Brand Boys

In a market obsessed with tech startups, one emerging private equity firm makes 40% per year with trendy products like gourmet jerky, frozen Sriracha chicken and vegan makeup.

- Amy Feldman

Strolling the aisles of a Whole Foods Market in West L.A. on a bright fall day, Josh Gol din, Julian Steinberg and Trevor Nelson come to an abrupt stop to marvel at a towering stack of Barkthins displayed in the salad bar area. Last April, their private equity firm, Alliance Consumer Growth, or ACG, scored big when the chocolate-snacks company sold out to candy giant Hershey for $290 million, or about four times revenue. They point out that in the science of brick-and-mortar retailing, seemingly small efforts, like promoting a product at the end of a grocery aisle, can make a new brand look established—or an unheard-of one appear like the next big thing. “With young brands, it’s all about getting people to try it,” says Steinberg.

For the past five years, ACG, which is dually headquartered in New York and Los Angeles, has logged an enviable record investing in startup consumer brands that are reinventing categories in an industry long dominated by stalwarts like General Mills, PepsiCo and Procter & Gamble. The market for consumer products has been in a state of upheaval in recent years. Upscale Millennials expect their packaged food and beauty products to be healthier and organic, without the toxins and chemicals that previous generations accepted for lack of choice. They’re willing to pay more for those healthier products, and they aren’t loyal to the big brands. That, in turn, has opened a gap for entrepreneurs—and led to a surge in acquisitions of startups by the large companies.