/How PopCorners growth made it an acquisition target

How PopCorners growth made it an acquisition target

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PopCorners is one of the fastestgrowing brands in the better-for-you snack category — and last year that growth attracted a big name in Big Food.

In December, PepsiCo​ announced it would buy PopCorners‘ parent company BFY Brands for an undisclosed amount and plans to close on its acquisition of the popped chip brand this year. BFY and PopCorners’ CEO Paul Nardone told Food Dive that his team has transformed the business over the last five years and the company plans to hold on to what made it so successful, while using the soda giant’s resources to scale up.

Just last year, PopCorners launched in Whole Foods nationwide and also unveiled two new snacks to its portfolio, Flex Protein Crisps and Flourish Veggie Crisps. 

“Anytime a business achieves that kind of momentum, it’s going to become very attractive,” he said.

As the company moves forward in the coming year, the goal is to continue to drive availability both in the United States and abroad.

“[PepsiCo] has tremendous resources that will directly result in PopCorners realizing its full potential. So as a brand owner, that’s what you want to do is you want to make your product widely available to more and more people. And that’s a hard thing to do for a small company,” he said. 

Permission granted by PopCorners

 

Nardone, who has committed to stay on as CEO after the deal closes, was named CEO of BFY Brands in 2015. He has spent his career at CPG companies, however, and this isn’t his first acquisition. Over the years, Nardone has helped build up smaller brands that were eventually sold off to Big Food. 

Most recently, he was an operating partner at private equity firm Sherbrooke Capital, where he focused on pushing growth across its healthy food and beverages portfolio. While there, he served on the board of directors of Angie’s Boomchickapop, which was later acquired by Conagra Brands. Nardone also was president and CEO of Immaculate Baking Co., where he led the company to become the top-selling natural brand in the refrigerated dough category before it was acquired by General Mills.

“When I take an assignment, it’s really with the mindset that we’re just looking to build a great business. And what happens a lot of times, you build a great business, it drives a lot of interest in the market,” he said. “So I think most people would say you never want to just be focused on trying to sell a business, but it’s sometimes the result of things really coming together nicely.”

How PopCorners does ‘one better’

But what differentiates PopCorners from some of the other snack brands out there today? Nardone said it has to do with the company’s slogan that appears on every package: ‘Do One Better.’ From farming to ingredients, the company has invested in improving its manufacturing practices and informing consumers about its process. 

“We believe in transparency and telling consumers and our fans what it is we want them to know about us and we thought that line ‘Do One Better’ really sums up so much of what we do. So it’s not just a tagline for a campaign, but it really embodies our commitment to sourcing and responsible manufacturing transparency,” he said.

PopCorners uses non-GMO corn supply grown in the U.S., as well as yellow and green peas in its Flourish Veggie Crisps sourced from a supplier who uses regenerative farming. The brand is one of many companies, like General Mills and Danone North America, turning to regenerative agriculture as consumers look for more sustainable products.

“My commitment is to find more and more suppliers that are committed to do that, simply because we think that’s the right thing to do. Even in the case where you may have to pay more for the ingredients than conventional ingredients,” he said. 

The company has also invested in its supply chain infrastructure, limiting the number of touch points for corn, its main ingredient. PopCorners built an extension on a railway that leads straight to its manufacturing facility in Middletown, New York to limit the handling between the farm and the store. As consumers grow increasingly concerned about food safety, simplifying that supply chain can help limit risk. 

Permission granted by PopCorners

 

The reduced supply chain allows the company to source all of its corn by rail, saving fuel it would use with trucks, which he said is the more common way that snack companies source their ingredients. Nardone said these efforts are illustrated with a sketch on the back of packages to educate consumers about the simplicity of its supply chain. 

“The integrity and uniqueness of our supply chain and manufacturing model is one of the things that I believe PepsiCo finds so special about our business,” he said. 

On a global level, the brand also has a facility in Belgium to reduce overseas shipping. Nardone said spending more money on facilities and being more open with consumers is where more of the industry is headed. 

In recent years, reports have found that shoppers are increasingly demanding transparency and a closer connection to their food. Nardone said more companies are aware of the importance of transparency today, but he doesn’t see many “doing what we’re doing from start to finish.” He said as time goes on, these practices will be even more significant to consumers.  

“I have two school-aged children, and I can just see it in that next generation because there’s a sincere curiosity and interest in wanting to understand the source of where their foods come from,” he said. “Consumers are reading labels more today than ever before. And it goes beyond reading labels. What’s behind the company is so, so important. Consumers want to feel that they can trust all of those elements. And when those line up, and in a transparent and trustworthy way, I think that translates to long-term loyalty. So from a business perspective, it certainly makes a lot of sense. And that’s why it puzzles me that more companies don’t understand.”

‘One-of-a-kind crunch profile’

​But as the better-for-you snack space grows and more companies make commitments to sustainability and transparency, it is harder for brands to stand out on crowded shelves. Nardone said this air-popped and gluten-free triangle-shaped snack is unique though because it uses a patented manufacturing process to give it the mouthfeel of popcorn in the shape of a chip. That process gives the chip its “one-of-a-kind crunch profile,” he said. 


“Consumers want to feel that they can trust all of those elements. And when those line up and in a transparent and trustworthy way, I think that translates to long-term loyalty.”

Paul Nardone

CEO, PopCorners


Oftentimes products like PopCorners are made by a contract manufacturer. But because PopCorners has patented technology to give it that crunch, the company uses its own plants, which gives them more control over the facility’s operations and the quality of the product, he said. In addition to its manufacturing facility in Middletown, the company also has one in Liberty, New York. 

With PepsiCo looking to enhance its premium snack portfolio, this acquisition will help them do so by bringing in the healthy crisps brand and its facilities. 

“BFY Brands offers distinctive products that deliver the great taste and ingredients consumers are looking for,” Steven Williams, CEO of PepsiCo Foods North America, said in a release when it announced it would buy PopCorners. “Their production capabilities will support the growth of our existing, more-nutritious snack brands.”​

The deal also falls in line with PepsiCo’s recent M&A moves to add healthier snack items to its portfolio as it shifts away from its dependence on soda. In 2018, the company bought baked fruit snack maker Bare Snacks and also purchased Health Warrior, which makes plant-based and protein-dense bars, mixes and snacks. 

When it comes to the snack itself, PopCorners hits on a lot of trends today with its health profile, including non-GMO, low-calorie, low-fat and gluten free. But Nardone says most important of all is taste. 

“It’s not another tortilla chip or another potato chip or another cheese puff. PopCorners’ success is really due to its uniqueness in the fact that it checks so many boxes of what today’s consumers are looking for,” he said. “Historically, there has been a trade off in achieving great taste and natural product credentials and PopCorners really is that perfect mix of natural product credentials with great taste, very distinctive crunch profile.”