Broadly speaking, these last 2.5 years have been tough on CPG brands relying on investment to turbocharge their growth. But for those that developed fiscal discipline, adapted to the new operational reality, and proved their business model again…the ongoing stillness and fog for investment and M&A is starting to clear. A handful of recent deals reaffirm that strategics are reliant on CPG entrepreneurs to provide innovation and growth that they can’t necessarily create internally. Moreover, venture investments within food and beverage CPG are at the highest point in two years. But I believe CPG entrepreneurs should continue staying cautiously optimistic, even as the once-imminent economic recession has receded. You have expected consumer spending growth to slow, interest rates higher for longer, and ongoing geopolitical risks that could potentially cause more supply chain bottlenecks.

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With the balance sheet in a great place, I think it’s the perfect time for General Mills (NYSE: GIS) to “reshape the brand portfolio” in hopes of staying relevant in today’s high protein grocery world. Over a very recent period of seven days…General Mills signaled twice (quite loudly in fact) that the 168-year-old multinational CPG company is ready to reshape its brand portfolio for growth. The first signal happened on September 12th, when General Mills announced that it has entered into definitive agreements to sell its North American Yogurt business to two leading French dairy companies…in cash transactions that totaled $2.1 billion. And then on September 18th, during the fiscal 2025 first quarter earnings call…General Mills CEO explicitly stated that the intended usage for those divestiture proceeds would be acquire smaller-size bolt-on assets that would enhance growth. For those that don’t follow the architecture of the General Mills brand portfolio, the North America Retail operating unit (which makes up 62% of total sales) is still dependent on what the company calls “morning foods,” with the largest of those foods being cereal. And if we eliminate the “Great Shutdown” outlier period, cereal has been facing long-term sales decline...forcing General Mills to communicate the category's ability to be consumed more as a snack food, but also utilize new product launches that contain much higher protein content (e.g. recent collaboration deal with GHOST Lifestyle Protein Cereal). And this makes sense…especially when you consider that protein has become a kind of "holy water" that instantly anoints any food or beverage with a health halo. In addition to the ubiquitous protein bars, protein powders, and protein beverages, more grams of protein seem to be making its way into anything and everything that’s quick, easy, and accessible…thus penetrating more diverse food and beverage categories. But then based on the previously mentioned investment specifics by General Mills CEO…which handful of CPG brands (focused in/around protein) could be highly probable targets? I'll provide M&A base cases for the following CPG brands; Kodiak, Aloha, IQBAR, Lenny & Larry's, Chomps, and the public company Simply Good Foods (NASDAQ: SMPL) that owns Quest Nutrition, Atkins Nutritionals, and OWYN.

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In today’s big data world, sage advice like “follow your intuition” too often gets criticized within business settings. Yet, having deep domain expertise can improve your intuition breadth and depth…allowing your brain to unlock the powers of pattern-matching…and the ability to more consistently predict what will happen next. And as you’ll hear in this episode, I didn’t need to question how I came to a particular conclusion the first time seeing the early concept for SALUD…I just knew the hydration brand had “winner” written all over it! But maybe I’m giving my “gut” too much credit…and overlooking my 12+ year history with SALUD’s co-founder Tyler McCann. And while us two “outsiders” didn’t spend too much time together at MusclePharm, “The Athletes Company” did form the foundation for our supplement industry knowledge. But beyond briefly talking through some of the most interesting moments from MusclePharm, Tyler and I discuss some of the great/bad/ugly strategic lessons that became iterative direct applications within the commercialization of SALUD. Moreover, we talk through some of the “drivers of demand” (and categorical trends) over the last decade that created massive opportunities within the supplement industry…many of which helped SALUD become a hypergrowth brand. Also, Tyler and I cover the strategic approach at SALUD…including its authentic cultural branding strategy, focused product portfolio, sales channel strategy, and how it has built strong initial brand awareness through scrappy partnerships…leaving many untapped “significant large deals” until the timing is right. Finally, I provide Tyler my “grand vision and goal” for SALUD…that I think even surprised him! But these are just some of the interesting topics we chatted about in this episode...

