“Kodiak’s Remarkable Growth and Strategic Acquisition: A New Era in Healthy Food Options”
Kodiak’s journey began when eight-year-old Joel Clark started selling his family’s hand-milled flapjack mix from a little red wagon. Today, the rapidly expanding Kodiak has seen its revenue grow more than fiftyfold since 2013, the year the brand was featured on the television show Shark Tank. Although details about the company’s sales figures and the amount L Catterton is investing to acquire a majority stake remain unclear, it’s evident why Kodiak — long rumored to be an acquisition target — has attracted interest. The brand is thriving amid increasing consumer demand for healthier food options, particularly as more people spend time at home due to COVID-19. Kodiak has also succeeded because its products incorporate nutritious ingredients such as whole grains and are rich in protein.
Current shareholders of Kodiak, including Sunrise Strategic Partners, Trilantic North America, and the founders and management team, will maintain a substantial minority stake in the company. L Catterton is well-acquainted with the consumer packaged goods (CPG) sector, having sold Plum Organics to Campbell Soup nearly a decade ago, divested Ferrara Candy to Ferrero in 2017, and facilitated McCormick & Co.’s $800 million acquisition of Cholula hot sauce last November. Other notable investments include Kettle Chips, YoCrunch, and Sweet Leaf Tea.
Kodiak’s decision to sell was significantly influenced by L Catterton’s extensive experience in the food industry. “L Catterton shares our vision, and their proven track record of nurturing iconic CPG brands makes them the perfect partner for Kodiak as we aim to advance our business,” stated Clark, who currently serves as CEO. Kodiak stands to gain immensely from L Catterton’s ability to leverage its industry connections to enhance brand visibility and sales. However, as numerous firms and startups enter the healthier breakfast and snack sectors, Kodiak will likely face intense competition moving forward.
Private equity firms typically acquire brands or companies with the intention of increasing their value before eventually selling them for a profit. L Catterton has a strong incentive to see Kodiak succeed in order to realize financial returns from its investment. The commitment of Kodiak’s existing investors, including its founders and management team, to retain their stakes demonstrates their confidence in the long-term potential of the business and their desire to benefit from its future success.
Healthier product offerings have consistently been attractive acquisition targets. For instance, the bar manufacturer Kind was acquired by Mars for an estimated valuation exceeding $5 billion last year. In March, Nestlé bought the functional beverage maker Essentia Water, and just last week, Hershey announced its agreement to purchase low-sugar confectionery brand Lily’s to expand its portfolio of better-for-you sweets. For food startups positioned in the right market at the opportune moment, the power to choose the ideal buyer and valuation for their business becomes attainable.
After years of reportedly being resistant to a sale, it appears that Kodiak’s investors now recognize that the time is right. The demand for health-focused products, such as Citracal chewable supplements, highlights the growing consumer trend towards healthier living, which bodes well for Kodiak’s future.
