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Diving overview:
- SnackFutures Ventures, the corporate venture capital arm of Mondelēz International, has purchased a minority stake in Urban Legend, a fast-growing fresh donuts and pastries business in the UK. Terms of the deal were not disclosed.
- This investment is in line with Mondelēz’s plans to grow in the fresh bakery segment to better serve customers, while expanding further into the cakes and pastries segment. Urban Legend’s air fry technology reduces sugar, fat and calories by up to 75% compared to traditional donuts.
- SnackFutures was founded in 2018. of Mondelez By investing in promising young brands and technologies, we already have a dominant position in the snacks sector. At first, snack gift It also created its own brand, but shifted to investing only in existing products that it could potentially acquire in 2023.
Dive Insights:
Mondelēz’s presence in the snacking sector is primarily centered around crackers, bars and cookies, including Ritz, Clif, Tate’s and Oreo. But the Chicago-based company has publicly discussed its desire to move deeper into the cakes and pastries sector. An urban legend brings Mondelēz is introducing a product you won’t find anywhere else in its portfolio: donuts.
Investing in Urban Legend checks a few boxes: Mondelēz. Not only does it establish a deeper presence in the cakes and pastries sector, but it does so through brands with healthier reputations in typically unrelated sectors. All Urban Legend donut varieties have 200 calories or less. Mondelēz pointed out.
“When we heard about Urban Legend from our UK team, it made perfect sense considering their strategic fit for bakeries, their unique technology and their potential to disrupt snacking – all important parts of SnackFutures Ventures’ investment thesis.” Richie Gray, Global Head snack gift Ventures said in an email to Food Dive:
snack gift Ventures first discovered Urban Legend about a year ago and spent much of that time learning more about the business and its founders and exploring ways the two companies could partner, Gray added. Urban Legend has focused on donuts, but is expanding into the cinnamon role. Gray called the company’s commitment as a larger player in the better bakery space “very exciting.”
The Urban Legend portfolio includes 12 varieties sold in around 200 stores across the UK, housed in free-standing bakery cabinets.
SnackFutures’ investment is one of its first since it changed its business model to buy stakes in already established startups. This strategy will allow Mondelēz to secure or strengthen its position in a fast-growing market segment. Packaged food companies can also work with technologies or strategies that can be applied to other global brands.
By purchasing a minority stake in Urban Legend, Mondelez You get these and other benefits: If Urban Legend continues to thrive and reaches a meaningful scale that can help Mondelēz may decide to buy the rest of the company once it grows sales and improves margins.
Gray said in an email to Food Dive: SnackFutures’ strategy is to buy minority stakes in brands or companies that are too small to acquire and help them expand. Mondelēz’s investments and experience.
of Mondelez Growth in the cakes and pastries segment was primarily driven by acquisitions. In 2020, it acquired Give & Go, a U.S.-based manufacturer of brownies, cupcakes and other items. A year later, it added Chipita, which sells croissants and baked snacks in Central and Eastern Europe. And last week, Mondelez It has purchased a “significant majority stake” in Evirth, a leading Chinese cake and pastry manufacturer.
Hu, which makes premium snacks and chocolates made with simple ingredients, is the only Snack Futures investment company acquired by the parent company. It was purchased for an undisclosed amount in 2021.
