founder built both. Peter Rahal co-founded RXBAR in 2012 with the slogan “No B.S.” and six ingredients on the front of the pack. He sold it to Kellogg’s for $600 million in 2017. Then he launched David in 2024, which he has described as the “literal opposite” of RXBAR: optimized nutrition through science-driven ingredients, including EPG (esterified propoxylated glycerol), a synthetic fat substitute.

Holding both bars, the contrast was striking. RXBAR: “3 Egg Whites, 6 Almonds, 4 Cashews, 2 Dates.” David: a nutrition panel promising 28 grams of protein, 150 calories, and zero sugar, achieved through engineered formulation. Only a year after the official launch, David raised $85 million, reached a $725 million post-money valuation, and was on pace for $100 million in first-year revenue. Simultaneously, the company acquired Epogee, a food technology startup known for its plant-based fat alternative, EPG.

Then, in January 2026, a class-action lawsuit alleged that David bars actually contain up to 83% more calories and 400% more fat than their labels state. The same founder who built the clean-label movement in snacking is now defending a brand built on ingredient complexity. David has called the claims "meritless" and argues its labeling complies with FDA regulations. The outcome remains uncertain, but the controversy has put ingredient complexity and labeling accuracy into mainstream conversation.

The protein bar category has moved through distinct waves. RXBAR launched the first wave in 2017: radical ingredient transparency as a brand-building strategy. Put six ingredients on the front of the pack. Tell consumers exactly what they are eating. That approach built a $600 million exit.

The second wave followed: optimized nutrition. Brands like Barebells, Quest, and eventually David competed on protein density, taste, and macro optimization. They solved the problem of making a bar with 20+ grams of protein that people actually want to eat. But they did it with maltitol, sucralose, artificial flavors, and in David’s case, synthetic fat substitutes. “No added sugar” became the category’s standard claim, even as ingredient lists grew longer and more complex.

Now I believe we are entering a third wave: a return to transparency, but with the protein density that consumers now expect. The evidence is building. Apps like Yuka now have over 80 million users worldwide, recording nearly 100+ million scans per month. According to Innova Market Insights, nearly 1 in 2 consumers globally purchased more fresh, unprocessed foods over the past year, and 1 in 4 say they are eliminating processed foods from their diets. In France, the supermarket chain Intermarché reformulated over 2,300 private-label products and removed 142 controversial additives in direct response to consumer pressure driven by Yuka scores.

The consumer behavior shift is real. According to Yuka’s own research, 94% of users will put back a product if it receives a red rating. The clean-label ingredients market is valued at $48-52 billion in 2025 and projected to reach $70-85 billion by the early 2030s, growing at 6-7% annually. The next protein bar winners will need to deliver 20+ grams of protein with ingredient lists that pass the Yuka test.

Why This Category / Why Now

The global protein bar market is valued at approximately $5.5 billion in 2025 and projected to reach $10-12 billion by 2034, growing at 6-8% annually depending on the source. In Europe, the market is worth $4.8 billion and growing at 6.1%.

The M&A pipeline confirms the category’s attractiveness. RXBAR sold for $600 million. Clif Bar for $2.9 billion. Grenade for $277 million. KIND for $5 billion. Trubar for $173 million just last month.

Three demand drivers are accelerating growth.

First, protein has become the dominant macro in consumer food culture. At the Consumer Analyst Group of New York (CAGNY) Conference 2026, Kerry Group described protein as no longer a trend but a “design requirement.” Foods carrying protein claims are growing at more than 7% CAGR in the U.S., while products without protein positioning remain stuck in low single digits.

Second, GLP-1 drugs are reshaping eating patterns in ways that favor protein bars specifically. By 2030, more than 30 million Americans could be on a GLP-1 treatment, up from 10 million in 2026 according to J.P. Morgan estimates. Users eat less overall but need more protein per meal to prevent muscle loss. About 70% of GLP-1 users who report consuming fewer calories said they are snacking less, according to EY-Parthenon. But the snacks they do eat need to work harder: high protein, high fiber, nutrient-dense. Protein bars fit this brief exactly.

Third, convenience. Modern consumers have less time to cook or prepare proper meals. A protein bar is one of the most convenient ways to consume 20+ grams of protein in under two minutes. The format is portable, shelf-stable, and requires no preparation. As meal occasions compress and snacking replaces traditional mealtimes for many consumers, the convenience factor becomes structural.

