Cloetta Fazer acquires Swedish confectionery company Karamellpojkarna
Cloetta Fazer has acquired confectionery producer Karamellpojkarna AB, the third largest supplier of throat pastilles in Sweden. The company’s Extra Starka Original brand is Sweden’s top-selling product in the segment. Karamellpojkarna is also the leader in the lollipop segment with its Fruktklubbor brand. Through the acquisition, Cloetta Fazer will increase its sales in Sweden by around 6%.
Throat pastilles are the third largest confectionery segment, accounting for 14% of the total market in Sweden, and have grown dramatically in Cloetta Fazer’s main markets. Among other things, the acquisition will give Cloetta Fazer expertise in tooth-friendly products and a strong position in a fast-expanding product segment in the Swedish market.
“In line with our strategy, we are seeking growth by diversifying into product areas where we currently have a weak position or none at all. Karamellpojkarna’s portfolio includes a number of robust brands and I am convinced that we can further develop and strengthen these,” says Cloetta Fazer’s CEO Jesper Åberg.
Karamellpojkarna a major player in the pastille segment
Karamellpojkarna, founded in 1952, is a family-owned company that manufactures, markets and sells well known brands like Extra Starka, Fünf Kräuter, Hemkola and Kungen av Danmark. Karamellpojkarna has some 40 employees and reported annual sales of around SEK 70 million in 2006.
In Sweden, Karamellpojkarna is a major player in the throat pastille segment. Aside from pastilles the company also makes fruit-flavoured lollipops and toffee products. Extra Starka is currently Sweden’s top-selling pastille in terms of volume and the company also has a leading position in the Swedish lollipop segment with its classic Fruktklubbor and Fifty-Fifty products. In addition, Karamellpojkarna has extended the assortment by launching a range of tooth-friendly sugar free pastilles containing xylitol in 2007.
“The knowledge of sugar free products that Karamellpojkarna brings to Cloetta Fazer is a welcome addition and we expect this to open up new opportunities for us in the market,” says Jesper Åberg.
All Karamellpojkarna products are manufactured at the company’s factory in Alingsås, north of Gothenburg on the west coast of Sweden, and production is planned to remain there. Cloetta Fazer’s growth target in the pastille segment also calls for increased production volumes.
“Cloetta Fazer is an ideal partner for us many respects and we are highly optimistic about the deal, which will give our brands new momentum for continued growth and development in this segment. I am also pleased with the plans to keep production operations here in Alingsås,” says Niklas Bohlin, Managing Director of Karamellpojkarna.
The transfer of ownership will take place on 1 October 2007. The parties have agreed not to disclose the purchase price.
Supports Cloetta Fazer’s development plans
Cloetta Fazer has successfully driven development in the Swedish and Finnish confectionery markets and strengthened its position in the Baltic countries. Today Cloetta Fazer has a confectionery market share of 40% in Finland and 24% in Sweden. In the Baltic region, the company is number two in the market.
The acquisition supports Cloetta Fazer’s plans for development in its main markets. Over a three-year period Cloetta Fazer has set its overall growth target at 25%, of which 10% will be met organically and 15% through acquisitions.
“The transaction will boost our total sales by approximately 2%. In view of the steadily rising demand for products of this type, we firmly believe there is scope to further accelerate our growth in the throat pastille segment,” says Jesper Åberg.