- PepsiCo purchased Health Warrior, a brand of plant-based, protein-dense bars, mixes and snacks, for an undisclosed amount, the company announced Wednesday morning. Health Warrior is the first brand that will be part of its new innovation program, The Hive, which focuses on smaller, emerging brands.
- Health Warrior was started in 2011 by a group of college friends who wanted to make nutritious superfoods more accessible to consumers. The brand's offerings are non-GMO and gluten-free, and include ingredients like pumpkin and chia seeds. Health Warrior will continue to operate out of its current headquarters in Richmond, Virginia.
- "We're fired up to join PepsiCo and continue to put nutritious options within reach of significantly more people," Health Warrior CEO Shane Emmett said in the company statement. "With a shared mission to help create healthy relationships between people and food, PepsiCo is the ideal partner to bring our nutrient-dense, plant-forward offerings to even more consumers and considerably accelerate Health Warrior's growth. This is the whole reason we started the company."
Health Warrior's brand slogan is "We make food that actually feeds you," which is appropriate to describe both the ingredients in its bars, powders and mixes — as well as the impact PepsiCo is hoping the brand will have on its bottom line. With plant-based and protein-dense snacking so on trend, it makes sense that the first brand brought aboard for Pepsi's The Hive program would fit the profile of Health Warrior.
Through acquisitions, the company best known for its signature soda has been branching into healthier snacking. This has been a strategy for years, though the company seems to be accelerating more into this space now. After all, PepsiCo bought Quaker Oats in 2001 and has jointly owned hummus and dips company Sabra since 2008. More recently, it bought baked fruit maker Bare Foods earlier this year and acquired probiotic drink maker KeVita in 2016. On an earnings call earlier this year, former CEO Indra Nooyi estimated PepsiCo has grown its business of good-for- you and better-for-you products from 38% of revenue in 2006 to about 50% last year.
PepsiCo, which also owns snacking giant Frito-Lay, has many different types of products under its umbrella, but no protein bars. In the company statement, CEO of PepsiCo North America Al Carey said this is an attractive growth space. PepsiCo North America Nutrition President Seth Kaufman told Fortune that the company has been "watching [this space] for a long time" and sees potential to use "seeds as a platform" for more than just bars.
The category is also a lucrative one. According to a Mordor Intelligence report, the global protein bar market was valued at $837 million in 2016 — with the U.S. being the largest consumer. High-protein bars, like the ones made by Health Warrior, were 56% of the market two years ago. On the whole, analysts expect the segment to post a compound annual growth rate of 3.9% between now and 2023.
But for proof of the power of protein bars, look no further than Kellogg. The company known for its cereals, which bought clean-label RXBAR for $600 million last year, has been reaping the financial rewards of its acquisition since the deal closed. In its latest earnings report, net sales were up 7% — largely because of RXBAR. And PepsiCo may see the same effect as it works to scale Health Warrior. Emmett has told the Richmond Times-Dispatch that through August this year, sales were up about 75% from the same time in 2017.
As the first company in PepsiCo's innovation arm The Hive, Health Warrior will set the tone for the trends and investments the company taps into. In the company statement, Kaufman, who oversees The Hive, said the company will "continue building the Health Warrior brand at a deliberate and sustainable pace and to leverage its entrepreneurial expertise and talent to benefit our broader portfolio."
Without a doubt, Health Warrior will also have some innovation in sales and marketing to pass along to PepsiCo. After all, Emmett told Fortune, Amazon is currently the protein-dense manufacturer's biggest customer.