But here is the tension. The category solved the taste, protein, and convenience problems. It has not yet solved the ingredient problem. The bars that dominate shelves today are built on complex formulations that most consumers do not fully understand. That gap between health positioning and ingredient reality is where the next wave of value creation will come from.

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What the Winners Got Right

RXBAR is the origin story for this entire category. Peter Rahal and Jared Smith started making bars in Rahal’s parents’ basement in Glen Ellyn, Illinois in 2012 with $10,000. The original recipe used dates, egg whites, nuts, and chocolate. Six ingredients or fewer per bar.

The breakthrough was the packaging. In 2015, they moved the ingredient list from the back of the pack to the front, in bold lettering: “3 Egg Whites, 6 Almonds, 4 Cashews, 2 Dates. No B.S.” That single design decision made RXBAR the fastest-growing nutrition bar brand in the U.S. They started by selling door-to-door at CrossFit gyms in Chicago. By 2017, net sales reached approximately $120 million.

Kellogg’s acquired RXBAR for $600 million (approximately 5x revenue). What followed is instructive. Layoffs hit 20% of staff in late 2018. A peanut contamination recall affected 15 flavors in January 2019. Rahal moved to a non-executive role. The brand is now part of Mars (through the Kellanova acquisition). RXBAR still exists, still uses whole-food ingredients, and still has a loyal customer base. But the insurgent energy is gone.

The lesson: transparency built a $600 million brand in 2017. It was early. The category then shifted toward protein optimization. Now the pendulum may be swinging back.

KIND is the category’s largest exit and shows both the opportunity and the limits of “visible ingredients” positioning. Daniel Lubetzky founded KIND in 2004, starting with bars made with simple ingredients and a nutrient-dense first ingredient: whole nuts, whole grains, or whole fruit. Mars took a minority stake in 2017 (valuing KIND at $4 billion) and acquired KIND North America fully in November 2020 for a reported $5 billion. At the time, KIND’s annual sales had reached $1.5 billion.

The KIND story matters for two reasons. First, it shows how easily a well-resourced incumbent can enter the protein bar category. In January 2020, KIND launched KIND Protein From Real Food Bars, extending its brand positioning into the high-protein space. When Mars bought KIND, it gained a platform that could credibly compete across the entire bar category.

Second, KIND illustrates where “visible ingredients” positioning has limits. KIND’s brand promise is “ingredients you can see and pronounce.” But look at the actual ingredient list for a KIND Protein bar: peanuts, soy protein isolate, glucose syrup, honey, palm kernel oil, sugar, chicory root fiber, soy lecithin. That is not the same as RXBAR’s “3 Egg Whites, 6 Almonds, 4 Cashews, 2 Dates.” KIND carved out a middle ground between candy bars and clean-label, but the protein bars still rely on soy protein isolate and palm kernel oil to hit their numbers. The bar for “clean” keeps moving, and KIND’s protein bars would not score well on Yuka.

For emerging brands, KIND’s trajectory raises a hard question: if incumbents can acquire their way into category credibility, where does that leave new entrants? The answer, based on exits since KIND, is that the category still rewards brands that go further on ingredient simplicity, that solve specific community needs, or that out-execute on distribution.

UPFRONT is a European example worth watching. The Dutch sports nutrition brand, founded in 2020 in Rotterdam, has grown to approximately EUR 80 million in revenue in just five years with a positioning that echoes RXBAR: nutritional values displayed prominently on the front of the packaging, with a focus on transparency and fighting deception in the food industry. Although they still use some artificial ingredients, it is definitely cleaner than most brands in the market and especially a lot more transparent. UPFRONT is proof that the RXBAR playbook translates to Europe, and that the transparency wave is not over.

Trubar is the most recent exit. Founded in 2019 by Erica Groussman, Trubar built its proposition around plant-based, allergen-free formulations and dessert-inspired flavors. 100% plant-based, gluten-free, dairy-free, soy-free, and sugar alcohol-free. In February 2026, ETi Gida (a Turkish snack company with $1.3 billion in annual sales) acquired Trubar for $173 million in cash with no earn-out.

The numbers: nearly $100 million in gross revenue in 2025, up from $50 million in 2024. Over 21,000 retail locations including Costco, Target, Whole Foods, and Erewhon. The brand more than doubled the category’s five-year growth rate.

Trubar’s positioning matters for this argument. It is the only major protein bar brand that has achieved significant scale while being entirely free of the processed ingredients that dominate the category. No maltitol, no sucralose, no artificial flavors, no sugar alcohols. That positioning was compelling enough to attract a $173 million all-cash acquisition.

