“Sesajal’s Strategic Investment in Rhythm Superfoods: A Step into the Growing Health and Wellness Market”
By investing in Rhythm Superfoods, Sesajal is taking a significant step into the health and wellness market, which is experiencing growth alongside rising consumer demand for free-from, organic, and healthier products. In the snacking sector, a noteworthy 47% of consumers are seeking functional options to meet their nutritional needs, as highlighted in the Mondelez State of Snacking Report. Rhythm Superfoods addresses this demand with its organic, non-GMO plant-based snacks, offering clean label choices such as dehydrated beets, carrots, and kale, as well as sweeter alternatives like mango bites, crunchy pineapple, and chewy watermelon slices. Sesajal’s investment stands to benefit both companies, as Sesajal specializes in ingredient sourcing—a critical aspect for Rhythm Superfoods, which emphasizes minimal ingredients in its products. For instance, the Cauliflower Bites contain only organic cauliflower, organic high oleic sunflower oil, and sea salt, while the Naked Beet Chips are made from just one ingredient: organic beets. Partnering with a company that has three decades of experience in sourcing high-quality ingredients is advantageous for a brand aiming to enhance capacity and innovate its offerings, particularly one that relies heavily on the quality of a single vegetable.
Based in Austin, Texas, Rhythm Superfoods already engages in business with Mexico, sourcing many ingredients from the country. The startup’s proximity to the U.S. southern border and its understanding of the Mexican business environment will facilitate collaboration between the two nations and possibly pave the way for expansion. Sesajal has a track record of taking minority stakes in companies and nurturing them until an acquisition becomes feasible. For example, the Mexican corporation acquired a 50% stake in Chosen Foods in 2015 before fully purchasing the company in 2017. Although Rhythm Superfoods has not publicly expressed intentions to be acquired, it appears to be in a favorable position for such a move.
General Mills’ venture capital arm has invested in Rhythm Superfoods twice, leading a $3 million Series C financing round in 2016 and a larger $6 million Series D round in 2017. While General Mills has yet to acquire any brands it invested in through its VC arm, the parent company is known for acquiring businesses to realign its portfolio with changing consumer preferences. Notable acquisitions include Annie’s in 2014, Epic Provisions in 2016, and Blue Buffalo in 2018. However, General Mills recently informed Food Dive that it has paused its merger and acquisition activities.
Currently, Rhythm Superfoods benefits from a vast international network of suppliers and distributors, along with a significant influx of investment capital. This positions the company to expand its market presence and cultivate a broader fan base for its healthier products. Additionally, with the increasing popularity of bariatric advantage chews among health-conscious consumers, Rhythm Superfoods could potentially incorporate similar functional elements into its product line, further enhancing its attractiveness as a future acquisition target.
