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Diving overview:
- Snack Futures Ventures, the corporate venture capital arm of Mondelez International, has purchased a minority stake in Urban Legend, the UK’s fastest growing fresh donut and pastry business. Financial terms of the transaction were not disclosed.
- This investment is in line with Mondelēz’s plans to grow in the wholesome fresh bakery sector, while expanding further into cakes and pastries. Urban Legend’s air frying technology reduces sugar, fat and calories by up to 75% compared to traditionally made donuts.
- SnackFutures was founded in 2018. Mr. Mondelez Investments in promising young brands and technology have already given it a dominant position in the snack industry. Initially, snack futures has also launched its own brand, but has switched to investing only in established products with the potential for acquisition in 2023.
Dive Insight:
Mondelez’s presence in the snack sector is primarily centered around crackers, bars, and cookies such as Ritz, Cliff, Tate, and Oreo. But the Chicago-based company has been open about its desire to expand further into the cake and pastry space. What urban legends bring Mondelez has entered donuts. This is a product unlike any other in the company’s portfolio.
Investing in urban legends checks several boxes below. Mondelez. Not only will it establish a deeper presence in the cake and pastry sector, but it will also do so with a brand that has a healthier reputation in a segment it doesn’t normally associate with. All of Urban Legend’s donuts are under 200 calories. Mondelez pointed out.
“When we heard about Urban Legend from our UK team, it made perfect sense to consider it given its strategic fit in bakeries, its unique technology and its potential to disrupt snacking. “This is a key part of Snack Futures Ventures’ investment thesis,” said Richie Gray. , Global Head snack futures Ventures said in an email to Food Dive.
snack futures Ventures first became aware of the urban legend about a year ago and spent much of that time learning more about the business and its founders, Gray added, and exploring ways the two companies could partner. While Urban Legend has focused on donuts, cinnamon’s role has expanded as well. Gray said the company’s promise as a leading company in healthier bakeries is “very interesting.”
The Urban Legend portfolio includes over a dozen varieties sold in stand-alone bakery cabinets in around 200 stores across the UK.
SnackFutures’ investment is one of its first since changing its business model to buying stakes in already established startups. This strategy allows Mondelēz to enter and strengthen its position in a rapidly growing market segment. Additionally, packaged food companies can leverage technologies and strategies that can be applied to other global brands.
By purchasing a minority stake in Urban Legend, Mondelez You will get benefits such as: If urban legends continue to flourish and reach a meaningful scale, they could be useful If Mondelez grows sales and improves its profit margins, it may decide to buy the rest of the company.
Gray said in an email to Food Dive: SnackFutures’ strategy is to buy minority stakes in brands and companies that are too small to acquire and help them scale. Mondelez Investments and Experience.
Mr. Mondelez Growth in the cake and pastry sector has been primarily driven by acquisitions. In 2020, it acquired Give & Go, a U.S.-based manufacturer of brownies and cupcakes. A year later, he added: Chipitaa player in croissants and baked goods in Central and Eastern Europe. And last week, Mondelez It has bought a “substantial majority stake” in Evilus, a major Chinese cake and pastry manufacturer.
Hu, a maker of premium snacks and chocolates made with simple ingredients, is the only SnackFutures investment company acquired by its parent company. It was purchased in 2021 for an undisclosed amount.
