News for October 23, 2024

Diageo juices booze-free portfolio with Ritual Zero Proof purchase 

Diageo North America has acquired Ritual Zero Proof, a leading non-alcoholic spirits brand, as part of its strategy to tap into the growing demand for alcohol-free alternatives. Ritual, launched in 2019 by founders David Crooch, Marcus Sakey and GG Sakey, offers non-alcoholic substitutes for whiskey, tequila, gin and other spirits. The acquisition supports Diageo’s broader “Growth Ambition” strategy to invest in high-potential, emerging categories. Non-alcoholic beverages have grown rapidly, with a 31% compound annual growth rate (CAGR) in retail sales over five years, and non-alcoholic spirits represent the fastest-growing segment in this space.

Cold brew tea brand East Forged lands $1.5 million investment 

East Forged, a producer of nitro-infused cold brew tea, has raised $1.5 million in a funding round led by TTC AgriS, the venture capital arm of Vietnam’s TTC Group. The investment will allow the company to scale its production and expand into key Asian markets, including Japan and South Korea. Spearheaded by Global Mind Agriculture Australia (GMAA), the funding will also support East Forged’s plans to enter luxury retail, boutique cafes and online platforms catering to health-conscious consumers. Founded in 2020 by Kym Cooper and Tania Stacey, East Forged offers ready-to-drink cold brew teas made without added sugars, artificial colors or flavors. Its novel nitrogen-infused tea sets it apart. With this new capital, East Forged aims to lead the growing craft tea movement globally.

Biotech startup ÄIO gets $6.47 million in VC funding 

ÄIO, a biotech startup founded in 2022 as a spin-off from Tallinn University of Technology (TalTech), has raised $6.47 million in venture capital funding. The round was led by Voima Ventures, 2C Ventures, SmartCap and Nordic Foodtech VC. This funding will be used to build a demo plant in Estonia by 2026 to produce environmentally friendly oils and fats from wood and agricultural by-products, offering a sustainable alternative to palm oil and animal fats. The company uses a patented fermentation process with specialized yeast to convert industrial residues, such as sugars from sawdust, into food-grade fats and oils. Investors like Nordic Foodtech VC and 2C Ventures see ÄIO’s solution as vital for both environmental sustainability and economic growth.

Helania closes $45M Series B to bring breast milk equivalent protein to market 

Helaina, a New York-based startup specializing in precision fermentation, has raised $45 million in a Series B funding round led by Avidity Partners, with participation from Spark Capital, Ingeborg Investments, Siam Capital and others. The funding will support the U.S. launch of Effera Human Lactoferrin, a bioactive protein mimicking breast milk, with plans to expand globally. The ingredient will initially appear in products from brands such as Kroma Wellness and Mitsubishi International Food Ingredients. The company has now raised $83 million in total, positioning itself as one of the most well-capitalized startups in the precision fermentation space.

Once Again seed butter brand buys organic almond manufacturer Big Tree Organic Farms

Once Again, a leading organic and natural nut and seed butter company, has acquired Big Tree Organic Farms, a California-based organic almond manufacturer. The acquisition invites Once Again to streamline its supply chain by positioning itself closer to the almond-rich Central Valley, reducing the environmental impact of shipping almonds cross-country. The new facility in Turlock, California, expands Once Again’s product offerings to include non-GMO and organic diced, sliced and slivered almonds, as well as almond flour. A new product catalog will be unveiled at SupplySide West in Las Vegas, Nevada, alongside a new website focused on ingredients.

Ayurvedic salt and pepper company Spicewell closes seed-funding round 

Spicewell, the world’s first nutrient-enhanced Ayurvedic salt and pepper company, has raised more than $1 million in an oversubscribed pre-seed funding round. Investors include Path Ahead Ventures (REI), Joyance Partners, Entrepreneur Ventures, Ashton Kutcher, Mila Kunis, and several health and wellness leaders. The funds will help scale Spicewell’s mission to transform pantry staples into functional, health-promoting ingredients. Spicewell’s New Salt, which contains 30% less sodium than regular salt and is blended with 12 organic vegetables, and its New Pepper, enhanced with organic vegetables and turmeric, offer consumers essential vitamins and minerals. The products are non-GMO, vegan, gluten-free and free from heavy metals and microplastics. Outlets like Thrive Market and Erewhon carry Spicewell products, and the brand has plans to expand into 250 stores by early 2025. The company is also addressing food service, securing partnerships with Compass Group and others.

