forces at play in F&B consumer

+ an official Erewhon review

I just spent a week in LA, a city that has not seen me in almost a decade. And I, as any consumer enthusiast would, had to step into the cult-coded expensive grocery store that is Erewhon. There’s something so satisfying about being immersed in this world of “hyperconsumerism”, as we can embrace each other’s questionable purchases without a hint of judgement.

My reviews of the various CPG products and prepared foods purchases from Erewhon are at the bottom of this blog but overall, I had one takeaway: I understand the hype.

Today’s piece is about five key forces I’ve noticed in food & beverage consumer:

1. The effects of tariffs for CPG

2. Specialty grocery becoming the first stamp of approval for emerging brands

3. How the Mediterranean diet could inform investing patterns in CPG

4. Using CPG to stay close to our favorite celebrities

5. Brand extensions and packaging shifts to tackle new product markets

📰The Latest in Consumer

• Hershey is buying LesserEvil for $750M

• Mondelez is investing almost $80M in a Switzerland Toblerone factory

• Harry’s Inc rebrands to Mammoth Brands to become an umbrella brand name for its portfolio, which includes Flamingo and Lume

• good girl snacks has raised a pre-seed fund, led by Collaborative Fund and others

1. Tariffs are affecting our beloved consumer brands

TLDR: Trump implemented a 10% minimum tariff rate that went into effect on April 5th. Immediately after, Trump announced a 90-day suspension of tariffs beyond the 10% that apply to all the countries in the original announcement. But the suspension excludes China, a key import dependency for many US companies. The import tariff rate goes up to 145% for China🤯

A big scare for all of our favorite consumer brands.

Snaxshot by Andrea Hernandez and Emily Sundberg’s Feed Me newsletters used interviews with consumer founders to share direct takes on how consumer founders will be impacted by tariffs. Some key points -

• For early-stage consumer founders, COGS is critical to keep low but tariffs are doubling, almost tripling their COGS, making scale a lot harder to achieve.

• Certain ingredients, such as vanilla and cacao, are incredibly difficult, if not impossible, to source in the US, so chocolate and ice cream brands are looking at an almost 40% increase in costs due to tariffs in Madagascar. US brands that use coconut products will also be impacted by high tariff rates in Vietnam, Sri Lanka, and Indonesia

• Founders are unsure of whether to raise their consumer prices and face a whiplash of lower sales or burn their cash now to keep prices affordable for consumers as they seek alternative manufacturing sources.

• Fortunately, for founders sourcing from Canada and Mexico, the US-Mexico-Canada Agreement in 2020 is protecting these founders from this tariff policy

• Hernandez predicts that we’ll start seeing more frozen brands enter the market to continue offering convenience at reasonable price points, eventually reducing the dependencies we have on imported goods.

It’s a very critical time for CPG right now, so it will be interesting to see which brands can withstand these policy pressures and which ones have to make severe sacrifices just to stay afloat.

2. specialty grocery helps brands get a gold star

Two weeks later, and I’m still thinking about Erewhon. It was fascinating to see how many brands I didn’t know existed. At face value, I thought getting into Erewhon would be even more difficult than retail. However, while the vetting process is difficult, Erewhon’s limited scale and “curiosity-driven” culture actually makes emerging brands more suited to sit on the shelves.

Specialty grocery, especially now, is thriving for consumers as well. A 2024 IFIC Food & Health survey found that “healthfulness” is an essential factor for consumers when purchasing food, so consumers can justify the high price for equally higher quality. Erewhon is known for ensuring that only the highest quality foods with the best ingredients sit on the shelves. Erewhon specifically looks for products with specific nutritional certifications, such as non-GMO and USDA Organic.

Specialty grocery stores also can attract what Bezi Labneh's founder calls “engaged eaters”, which are people that are in the know when it comes to food. Many Gen Z consumers would be classified in this category, as we’re more aware of what we’re eating and where it’s coming from. Our curiosity also helps us become early adopters of food trends, so it makes sense for consumer brands to focus on breaking into specialized stores first before making their way to big retail.

3. mediterranean wins…again!!

The US News and World Report ranked the Mediterranean diet as the best overall diet for 2025. And honestly, we should be paying attention to this more!! For years, the Mediterranean diet always appears to be the best diet to follow, as it complements some of the other more “fad” diets we’ve seen in the past. Right now, with high-protein becoming a growing (and hopefully long-term) trend, people are again recognizing the benefits of the Mediterranean diet.

Cava is a prime example. My first time having this was in North Carolina in 2021, and it quite literally changed my life. After going public in 2023, Cava has been encroaching on Chipotle, who currently leads in healthy fast-casual food. Just last year, Cava’s 2024 revenue was $954M, a 13% increase from 2023. While it’s still far off from Chipotle’s $11.3B revenue in 2024, Cava stands a chance to capitalize on the Mediterranean diet fix that everyone want to get in on.

Even in CPG, Meditterranan-inspired products are seeing success. Some key examples:

• In late 2024, Pepsi acquired Sabra Hummus for $224M

• Bezi Lebneh is bringing a new Mediterranean dip into the spotlight, and their packaging…STUNNING (big shoutout to Red Antler who led the branding for this brand)

• Fix Dessert Chocolatier, aka the original Dubai Chocolate creator, is bringing the chocolate and pistachio combination across the US as many brands are using this as inspiration for new drinks and treats (check out Shake Shack’s Dubai Chocolate Pistachio shake)

• Greek yogurt sales on a YOY basis are picking up again, likely from a resurgence in dairy products and a broader focus on high-protein foods. Chobani and Danone are innovating new products to expand their Greek yogurt portfolio.

