Richmond-based nutrition bar maker Health Warrior Inc., has been acquired by food and beverage behemoth PepsiCo.
The deal for the maker of chia seed-based snack bars and related plant-based food products will help push Pepsi further into a category of selling more nutritious foods as the company responds to shifting consumers tastes. Health Warrior also will be part of Pepsi’s new emerging brands division.
For Health Warrior, the purchase gives the budding national business the financial backing, the marketing and sales prowess and the research and development expertise from one of the world’s biggest consumer products companies whose brands include Fritos, Mountain Dew, Quaker Oats, Gatorade and Bubly sparkling water.
“The whole reason we started the company was to be able to provide more plant-base super food options to more Americans,” said Shane Emmett, Health Warrior’s co-founder and CEO, who will remain with the company.
“The ability to build a good consumer brand here and be part of the PepsiCo brand, that is something we are really super excited about with this deal,” he said.
Health Warrior, founded in 2010 by Emmett and two college friends, makes chia seed-based bars available in 12 flavors sold at more than 12,000 retailers nationwide. It sells more than a million bars a month.
The company branched out this year offering two product lines beyond its popular health bars — protein mug muffins and the superfood protein powder made from plant-based protein rather than exclusively from chia seeds.
Under the acquisition deal, Health Warrior will keep its headquarters in the Scott’s Addition neighborhood of Richmond. All 20 full-time employees working in Richmond as well as a number of marketing and sales professionals working throughout the U.S. will remain with the company.
Terms of the deal, announced Wednesday morning, were not disclosed.
“PepsiCo’s acquisition is a validation that the Health Warrior team has built a powerful mission-based brand that is authentic in its commitment to delivering convenient superfoods,” said Ted Chandler, a former Health Warrior board member who is a managing director of NRV, the Richmond-based venture capital firm that invested in the snack bar maker for the past five years.
“Now with the marketing resources and vast distribution network of PepsiCo behind Health Warrior, it is exceptionally well-positioned to reach its full potential,” Chandler said.
Having a Fortune 500 company buy a Richmond-based startup — and keeping that business here — provides the confirmation of the importance of the region’s growing entrepreneurial ecosystem, area entrepreneurs said.
“This is especially good news for Richmond as this is a testament of all the great things going on in the city,” Emmett said.
“Years ago, a big company would come in and buy a business and say they know everything about the space and say to the young company, ‘We will teach you everything you need to know,’ ” Chandler said. “This is different. This is more of a partnership than a take out. They are bringing great strength to the table but are allowing the Health Warrior team to innovate and grow.”
The purchase is the first investment for PepsiCo’s The Hive division, a newly created entity within the company focused on growing emerging, smaller brands.
The Hive “will help us grow these brands sustainably and deliberately, to make sure we grow the right way,” Emmett said.
The executives with PepsiCo and its Hive division have a great foresight on how to grow emerging brands, he said.
“We will be able to share the things we do as a startup with the biggest food and beverage company in the United States. We are going to work really hard to build something special here.”
PepsiCo said it was attracted to Health Warrior because it’s a growing, plant-based superfoods company. The company has made significant headway in the fast-growing nutrition bar category.
“Health Warrior is a nutrition-forward trailblazer that can provide great insight into high value categories and consumers while benefiting from our expertise and resources to bring plant-based nutrition to more people,” said Seth Kaufman, president of PepsiCo North America Nutrition, who oversees The Hive.
Health Warrior began selling its bars in 2011 and then began a national rollout in Whole Foods Markets a year later. Its bars now are sold at retailers including Target, Wegmans, Ellwood Thompson’s Local Market and on Amazon.
Sales were up about 75 percent this year through August compared with the same period a year ago, Emmett said two months ago. The company doesn’t disclose actual results.
Chia seeds, touted as a superfood that are rich in fiber, healthy fats and antioxidants, has been the cornerstone of Health Warrior. But the company introduced an energy bar last year using pumpkin seeds that now comes in five flavors.
In August, Health Warrior introduced protein mug muffins, which are a warm, spoonable muffin that contains 12 grams of plant-based protein and only 6 grams of sugar. It also launched a protein powder that has 20 grams of plant-based protein from a blend of pumpkin, chia, hemp and flax seeds plus probiotics. The powder is grain-free and gluten-free and has about 2 grams of sugar.
PepsiCo’s purchase of Health Warrior started with Emmett having some casual conversations about his business with company officials at a trade show conference.
“It came together pretty quickly,” Emmett said. “It just seemed to be a great fit — having a portfolio goal of good-for-you foods. The Hive will be a really big idea in the food industry. So now you have a really cool one-two punch.”
