NCN News for March 13, 2018

Clorox announces agreement to acquire supplement company Nutranext

The Clorox Company (Oakland, California) will acquire Nutranext (Sunrise, Florida), a vertically integrated manufacturer and marketer of dietary supplement brands, from an affiliate of WM Partners, for $700 million. Nutranext does business in the retail, e-commerce and direct-to-consumer (DTC) channels, generating sales of about $200 million in 2017. Nutranext—whose portfolio includes Rainbow Light, Natural Vitality, Neocell, Champion Performance, Iceland Health and Sedona Labs—follows Clorox’s May 2016 acquisition of RenewLife in digestive health. Nutranext also markets supplements through its DTC business under the Stop Aging Now brand. The company, founded 30 years ago as Nature’s Products Inc., was known as Wellnext before its new corporate name was announced in December 2017. According to WM Partners, since its involvement in 2015, Nutranext has nearly doubled revenues and more than quadrupled EBITDA, driven by operational organic growth and strategic add-on acquisitions to create a scalable platform of leading brands. Clorox and WM Partners are both NCN Cornerstone Investors.


Ancient Nutrition announces $103 million strategic investment

Ancient Nutrition (Nashville, Tennesee)—a brand of bone broth products including flavored protein powders, supplements, collagen and meal replacements—has received a $103 million strategic minority investment from VMG Partners, Hillhouse Capital, Iconiq Capital and members of a co-investor network. Ancient Nutrition was co-founded in 2016 by Jordan Rubin and Josh Axe, a doctor of natural medicine, and has become the second-ranked protein supplement and meal replacement brand in the natural health channel as defined by SPINS, according to a news release. Rubin founded Garden of Life whole food supplements (recently acquired by Nestlé as part of Atrium Innovations) and is the author of The Maker’s Diet. Axe is founder of the Axe Wellness e-commerce site and wrote the health book Eat Dirt, recently featured on public television. Axe Wellness generated $46 million in 2016 revenues, ranking number 35 on the Inc. 5000 list last year.


Kraft Heinz launches platform to partner with emerging food and beverage brands

The Kraft Heinz Company (Chicago, Illinois) has launched Springboard, a platform to grow “disruptive” startups, joining a growing trend among multinational food corporations to establish accelerators and venture units as a way to invest in food and beverage innovation. Springboard will seek opportunities to develop brands “with authentic propositions and inspired founders” in four areas: natural and organic, specialty and craft, health and performance, and experiential. Founders will be encouraged to continue leading their businesses with support from Kraft Heinz in marketing, R&D and consumer insights. Springboard will also run an incubator program for startups at a pre-valuation stage; selected companies will receive financial support for brand building and guidance on fundraising.


Perfect Day raises $25 million for animal-free dairy proteins

Perfect Day (Berkeley, California), a biotech company that uses a yeast fermentation process to produce dairy proteins (whey and casein), has attracted $24.7 million in Series A funding. Founded in 2014, the company also announced its first patent for the use of animal-free dairy proteins in food applications. Funding was led by Temasek, a Singapore state-owned investment company, with Horizons Ventures, Continental Grain, Iconiq Capital, Lion Ventures and Verus International participating. Perfect Day dairy proteins are sustainable, vegan, lactose free and cholesterol free, and sidestep the environmental footprint of traditional dairy production. “This round brings us closer to our goal: to provide dairy for everyone in a sustainable way,” said co-founder and CEO Ryan Pandya.


Fonterra and Foodspring form strategic partnership in sports nutrition

The venture arm of global dairy cooperative Fonterra (Auckland, New Zealand) has announced its first strategic partnership, teaming with German nutrition start-up Foodspring (Berlin, Germany) through an investment in its VC-backed holding company, Goodminton AG. Foodspring’s sports-nutrition portfolio focuses on protein-enhanced products including whey protein shakes, organic superfoods, supplements, bread mixes, muesli, bars, beverages and other food items for fitness enthusiasts. Judith Swales, Fonterra’s COO of velocity and innovation, said the deal creates exciting new business and market development opportunities: “Fonterra is a global leader in protein and high-value advanced ingredients, so it’s only right we should strive to be at the forefront of the active nutrition market.”


Youngevity acquires ViaViente antioxidant beverage

Direct-selling company Youngevity International Inc. (San Diego, California) announced the acquisition of ViaViente (Henderson, Nevada), distributors of The ViaViente Miracle, a concentrated fruit blend rich in antioxidants. ViaViente is made from whole fruits, including the seeds and skins, and mineral water from Vilcabamba, Ecuador, a region known for its high concentration of centenarians. In 2007, the product received the Brunswick Labs ORAC Seal of Certification for antioxidant content. Youngevity has been seeking acquisitions to support its international expansion and says that more than 75 percent of ViaViente’s recent distribution has been to Japan. In February, Youngevity announced the purchase of eco-cleaning product company Nature Direct in Australia.


FAIRR briefing sorts risks and opportunities in protein

A briefing published by Farm Animal Investment Risk and Return (FAIRR), “Plant-Based Profits: Investment Risks and Opportunities in Sustainable Food Systems,” concluded that Nestlé and Tesco are best positioned to benefit from projected growth in the market for alternative proteins. The briefing captures progress measured by FAIRR’s sustainable protein “engagement” with 16 global food companies that calls for strategic thinking on building sustainable protein supply chains. According to FAIRR, all companies market at least one own-brand alternative protein product; three have goals to increase their portfolio of alternative proteins (M&S, Nestlé and Unilever); and all lack a coherent marketing strategy for alternative protein products. Traditional livestock production presents reputation and market risks for companies that are over-reliant on animal proteins to drive revenue growth, and more investors are developing ways to assess such risk in food portfolios, the briefing said. Nearly 60 organizations are FAIRR investor-members including Aegon, Aviva Investors and Nordea.


