Mondelez buys majority stake in Grenade​

By Curtley Bale​

The Story

International snack food company Mondelez has bought a majority stake in Grenade, the UK-based company focussing on healthier, low sugar snack options. Grenade is best known for its market-leading protein bar, Carb Killa. Grenade was founded in Solihull by Alan and Juliet Barratt in 2010 and bought by private equity firm Lion Capital in 2017 for £72m. Mondelez also owns one of Britain’s hallmark companies, Cadbury’s. The deal is set to be worth £200m but the exact shareholding figures have not been announced.

What it Means for Businesses and Law Firms

Grenade was a UK start-up aimed at healthier snack options. Its initial audience began with gym-goers or those who were looking to maintain a healthier diet. However, low sugar options have become far more mainstream in recent years, leading to Grenade expanding into 80 countries (CityAM). Its Carb Killa protein bar has been a market leader since 2016, attracting consumers who seek a nutritious snack on the move. Grenade has since expanded into milkshakes and energy drinks. The recent surge in popularity led to Grenade posting revenue figures of £51.7m in 2019, a 37% increase on 2018’s figures (Financial Times).

Mondelez’s motivations lie in the need to diversify its product portfolio. The company owns some of the world’s most well-known brands such as Cadbury’s, Milka, and Oreo. However, many of these snacks tend to be high in sugar, an issue as some consumers become more cognisant of the food they consume, seeking out healthier, less sugary varieties where possible. This health consciousness is being encouraged by governments around the world as countries look set to tackle obesity in the coming decade. Weapons such as a sugar tax and a ban on promotional offers of sugary foods are all being utilised in the UK's fight. Therefore, it makes sense that Mondelez is seeking to enter into the healthy snacks market.

The healthy snacks market is a fast-growing segment with Mondelez’s most recent acquisition coming in 2019 when it bought Perfect Snacks in the US for $284m. Alongside Grenade, Mondelez is now in a much better position in this market. The company has also committed to retaining the Barratt family’s minority control of the company with Alan Barratt remaining as CEO.

Looking forward, the international snack food giant has targets of continued global expansion and widening the product range (Mondelez press release). Mondelez currently operates in 150 countries meaning it has the infrastructure to help increase Grenade’s global footprint. With this deal, Mondelez seems to be hedging its bets and future-proofing its business as continued action on obesity is inevitable.

Mondelez was advised by Baker McKenzie with the firm structuring the deal across multiple jurisdictions and ensuring the transaction met the client’s “strategic vision” for future business (Baker McKenzie).

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