Barebells is the European market leader, and for good reason. Founded in Sweden in 2016 as part of the Vitamin Well Group (EUR 650 million in total group revenue across 40+ markets). Barebells holds leading market positions in all Nordic countries, Estonia, and the Netherlands, and has quickly achieved a top position in U.S. retail and on Amazon.

The brand solved the taste problem better than almost anyone. “No added sugar,” 20 grams of protein, premium Swedish branding. In April 2025, Barebells introduced vegan Fudge Brownie and Caramel Choco Chip bars, each providing 16 grams of plant protein per serving, showing how European brands are leveraging taste and innovation to compete with U.S. market leaders.

But the ingredient list tells a different story about where the category is heading. A Barebells Cookies and Cream bar contains: milk protein blend, glycerin, maltitol, bovine collagen hydrolysate, polydextrose, cocoa butter, water, soy protein isolate, sunflower oil, natural and artificial flavors, sucralose. That is 16+ ingredients, including maltitol (a sugar alcohol that can cause gastrointestinal distress), artificial flavors, and sucralose.

Barebells won the current game decisively. The question is whether that game is changing.

Fulfil is the Irish exit story. Founded in 2016 in Dublin, Fulfil differentiated by adding 100% of the recommended daily allowance of nine vitamins to each bar. Hershey took a minority stake in 2019. By 2022, the brand had reached approximately EUR 120 million in revenue. Ferrero acquired it for an estimated EUR 150 million. Fulfil proved that a European protein bar brand could build meaningful scale and attract a major acquirer. But like Barebells, the ingredient list includes maltitol, polydextrose, and sucralose.

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What Went Wrong (or: The Risks)

The protein bar category has clear failure modes. Two recent examples illustrate what not to do.

ZonePerfect was discontinued in March 2024 after nearly three decades on the market. Abbott Laboratories acquired ZonePerfect in 2003 for $160 million. The brand was built around the Zone diet (40% carbs, 30% protein, 30% fat) and sponsored major events like the San Francisco Marathon. By 2024, the bars had not kept pace with category evolution: only 12-15 grams of protein per bar, higher sugar content than competitors, and no clean-label positioning. Abbott shut down the brand entirely and laid off 195 employees at its Solano County manufacturing plant. The lesson: the category moves fast, and brands that fail to reformulate get left behind. ZonePerfect was overtaken by bars with better macros, cleaner ingredients, and stronger brand positioning.

Raw Rev, a vegan protein bar maker, filed for Chapter 11 bankruptcy in May 2023. The company had estimated assets of $500,000 to $1 million against liabilities of $1 million to $10 million. Raw Rev had distribution in Sprouts Farmers Markets and other natural grocers, but could not achieve the scale needed to compete. The plant-based protein bar segment is growing, but it requires significant capital to build distribution and brand awareness. Trubar’s $173 million exit proves the category can work at scale; Raw Rev’s bankruptcy shows what happens when a brand cannot get there.

David is a different kind of case study. It is a commercial success by almost any measure: $85 million raised, $725 million valuation, $100 million in first-year revenue, 3,000+ retail locations within months of launch. Peter Rahal has built one of the fastest-growing CPG brands in recent memory.

But the lawsuits now surrounding David signal a potential turning point for the category. In January 2026, a class-action lawsuit alleged that David bars contain up to 83% more calories and 400% more fat than their labels state. The dispute is technical: it centres on whether bomb calorimetry or FDA-approved alternative methods should be used to measure calories in foods containing non-digestible ingredients like EPG. Rahal argues the science is on his side and that David’s labeling complies with FDA regulations.

Separately, David faces an antitrust lawsuit from three smaller food producers (Own Your Hunger, Lighten Up Foods, and Defiant Foods) who allege that David’s acquisition of Epogee, the sole manufacturer of EPG, was designed to cut off competitors from accessing the ingredient. The plaintiffs claim they faced “complete production shutdowns, employee layoffs, lost sales, idle manufacturing capacity, and stranded R&D investments” after David acquired Epogee and allegedly stopped supplying EPG to competitors.

The outcomes of these lawsuits remain to be seen. David may prevail on both fronts. But regardless of the legal outcomes, the episode could mark a pivotal moment for the category. The David controversy has put ingredient complexity and labeling accuracy into mainstream conversation. If consumer trust in optimized-nutrition positioning erodes, the brands waiting in the wings are those built on radical ingredient simplicity. The third wave may be accelerating.

