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The potential Kraft Heinz split and Ferrero's $3.1 billion WK Kellogg buy means that a grand repositioning of food giants may finally be on the menu, GroundForce Capital co-founder Mark Rampolla tells Axios Pro.

Why it matters: Consumers' shift away from sugary cereals and processed meats is lifting dealmaking beyond just the better-for-you category. 

Context: GroundForce Capital is a growth equity firm that started out with plant-based food investments in 2015. It has since expanded its investment strategy to health and wellness more broadly.

Previous investments include Beyond Meat, Liquid Death, and Chameleon Cold Brew, which it bought from Nestlé in 2022.

This interview with Rampolla has been lightly edited for length and clarity.

On LinkedIn, you asked if a potential Kraft Heinz split was the "end" of big food. What did you mean?

"There's a storyline among early entrepreneurs that [companies like] Coke have to be in decline sooner or later. I raised money for [coconut water brand] Zico around that, but the reality is over the last 20-30 years it hasn't affected them. Their stock performance and profitability has been pretty damn good."

"The Kraft Heinz [news] was sort of like, 'Wow, okay, this could be the beginning of the massive shift that people have been predicting.'"

It's been nearly ten years since you co-founded GroundForce. What have you learned?

"It's relatively easy to get a brand to $10-$20 million of revenue, but, man, it's really hard to get to $100 million or beyond."

"There was an era where it seemed that profitability didn't matter. Those days are gone. We're back to the old-fashioned era of a business that has got to make money, sooner or later."

How has your thesis around plant-based business changed?

"It's not without its logic and reason. The challenge was that the excitement, investment, and ideas got ahead of the curve."

"There's been a reset. Plant-based is a tactic, not a strategy."

There are tailwinds in the better-for-you category. What are people missing?

"Although the specific trends may change — protein, kombucha, better-for-you soda — the overall trend is still shifting away from Coke, Pepsi, Nestle, McDonald's, highly processed, less nutrient-dense food."

You haven't been superactive this year. Why?

"We expect to close three to four investments this year. We're not going to rush it."

"We're disciplined about what we look for and where we want to invest. We're entering the later phase of our third fund, so we only have so much space for additional investment."

"I think that it's great that we're asking some tough questions about how our policies have been formed. I think he's asking some tough questions."

You founded the coconut water brand Zico and then sold it to Coke. What's interesting about coconut supply chains that I wouldn't know?

"Coconut has been a massive global commodity for a long time, for its meat and oil. A lot of that never even gets in the food — it goes in beauty products, industrial products, and so many other things. The water is the byproduct. And now it's a multibillion-dollar global industry."

GroundForce Capital's Mark Rampolla on disruption coming to the food aisle

Consumers' shift away from sugary cereals and processed meats is lifting dealmaking beyond just the better-for-you category.

Photo illustration of Co-Founder and Co-Managing Partner of GroundForce Capital Mark Rampolla surrounded by a repeating pattern of the GroundForce Capital logo, and an apple on a stack of money. 

Photo illustration: Axios Visuals. Photo: GroundForce Capital

The potential Kraft Heinz split and Ferrero&#x27;s $3.1 billion WK Kellogg buy means that a grand repositioning of food giants may finally be on the menu, GroundForce Capital co-founder Mark Rampolla tells Axios Pro.Why it matters: Consumers&#x27; shift away from sugary cereals and processed meats is lifting dealmaking beyond just the better-for-you category.

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GroundForce Capital's Mark Rampolla on disruption coming to the food aisle

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