Belgian-based investment firm Verlinvest – which has backed the likes of Oatly, Vita Coco and the UK’s Genius gluten-free bread line – sold its majority stake in popchips for an undisclosed amount. The baked snack brand will anchor Velocity Snack Brands (VSB) portfolio, paving the way for like-minded brands to follow similar trajectories.
The new Los Angeles-based venture will focus on the ‘salty, sweet and nutrition bar’ categories, with an emphasis on thoughtful brand stories that connect with consumers and satisfy their unmet needs, CEO Amit Pandhi told BakeryandSnacks.
“We saw a real need in the marketplace for something like VSB, and just like brands need to innovate within their product lines and products, we felt like this platform was also something that needed to be innovated,” he said, referring to traditional investment models.
Pandhi, who helped low-calorie ice cream brand Arctic Zero become the sixth most popular pint on US retail shelves, joins the team after years in both CPG and private equity. Importantly, he said, he has long been a consumer himself: “It’s a personal philosophy of mine to democratize health and wellness products, and we can really do that at VSB.”
As an investor and incubator, VSB “really serves as an alternative for entrepreneurs and brands, versus staying independent or selling to a large multinational CPG. And the real purpose for VSB is that we’re nimble – like a small independently run brand – but really we have the sophistication, the resources, and [the] team of a larger, publicly traded CPG,” he explained.
Retailers are very sophisticated, as are consumers. As consumers habits and usage occasions have changed, retailers have adapted to meet them there. Whether it’s convenience or drug or mass or grocery, I think all of them are open to fulfilling the needs of their consumers. So, you see that across the entire spectrum – and that’s why there’s been so much innovation in the space.
There are still unmet needs in the marketplace, and our goal is to make sure we fulfill them through our own innovation or by partnering with [retailers] as brands become part of the VSB platform.
– Amit Pandhi, CEO of Velocity Snack Brands, on the importance of the retailer-brand-investor relationship
Big ambitions: ‘poised to be the leading destination for excellence in the snack industry’
The popchips team will join VSB, as the firm seeks to hire “the most talented and experienced people in the industry,” Pandhi told us. Key additions will be announced later this year.
These snack pros will look for brands “trying to solve a pain point for consumers” and those that have “built something special for a clear consumer demand.” They should have a loyal following with strong repeat purchase patterns and a product that has room to scale and reach new customers.
VSB will prioritize brands that have “real emotional connectivity,” he said, adding no category is necessarily off-limits.
“While things are changing, for many years, products were just not available to consumers. The world’s a different place now. We all still like to indulge, but indulge in a way that’s better for us.”
VMG, for instance, has supported major bakery and snack players including KIND (in which Mars Wrigley owns a minority stake), Nature’s Bakery, Bare Snacks (now under Frito-Lay), Perfect Snacks (scooped by Mondelēz in June), Snack Factory’s Pretzel Crisps (part of Snyder's-Lance), and Pirate Brands (now with Hershey).
Let popchips lead the way to a healthier snacking future
Keith Belling, a self-proclaimed serial entrepreneur who recently launched riced cauliflower brand RightRice, co-founded popchips in 2007 with Patrick Turpin. While Turpin has been uninvolved with the brand for 'some time,' Belling will occasionally advise on 'high-level' decisions but will otherwise let VSB run the show.
In just over 10 years, popchips has reached nearly 90% awareness, according to Pandhi, and checks all the boxes for contemporary snacking demands. It has also permeated most retail channels nationwide.
“That gave us the confidence that the product had earned the right to expand its presence in retail locations with innovation and products that people can love,” said Pandhi, noting the brand’s diversification into pea-based snacks with Yes Peas and Nutter Puffs, a peanut flour puff similar to Bambas.
He added he was “exceptionally excited” to have popchips as the first of what will become several acquired and created-in-house snack brands.
Belling agreed that VSB’s mission aligned perfectly with his brand’s better-for-you foundation: “I look forward to seeing how they leverage the expertise and operating synergies of the snack platform they are building to take popchips to the next level.”
VMG general partner Wayne Wu said the firm had been kicking around the idea of a consumer products platform ‘for some time,’ and popchips provided the ideal lead-in.
Pandhi’s “skill set and passion will be invaluable as we build out the Velocity Snack Brands platform,” added VMG VP Jon Marshall. “The popchips brand is the perfect anchor...with its strong brand awareness and broad consumer appeal [among] those seeking healthy snacks.”