The Patterns

The category has moved through three waves, and the third is beginning. Wave one (2012-2017): RXBAR proved transparency could build a $600 million brand. Wave two (2017-2025): Barebells, Quest, David, and others competed on protein optimization and taste, using complex formulations to hit macro targets. Wave three (2025+): The return to transparency, but with the protein density that consumers now expect. Trubar’s $173 million exit and UPFRONT’s EUR 80 million revenue in Europe suggest this wave is already underway.

Incumbents can buy their way in, but they cannot buy community. Mars acquired KIND for $5 billion. Mondelez bought Clif Bar for $2.9 billion and Grenade for $1.3 billion. These are confectionery companies buying health credibility. But the most successful insurgent brands (RXBAR with CrossFit, Trubar with allergen-conscious consumers) built their scale by owning a specific community first. Emerging brands win by going deeper on a positioning that incumbents cannot easily replicate through acquisition.

“No added sugar” was the second wave’s answer. The third wave will go further. Nearly every major protein bar brand claims “no added sugar.” Most achieve this by replacing sugar with maltitol, sucralose, or other sugar alcohols and artificial sweeteners. The claim is technically accurate and substantively misleading. As consumers become more ingredient-literate (driven by apps like Yuka, social media, and the broader clean-label movement), the bar will move from “no added sugar” to “ingredients you can actually read.”

GLP-1 is a structural tailwind, and it favors clean formulations. More than 15 million Americans are currently using GLP-1 medications, and that number is expected to triple by 2030. Users eat less overall but need more protein and fiber per serving to maintain muscle mass and digestive health. Protein bars are well-positioned to serve this need, but GLP-1 users are also more likely to scrutinize nutrition labels. The brands that win this demographic will be those that deliver high protein in a format that feels nutritionally clean, not engineered.

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Is There Room for New Entrants?

This is the honest question: does the protein bar category still make sense for new founders, or is the game already won?

The U.S. market is crowded. Quest, Clif, RXBAR, Barebells, David, KIND, and Trubar compete aggressively for shelf space. Incumbents like Mars, Mondelez, and Ferrero have acquired their way into the category and can fund sustained distribution battles.

But the ingredient analysis reveals a persistent gap. Look at what is on the shelf today:

• RXBAR has clean ingredients but only 12 grams of protein.

• Barebells has 20 grams of protein but uses maltitol, artificial flavors, and sucralose.

• David has 28 grams of protein but uses synthetic fat substitutes and is now facing multiple lawsuits.

• KIND positions as “ingredients you can see” but its protein bars contain soy protein isolate, palm kernel oil, and glucose syrup.

• Trubar is plant-based and allergen-free but positions primarily as a lifestyle brand.

The gap is a protein bar that delivers high protein (20 grams or more), high fibre, low sugar, AND a short, recognizable ingredient list. A bar where you can read the back of the pack and understand every word. A bar that does not rely on maltitol, sucralose, artificial flavors, or engineered fat substitutes to hit its nutrition targets.

That position is especially unclaimed in Europe. The European protein bar market is worth $4.8 billion and growing at 6.1% annually. The UK, Germany, and Nordic countries lead consumption, driven by fitness culture and strong demand for clean-label products. European consumers have historically been more skeptical of processed food than their American counterparts. Strict EU regulations on health claims and food labeling create barriers for U.S. brands and advantages for brands built with compliance in mind from the start.

Barebells and Fulfil are the continent’s largest protein bar brands, and neither is positioned as truly clean-label. Both use maltitol and sucralose. The Yuka effect is stronger in Europe than anywhere else: the app was born in France, and European retailers like Intermarché have already reformulated thousands of products in response to consumer pressure. The regulatory and cultural environment in Europe makes ingredient transparency a more urgent competitive requirement than in the U.S.

UPFRONT’s success in the Netherlands (EUR 80 million revenue with front-of-pack transparency positioning) suggests the playbook works. For a founder building a truly clean protein bar in Europe, the path is visible. Trubar proved that clean formulations can scale and attract acquirers. RXBAR proved that ingredient transparency is a brand-building strategy. The demand exists. The shelf space is there. The acquirers are actively buying. What is missing is the brand that combines 20+ grams of protein with a Yuka-friendly ingredient list.

What about the David playbook: optimized nutrition over clean-label? There is a case for it. David reached $100 million in revenue faster than almost any CPG brand in history. GLP-1 users, in particular, care about protein-to-calorie ratios. But the current lawsuits, whatever their outcome, have exposed the vulnerability of that positioning. When your brand is built on nutritional precision and the labels are questioned, the entire value proposition is at risk. Clean-label is a more defensible moat because the ingredients are visible. You cannot be accused of misleading consumers when the ingredient list is “dates, egg whites, almonds.”

