October 19, 2016

UK-based Kolak Snack Foods and France’s Europe Snacks have announced the merging of their companies through a £225 million (US$276 million) deal, resulting in one of the largest private label savory snack companies in Europe.

The two companies, which both produce their own branded savory snacks in their respective markets, will combine their product portfolios and will integrate their technical expertise to form a new group that will include six manufacturing sites across France and the UK. Combined, the facilities will have the annual capacity to produce 1.4 billion packs of the group’s 750 product types. Sales of its products to its 200 European partner retailers and discount customers are expected to reach approximately €250 million (US$274 million) per year.

“By bringing together Europe Snacks and Kolak we are moving towards our goal to become the pan-European partner of choice for our customer’s brands, driving innovation across a full range of crisps and snacks,” said Christoph Fenart, CEO of the new group. “Both businesses share an entrepreneurial spirit and are committed to delivering quality and value to our customers.”

Founded in 1984, Kolak produces a wide range of potato crisps, hand cooked crisps, extruded, fried, and popped snacks, popcorn, and stacked chips at its two production sites in the UK where the company employs more than 1,000 people.

Europe Snacks was founded in 1991 and specializes in extruded technologies. The company is the leading own-label stacked chip maker in France, producing stacked chips, crackers, and popped snacks from its four production sites in France where it employs over 400 people.

The global savory snack market was valued at $94.5 billion last year and is expected to see a compounded annual growth rate (CAGR) of 7.9 percent between 2015 and 2020, according to the Global 2016 Savory Snacks Market Report.

Additionally, the sector can offer growth through consolidation. The market is highly fragmented, with the top five brands holding less than a 16 percent share of the market, giving room to smaller players to gain a greater presence.

Under the terms of the merger, Kolak co-founder and former chairman and CEO, Ashok Lakhani, will join the new group Board as a non-executive director, while his co-founding partner, Bharat Lakhani and other shareholders will be removing themselves from the running of the business. Rikin Lakhani and Nicolas Eyméoud – both managing directors of Kolak and Europe Snacks – will remain in their respective leadership positions.

Both companies will continue to produce and operate under their already-established brand names.

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Lynda Kiernan