Starco Brands, a notable player in the food and beverage industry, is poised to acquire its contract manufacturer, The Starco Group (TSG). On July 29, the company announced a “non-binding, exclusive letter of intent” for this significant acquisition.
In conjunction with this move, Starco Brands—known for its meal-replacement brand Soylent and Winona Pure cooking sprays—revealed a reorganization of its operations. This strategic overhaul and the potential acquisition of TSG represent a “significant milestone” in advancing the company’s scale, research and development (R&D), product offerings, and vertical integration.
The acquisition will lead to a rebranding, with Starco Brands changing its name to Starco. Under this new structure, the company will establish two primary operating subsidiaries: Starco Brands and Starco Manufacturing. Each subsidiary will function as an independent business unit under the overarching Starco brand, with Ross Sklar continuing as chairman and CEO.
“I founded The Starco Group as a diversified chemical manufacturer in 2015 as a result of multiple synergistic acquisitions with a technical focus in aerosol and liquid fill,” Sklar stated. He further explained that the vision for Starco Brands was to cultivate a diverse portfolio until sufficient scale was achieved, at which point integration with TSG’s manufacturing capabilities would take place under the Starco name.
Importantly, this acquisition is seen as a “protective step” to secure ownership of a “significant portion” of the supply chain. Starco Brands anticipates that these changes will improve profit margins and introduce an additional revenue stream through private label products.
Founded in 2015, TSG operates three facilities across the United States, focusing on the food, beverage, personal care, and household product sectors. The company offers private label and co-packing services for third-party and retailer-owned brands, operating plants such as Four Star Chemical in Los Angeles, BOV Solutions in Statesville, and Temperance Distilling in Temperance.
In the fiscal year 2024, Starco Brands reported net revenue of $58.7 million, marking a 7.7% decline from 2023, primarily due to stock shortages. However, the company has shown improvement by reporting an unadjusted net loss of $17.3 million, a notable decrease from the $46.4 million loss experienced in the previous year.