The opportunity in Europe is clean-label. The opportunity in the U.S. may be contested. For founders with limited capital, Europe offers a clearer path.

Takeaways

Protein bars are a $15 billion category worldwide with strong M&A momentum and structural tailwinds from GLP-1 adoption and convenience culture. The first wave of brands (RXBAR) proved transparency could build a $600 million exit. The second wave (Barebells, David) competed on protein optimization with complex formulations. The third wave will be defined by whoever combines both: high protein with ingredients consumers can actually understand.

• RXBAR → David tells the story of the category’s evolution. Same founder. RXBAR: clean-label, $600M exit in 2017. David: optimized nutrition, $725M valuation, now facing lawsuits over labeling and antitrust. The arc from radical transparency to engineered formulation, and the backlash it has generated, signals where the category is heading next.

• KIND: $5B exit, $1.5B revenue. Proves incumbents will pay enormous premiums for health credibility. Also proves that “visible ingredients” positioning has limits: KIND’s protein bars still rely on soy protein isolate, palm kernel oil, and glucose syrup.

• Trubar: $173M exit, ~$100M revenue. Plant-based, sugar-alcohol-free, allergen-free. The cleanest formulation among the major brands, and the most recent successful exit. Clean-label is a viable path to scale.

• ZonePerfect: discontinued after failing to evolve. Abbott shut down the brand in 2024. Only 12-15g protein, dated formulation, no clean-label positioning. The category moves fast; brands that do not reformulate get left behind.

• UPFRONT: EUR 80M revenue in Europe with front-of-pack transparency positioning. Proof that the RXBAR playbook translates to Europe and that the third wave is underway.

• Barebells dominates European shelves with 20g protein and strong branding. But the ingredient list (maltitol, sucralose, artificial flavors) sits uneasily with its health positioning. As consumers become more ingredient-literate, that gap becomes a vulnerability.

• The biggest gap in the category is a protein bar that is high in protein, high in fibre, low in sugar, and actually clean. That position is unclaimed in Europe. The consumer trends, the exit data, and the regulatory environment all point toward this as the next opportunity.

• GLP-1 is a tailwind that favors high-protein, nutrient-dense formats. But GLP-1 users scrutinize labels. The brands that win this demographic will be those that deliver macros without ingredient complexity.

Contents

• The Setup: Weight loss drugs are changing how people taste food. Acquirers are responding with billion-dollar deals across the sauce and spice aisle.

• Why Now: The GLP-1 effect, a premiumization wave across condiments, and a deal pipeline that spans barbecue sauce, hot sauce, mayo, and seasonings.

• What the Winners Got Right: Bachan’s ($17M raised, $400M exit), Truff (luxury positioning in a commodity category), and Fly By Jing (cultural specificity as competitive advantage).

• What Went Wrong: Huy Fong’s Sriracha crisis, and what happens when supply chain control is an afterthought.

• The Patterns: Five lessons on building in the sauce and spice category.

• Is There Room Left: Why Europe’s premium sauce and spice market is still wide open.

• Takeaways: What founders and investors should remember.

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The Setup

America’s obsession with weight loss is creating a deal frenzy in one of the most overlooked aisles in the grocery store: sauces and spices.

Last week, Reuters reported that GLP-1 drugs are sending consumers looking for more flavor in their food, and that sauce and spice makers are attracting significant deal interest as a result. The article cited Bachan’s, a Japanese barbecue sauce acquired by The Marzetti Company for approximately $400 million, and Tapatio, the fifth-largest hot sauce brand in the U.S., acquired by Highlander Partners in January 2026.

These are not isolated deals. McCormick acquired Cholula for $800 million in 2020. Advent International acquired Sauer Brands (the parent of Duke’s Mayo, Kernel Season’s, and The Spice Hunter) for over $1 billion in January 2025. McCormick then paid $750 million in August 2025 for additional ownership of McCormick de Mexico, explicitly to expand its condiments and sauces portfolio. Campbell Soup acquired Sovos Brands (parent of Rao’s pasta sauce) in 2024.

On the Bachan’s earnings call, Marzetti CEO David Ciesinski used a term that may define the next phase of food M&A: he called the brand “GLP-friendly.”

