Welcome to The Week in Consumer Packaged Goods, a weekly round-up for marketers from Quad Insights that covers the latest must-know news surrounding the CPG space.
Amazon offers nationwide delivery of Whole Foods’ 365 products
On Monday, Amazon made more than 600 items from the Whole Foods 365 private label available for nationwide shipping, which is free for Prime members. (Whole Foods Market is a subsidiary of Amazon.) The products include non-perishable items such as pasta, coffee and tea. As noted by Greg Sleter of StoreBrands,“Throughout 2023, Whole Foods has worked to raise the profile of its 365 private brand [with] an aggressive consumer-facing marketing campaign, which includes recurring television commercials, focused on the breadth and depth of the product assortment sold under the 365 brand.”
As Bloomberg’s Matt Day reported earlier this month, Amazon has been making other changes to its grocery business. “In a move likely to play well with shoppers,” Day wrote, “the company … plans to merge its various e-commerce supermarket offerings — from Whole Foods, Amazon Fresh, Amazon.com — into one online cart.”
• “Amazon Fresh Grocery Delivery Is Now Available to Non-Prime Members. What to Know” (CNET)
• “Amazon axes some private label brands as part of wider cost cuts” (CNBC)
AB-InBev sells eight craft beer and beverage brands to pot company Tilray
AB-InBev entered into an agreement with cannabis company Tilray Brands this week to sell eight of its craft beer and beverage brands. The transaction will expand Tilray’s craft beer holdings — which currently include brands such as SweetWater Brewing and Montauk Brewing — from four to 12 and is expected to elevate Tilray from the ninth-largest craft beer company in the U.S. to the fifth. Tilray’s new acquisitions include Breckenridge Brewery, Redhook Brewery, Shock Top and Widmer Brothers Brewing, as well as Hiball Energy.
Set to close in September, the deal comes as AB-InBev continues to report significant losses in revenue following the Bud Light boycott over the brand’s partnership with transgender influencer Dylan Mulvaney. “The deal is valued at $85 million in cash, according to an 8-K filing by Tilray — a steal considering the 2020 SweetWater acquisition alone was $300 million,” notes Chris Malone Méndez of Men’s Journal.
• “Anheuser-Busch Slashes Craft Beer Portfolio, Selling 8 Brands to Tilray” (VinePair)
Campbell’s grows its premium food presence with acquisition of Sovos Brands
On Monday, Campbell Soup Company announced the acquisition of Colorado-based premium food manufacturer Sovos Brands — a $2.7 billion deal that is set to close by December. Best known for its flagship Rao’s brand pasta sauce, Sovos Brands also makes pastas, soups, frozen foods and more. As noted by Consumer Goods Technology’s Jennifer Guhl, the acquisition is part of a strategic move by Campbell to assemble a $1 billion sauces business. “For Campbell, the company is able to bring the expertise heft of its supply chain, retail relationships and marketing insight to the brands it’s acquiring, while tapping into Sovos’ expertise in innovation, category expansion and the marketing of high-growth brands,” notes Food Dive’s Christopher Doering.
• “Campbell Soup CEO: Sovos Brands acquisition is a significant source of growth” (Yahoo Finance)
• Earlier: “How Sovos Brands Grew Rao’s 9X In Six Years” (Forbes)
Kellogg on track to finalize spinoff of snacking business Kellanova
In anticipation of the spinoff of Kellogg’s snacking business, to be known as Kellanova, in the fourth quarter of 2023, Kellogg Company CEO Steve Cahillane noted at a meeting of investors on Wednesday that the split is on track and that the new company will focus primarily on growing the Pringles and Cheez-It brands.
“Kellogg Co. announced in June 2022 it would split into three parts: a cereal business and a plant-based food company, both of which would remain headquartered in Battle Creek, and a snack business to be headquartered in Chicago with a campus in Battle Creek,” Anna Fifelski of The Detroit News notes. “The company subsequently said in February that it would keep the plant-based food business, MorningStar Farms.” What will now amount to a two-way split will yield two new entities: WK Kellogg Co. (which will include the cereal brands and MorningStar Farms) and Kellanova.
Following the split, Kellanova is projected to post full-year sales in 2024 between $13.4 million and $13.6 million, according to Reuters. In addition to Pringles and Cheez-It, the new company will also focus on growing the market share of brands including Pop-Tarts, Rice Krispies and Eggo.
• “Kellogg pins growth in snacking unit on Pringles, Cheez-It ahead of split” (Food Dive)
• “Pepsi Expands NFL Sponsorship With O’fficial Zero Of The NFL’” (Forbes)
• “Molson Coors expands further into bourbon with Blue Run Spirits acquisition” (Food Dive)
• “Victoria’s Secret recruits familiar, supermodel faces for new ‘Icon’ campaign” (CNN)
• “Origin Materials introduces PET bottle cap intended to boost recyclability” (Packaging Dive)