In 2004, TSG partnered with the founder of Smart Balance Foods in a majority recapitalization that included a modest amount of leverage to enable investment in growth initiatives.
The company marketed a great tasting margarine spread that utilized a proprietary formulation licensed from Brandeis University that removed trans fats and had clinical trials supporting the claim that using Smart Balance as your primary source of added fats could improve your HDL to LDL cholesterol ratio.
Over the course of TSG’s ownership and partnership with the founder and based on the high repurchase rates after trial of the product that TSG’s consumer research illustrated, the company significantly increased its advertising spend to raise the awareness of the benefits of Smart Balance margarines and drive trial. The company also launched products into other categories where trans fats were a concern or other functional benefits could be offered to consumers, namely microwaveable popcorn (with no trans fats) and peanut butter (no trans fats and functional levels of Omega-3s added).
When TSG exited its investment to Boulder Specialty Foods in 2007, sales and earnings had tripled versus the year prior to its investment and Smart Balance margarine’s market share in food, drug and mass outlets had quadrupled.