Laird Superfood acquires snack maker Picky Bars for $12M

Source: fooddive.com

Dive Brief:

  • Plant-based manufacturer Laird Superfood acquired Picky Bars, a provider of energy bars and nutritionally enhanced oatmeal and granola, for $12 million in cash and stock.
  • Picky Bars, founded by professional athletes in 2010, specializes in clean-label products with a balanced protein, fat and carbohydrate content. Its offerings, which had previously been sold only direct to consumer, will be offered through Laird Superfood’s omnichannel platform across the U.S. 
  • The acquisition is Laird Superfood’s first since going public in September. It also marks the company’s expansion into product segments beyond its functional, beverage-focused portfolio, which includes coffees, coconut-based creamers, powdered drink mixes, coconut waters and dried fruit and nuts. 

Dive Insight:

While Laird Superfood may be adding new product segments with its acquisition of Picky Bars, there is a lot about the deal that suggests a conservative and complementary merging of the better-for-you manufacturers.

Both companies were launched by athlete entrepreneurs. Established in 2015, Laird Superfood’s co-founders include big wave surfer Laird Hamilton and former pro volleyball player Gabby Reece. Picky was founded in 2010 by track and field athlete Lauren Fleshman, long-distance runner Stephanie Rothstein Bruce and triathlete Jesse Thomas.

Each manufacturer also embraces a low-sugar, clean-label ethos for their products. Laird Superfood positions its powdered plant-based creamers, sweetened with coconut sugar and featuring functional flavors like turmeric and mushroom, as the alternative to heavily processed options. Picky Bars uses dates for sweetness in its bars and oatmeal, and fats as such nuts, seeds and coconut oil throughout its product line. More recently, this has included pancakes and a nut butter topping, Drizzle.

Laird Superfood has been seeking an expansion beyond beverages for some time. In 2020, its powdered creamers supplied 71% of the company’s sales, according to its most recent earnings presentation, although the company’s most recent product introductions have been in functional coffee and powders. It has a shelf-stable liquid creamer slated to debut later this year. This past fall, right after the company’s IPO, Laird Superfood co-founder and CEO Paul Hodge said in an interview the company was targeting categories “that not only differentiate us from any other brand” but also in which it could offer products with previously unavailable attributes.

The company has since expanded into better-for-you whole snacks such as dates and pili nuts, which are native to Southeast Asia and have a high magnesium content. According to the company, inventory on hand for the pili nuts sold out on the first day of the product’s October launch, and remained out of stock for the entire month after. Picky Bars’ portfolio, which includes quirky bar varieties such as Ah, Fudge Nuts! and Blueberry Boomdizzle, four varieties of granola and three flavors of oatmeal, further adds to Laird Superfood’s snacking lineup. 

The two Oregon-based manufacturers also fit like puzzle pieces in terms of their approach to sales. Laird Superfood’s products are available in nearly 7,100 retail locations, according to the company’s most recent earnings presentation, although approximately 60% of its sales originate online from its website and Amazon. The company has set a target of 20,000 retail locations, Hodge mentioned in its most recent earnings call. Picky Bars, which has taken a pure e-commerce-based approach, has a subscription and loyalty program called the Picky Club, in which customers can customize shipments with their mix of products. Laird Superfood has its own subscription program with volume-based discounts, reflecting its price-conscious approach to better-for-you foods.

The acquisition is taking place not only after a successful IPO but also a year of strong sales growth for Laird Superfood, despite the hurdles of the pandemic. Sales for full-year 2020 rose 98.5% to hit $26 million, according to its most recent earnings report. It also finished the year strong, with net sales up 75% to reach $7.3 million in the three months ending Dec. 31. Online sales leapt 170%, with wholesale up 45%.

Continuing this clip will be challenging. While making acquisitions such as Picky Bars is one path to growth, Laird Superfood has another option: aligning with Big Food. In fact, Laird’s biggest investor is Danone Manifesto Ventures, the corporate venture arm of the global food giant. In response to an analyst’s question during the company’s fourth-quarter 2020 earnings call about the potential of future partnerships, Hodge was open to the possibilities, even though Laird Superfood considers its products an alternative to more established brands.

“If there’s an opportunity that basically enables us to build this brand, that’s what it’s all about,” Hodge said during the earnings call. Whether acquiring a brand or partnering with a large CPG, “if there is a deal that’s just is a win-win for everybody, we’ll certainly be looking at it.” 

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