Mars Inc. is buying a piece of snack-bar maker KIND LLC, the latest move by an established food company to strengthen its standing in the fast-growing market for healthier treats and meals.
The fruit-and-nut bars KIND began selling in 2004 helped establish a growing market for lower-sugar food with relatively simple recipes. Grocers began stocking the bars at check-out aisles in place of candy such as Mars's M&M's. Stalwarts Kellogg Co. and General Mills Inc. raced to create similar products. Mars, too, is working to reduce sugar content and removing artificial ingredients in its foods and candy.
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KIND now has products in about 190,000 stores and logs more than $700 million in annual sales. KIND founder and Chief Executive Daniel Lubetzky said the partnership with Mars could help his company grow outside the U.S.
"The primary objective is to grow our core business globally," he said in an interview. "We need to move fast."
Mars didn't disclose the size of the stake it gained in KIND but the investment is estimated to be more than $1 billion.
Mars is working on reducing the sugar and removing artificial ingredients in its food and candy. With about $35 billion in annual revenue and vast overseas reach including placement in 2.3 million locations in China alone, Mars also sells Pedigree pet food and other pet care brands, in addition to snacks and candy.
KIND began discussions with potential investors over the summer, but Mr. Lubetzky said he was adamant that he wouldn't sell the company outright. He said the deal with Mars doesn't preclude KIND from partnering with other food makers in the future, particularly if a new partnership helped KIND expand beyond snack bars and granola.
"In 2018," Mr. Lubetzky said. "we're going to be acquiring companies and entering new markets."
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(END) Dow Jones Newswires
November 29, 2017 14:07 ET (19:07 GMT)