Emerging manager Forward Consumer Partners closed its first CPG-focused fund in December and made its first acquisition in April. But the deal originated seven years ago at a San Francisco fine foods show. Here’s how the deal finally came together.
Before launching FCP in Greenwich, Conn. and raising $425 million to focus on CPG, Matt Leeds was with L Catterton and attending the 2017 Fancy Food Show in San Francisco.
That’s when Firehook Bakery’s tiny booth caught his eye. It was one of 1,400 exhibitors sprawled across 17 acres of floor space. But the crackers on offer stood out.
“You could just tell,” Leeds says. “Then I saw them popping up everywhere.”
Leeds noticed the artisanal crackers in cheese shops, specialty food stores and at parties he attended. They were hot.
“There is a deep consumer love for this brand,” Leeds says.
Leeds says Firehook’s CAGR has soared 50 percent over the last 10 years. The cracker market in general is valued at $22 billion and expected to reach $36.5 billion, according to Verified Market Research.
Not For Sale
But founder-owner Pierre Abushascra wasn’t ready to sell. He was content to continue growing Firehook slowly as he had since leaving banking and launching Firehook’s first bakery in Alexandria, Va. in 1992. Costco had earlier picked up the cracker after stumbling on it at an earlier Fancy Food Show where Firehook was sharing a booth with an olive oil maker.
Leeds vowed to stay in touch and offer counsel. Abushascra accepted with one condition: the advice came free with no obligations to sell. Abushascra says Leeds kept his word, which made all the difference when the time finally came to sell.
“He often had more conviction than I did,” Abushascra recalled. “He was one of the first to call and check on us when Covid hit.”
Abushacra was born in Lebanon and raised in Greece, where his banker father and family fled amid Lebanon’s civil war. The family moved to the U.S. when Abushacra was a teen. He graduated college with a finance degree and followed his father into banking.
In 1992, he joined two baker friends struggling to raise money to open a bakery in Alexandria, Va.’s Old Town neighborhood. They named the bakery Firehook after an ancient baking tool used to pull clay pots out of fire. He soon bought out his partners and grew the business slowly without outside investment and little debt.
“Because of my banking background, I was really conservative and making sure our balance sheet was strong,” Abushacra says.
Before Covid, Firehook had grown to nine bakeries.
Covid Changes Everything
Covid brought into focus the real value of the cracker to Firehook’s operations. While Firehook was forced to close bakeries, its line of crackers was thriving as consumers sought out shelf-stable snack options to enjoy at home.
That dynamic was impossible to miss. The cracker was now everything.
“It was so clear,” Abushacra says.
All but three of its bakeries have since shuttered and its cracker-making operations significantly expanded and are now the primary focus of the business.
Recently, and for the first time, Abushacra says he sat down to develop a long-term financial plan for Firehook. That’s when the thought of selling first arose.
“I started to realize that it was outgrowing me,” Abushacra says. He says he consulted with his wife and three young adult sons, all of whom have worked in various roles at the bakery, and decided to sell.
He also wanted to take chips off the table, too, after grinding for 32 years.
Abushacra started the process in earnest last year, hiring Seattle-based investment bank Novelty Hill Capital. Abushacra and Novelty Hill had conversations with other PE shops, but ultimately sold a controlling interest to Forward. But it wasn’t a lengthy negotiation, closing in 45 days after talks started.
“Matt was very clear where he wants to take the business,” Abushacra says. “He understands the brand.”
The Plan
Abushacra retains a minority interest and remains on the board but has relinquished management. Leeds and Forward have brought on a new executive team, including hiring PE vet Maura Mottolese as CEO.
Mottolese was CEO of Tate’s Bake Shop when The Riverside Co. sold it to Mondelēz International Inc. (Nasdaq: MDLZ) for $500 million in 2018. She was CEO of Cholula Hot Sauce’s parent company when L Catterton sold it to McCormick’s for $800 million in 2021.
In addition, Forward hired Terry Bigham as chief growth officer and former Dewey’s Bakery CMO Ellen Howse as chief marketing officer.
The plan is to significantly expand the two-person sales team and accelerate Firehook’s growth through increased consumer awareness to move the cracker beyond the perimeter of stores to dedicated shelf space.
Forward Consumer Partners’ Investment Thesis
In general, FCP plans to acquire five to seven well-established branded consumer businesses with steady growth. FCP seeks to invest in companies above the venture capital and growth equity stages and below the radar of L Catterton, TSG Consumer Partners, Roark Capital Group and other giants investing in branded consumer businesses.
Leeds says this is an overlooked niche and that’s why he left his L Catterton partnership after eight years with the Greenwich firm to launch FCP.
FCP plans to write checks of between $25 million and $100 million for majority control of companies with strong brand loyalty and annual revenue of $25 million to $250 million.
Contact Matt Leeds at: [email protected]
