Enjoy Life Foods sells to Mondelez International: 'We're growing fast, but we're impatient. Now is the time to really expand distribution'
Warady, who has been with Enjoy Life Foods – co-founded in Illinois by Scott Mandell (CEO) and Bert Cohen in 2001 – from the inception, said that he and Mandell will be staying with the business, which will retain its current HQ and be run at arm’s length as a standalone operation by Mondelez (also based in Illinois).
“One of the unique parts of the acquisition is that we’re going to remain employees of Enjoy Life Foods and all members of the team are planning on remaining.”
Now is the time to really grow distribution
But why sell up?
“Because we’re impatient,” said Warady. “The [allergen-friendly] category has kind of caught up to the Enjoy Life brand. Over the last few years we’ve had just tremendous growth; we’ve grown 40% a year each year for the past three years, and the majority of that growth has come from velocity as opposed to distribution, so more people are buying the brand and more people are buying more of the brand.
"But now is the time to really grow distribution, and to do that requires additional resources and a partner that understands what we are trying to do. We’re in 35,000 stores throughout North America, but having the resources of a larger company can really help us achieve far broader distribution both here and overseas. We see tremendous opportunities globally."
He added: "We get inquiries from countries around the world literally every single week, but we've been taking it slow. We're in South Africa, Israel, and the UK, but with the Mondelez global footprint we'll certainly be able to enter new markets on a much more rapid basis."
The resources of Mondelez will provide us with the ability to accelerate innovation
As for financing, he added: “We originally funded the business with money from friends and family, and then in 2006 we did our last true capital raise, but it was all non-institutional money, and no private equity investors were involved. Since then we’ve funded our business through cash-flow.
“The resources of Mondelez will provide us with the ability to accelerate innovation, make our products taste even better than they currently do with the help of Mondelez’s R&D team, and make us even more efficient from an operational standpoint [around 70% of Enjoy Life’s products are made in-house at a dedicated nut- and gluten-free bakery in Chicago, Illinois and 30% are co-packed].”
At Expo West we’ll be introducing a brand new category of products
So what’s in the innovation pipeline for Enjoy Life Foods, which generated revenues topping $40m in 2014 from cookies, chocolate, snack bars, and savory snacks free from the eight most common allergens (wheat, dairy, peanuts, tree nuts, egg, soy, fish and shellfish)?
Said Warady: “Our focus will continue to be in snacks, but when you look at the way people eat, they are snacking more often during the day, and snacks tend to be more functional, higher in protein, higher in functionality, and that’s where we see our growth.
"At Expo West we’ll be introducing a brand new category of products that we’ve not been in before.”
Mark Clouse, chief growth officer at Mondelez International, said: "The Enjoy Life brand expands our portfolio into faster growing, on-trend, 'better-for-you' areas and provides an excellent platform to make these delicious offerings available to consumers with 'free-from' needs or simply looking for healthy-lifestyle options, both in the United States and beyond."