- Kind Snacks acquired better-for-you soft-baked snack bar company Nature's Bakery, the companies announced. Terms of the deal were not disclosed, but The New York Times reported sources valued it at around $400 million.
- The acquisition will help Kind owner Mars continue to build its health-and-wellness business, the companies said in the statement. Nature's Bakery's snack bars are clean label, plant-based, nut-free and non-GMO.
- This deal comes just weeks after Kind itself was acquired by Mars, which had purchased a minority stake in the business in 2017. Terms of that deal were also not disclosed, but Kind continues to operate as a distinct and separate business under the Mars umbrella.
Now that Kind has the financial resources of one of the world's largest privately held companies, it's showing that Mars didn't just get a snack brand known for its natural ingredients and emphasis on health. It also got a company that has its eyes on broadening its hold on the space.
Rumors have been swirling that Nature's Bakery was putting itself out for a sale since early this year. The company, founded in 2011 by father and son team Dave and Sam Marson, is based in Nevada and focused on healthy and family-friendly snacks. Private equity firm VMG Partners — which was an early investor in Kind Snacks — has a minority stake in the business. According to a June report from Mergermarket, Nature's Bakery generates about $15 million to $20 million annually in earnings before interest, taxes, depreciation and amortization.
"If you look at pantries across the country, odds are you will find KIND and Nature's Bakery products sitting side-by-side," Daniel Lubetzky, Kind founder and executive chairman, said in the press release. "Both brands have created loyal followings by being true to their unique value propositions. It comes as no surprise that, along with KIND, they remain one of the growth leaders within the snack bar category."
This is not Kind's first acquisition. Last year, after Lubetzky stepped down from the CEO post and handed the reins of the company to CPG veteran Mike Barkley, Kind purchased Creative Snacks Co. The North Carolina company is known for its nut clusters, granola and pretzels. This acquisition extended Kind's reach into another part of better-for-you and clean-label snacking with a brand that appealed to different consumers.
Nature's Bakery also broadens Kind's reach while staying in the category. Nature's Bakery products are all nut-free, delivering the nut-heavy snack maker consumers looking for allergy-friendly products. Lubetzky told The New York Times that Kind will keep Nature's Bakery's supply chain completely separate from Kind's in order to ensure the products remain nut-free.
Considering one in 10 U.S. adults has a food allergy, according to a JAMA study, adding products to serve this population could be lucrative. One in four U.S. residents — or 85 million people — spend $19 billion each year to avoid buying products with top allergens, according to Food Allergy Research & Education.
But while Kind Snacks is putting its name on this acquisition, Nature's Bakery is also now going to benefit from the significant distribution, production and R&D advantages of Mars, Incorporated. The larger corporation's stake in Kind Snacks helped broaden its reach to 35 countries, as well as aided in brand extensions to the cereal, frozen and protein bar categories. Nature's Bakery is a larger brand in the better-for-you snacking space already, but with this acquisition, it's bound to go farther, and maybe even expand beyond its soft bar products.
It's also a beneficial acquisition for Mars as well. Although the privately held company has a significant global business in side dishes and sauces, as well as pet food and care, many consumers associate the company with its well-known portfolio of candy and chewing gum. By quickly expanding into better-for-you snacks, it shows that Mars is focusing on more than just treats — an important position to hold as consumers are searching for healthier things to eat.