A month after announcing a deal to buy baby food firm Plum Organics, Campbell Soup has unveiled plans to acquire Kelsen Group A/S, a Danish producer of baked snacks that has developed a significant presence in China.
Kelsen Group - which is owned by Maj Invest, a private equity firm, and several other investors - sells products in 85 countries under brands including Kjeldsens and Royal Dansk.
A key player in the sweet biscuits category in China and Hong Kong, Kelsen has been exporting Danish butter cookies to China for more than twenty years, and will give Campbell “a solid platform for growth in baked snacks in China and for the expansion of our international footprint”, said Campbell Soup CEO Denise Morrison.
Sales of products under the Kjeldsens brand in China have grown at a compound rate of more than 28% in the last three years, said Campbell Soup, which is a significant player in the baked snacks market in North America (via its Pepperidge Farm cookies and crackers business), and Australia (via its Arnott’s biscuits operation).
Kelsen, which employs 366 staff, generated DKK 1.043bn ($180m) in net sales in calendar year 2012, said Morrison.
“The acquisition of this successful business is another important step in Campbell’s quest to delight new consumers through expansion into higher-growth spaces, including fast-growing emerging markets.”
A wonderful marriage of complementary skills and capabilities
The plan is to run Kelsen as a standalone business based in Denmark, reporting to Luca Mignini, president of Campbell International.
Mignini said: “Kelsen’s combination with Campbell will represent a wonderful marriage of complementary skills and capabilities.
“Its strong position in China and Hong Kong will enhance our presence in the region. At the same time, Kelsen’s talented management team will have the opportunity to leverage Campbell’s marketing, consumer insights, R&D and supply chain expertise to grow the business in both new and existing markets.”
Brian Rønsholdt, CEO of Kelsen Group, said: “Campbell’s consumer-focused capabilities and wide-ranging experience in biscuit production will provide new resources for enhancing Kelsen’s product lines and strengthening our engagement with consumers around the world.”
Campbell Soup in Greater China
Campbell Soup’s Greater China business has offices in Shanghai, Hong Kong, and Taipei, and sells products throughout mainland China, Hong Kong, Macao and Taiwan.
Campbell's branded soups are the market leader in Hong Kong, as is the Swanson range of broths, while Arnott's biscuits are also popular in Hong Kong, said the firm.
On the firm’s third quarter earnings call on May 20, Campbell Soup’s CFO B. Craig Owens was asked about acquisition targets in global baking and snacking and what “more can you do in terms of maybe joint ventures or even leaning on your Indonesian business more to drive a larger footprint in snacking over in China”.
He said: “It's absolutely something that we're considering. In fact, one of the things that we have done as we talked about broadening our footprint in emerging markets, we've been very active.”
Speaking at the Consumer Analyst Group of New York Conference in February, CEO Denise Morrison said that “China is another priority for Campbell in Asia. And we're evolving our business model there to unlock its growth potential. So this is another space to watch.”
The terms of the deal - which is subject to regulatory approvals - were not disclosed.