- Sonoma Brands, which purchased Krave from Hershey in May, said it will purchase Chef’s Cut Real Jerky for an undisclosed amount. The equity firm also invests in other food brands such as Dang coconut chips and owns a few other businesses, including sweets company SmashMallow.
- Chef’s Cut, founded in 2009, sells jerky, meat sticks and biltong made with real ingredients and premium cuts of steak. Jon Sebastiani, who started Krave in 2009 and now is the founder and managing partner of Sonoma Brands, told Food Dive the deal with Chef's Cut came together in less than a month.
- "With these two brands, we can really get more surgical on channel focus, on consumer segmentation, on messaging, and we can attack part of the premium position of this category from different angles," Sebastiani said. "We're more powerful together than each of us apart."
In the four years since it was founded, Sonoma Brands has worked with more than a dozen young food, beverage and other consumer brands including Dang, SmashMallow and Medlie Organic Veggie Drink. The purchase of Chef’s Cut Real Jerky marks the second purchase since May for the brand incubator in the premium jerky space after it snapped up Krave from snack and confections giant Hershey.
In an interview, Sebastiani said the recent purchases are part of Sonoma Brands' bet on the premium position in the meat snack category. It also gives the investor more chances to extract synergies when it comes to manufacturing the products, negotiating better terms with its co-packers and having a deeper bench of brands to pitch to prospective retailers and consumers.
The global meat snacks market is a fast-growing segment in food, a major reason why so many food companies have products in the space. Revenue is expected to be $14.5 billion in 2029 compared to $7.1 billion a year ago, according to Transparency Market Research.
While they may overlap in some product offerings, Chef's Cut has exposure in sticks, biltong and zero sugar meats, areas Krave doesn't currently have SKUs. Sonoma also can use the brands to target a broader set of consumers, including women and fitness enthusiasts, popular with Krave, Sebastiani said.
The acquisition of Krave marked a homecoming of sorts for the premium jerky brand founded by Sebastiani in 2009 before it was purchased by Hershey for $220 million six years later.
Krave is "still very much viewed as a premium brand and it's the godfather of this current meat snacks renaissance," he said. "Our acquisition of Krave spoke to the marketplace that we were going to take the premium direction seriously and our phones started to ring."
Other companies have reached out to Sonoma Brands, and while Sebastiani said another deal isn't imminent, "we are definitely going to consider acquiring more" to consolidate in the segment and extract further synergies.
During its time under the ownership of Hershey, Krave struggled as mainstream jerky options increased and other premium players entered the market, squeezing margins and leaving companies to fight for limited shelf space. Sebastiani said it's possible consumers simply decided to return to more of the legacy brands on the market because with so many competitors in premium compared to when Krave started, it was hard to distinguish what it meant to be in the upper echelon of the category.
Hershey ultimately wrote down the value of the Krave brand by $108 million earlier this year. The challenge is that the niche is dominated by Jack's Link, which holds more than a 50% market share, and a few other prominent players like Country Archer Provisions.
While Krave may not be what it once was, it still could do well under the oversight of a privately owned firm that specializes in trendy brands by a leader who knows the segment. Krave thrived under Sebastiani's ownership and it very well could again. It's uncertain what financial shape Chef's Cut was in before Sonoma's purchase, but regardless it could benefit from Sebastiani's tutelage as well.
"We feel [Chef's Cut] gives Krave more leverage, and our thesis is again to build a portfolio of premium brands to more effectively compete against the legacy big brands," Sebastiani said.