Target Information

Exponent has successfully acquired and merged two prominent Better-for-You (BFY) snacking brands: Eat Real and Proper. Both companies will remain operational under their established brand names while being consolidated into a single Group. The acquisition leverages Exponent's extensive background in the food and beverage industry, having previously invested in notable brands such as Vibrant Foods, Quorn Foods, Loch Lomond, and Meadow Foods.

Founded in 2014 by Priyesh Patel, Eat Real has emerged as the leading ‘Free-From’ snacking brand in the UK. The company is renowned for its flagship products, including lentil, hummus, and quinoa chips, all of which are vegan, gluten-free, and devoid of the 14 most commonly declared allergens. Eat Real has achieved remarkable growth by championing natural ingredients and a commitment to avoiding artificial flavorings, colorings, and preservatives, resonating well with health-conscious consumers both domestically and globally.

Industry Overview

The Better-for-You snacks segment is witnessing rapid growth within the UK’s £4 billion crisps and snacks market as health-conscious eating habits gain traction among consumers. This shift in consumer preference is markedly influencing demand for healthier snacking options. Brands like Eat Real and Proper have successfully capitalized on this trend through innovative product offerings and robust marketing strategies.

Proper, which was founded in 2011 by Cassandra Stavrou and Ryan Kohn, has been a pioneer in redefining healthy snacking in the UK, particularly in the popcorn category. The company distinguishes itself with unique and impactful branding that resonates with modern consumers seeking low-calorie, vegan snacking alternatives. In 2019, it launched Properchips, which became the UK’s most successful BFY product introduction in recent years, further solidifying its standing in the market.

As the demand for Better-for-You products skyrockets, these brands continue to innovate and respond effectively to consumer trends. Their growth strategies focus on attracting a broader customer base to healthier snacking, while the separate brand identities continue to thrive under the shared vision of collaboration and innovation.

With both companies committed to expanding their market presence, industry analysts expect sustained momentum in the BFY segment. This collaborative effort harnesses each brand's strengths to enhance the consumer experience, ostensibly benefiting the entire snacking sector.

Rationale Behind the Deal

This acquisition represents a strategic move for Exponent as it seeks to strengthen its footprint in the health-centric food and beverage market. By merging two innovative brands that align with consumer demand for healthier options, Exponent aims to create synergies that will enhance product offerings and drive growth.

Furthermore, consolidating Eat Real and Proper under one operational umbrella is anticipated to advance research and development initiatives, facilitating the introduction of novel products and innovations in response to evolving consumer preferences.

Information About the Investor

Exponent is a leading private equity firm with a strong track record of investing in food and beverage sectors that align with health and well-being trends. Under the leadership of Chair Kevin Brennan and CEO Chris Schulze-Melander, the firm is poised to shepherd the new Group through a transformative phase aimed at amplifying both brands' market presence.

Kevin Brennan, a seasoned executive with a history of steering fast-growing healthy food businesses within private equity, and Chris Schulze-Melander, former European CEO of Ecover, bring extensive experience to their roles. Their combined expertise in managing and expanding challenger brands is expected to play a crucial role in the success of the newly formed Group.

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From a strategic investment perspective, this acquisition appears to be a sound decision for Exponent. The merger of Eat Real and Proper can potentially yield substantial benefits by combining resources, marketing strategies, and innovation pipelines. Given the increasing consumer demand for healthier snack alternatives, the new Group is well-positioned to capitalize on this trend.

Moreover, the individual strengths of both brands can be synergistically enhanced under unified leadership, allowing for a more robust approach to market challenges and consumer engagement. This strategic alignment is likely to facilitate improved operational efficiencies and accelerate growth trajectories.

However, it will be essential for the new Group to remain vigilant in navigating competitive pressures within the snack market. Continuous innovation, effective branding, and a focus on quality will be critical as they work to attract new customers into the healthy snacking category.

In conclusion, the merger of Eat Real and Proper holds promising potential for Exponent, provided they harness their brand strengths effectively and remain responsive to consumer trends. The Dealert views this acquisition as a compelling opportunity to drive significant growth in the Better-for-You snack segment.

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