Natural Products Canada invests in water technologies

Natural Products Canada (NPC) has invested in Island Water Technologies (IWT, Montague, PE), a company commercializing two proprietary water technologies: Regen, a solar-powered, fixed-film wastewater treatment module that uses less electricity and no chemical additives; and Sentry, a bio-electrode sensor platform for real-time monitoring of microbial activity and wastewater contaminants at wastewater treatment facilities. Island Capital Partners also invested. Natural Products Canada is a not-for-profit organization that accelerates the development of natural products and sustainable technologies. NPC has also invested in Mazza Innovation, developer of PhytoClean extraction technology to produce botanical ingredients. Nutrition Capital Network and NPC will co-host the NCN Canada II investor meeting on June 27-28 in Toronto, Canada.


Nulo Pet Food raises $5.5 million

Nulo Pet Food (Austin, Texas), a maker of high-protein, grain-free premium pet foods, has raised $5.5 million in equity and other securities, according to an SEC Form D filing in February. Earlier, CAVU Venture Partners announced a $9.5 million investment in the company in 2016, describing Nulo as “the first lifestyle brand within pet food.” Nulo uses a patented probiotic, BC30, to support immune health and nutrient absorption. Nulo formulas contain no potatoes, tapioca, corn, wheat, soy or gluten. In 2010, Nulo completed a $3.3 million financing, according to the Austin Business Journal.


First beverage leads investment in vitamin-infused coffee pods

First Beverage Ventures has led an investment round in VitaCup LLC (San Diego, California), a vitamin-infused coffee and tea company. Available in a Keurig-compatible format, VitaCup’s coffee and tea pods are sold primarily through e-commerce channels. “Consumers increasingly demand more functionality from the beverages they consume every day,” said Bob Nakasone, a managing director at First Beverage. “As the retail landscape continues to become more competitive for coffee brands, VitaCup has created a highly effective DTC model offering functional, great-tasting products in a differentiated, e-commerce friendly format.” First Beverage Group also announced that its investment banking division is merging with Cascadia Capital.


Perwyn acquires Freshcut Foods in UK

Perwyn has announced an investment in Freshcut Foods (Nottingham, United Kingdom) in a management buyout. Freshcut Foods provides value-added vegetables, fruits and carbohydrates to food manufacturers and food service operators in the UK. The company employs about 250 staff at two manufacturing sites. Perwyn cited “attractive underlying demand trends towards a healthier, vegetable-rich diet” as a rationale for investment. “Freshcut is well placed to enable its customers to provide healthier products that consumers are increasingly seeking out,” said Heinz Holsten, a Perwyn partner.


Arla acquires Yeo Valley Dairies

Arla Foods, the Danish Dairy cooperative, will acquire Yeo Valley Dairies (Bristol, United Kingdom), a subsidiary of the Yeo Valley Group. The transaction will give Arla Foods the right to use the Yeo Valley brand in the UK market for milk, butter, spreads and cheese. The Yeo Valley yogurt, ice cream, cream and desserts business will still be run independently through Yeo Valley Group under the ownership of the founding Mead family. Yeo Valley is a leading organic dairy brand in the UK. Currently in the UK, only 4 percent of fresh milk sold is organic, compared with 10 percent in Germany, 16 percent in Sweden and 29 percent in Denmark, according to Arla. “Our ambition is to encourage customers in the UK to trade up from standard to organic milk, butter and cheese, driving overall growth for organic across dairy categories,” said Peter Giørtz-Carlsen, executive VP for Arla Foods.


Private equity firm picks up Modern Market healthy eatery

Private equity firm Butterfly has acquired Modern Market (Denver, Colorado), a farm-to-table, fast-casual restaurant chain. Terms were not disclosed. Founded in 2009 by Anthony Pigliacampo and Rob McColgan, Modern Market operates 28 restaurants across Colorado, Texas, Arizona, Washington, D.C., and Maryland. The menu caters to consumer demand for paleo, vegan, vegetarian, gluten free and other dietary trends, and features protein-centric bowls, salads, sandwiches and pizzas. Ingredients are sourced from farmers, ranchers and suppliers who use sustainable practices. “Anthony and Rob have built a highly scalable concept with an incredibly loyal following,” said Adam Waglay, Butterfly co-founder.


Carrington acquires organic whey protein brand

The Carrington Tea Co. LLC, dba Carrington Farms (Closter, New Jersey), has acquired Tera’s Whey (Madison, Wisconsin), a supplier of organic whey protein. Founded in 2009, Tera’s Whey has a line of certified organic whey proteins sourced from artisan cheese makers in Wisconsin. The company also makes goat whey protein powder. According to Carrington, Tera’s Whey has had substantial year-over-year growth and “will help accelerate Carrington Farms’ efforts to deliver protein powders that meet consumers’ changing tastes and preferences.” Citing SPINS data, Carrington says the U.S. protein powder industry reached $855 million in sales through September 2017, up 4 percent, for natural retail and multioutlet channels combined. Carrington sells organic coconut oil, ghee, grains and milled and whole seeds.


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