Private equity company VMG Partners has acquired popchips under its newly-created healthy snacks incubating platform Velocity Snack Brands (VSB) for an undisclosed sum.
Popchips was founded in 2007 by Keith Belling, a serial food entrepreneur who recently launched vegetables-based grain brand RightRice, and Patrick Turpin. Its products include original rounds, ridges, Nutter Puffs, and Yes Peas.
Barclays served as exclusive financial advisor to popchips and its majority shareholder Verlinvest, and San Francisco-based Morrison Foerster served as legal advisor to popchips during the transaction.
VMG Partners has previously invested in various high-growth snack brands such as KIND Snacks, Pirate’s Booty, Perfect Bars and Quest Nutrition, some of which have made prominent exits to large CPG companies including Hershey and Mondelēz.
The investment company noted VSB was created after it identified an “immense opportunity in the market,” and will be headquartered in Los Angeles and led by CEO Amit Pandhi, who was most recently president and CEO of low-calorie desserts brand Arctic Zero.
Pandhi also serves as a board member for Dang Foods, Bright Foods and Nutista. In his new role, Pandhi will provide data-driven execution and support to VSB brands, entrepreneurs and founders as the portfolio of brands builds additional scale.
He told me via email that it was “an easy decision” to choose popchips as the anchor brand for VSB since Belling and the VMG team have had a good relationship over the past 15 years, noting that “popchips has nearly 90% brand awareness in the market and has phenomenal attributes in its product as a better-for-you, healthier snack brand.”
VMG believes that there should be an alternative home for entrepreneurial better-for-you snack brands other than by staying independent with “often times limited resources,” or being acquired by a large multi-national CPG company, according to Pandhi.
He expects snacking brands to thrive under VMG’s “shared resource” model.
VMG’s general partner Wayne Wu said in a statement: “I couldn’t think of a better starting point for VSB than the acquisition of popchips. Building platforms in categories where VMG has been actively investing for nearly 15 years has been something we have been contemplating for some time and we are thrilled to kick off our first consumer products platform with popchips as a partner.”
Belling, who self-claimed to be a VMG fan, believes VSB’s mission is well aligned with popchips’ commitment to innovation and leadership in the better-for-you snacks category, saying that “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.”
However, he was unable to reach for further comments on popchips’ growth outlook and potential partnerships between VMG Partners and RightRice.
In the coming years, VSB is expected to invest in a wide range of snacking sectors including salty, sweet and nutrition bars, and, along with future VMG platform concepts, it will also house a portfolio of brands that meet an array of consumer needs and usage occasions.
VMG Partners said: “Platforms like VSB will be dynamic, nimble and flexible, as small start-ups are, but will also bring best practices, experience and expertise, such as that of larger, more corporate entities, without the cumbersome standards and processes that can hinder growth potential.”
