Dive Brief:

  • Mars, Incorporated is fully acquiring Kind North America, the companies announced. The deal was first reported by The New York Times.
  • Mars took a minority stake in the healthy snacking company in 2017. Terms of the acquisition were not disclosed, but people with knowledge of the deal told The New York Times it valued Kind at about $5 billion. Kind founder Daniel Lubetzky told the newspaper Kind’s sales are about $1.5 billion annually.
  • Kind is one of the biggest brands in healthy snacks. Since it was founded in 2005 by Lubetzky, the company has emphasized its simple and natural ingredients, featuring nuts and grains. The brand started out in snack bars and has since branched out to cereal, smoothie bowls, energy and refrigerated protein bars. Since Mars first took a stake in the company, its products have become available in 35 countries. 

Dive Insight:

Better-for-you and clean-label snacks are taking the industry by storm, providing strong reasons for Mars to fully acquire Kind North America. According to Innova, 91% of consumers believe food and beverage options with recognizable ingredients are healthier. Kind has been a trailblazer, with its clear packaging to show consumers what they’re getting in their bars, and devotion to natural ingredients. Kind operates under a corporate philosophy called the Kind Promise, which codifies the company’s dedication to clean-label ingredients, healthy food and transparency.

Mars is adding a big success in the natural and better-for-you space to its stable of products. This is the type of brand that could truly help Mars continue to grow and adapt as a leader in the food space. While Mars is best known for its confections and gum, purchasing a large player in the better-for-you space adds better portfolio diversity to meet changing human consumers. (Mars also has sizeable pet food and pet care divisions.)

Under the terms of the acquisition, Kind will function as a distinct and separate business under the Mars umbrella. Lubetzky will continue to work with the business he started and retain a financial stake in Kind, most of which he had previously donated to charity.

When Mars took the stake in Kind three years ago, a source familiar with the deal told CNBC the deal gave Mars the right to a full acquisition of the snack company. 

“When we began this partnership, I said it was one built on mutual admiration and a shared vision for growth,” Mars CEO Grant Reid said in the statement today. “After three years, you can see the impact, as together we have grown the healthy snacking category and brought KIND and the KIND Promise to 35 countries and into new categories.”

Lubetzky also roundly praised Mars in the statement.

“I am so proud of how well the Mars and KIND teams have complemented and strengthened each other over the past three years,” Lubetzky said. “We are now well positioned to further advance our efforts and continue building a foremost health and wellness platform.”

Kind has several big plans outlined in the press release, all of which will become much easier as an arm of Mars, Incorporated. By 2025, the company commits to adding more than 2 billion servings of nutrient-dense food to diets and the previously announced goal of exclusively sourcing all almonds from bee-friendly farms. With Mars’ presence in 80 countries worldwide, a $1 billion commitment to sustainability and its charter membership in the Sustainable Food Policy Alliance, these goals are now much more in Kind’s reach. 

As the pandemic has put a damper on most business, there have not been many big M&A deals in the last several months. While some may say the seeds of this deal were sown three years ago, it’s still a good time to announce this acquisition. As consumers are looking to eat for their health, Kind is well positioned on this trend. And while the indulgent part of Mars’ business is continuing to reap financial rewards, the company is also prepared for the consumers who are more interested in staying healthy.

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