Foreverland raises millions to grow carob-based chocolate alternative 

Foreverland, an Italian food-tech startup, has raised $3.61 million in seed funding to scale its sustainable carob-based chocolate alternative, Choruba. The funding round attracted investors including Grey Silo Ventures and Eatable Adventure and will support the establishment of Foreverland’s first manufacturing facility in Puglia, Italy, scheduled to open in January 2025. Choruba offers a plant-based, eco-friendly alternative to chocolate, addressing the environmental and ethical challenges of traditional cocoa production.

Canadian company leveraging flies for protein raises $58M 

Entosystem, a Canadian startup focused on transforming organic waste into high-quality ingredients, has secured significant investment from Idealist Capital, Sanimax and Fondaction. The funding will support the expansion of its existing Drummondville facility and the construction of a second commercial plant. Entosystem’s innovative process diverts organic materials from landfills and converts them into 5,000 tons of protein meal and 15,000 tons of organic-certified fertilizer annually. The Drummondville plant, which processes 90,000 tons of organic matter each year, operates as a carbon-negative facility. An independent study shows the project reduces greenhouse gas emissions by 85%, generating valuable carbon credits. The expansion is expected to bolster Entosystem’s capacity to produce eco-friendly protein for animal feed and organic fertilizers, further reducing the environmental footprint of food systems.

Atalanta Corp. advances Mediterranean portfolio with Big Picture Foods acquisition 

Atalanta Corp., a global specialty food importer, has acquired Big Picture Foods, a manufacturer known for its regenerative organic certified products, including olives, peppers and capers. This acquisition strengthens Atalanta’s portfolio, particularly in Mediterranean products, complementing its existing offerings of cheeses, charcuterie, deli meats and seafood. The acquisition will provide Big Picture Foods with access to broader distribution and new markets, while allowing it to maintain its independent identity and leadership team. Atalanta, part of the Gellert Global Group, continues its growth in 2024, following its earlier acquisition of canned seafood importer J.A. Kirsch. This latest move further solidifies Atalanta’s position in the specialty food market, expanding its reach into clean, organic and regenerative products.

PepsiCo picks up Siete Foods for $1.2 billion 

PepsiCo has entered into a definitive agreement to acquire Siete Foods, a Mexican-American heritage brand, for $1.2 billion. The acquisition aims to expand PepsiCo’s multicultural and better-for-you food portfolio by incorporating Siete’s range of tortillas, salsas, seasonings, sauces, snacks and more. Siete, founded in 2014 by the Garza family, is known for its authentic, heritage-inspired products, which are distributed across U.S. grocery, club and natural and organic food retailers. Siete CEO Miguel Garza expressed excitement about partnering with PepsiCo to make Siete’s products more widely available, while also inspiring other Latino businesses. The deal is expected to close in the first half of 2025, pending regulatory approval. Financial advisors for the acquisition included Centerview Partners and Lazard.

Lucky Energy raises $11.75M for retail expansion, new hires 

Lucky Energy, a better-for-you energy drink brand, has closed an oversubscribed $11.75 million Series A funding round led by Brand Foundry Ventures, with participation from Imaginary Ventures, Sapphire Sport and Sugar Capital, bringing the company’s total funding to $26.5 million. Launched in late 2023 by beverage entrepreneur Richard Laver, Lucky Energy anticipates expanding to more than 8,000 stores by the end of 2024. The new funding will be used to boost brand awareness, support strategic partnerships and accelerate retail growth, with plans to enter major retailers by 2025.

Alternative chocolate startup California Cultured closes significant investment 

California Cultured, a food-tech startup specializing in producing cocoa and botanicals through plant-cell cultures, has secured a significant investment from Sparkalis, the venture arm of Puratos, a global leader in bakery and chocolate ingredients. This partnership will help California Cultured scale its technology and address the growing demand for sustainable cocoa alternatives. The startup, founded in 2020, is constructing a 12,000 square foot facility in West Sacramento, California, expected to be operational by mid-December 2024. California Cultured’s approach involves growing cacao plant cells in bioreactors, which use nutrients rather than sunlight and soil, to produce cocoa. This method offers significant environmental benefits, reducing dependency on traditional agriculture and mitigating the challenges posed by climate change, unstable supply chains and ethical concerns surrounding cocoa farming. With this new funding, California Cultured aims to scale up operations, expand partnerships and further develop its technology to secure a stable and scalable alternative to traditional cocoa production.