Here is the connection. Roughly 12% of American adults (about 41 million people) have used GLP-1 drugs like Ozempic, Wegovy, and Mounjaro. A March 2025 study by Dr. Richard Doty at the University of Pennsylvania found that these drugs ‘dull’ all five basic tastes. GLP-1 diets emphasize lean protein, which needs flavor. As Ciesinski told Reuters: “Chicken tastes like chicken, so it begs for flavor.”

The global sauces, dressings, and condiments market is valued at roughly $200 billion in 2025, growing at over 6% annually. The deal values across the category suggest acquirers are pricing in a structural shift in how Americans eat, not a temporary trend.

Why This Category / Why Now

Three forces are converging.

The first is GLP-1 adoption at scale. One in eight American adults have used these drugs, and the number is growing as prices drop and oral versions become available. The critical insight is that GLP-1 drugs do not just suppress appetite. They dull taste perception broadly, across all five basic tastes. Users eat less food, but the food they eat needs to deliver more flavor. That creates sustained, structural demand for sauces, spices, marinades, and seasonings.

Source: International Flavors & Fragrances, 2025

Most users stay on GLP-1 drugs long-term (stopping leads to rapid weight regain), which makes this a permanent shift in eating behavior, not a temporary change. The drugs can also cause muscle loss, pushing users toward higher protein intake, which further drives demand for flavor-adding products.

The second is the premiumization wave across the entire condiment aisle. The same pattern that reshaped olive oil (as we covered in the Graza post) is playing out across sauces and spices. Consumers are trading up from commodity products to premium, ingredient-forward brands with distinctive positioning and branding. Bachan’s sells Japanese barbecue sauce for $10. Truff sells truffle-infused hot sauce for $15 to $18. Fly By Jing sells Sichuan chili crisp for $15. Rao’s built a $900 million+ brand around premium pasta sauce. All built cult followings through DTC and social media before expanding into mass retail.

The third is consolidation pressure. The top five players (Unilever, Kraft Heinz, Nestlé, McCormick, and General Mills) collectively hold only about 30% market share. The category is fragmented, which means acquirers have plenty of targets. The recent deal cadence confirms it: McCormick alone has made three major moves (Cholula $800M, McCormick de Mexico $750M, and the Sauer Brands pursuit) in under five years. Kraft Heinz announced in September 2025 it would split into two companies, one focused entirely on condiments and sauces.

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What the Winners Got Right

Bachan’s is the deal that defines this moment. Founded in 2019 by Justin Gill, a Sebastopol, California landscaper who adapted his grandmother’s multigenerational Japanese barbecue sauce recipe into a packaged product. The name means “granny” in Japanese. Gill initially packed orders from his home, funding Facebook ads with high-interest short-term loans.

Justin Gill with his grandmother, his ‘Bachan’, the inspiration behind the sauce

The growth: $35,000 in year one, $1.5 million in 2020, $35 million by end of 2022, $87 million in 2025 net sales. A three-year compound annual growth rate of over 48%. The company raised only $17 million total across two rounds (Prelude Growth Partners and Sonoma Brands Capital) and became the number one bestselling barbecue sauce on Amazon.

In February 2026, The Marzetti Company acquired Bachan’s for approximately $400 million (4.6x revenue). On the earnings call, Ciesinski called it “GLP-friendly” and “a perfect complement” to Marzetti’s portfolio.

What makes Bachan’s instructive: Gill outsourced manufacturing to a Northern California co-packer from the start, reducing capital needs while protecting quality. He built through product demonstrations at retail and strong DTC before expanding to 11,000+ doors including Costco, Whole Foods, Target, and Kroger. A strategy we have seen more often in this Substack series. The sauce is cold-filled with no preservatives, near-zero sugar. Structurally “GLP-friendly” before the term existed.

For investors: $17 million raised, $400 million exit. That is the most complete capital efficiency story in recent condiment M&A.

Truff is the premiumization case study. Founded in 2017 by Nick Ajluni and Nick Guillen, who started with an Instagram account (@sauce) before developing a truffle-infused hot sauce at $15 to $18 per bottle. The brand generated $25 million in revenue by 2020, growing 400% during the pandemic. SKKY Partners (co-founded by Kim Kardashian) invested in a PE round in late 2023.

Truff proved that sauces, a category with razor-thin margins for legacy brands, can support luxury pricing when the brand is built around identity and aesthetics rather than just the product itself. The matte black bottle and geometric truffle cap signal premium before you taste anything. Truff is now in 15,000+ retail doors and has expanded into pasta sauce, olive oil, mayo, and truffle salt, with international sales in the UK, Australia, Kuwait, and South Korea.

