A $90 million bet on protein powder’s staying power

Land O’Lakes, a tool all the techies are using, and John Haugen on SEMCAP Food and Nutrition’s $90 million investment in Good Protein. Here’s my colleague Victor Stefanescu with that report:

The Details

A Minnesota investment group is making a more than $90 million bet that protein’s popularity isn’t just a fad.

SEMCAP Food and Nutrition, a Twin Cities private equity firm that has invested in food companies such as Purely Elizabeth and Good Culture, is buying a majority stake in Good Protein, a Canadian brand that makes all-in-one protein shakes.

Good Protein sells its powders in flavors from apple crumble to salted caramel in retailers such as Costco in Canada.

John Haugen, a managing partner at SEMCAP, said he thinks the brand can make waves in the United States.

The non-dairy, clean-label shake powders stand out for their taste, said Haugen. His name is likely familiar to anyone in big food: Haugen is a former General Mills vice president who spent nearly a decade as managing director of the company’s venture capital arm, 301 Inc.

“When you think about high-usage products, taste really matters and also variety,” Haugen said. “If you went onto the Good Protein website, you could see [an array] of flavors because people get burned out on the same thing every day, and they want variety. But they want variety on a product that they know.”

Haugen said it can be a “red flag” if a founder leaves a company shortly after an acquisition. But Good Protein’s founder, Edward Lalonde, will retain a strong stake in the company, Haugen said.

Founders stayed on at Good Culture and Purely Elizabeth after SEMCAP invested in the two industry-disrupting brands, which make products such as cottage cheese and cereal. Italian food company Ferrero recently acquired Purely Elizabeth.