‘With Pändy we can show the way’: Bayn CEO says Swedish confectionery acquisition will accelerate sugar reduction trend
Sugar reduction expert Bayn Europe has entered into a letter of intent to acquire Pändy Foods. Bayn’s ownership will account for approximately 51% of the combined group and the company said the deal will be partially financed by issuing new shares.
Announcing the deal – the financial details of which have not been disclosed – Bayn said it would create a ‘fast-growing and strong international food tech group’.
D2C move creates ‘field-to-fork’ supplier
The Pändy acquisition would mark Bayn’s first move into the direct to consumer space.
Pändy was formed in 2016 when three engineering students came together in Stockholm with ‘a vision of creating healthier snacks’. The first products were launched in 2016 and the run-away success in Pändy’s domestic market saw the group immediately expand in Europe. Today, the company sells a range of 13 products – from protein bars to beverages and confectionery – with a presence in 15 markets around the world.
“Previously we have only sold to producers; now we can access the customers directly. Pändy formulates, produces and markets sugar-reduced FMCGs. Currently [SKUs include] protein-bars, energy-beverages, jelly-gums, snacks and soon also chocolate bars. They are good at quick market introductions and are banking on the same trend as we are: sugar-reduction,” Bayn’s chief executive, Patrik Edström, told us.
“We see this as a natural next step in [Bayn's] development. Together we become a total supplier from field-to-fork for raw materials to finished consumer products."
Certainly, Pändy Foods CEO Simon Petrén believes the deal will enable the low-sugar snacks-to-confectionery maker to step up its growth. Commenting on the agreement, Petrén stated: “Together with the team at Bayn we see a great opportunity to grow significantly faster and act on incoming inquiries as well as create a leading company group for the future of healthy foods and sugar-reduced products.”
These enquiries include requests from ‘major players’ who want to collaborate or buy the company’s production technology, Petrén revealed. “Developments in the market are fast and we are constantly being contacted by major players who want to collaborate with us and buy the technology and production with the product portfolio we provide.”
A ‘state-of-the-art showcase’ for sugar reduction
Bayn is no stranger to Pändy. Edström explained the two groups have ‘collaborated together for a while’. Most recently, the firms jointly developed a new brand profile – ‘Everyday Snack, Monday To Sunday’, with several products launched at the Stockholm Fitness Festival.
"The companies complement each other very well," according to Edström who flagged aligned areas of expertise, organisational structure and vision.
Pändy boasts an experienced product-innovation team, knowledge of production technology and customisation, as well as a history of ‘rapidly establishing’ products in several markets. For its part, Bayn has expertise in sweetening with plant-based fibres and established raw material technology.
Beyond the consumer opportunity, Bayn believes that it can leverage the Pändy brand to show other manufacturers what can be achieved in sugar reduction.
“We are already well advanced in the process of launching several new products, where Pändy will in [the] future become a state-of-the-art showcase to other brands that the product and raw materials works all the way out to the end consumer,” Edström predicted.
He believes this will help accelerate the market for sugar reduction technologies – providing a boost in demand for Bayn’s ingredient technologies. “Buying customers have been won over already, but there are lots of specifiers and producers who hesitate to deviate from chemical sweeteners. This is where the acquisition of Pändy comes in. With Pändy we have a specifier who can show the way,” Edström elaborated.
Synergistic potential for innovation and growth
Bayn will therefore leverage Pändy to act as a first-mover in the consumer space. This, the company believes, will provide other consumer brands with the confidence they need to make the switch to natural sweeteners.
By covering the entire FMCG value chain, the enlarged group will focus on ‘effective holistic testing’ and the launch of new innovations as well as having the necessary tools to quickly establish new raw materials and products in the market.
“Besides our own sweetening solution, which will be continued under the Bayn-flag, we now have access to a B2C-channel. The time to market is much shorter for B2C, but once there is a precedence, the other players are often quick to follow,” the group’s chief executive predicted.
Bayn said the combined company would benefit from ‘several synergies’ that it expects to contribute to a more efficient organisation as well as increased growth and profitability.
Not least among these will be an enhanced research and development capacity, Edström stressed, as he played down the prospects of a significant cost-cutting drive.
“You do not necessarily need to reduce costs to create synergies. In this case we believe that our R&D can be used more efficiently. Also, our regulatory, quality and admin-functions can dilute their costs. And yes; we’ll do some best-practice [research] to see where the smartest solutions might be and what they are. There might be one or [more] adjustments to be done as well, but that is a bit premature.”
The acquisition is subject to the usual due diligence process and is conditional on approval from shareholders in Bayn. This process ‘starts immediately’ and is expected to be completed in January.
The company hopes to close the deal in the first quarter of 2020.
