BERKELEY, CALIF. — Sovos Brands made its marketplace debut in February 2017 with the acquisition of Michael Angelo’s Gourmet Foods, Inc., a producer of frozen Italian entrees. Since then the company has made acquisitions all over the retail store, in dairy, condiments and baking mixes, and is now approaching $1 billion in sales. The strategy driving Sovos Brands is simple — to bring change to sleepy retail categories.  

“The brands we have are not how you build an efficient scale play,” said Priscilla Tuan, senior vice president of marketing. “But we are looking for specific businesses. Our mission is delicious food for joyful living. Each of the brands we have all stand for that, and they stand out in their space. These are brands that have transformed sleepy categories.”

Since acquiring Michael Angelo’s, Sovos Brands has acquired Rao’s Specialty Foods, the maker of Rao’s Homemade pasta sauces, Noosa Yoghurt and Birch Benders, a better-for-you pancake and waffle mix maker. Ms. Tuan defined a “sleepy category” as one that hasn’t had true innovation or a disruptor for a while.

“They are categories that don't draw consumers,” she said. “The challenge is how do you grow these categories? We look for brands that are driving growth. Birch Benders is a good example. They brought new households into the pancake and waffle mix space; they are bringing people back to the category.”

Birch Benders microwavable, keto-friendly snack cupsSovos Brands acquired Birch Benders in August, and the acquisition expanded the company’s reach into the breakfast and snacking categories. Launched in 2011, Birch Benders makes baking mixes as well as toaster waffles and pancake and baking cups.

“From a pancake and waffle mix standpoint, we are looking at flavors and mix,” Ms. Tuan said about future opportunities for Birch Benders. “That brand is the leading growth brand in the natural space.”

Once the businesses have been integrated into Sovos’ structure, the company uses innovation to capitalize on category adjacencies and accelerate sales.

“We acquired Rao’s in 2017,” Ms. Tuan said. “It was a small but growing brand. We were growing it 40% going into COVID, and coming out of COVID it has accelerated.”

The Rao’s Homemade product line has grown and now includes tomato and pasta sauces as well as soups and several varieties of pasta.

Sovos Brands acquired Noosa in late 2018. At the time of the acquisition, Noosa was a manufacturer of Australian-style yogurt made with whole milk, honey and fruit purees. Since the acquisition, Noosa has extended its reach into a variety of adjacencies. In addition to new packaging formats, Noosa introduced Greek, a yogurt variety made with higher protein and lower sugar, and entered the fruit smoothie category. The smoothies come in 7-oz servings that have 160 calories, 5 grams of protein and 6 grams of fat.

Noosa Greek yogurt“With Noosa we were able to take it from declining double digits, and Sovos returned to growth in mid-single digits,” Ms. Tuan said. “We stepped in and wanted to give people what they want. With Noosa, it's delicious yogurt they can feel good about.”

Sovos Brands’ focus has primarily been on retail, and the company has benefited from consumer shopping patterns shifting toward retail formats. But Ms. Tuan emphasized that even before the COVID-19 pandemic hit, Sovos Brands was benefiting from shifting consumer trends.

“We are playing in major categories consumers use to feed their families,” she said. “These are not esoteric categories; they are bread-and-butter categories that are benefiting from the trends that are driving people to eat at home. The eating-at-home trend was tired, but people are rediscovering culinary.”

She added that COVID-19 hasn’t changed management’s overall strategy. What has changed is how it sells products to consumers.

“In March, we had a wakeup call,” Ms. Tuan said. “We learned the virus was going to stay around, and we had to adjust.”

Adjustments have included multi-packs, variety packs and more experimentation with e-commerce.

“We really started focusing on e-commerce about a year and a half ago, and it has put us in a great position,” Ms. Tuan said. “We are now at a tipping point with our retail and agency partners in finding new ways to engage with consumers.”

Ms. Tuan joined Sovos Brands in 2017 and said she was employee No. 7. She came to the company after a 17-year career with The Clorox Co.

Michael Angelo's pasta“At the time, we had no office, no computers, no printer … We were flying by the seat of our pants,” she said. “We were industry professionals from the CPG space who wanted to build something with our own two hands.

“We've grown our top line 20% in the past three years. We’ve gone from nothing to four major brands.”

Even as the company gains greater scale, the focus of management is on profitable growth, according to Ms. Tuan.

“What we constantly ask is how do we crack the nut to allow smaller brands to reach their potential,” she said. “That mindset has given us a proven track record of driving growth far above the industry average.”