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AI is the heartbeat of CRISPR gene-editing, precision fermentation, and cellular agricultural when it comes to unlocking boundless consumer-centric food advancements. These deep-learning platforms can design ingredients from billions of edible sequences and apply parameters for producing them. And I know A LOT of you are probably saying, “that’s not natural and probably dangerous,” which I totally understand…but also consider the positive product development aspects of being able to pack more nutrition into products without sacrificing on taste. So, what does PepsiCo do with this powerful technology? It wanted to elevate the consumption experience for gamers who choose Doritos. Gamers download Doritos Crunch Cancellation software and when the technology is turned on, the software detects the crunching sounds and silences it within the gaming experience...while keeping the gamer’s voice intact. No word on when Doritos Silent will be integrated right into the actual flavored tortilla chips.

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Because I cut my teeth in what most call the “Barnum & Baily Circus” side of ingestible CPG (aka the sports nutrition niche of the supplement industry), I’m very used to founders making “big things coming” proclamations. But that being said, I’m struggling to remember the last time I’ve felt this much pre-launch wonder/intrigue around a functional CPG product…with many competitors, retailers, and industry colleagues, reaching out to get my thoughts on David protein bars. Some of this could be attributed to that half-year “hype cycle” leaving many to wonder about the product details, but also that this is the categorical “second act” for Peter Rahal…who previously founded RXBAR, that exited to Kellogg’s in less than five years for $600 million in 2017. But beyond talking through some of the most interesting moments of that RXBAR wild ride, Peter and I discuss some of the strategic lessons from that successful first “protein bar venture” that became iterative direct applications within the conceptualization of David. Moreover, we talk through how watching the protein bar market staleness of the last handful of years helped reignite that entrepreneurial spark (after trying his hand at being a venture capitalist). Also, Peter and I cover the new strategic approach at David…including which “drivers of demand” are most important, the remix inspiration for its visual identity, and the brand’s bold long-term strategic narrative. But these are just some of the interesting topics we chatted about in this episode...

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Most CPG companies are largely unready to handle the ingredient shortages, price hikes, and supply issues caused by climate change (and/or population growth) over the next decade. From staple crops to cash crops like cocoa and coffee, disruption from these factors won’t happen everywhere at once…but the impact severity will only increase over time. Food technology innovations like precision fermentation and cellular agriculture present hopeful aid…that is if they survive the upcoming predicated market consolidation period. The problem was created when these food technology startups raised billions at the “tippy top” of market valuations, scaled up operations too quickly, and hit commercialization snags. So, the question remains: how long before traditional agricultural giants like Cargill just buy up all the struggling precision fermentation and cellular agriculture startups that own valuable IP…further strengthening market domination of whole commodity groups?

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It was two years ago when protein input prices got WHEY out of control, but as Justin Timberlake once said, "what goes around, goes around, goes around...comes all the way back around." But back in April of this year…I shared this funny meme on Instagram that provided a cryptic message to supplement brand owners that sell "whey protein" products. And I was trying to warn them that this “grossly underreported food supply story” would most-likely impact dry whey commodity pricing…even if USDA managed containment at an acceptable level. So, why did I care so much about the potential impact from the Highly Pathogenic Avian Influenza (HPAI) being detected in dairy cows? At the time, I had no idea if the virus would (1) spread quickly across dairy cow herds, (2) have high mortality rates, and (3) cause meaningful reduction of milk production of recovered dairy cows. But what I did already know was that the U.S. had low inventories of cows and there was a rising domestic demand for dry whey (especially whey protein concentrates). And as you might be able to guess, dry whey price has been climbing...doubling YoY (from the August inventory five-year high) and increasing 50% from when I posted that cryptic meme (making it the highest price since April 2022). Yet, I’m sure many of you are still wondering…what does all this information mean? So, my latest first principles thinking content will aim to make it more actionable by presenting short- and long-term insights for supplement brand owners, and I’ll even toss in a little love for consumers too. While there's tons of different puts and takes, I believe a slight market tightening will keep dry whey commodity pricing at heightened levels until the latter part of the first half of 2025. Though some supplement brand owners might not be feeling much from the recent price increases yet...savvy operators should realize it’s coming, as there’s generally a several month lag that happens because of (1) the natural timeline of production (and supply-chain) flows, but (2) most likely it’s because supplement brand owners don’t procure protein (or honestly any ingredients themselves). So, much of the impact could depend on the stock levels of protein material at contract manufacturers and if that coMan has decided to pass cost increases immediately to supplement brands. And just to add the end-consumer layer here…there would be even further lags in when this cost increase could impact you on the shelves with higher prices. But it's likely consumers will see some categorical price inflation again. It won’t be anything like two years ago…but also consider that many supplement brands haven’t lowered prices much (if at all) yet. The strongest brands will be able to again increase prices. This is already starting to take shape too, as several large public companies (that own leading protein CPG brands) have mentioned a plan to increase prices. And then finally, my longer-term outlook around what could impact whey commodity prices centers around global population increases...as it's hard to grasp how farmers, using only traditional agricultural methods, will handle protein supply for this immense population proliferation. Yes, there’s still a number of levers to pull that can increase global milk output and production “naturally,” but eventually food technology methods like precision fermentation and cellular agriculture will need to play a key role in meeting future protein demands.