  

4. CPG enables affordable, accessible fan loyalty for celebrities

In short, we aspire to eat like celebrities or eat what celebrities deem worthy. There’s a reason I felt an inclination to not only buy Hailey Bieber’s Strawberry Skin Glaze smoothie but also her soft serve at Erewhon (the soft serve deserves an AWARD, it’s incredible). Erewhon makes $800K each month from the smoothie alone.

As consumers, we enjoy feeling a touch closer to some of the idols we see on-screen every day. Right now, the Kardashian x Crumbl lineup is all over my social media. Honestly, this is one of the more paradoxical collaborations I’ve seen, but it does remind me of the infamous line I heard at a CPG event once - “indulgence always wins”.

McDonald’s has been doing it for years, with Michael Jordan in 1992, Travis Scott in 2020, and most recently, Angel Reese. While top-tier celebrities can always throw their name into these collaborations, this is evidence that up-and-coming professionals can also make a name for themselves in the consumer space. I mean, how could you forget that Charli D’Amelio singlehandedly made Dunkin Donuts relevant again?

Similar to Erewhon, other retail giants are seeing the success celebrities bring to food & beverage. Walmart has been doubling down on becoming the go-to store for young consumers and its recent product partnership with Glen Powell is SO smart. I’m a huge condiments/dips fan - ketchup, honey mustard, hummus, greek yogurt with an ungodly amount of ranch seasoning - you get the point. Powell took his Texas origins to launch Smash Kitchen, a line of condiment products that prioritizes clean, organic ingredients.

While I have mixed opinions about the Kardashian x Crumbl collab (talk about brand MISalignment), I expect to see long-form partnerships like Glen Powell and Walmart where celebrities can engage younger consumers through products at a reasonable price point.

wow…just wow😍

5. Brand extensions & packaging changes help tackle new markets

I saw this incredible LinkedIn post by Antionietta Galasso that uses a visual to depict how brands adjust their packaging to compete in new product markets. Packaging and branding are becoming ever more critical to attracting customers, as emerging brands use branding to disrupt monotonous markets (for example, Fishwife disrupting the tinned fish market!). As shown below, long-standing brands can use packaging shifts to their advantage as they can establish brand relevance in new shelf areas without drastically changing their portfolio mix.

With shelf space becoming increasingly competitive, incumbent brands aren’t doubling down on the space they have; instead, they’re finding new opportunities to expand. This is usually through SKU expansions, acquisitions, or brand refreshes.

One example is Hershey. They’ve always sat in the candy aisle alongside several other brands, with a spotlight near the ice cream aisle to sell the chocolate syrup. However, Hershey now also sits in the frozen aisle…right next to TruFru.

This is incredibly smart because the candy aisle is FILLED with brands that are equal competitors to Hershey and new brands that offer eco-friendly and sustainable value propositions that Hershey simply can’t commit to at their level and scale. However, TruFru created a market that didn’t exist before, and Hershey is now throwing its name in the frozen market to capture this share as well.

We’re seeing it with Kraft-Heinz, as they have just launched three new global flavor sauces in bottles that look pretty similar to Bachan’s Japanese BBQ sauce. Coincidence? Probably not.

more examples!!

🛍️My Official Erewhon Review

As promised, here are the list of products/foods with my rating/thoughts, starting with the prepared foods:

• buffalo cauliflower: 9.5/10 - perfect crispiness and texture, would recommend to people that aren’t even a huge fan of cauliflower, wish it was just warmer

• brussel sprouts salad: 7/10 - love brussel sprouts in general but this could’ve had a punchier flavor. i do love the texture, it’s something like a light version of coleslaw

• fish filet: 3/10 - it was giving NOTHING. no flavor at all

• eggplant lasagna: 8/10 - huge fan of eggplant and felt like the flavors of cheese, tomato, and eggplant combined well together

• turmeric chicken tenders: 2/10 - again, just no flavor and SO dry. even with mustard and ketchup, i couldn’t get myself to eat this

• hailey bieber smoothie: 6/10 - it’s good but not great? i like a smoothie that at least feels healthy but this felt like too much sugar

• hailey bieber soft serve: 10000/10 - this may be contradicting my last bullet but if i have committed to ice cream, then i’ve committed to a sugar overload. the combination of peanut butter, mini chocolate chips, and the strawberry was perfect. PERFECT.

now for the snacks:

• behave candy: 4/10 - i’ve featured this brand on my blog before, as it’s a low-sugar gummy bear brand but it was super hard to chew and not enjoyable at all

• vegobears: 9/10 - as for this gummy bear brand, they’ve mastered the right chewiness and punchy flavor that completely satisfies my sweet tooth

• french squirrel: 8/10 - i’m not sure what i thought this brand was going to be but it’s like 3-4 chocolate-flavored cheerios stuck together in chunks and coated in date sugar. i’ll always appreciate a snack using date as a sweetener, so this was a win for me.

• lexington bakes: 7/10 - super good flavor but more of an indulgent product instead of a convenient snack

erewhon haul

can you tell that food & beverage is my favorite part of consumer?

Thanks for reading,

Sanjana