Mars cosies up to Kind Bar through minority stake
- Kind said Wednesday Mars is taking a minority stake in the healthy-snacking company, according to a press release. The details of the agreement, including the size of Mars' investment, were not released.
- Kind will continue to operate independently under the leadership of its founder, Daniel Lubetzky, and handle operations in the U.S. and Canada. In partnership with Kind, Mars will lead growth outside of those countries.
- In addition to expanding the reach of Kind products, the press release adds the new relationship with Mars will enable the company known for their fruit and nut bars to expand into new categories. CNBC said the deal gives Mars the option to fully acquire Kind in the future.
Mars' investment in Kind is another sign that the better-for-you snacking trend isn’t going anywhere. The $33 billion U.S. snacking market has seen a surge of interest in simple ingredient, clean label products, especially among millennial consumers, and Kind has been in the sweet spot of this growth.
Kind, which touts its promise to always have nutritious food in all products it makes, mirrors these demands perfectly. From the clear packaging, so nuts and seeds in their bars are visible, to a promise to use as little sugar as possible, Kind is dialed in to what consumers want, helping make it the third-biggest snack bar maker globally. In August, Kind made its first push beyond bars with the introduction of a line of fruit snacks called KIND Fruit Bites made only with real fruit and missing added sugar, juices, purees, concentrates, preservatives or genetically engineered ingredients.
The minority investment deal announced Wednesday appears to be a win-win for both parties. Mars, known for its candy bars, gains access to a trusted, healthy brand which may serve as a springboard to help it develop a global health and wellness platform. It's also the latest sign that while Mars remains wedded to its popular candies, including M&M's, Snickers and Twix, it's looking to go beyond the sweets that made it famous. Earlier this year, Mars doubled-down on pet care after it purchased the animal-hospital chain VCA for about $7.7 billion.
For Kind, it is able to remain independent while benefiting from Mars' behemoth international distribution network. Kind already sells through distributors in 14 countries. However, Mars could grow international sales even more — allowing the nut bar and fruit snack company to expand to countries like China.
While the exact investment Mars made is unknown, a source familiar with the deal tells CNBC this partnership gives Mars the option to acquire Kind at a later time. It’s important to note that both Mars and Kind are privately owned, giving both companies the autonomy to maintain their independence. The business network estimated that Mars' investment valued Kind at about $3 billion, though potentially as much as $4 billion, depending on how the snack maker grows —a sign of just how valuable companies like Kind are in today's climate.
Media reports first indicated that Kind was considering selling a minority stake back in July. At the time, large food companies like Kellogg, General Mills, and Campbell Soup were considered likely investors. It’s interesting that a company best known for Snickers and Twix bars was the one that Kind found most attractive.
To date, the snacking operations for Mars have been focused on sweets. This new partnership gives the large manufacturer a foothold in the growing healthier side of snacking.
Competing large CPG companies have also been entering into the snack space with better-for-you companies. In October, Kellogg announced it was acquiring Chicago Bar Company, which makes the popular clean-label RXBAR, for $600 million. Conagra Brands also recently purchased ready-to-eat popcorn brand Angie’s Bommchickapop for $250 million. General Mills diversified its portfolio to include health-focused companies when it bought Annie’s Homegrown for $820 million three years ago.
While the exact finances of the Kind deal are unknown, Mars is smart to enter the popular snack space, especially through a reputable startup that has grown quickly and amassed a devoted customer fan base. It's unknown whether Mars will enter into similar deals with other companies, but this latest transaction is a sign that it may be heading that way and making healthy snacks a bigger focus.
- KIND Snacks KIND AND MARS ANNOUNCE PARTNERSHIP TO BRING HEALTHY SNACKS AND THE KIND PROMISE TO PEOPLE WORLDWIDE
- New York Times Snickers Owner to Invest in Kind, Third-Biggest Maker of Snack Bars
- CNBC Mars takes stake in Kind Bar as nut bar eyes international growth
- Food Manufacturing KIND And Mars Announce Partnership To Bring Healthy Snacks To People Worldwide