Fly By Jing represents cultural positioning as competitive advantage. Founded in 2018 by Jing Gao with a Kickstarter for Sichuan Chili Crisp that became the top-selling hot sauce on Amazon within six months. The brand has raised $17.2 million (including a $12 million Series B) and is in 4,000+ retail doors. Gao positioned it as the first premium Chinese food brand, with a mission to bring “uncensored Chinese flavors” to the mainstream.

The investor lesson: cultural specificity creates deeper competitive advantages than flavor innovation alone. Fly By Jing did not dilute its Sichuan identity to appeal broadly. It made the audience come to it. In a category where most brands compete on taste profile, Fly By Jing competes on provenance and cultural legitimacy. That is harder to replicate.

The same premiumization wave is producing winners in other sauce segments too, particularly pasta sauce, where insurgent brands are reinventing a category that has barely changed in decades. The opportunity there is large enough to warrant its own deep dive, which we will cover in a future post.

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What Went Wrong (or: The Risks)

Huy Fong Foods built Sriracha into the most recognized hot sauce in America. One in three U.S. households had a bottle. Revenue exceeded $150 million. Zero advertising spend. Pure organic cult status.

Then the supply chain collapsed. In 2017, Huy Fong ended its exclusive 30-year relationship with Underwood Ranches, its sole jalapeño supplier. The company shifted to sourcing from Mexico. Drought, COVID disruptions, and poor crop quality led to repeated production halts in 2020, 2022, 2023, and 2024. The product disappeared from shelves. Bottles hit $150 on Amazon.

Competitors flooded the gap. Amazon sales jumped 204% for Sky Valley Sriracha and 396% for Yellow Bird. Tabasco became the bestselling sriracha brand in the U.S. for H2 2023. Consumers discovered that sriracha was a product type, not a brand. The moat was gone within 18 months.

On top of that, only three days ago Huy Fong Foods again halted shipments. “Just when culinary directors and home chefs alike breathed a collective sigh of relief, the assumption that major hot sauce brands had finally stabilized their fragile supply chains shattered overnight. Huy Fong Foods has officially halted Sriracha shipments yet again, sending shockwaves through the American restaurant industry and leaving regional suppliers scrambling for answers. The culprit is not a factory bottleneck or a labor dispute, but a catastrophic agricultural shortfall that has completely wiped out the expected yield of winter red jalapeño peppers across key farming districts in Mexico.”

The lesson applies across the entire sauce and spice category: supply chain control is existential. Huy Fong had no backup supplier, no ingredient diversification, no buffer inventory. Compare that to Bachan’s, which outsourced production to a co-packer while maintaining quality control, or Fly By Jing, which sources directly from Chengdu.

The broader risk is the premium gap. Legacy brands compete at $3 to $5. Premium brands charge $10 to $18. Building a brand that justifies the premium is the hard part. Most new entrants get stuck in between: too expensive for mainstream shoppers, too undifferentiated for premium buyers.

The Patterns

“GLP-friendly” is becoming a valuation framework. When a CEO uses that term on an earnings call to justify a $400 million acquisition, it signals how acquirers are rethinking value. Products that add flavor without adding calories, sugar, or processed ingredients are structurally advantaged. Sauces and spices are the purest expression of this.

The premiumization playbook is proven and repeatable across sauce subcategories. Take a low-innovation category, add quality ingredients, distinctive packaging, and a strong origin story. Launch DTC, expand into retail. Bachan’s did it with barbecue sauce. Truff did it with hot sauce. Fly By Jing did it with chili crisp. Graza did it with olive oil. Rao’s did it with pasta sauce. Sir Kensington’s did it with ketchup and mayo. The brands that execute this arc consistently attract acquisition interest at premium multiples.

Supply chain control is the hidden moat. Huy Fong’s collapse demonstrates what single-supplier dependency does to a dominant brand. The winners in this category either control their sourcing or outsource production strategically while maintaining quality oversight.

Cultural positioning creates deeper moats than flavor positioning. Truff owns “luxury.” Fly By Jing owns “authentic Sichuan.” Bachan’s owns “Japanese family recipe.” These positions are harder to replicate than a flavor profile. When a brand is defined by a culture or identity, competitors cannot copy it without appearing derivative.

Consolidation is accelerating, and sauces are the prize. Kraft Heinz is splitting its company around condiments. McCormick has spent over $2 billion on sauce and spice acquisitions in five years. Advent International paid over $1 billion for Sauer Brands. For founders building premium sauce or spice brands, the exit environment has never been stronger.

