⏱️ Your Mega-Merger Playbook

For a summer without a whole lot of financial news, the rumored buyout of snacking giant Kellanova by legacy candy maker Mars hit like Hurricane Debbie. The potential for a company with an estimated combined revenue of $60 billion, after all, carries a lot of crosswinds.

And while everyone loves a big merger, at the entrepreneurial level, it’s often hard to parse out how it might change the stakes at the entrepreneurial level. 

So what should you watch out for as the owner of one of those entrepreneurial brands? We checked with experts around food and beverage to understand some of the things that smaller brands should clock into when the whales start their mating dance.

Insiders can access the full story to learn what challenges and opportunities experts say the deal could produce and glean more insights from industry veterans.

Monster Beverage Corp. co-CEO Rodney Sacks cited an “actually relatively unprecedented” downturn in consumer spending and c-store traffic as the cause of anemic sales growth in the company’s latest earnings report, released this morning. 

⚡ Hilton Schlosberg, vice chairman and co-CEO, admitted during prepared remarks that energy drinks “experienced lower growth rates” in Q2 as consumers have turned away from c-stores in search of higher-value channels like mass and dollar. Let’s take a closer look:

• Net sales increased 2.5%, to $1.9 billion. 
• Within its RTD Energy Drinks segment – its core Monster line, plus Reign Total Body Fuel, Reign Storm, Bang Energy and Monster Tour Water – rose +3.3% from the same period last year to $1.74 billion. 
• Attempts to innovate are also bringing growing pains: Thanks to decreasing FMB volumes, net sales in Monster’s Alcohol Brands segment – which includes The Beast Unleashed, Nasty Beast Hard Tea, and various craft beers and hard seltzers – were down -31.9% to $41.6 million, from $61 million in Q2 2023. 
• The company reported a write-down of around $8.1 million related to brewery closures in the quarter. 

BevNET Insiders can read the full story to learn why the company isn’t backing off from its planned 5% price hike this November.

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This week the CPG Week podcast team shared their favorite discontinued products before jumping into a packed episode ranging from “zombie brands,” a rumored mega-merger of snacks and sweets, earnings results and PRIME’s ongoing legal woes.

• The team dives into a discussion of zombie brands and how it relates to alternative meats, the pandemic and… Steven Seagal movies? 
• The group also talked through the rumored acquisition of Kellanova brands by Mars and what it could mean for the snacks and sweets sectors
• The show closes with a review of some of the latest beverage industry earnings and a rundown of yet another lawsuit against Logan Paul’s PRIME beverage company.

Listen to the full episode on Nosh.

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