Lesaffre boosts savory ingredient portfolio with majority acquisition of Biorigin 

Lesaffre, a leading French yeast manufacturer, has acquired a 70% majority stake in Biorigin, a division of Brazilian firm Zilor, with Zilor retaining a 30% share. Biorigin specializes in producing natural ingredients for the human food and animal nutrition sectors, with a focus on yeast derivatives. This acquisition, which includes Biorigin’s production facility in Quatá, Brazil, aims to strengthen Lesaffre’s capacity to deliver savory ingredient solutions by enhancing production, logistics and customer service. The partnership will enable both companies to leverage their complementary strengths, with Lesaffre bringing advanced R&D capabilities and global reach, and Biorigin offering a strong commitment to sustainability and innovation. Pending regulatory approvals, the acquisition will allow Biorigin to retain its brand identity while benefiting from expanded expertise and resources.

La Vie raises $26.5M to expand its plant-based pork business 

French plant-based pork and deli brand La Vie has raised $26.5 million in a new funding round, bringing its total funding to $53 million over the last three years. The round saw participation from historical shareholders, new investors such as Zintinus and Sparkfood, and a crowd-equity campaign involving over 3,000 investors, marking France’s largest crowdfunded initiative. The funding will support the enhancement of La Vie’s existing plant-based deli products and the development of new ones. The brand now partners with over 8,200 retailers and restaurants across Europe. With this new funding, La Vie plans to expand its distribution in France and the UK, invest in product innovation and raise awareness through campaigns, including its first TV ad.

Investor Ahimsa Brands buys plant-based nugget brand Simulate 

Simulate, the plant-based company known for its NUGGS brand, has been acquired by Ahimsa Companies, an investor focused on the plant-based sector. Facing a need for significant capital, Simulate chose acquisition over further fundraising. The deal’s valuation remains undisclosed, and it included a mix of cash and equity. Previously valued at over $250 million after raising $50 million in a 2021 Series B round, Simulate has remained relatively quiet since 2022, when it launched food service products. Terris confirmed that Simulate has been focused on developing fiber-spun technology, nearing scale-up for a plant-based chicken breast and other whole-muscle formats. Ahimsa, which previously acquired Wicked Kitchen, views consolidation as key to advancing the plant-based industry.

Luxury giant Moët Hennessy Louis Vuitton snags stake in booze-free French Bloom brand 

LVMH’s Wines and Spirits division has acquired a 30% stake in French Bloom, a premium alcohol-free sparkling wine brand, marking its entry into the rapidly growing alcohol-free market. This strategic move aligns with Moët Hennessy’s aim to diversify its portfolio and cater to the increasing consumer demand for health-conscious, alcohol-free alternatives. The global alcohol-free beverage market, which generated nearly $11 billion in 2022, is projected to grow by 7% annually through 2026. French Bloom, launched in 2019 by model Constance Jablonski and Maggie Frerejean-Taittinger, offers luxury de-alcoholized cuvées made from organic French Chardonnay and Pinot Noir grapes. The brand has won “World’s Best Alcohol-Free Sparkling” awards in both 2022 and 2023.

Sex telehealth company Hello Cake raises $18M 

Hello Cake, a sexual wellness and telehealth company, has raised $18 million in a Series B funding round and acquired Trigg Laboratories, the parent company of lubricant brand Wet. Led by existing investors Silas Capital and Strand Equity, with AF Ventures also participating, the funding brings Hello Cake’s total capital raised to over $36 million. The acquisition includes Trigg’s 70,000-square-foot manufacturing and distribution facility in Las Vegas, establishing Hello Cake as a vertically integrated player in the sexual wellness market. CEO and co-founder Hunter Morris emphasized that the acquisition and vertical integration will drive profitability, allowing Hello Cake to compete with larger brands like Reckitt Benckiser and Church & Dwight. Trigg’s COO Simone Buntin will remain at the helm of the company. Hello Cake has expanded rapidly since its 2020 launch, doubling its retail footprint to over 13,000 stores and introducing telehealth services. The brand also offers prescription medications, such as O-Cream Rx and Libido Lift Rx, aimed at enhancing sexual wellness for women.

Plant-based egg startup UOBO lands $530M for R&D and expansion 

Barcelona, Spain-based food tech startup UOBO has raised $530,000 in seed funding, led by Enzo Ventures, to further develop its plant-based egg alternatives and expand operations. UOBO recently launched liquid plant-based eggs for the food service industry, made from canola and potato protein, which can replace eggs in dishes like omelets and pastries while delivering an authentic taste. In addition to scaling production, UOBO has partnered with fellow food-tech innovator Cubiq Foods to develop a new egg-free product tailored for large-scale manufacturers. This collaboration aims to offer a sustainable, plant-based alternative that replicates the taste, texture and functionality of traditional eggs, addressing the environmental concerns of conventional egg production.

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