Is There Room for New Entrants?

In the U.S., the premium sauce space is increasingly crowded. Truff owns luxury. Fly By Jing owns Sichuan. Bachan’s owns Japanese barbecue. Rao’s owns premium pasta sauce. The shelf space battle is intense.

Europe is a different story.

Premium sauce and spice penetration in Europe is far lower than in the U.S. The category is dominated by legacy brands with almost no premium, brand-forward European sauce or spice companies at scale. Walk into the supermarket and you won’t see any innovation on the shelf. In addition, the GLP-1 trend is arriving in Europe as Wegovy and Mounjaro gain approval and adoption. The same taste-alteration dynamics driving demand in the U.S. will follow.

For European founders, the opportunity mirrors what we described in the olive oil and electrolyte posts: a proven category playbook with no credible European brand claiming the position. A sauce or spice brand with genuine European provenance (Spanish peppers, Portuguese piri piri, North African harissa, Balkan ajvar, Mediterranean herb blends), clean ingredients, premium packaging, and DTC-first distribution has a real window.

The broader opportunity is in “GLP-friendly” flavor products as a platform. Hot sauce is one entry point, but barbecue sauces, marinades, fermented condiments, spice rubs, and seasoning blends all benefit from the same structural tailwind. A European brand that builds a flavor platform across these subcategories could capture a position that does not yet exist on the continent.

Takeaways

GLP-1 drugs are reshaping food M&A in ways that go beyond calorie counting. The taste-dulling effects create sustained demand for bolder sauces and spices, and acquirers are pricing this in at premium multiples. For founders and investors, the window is open.

• Bachan’s: $17M raised, $400M exit, 4.6x revenue. The acquirer explicitly framed the deal around GLP-1 tailwinds. This is the benchmark for sauce and spice M&A going forward.

• The deal pipeline is category-wide: Cholula ($800M), Sauer Brands ($1B+), McCormick de Mexico ($750M), Bachan’s ($400M), Tapatio, Sovos/Rao’s. This is a sauces and spices M&A wave, not isolated transactions.

• Truff and Fly By Jing prove that premium pricing and cultural positioning work in sauces. Identity and provenance create deeper advantages than flavor alone.

• Huy Fong’s Sriracha crisis shows how single-supplier dependency can destroy a dominant position in under two years. Supply chain control is non-negotiable.

• GLP-1’s taste effects are structural. Most users stay on the drugs long-term. Demand for flavor-forward sauces and spices will persist and grow.

• Europe has no credible premium sauce or spice brand at scale. The GLP-1 trend is arriving, the playbook is proven, the position is unclaimed.

Data points flagged for verification:

• Bachan’s acquired for ~$400M on $87M net sales (Reuters, Press Democrat, Feb 2026)

• Bachan’s raised $17M total (Press Democrat)

• Bachan’s revenue trajectory: $35K > $1.5M > $35M > $87M (Bloomberg, Taste Radio, Press Democrat)

• Marzetti CEO “GLP-friendly” quote (Reuters, earnings call)

• Tapatio acquired by Highlander Partners, Jan 2026 (Reuters)

• Cholula acquired by McCormick for $800M (2020, widely reported)

• Sauer Brands acquired by Advent International, valued at $1B+ (Bloomberg, Food Processing, Jan 2025)

• McCormick de Mexico: $750M for additional 25% stake (McCormick SEC filing, Aug 2025)

• Kraft Heinz splitting into two companies, one focused on condiments/sauces (Sep 2025, GMInsights)

• Campbell Soup acquired Sovos Brands / Rao’s (2024, widely reported)

• 12% of Americans have used GLP-1 drugs / 41M people (Reuters)

• GLP-1 taste study by Dr. Richard Doty, March 2025 (Reuters)

• Global sauces and condiments market ~$200B in 2025, 6%+ CAGR (Statista, GMInsights)

• Top 5 players hold ~30% market share (GMInsights)

• Truff $25M revenue in 2020, 400% pandemic growth (Fortune Business Insights)

• Truff in 15,000+ doors (OC Business Journal, 2022 figure)

• Fly By Jing raised $17.2M (PitchBook)

• Fly By Jing in 4,000+ doors (press release, 2023)

• Huy Fong competitors saw 204-396% Amazon sales jumps (Jungle Scout via Manufacturing Dive)

• Tabasco bestselling sriracha H2 2023 (NielsenIQ via Fortune)