BOULDER, COLO. — Sunrise Strategic Partners is aiming to accelerate the next generation of disruptive food and beverage brands with the addition of a new leader and new funding from its partner Trilantic North America.
The Boulder-based accelerator announced Trilantic invested “hundreds of thousands of dollars” to support the growth of emerging brands in the healthy, active and sustainable living space. It also added CPG veteran Peter Burns as a managing partner.
Mr. Burns most recently was chief executive officer of ONE Brands, where he led the nutrition bar maker’s sale to The Hershey Co. Before that he was CEO of Justin’s, where he led the nut butter brand’s sale to Hormel Foods Corp. He joins Steve Hughes and Vincent Love as managing partners of Sunrise’s new investment vehicle funded by Trilantic North America’s Fund VI North America.
Launched in 2016, Sunrise has provided growth expertise and capital to emerging brands, including Cali’flour Foods, Coolhaus, Kill Cliff, Little Secrets, Maple Hill Creamery, Pact and Teton Waters Ranch. The partnership between Sunrise and Trilantic already has led to two successful exits. Sunrise invested in Kodiak Cakes in 2016, helping grow revenue from $15 million to more than $200 million and driving the better-for-you food brand’s sale to L Catterton. It also was an investor in Vital Farms, an egg and butter brand, which completed its IPO last year.
Key to Sunrise’s success is its strategy of investing in brands that resonate with millennials. The demographic’s purchasing power increased more than 60%, or $1.5 trillion, between 2016 and 2020.
“With this purchasing power, millennial consumers are driving a massive shift from legacy brands and businesses to emerging companies that better align with their values, including better-for-you food and beverage brands,” Mr. Hughes and Mr. Burns said.
Eight-in-ten millennials consider quality a top factor for making food purchases, and 68% are willing to pay more for higher-quality food products, they added.
“With these higher expectations from millennial consumers, mission-driven brands that recognize this shift in consumer preference and use the opportunity to connect with millennials will be influential, growth-driven brands for the next 25 years,” the managing partners said.
Healthy snacking, low-carb, functional beverages, flexitarian diets and plant-based diets are among the trends Mr. Burns and Mr. Hughes are watching closely.
“Brands that are finding success with a direct-to-consumer model are very interesting to us,” they said. “Also, brands that are focused on solving key issues like climate change via product or packaging innovation.”
Consumers are beginning to understand the environmental impact of factory farming and are making the switch to support brands that implement regenerative agricultural practices, they added. Sunrise’s portfolio includes a number of brands supporting this shift, including Vital Farms, which offers only pasture-raised products. Teton Waters Ranch offers 100% grass-fed, antibiotic- and hormone-free beef, while Maple Hill offers 100% grass-fed organic dairy items from more than 100 farms, representing a quarter of all organic dairy farms operating in New York State.
Another millennial-driven trend Sunrise is keeping an eye on is the push toward simple, clean ingredients and low sugar options.
“Since sugar is known as the new tobacco, we’ve seen that brands who can deliver on great taste without added sugar are finding success with consumers,” Mr. Hughes and Mr. Burns said. “We’ve already seen our current portfolio brands capitalizing on this trend, with Little Secrets offering chocolate products that are lower sugar than conventional products, and Maple Hill recently launching the industry’s first-ever zero sugar organic milk.”