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Encore Consumer serves up bacon with Tender Belly investment

  • Shannon and Erik Duffy founded Tender Belly in 2010
  • Encore’s third fund raised $260 mln in 2015
  • Encore invested in Full Sail Brewing in 2015

Encore Consumer Capital, a consumer-focused PE firm, is adding bacon to its roster of companies, which includes Brownie Brittle, Cece’s Veggie Noodle and Full Sail Brewing.

The San Francisco buyout shop has invested in Tender Belly LLC. The Denver company is known for its signature dry-cured bacon, which takes two weeks to make and is cherry-wood smoked.

Other products include ribs, sausages, and ham. The company reportedly generates over $10 million in sales.

Brothers Shannon and Erik Duffy founded Tender Belly in 2010. With the deal, Tender Belly aims to stay true to its motto of “certified awesome.” The company sources its pigs from small family farms, feeds them a 100 percent vegetarian diet and raises them in a crate-free environment, Shannon Duffy, who is CEO, said.

Tender Belly began speaking to Encore several years ago after it first appeared on the Inc. 5000, Duffy said. PE wasn’t the right fit at that time, he said. Now, Tender Belly wants to expand.

“I’m more interested in growing big and blowing this thing up,” Duffy said. “We’re hiring and growing nationally.”

Plans include having Tender Belly products in a national grocery chain, he said. Currently, Tender Belly products are available online and in certain stores and restaurants in Colorado, Southern California and Texas.

But not all retail is suitable for Tender Belly, whose items are expensive, Duffy said. Tender Belly bacon typically sells in a physical store for $10 to $11, he said. By comparison, one pound of signature dry-rub uncured bacon starts at $16 online.

“We need more high-powered people at the table to get the job done,” Duffy said of the plans to go national. Tender Belly is looking to add seven to 10 executives, including a controller and a national sales manager, he said.

He wouldn’t disclose terms of the deal with Encore, saying only that the PE firm has a stake in Tender Belly. The company did not use an investment bank. Both brothers are staying with the company. Shannon is CEO while Erik is “pork pimp.”

“He’s our original salesman and still salesman and ambassador for Tender Belly,” Shannon Duffy said.

Duffy said he had heard “some things good, some bad” about partnering with a private equity firm. “I did my due diligence,” he said. “Encore is amazing to work with.”

“People are going to love our products even more when we get them all over the country,” he added.

Encore has already earned its chops in the meat space. The firm invested in Aidells Sausage in 2007 and sold the company to Sara Lee in 2011 for $87 million, PitchBook said.

Encore focuses on food and beverage, pet products as well as personal care and beauty. The firm typically invests between $5 million to $30 million equity per deal.

Encore is investing out of its third fund, which closed on $260 million in 2015.

Tender Belly is the latest deal for the PE firm. In March, Encore invested in Supergoop, acquiring a minority stake in the sun-protection brand. Encore also took a minority of Veggie Noodle, which offers spiraled veggie noodles, last year.

The PE firm invested in Full Sail Brewing, a craft beer company, in 2015. It backed Brownie Brittle in 2013.

Executives for Encore declined comment.

Action Item: Contact Tender Belly CEO Shannon Duffy at +1 303-305-4360

Photo of Tender Belly dry-rub uncured bacon sourced from Tender Belly website