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PE Hub: Remember that gingerbread house...


Remember that gingerbread house you decorated with the kids last month? Traub Capital bets you do

By Aaron Weitzman

January 7, 2022




Products come and go, but memories last forever. That’s what Traub Capital Partners hopes to bring consumers with its new investment. Earlier this week, the firm bought Brand Castle and is pairing it with portfolio company Signature Brands, with the hopes of giving consumers joyful memories focused on the holidays.

“The shift that has happened with the consumer is wrapped around mindfulness and also a shift from tangible to the less tangible asset,” Mortimer Singer, managing partner of Traub, told PE Hub. “People who purchased a physical product 20 years ago are today more interested in buying services and products that will help forge experiences. It’s time well spent versus a good that will potentially expire and get out of date.”

Signature Brands was purchased by Traub back in 2018 and is a North American manufacturer of dessert decorating products, as well as a player in the other celebration product categories. Brands include Betty Crocker, Cake Mate, Pumpkin Masters, PAAS and Giftpop.

Brand Castle has a variety of crafty cooking kits, including gingerbread house making kits and other seasonal cookie kits.

Both companies play into the consumer shift that has been on-going since the covid-19 pandemic. Sometimes the consumer can grow tired of a product. But when the product turns into an event, that creates memories with family, and then it is more likely that the family will not only keep the tradition going but also pass along word to their friends.

“We are focused on the enthusiast consumer, and those types of consumers are enthusiastic about spending quality time with their children and family, off the screen and electronics,” said Singer. “The link between tangible and intangible is that if you can make a consumer products company create a memory, then you are staying in the collective subconscious of the consumer.”

Singer argues that Traub has the expertise to bring these companies and their hard products into the 21st century, transforming how they go to market and communicate with consumers.

“We have all these operating partners that can drive change, value, operations and merchandising. In the lower-middle market, we truly believe that if you stitch the left and the right brain together, it causes the alchemy that we think we can generate in the companies that we buy,” he said.

Brand Castle has been a corporate orphan that was somewhat operated by remote control and autopilot from Switzerland by the former owner, but according to Singer, one thing never changed: the consumer loved the brand.

“The consumer kept showing up regardless of what the company did or didn’t do. So, we thought if we could super charge and add topspin by creating meaningful memories, the consumer will be surprised and delighted,” he said. “For consumers, what better experience is there than to get messy with your family and children at the kitchen table? Those memories last a lifetime and for generations. When you stitch brand and the enthusiast consumer together, that’s a really powerful cocktail for a good business.”

Traub perceived the opportunity to add premiumization to the targets through the channels they were already in and opportunities to get into other channels they were not in.

“E-commerce, new channels of distribution, like the club channel, which we are now in and lastly, international,” said Singer. “In the Middle East for example, you bring a cake instead of wine when you go to someone’s home. So, we are focusing our cake brands to get more consumers worldwide.”

Signature Brands was acquired three years ago, and it was a corporate orphan with great long-standing brands. It was a perfect fit for what Traub looks for.

“We look for established brands that didn’t get the love it deserved, and an opportunity to leverage brand equity to improve the consumer experience and expand into alternative categories,” said David West, managing director at Traub.

West said that Brand Castle fits in with the products that Signature Brands features.

“Brand Castle is a family celebrations business. It has dessert decorating products, cake making brands and a group of seasonal business Easter egg decorating, pumpkin masters pumpkin carving kits, seasonal popcorn tins,” said West. “Signature Brands, which has consumers across many of the major holidays, had been looking for a long time for a company that booms around Christmas time.”

It is also a bonus that these products are “covid-proof,” as the pandemic has increased the amount of time people spend at home working on activities together.

“We want to lean on the brand power and take advantage of brand equity to expand into other categories,” said West. For example, taking the PAAS Easter eggs and expand out of egg decorating and into the broader Easter category. We think there is a lot of value to be generated with the brand.”

He added that the goal is to expand to more holidays.

“We have captured Easter, Halloween and Christmas, but we would love to have an opportunity to expand beyond those holidays to other major holidays like the Fourth of July, Valentine’s Day, etc.,” he said. “Signature targets both organic growth as well as potential future add-ons.”


Link to article on PE Hub: click here




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