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Even after shining a spotlight on arguably one of the largest “blue oceans” just over two years ago, it seems inattentional blindness continues to plague most supplement brands. But within the supplement industry…maybe the phenomenon of missing something so obvious could be attributed to being distracted by the same old way or even disbelief that there’s a simpler opportunity. The “sports nutrition” niche of the supplement industry is a graveyard of once-buzzy brands that abruptly stopped growing…at least in part because they never had a solid strategic plan to turn anyone into a customer who wasn’t already relatively fit. In July 2022, I explored a related topic, showing through a collection of different statistics that spanned race signups, connected fitness average workout by subscriber data, wearables activity levels, and even national/state park visitation numbers…that there was widespread growth across endurance activity type, interest, and competitive level. Additionally, I presented several other "Great Shutdown" accelerated “drivers of demand” that showed how drastically different the fitness landscape became, thus providing the needed shifts in consumer behavior that could fuel new commercial opportunities within the supplement industry. But while change absolutely happened from 2020 to 2022...these last two years have been an equally chaotic period for the fitness landscape. So, I'll re-examine a few previously utilized statistical trends for their stickiness level and then also explore a few new data stories (like the rise of run clubs, longevity and healthspan trend, fit lifestyle sports nutrition shift) that encompass today’s fitness vibes. But does this compelling data storytelling around potential long-term consumer behavior change justify a strategic action by brand owners within the “sports nutrition” niche of the supplement industry? Because oftentimes the best approach is to let others better serve that market. That being said, I'll re-examine two sports nutrition brands (Science in Sport and Bare Performance Nutrition (BPN)) that are authentically serving the endurance activity market. Plus, I'll add a new dynamic to this discussion with Raw Nutrition recently launching a subline of sports nutrition products called Raw Endurance. Additionally, I'll tackle key strategic elements like product strategy because it’s important to meet the endurance activity consumer where they are right now (and consider future adjacencies). Finally, I remind supplement brand owners that the biggest “blue ocean” opportunity is through incrementality. That’s why I talked about the foundational human movements of walking, hiking, biking, and running…as it provides you with a chance to turning a “beginner” into a customer. And what I mean by a “beginner” isn’t the typical fitness industry definition of someone relatively young (and capable) who wants to become more conventionally attractive, get swole, or learn a trendy workout. I’m talking about most adult Americans who don’t currently hit the CDC’s recommended minimums for regular exercise. More than ever, humans are beginning to realize that movement is an essential component in quality of life…but what the supplement industry doesn’t understand is that being distracted by the same old way or even disbelief that there’s a simpler opportunity is leaving significant underserved audiences of true beginners (with enormous demand).

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Even though my son Axton is only four months old, I can already see the “like father, like son” idiom playing out. Any parent knows that our children will mimic us…the good stuff, the bad stuff, and even all those autopiloted daily consumption decisions. But what happens when it’s recommended that kids under 12 shouldn’t drink something that 73% of American adults drink daily? Well…a 7-year-old noticed this market opportunity and launched Kiid Coffee, betting that there are more kids out there (just like him) that would love to share a bitter morning beverage with their coffee-loving parent. And don’t worry…Kiid Coffee is 99.9% caffeine-free and formulated specifically for growing kids. But what about us energy drink loving parents? Be patient…I have a feeling Axton is already formulating the “world’s first energy drink crafted specifically for kids.”

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