Mondelēz acquires Hu Products: 'There's significant opportunity to take Hu to the next level'
Mondelēz made a minority investment in Hu in April 2019 through SnackFutures – its innovation arm launched in 2018 – which granted the company a right of first offer to acquire the company. Following a competitive bid for Hu, Mondelēz International acquired 100% ownership of the brand. Financial terms of the deal were not disclosed.
"Hu is extremely excited to tap into Mondelēz International’s knowledge of snacking to better understand what white space exists for Hu's unique ingredient guardrails for purposes of innovation. Moreover, we are excited about the support Mondelēz International will bring in furthering our company's purpose and mission of getting as many people 'Back to Human' as possible," the brand told FoodNavigator-USA.
Glen Walter, EVP & president, Mondelēz International North America noted how the acquisition of Hu helps bolster and grow the global snacking company’s current portfolio.
“Hu is a strong strategic complement to our snacking portfolio in North America,” he said. “This well-being brand platform provides further growth opportunities in chocolate, cross-category potential in crackers, as well as meaningful opportunities to expand distribution including in e-commerce and premium conventional retail."
Hu will join other fast-growing premium and well-being snack brands in Mondelēz’s portfolio such as Tate’s and Perfect Snacks, and will operate as part of the North American Ventures business model but function as a separate business – to preserve the “entrepreneurial spirit” and authenticity of the brand culture – producing all products at its current manufacturing facilities.
Mondelēz will be on hand to provide Hu with the necessary resources to help fuel the brand’s next chapter of growth, which includes major leaps in distribution, Walter told FoodNavigator-USA.
“There is a significant opportunity to take Hu to the next level by using the scale, distribution, and resources of Mondelēz International to grow. We’ll utilize the vast Mondelēz International distribution network to accelerate growth of the brand, while also providing global resources and support in areas including R&D, supply chain, sales marketing, and e-commerce."
Hu products have made the successful leap from the natural channel where the brand has thrived into conventional retail including distribution at major retailers such as select Kroger and Albertsons store banners.
Speaking to FoodNavigator-USA, the brand said, "We are excited to partner with Mondelēz International specifically in the area of reaching more consumers and customers across the USA and potentially internationally in the future, as we go from selling primarily in natural food stores into more traditional grocery stores. Mondelēz International has great relationships with retailers across the globe that can help us extend our brand and our mission."
Its direct-to-consumer channel, which flourished in the past year as many consumers shopped online for their food products, will continue to be a core focus for the brand, Hu noted.
"We will continue to follow our eater where and how they like to shop. The subscription model has been very effective for our business and it's something we will continue to make a priority as a convenient way for our loyal fans to always stay stocked up with our products."
Building a snacking platform, future product innovation
Founded in 2012 Hu began as ‘Hu Kitchen’, a high-end restaurant and market in New York City making and selling vegan and paleo-friendly chocolate bars made with a handful of simple ingredients and free from emulsifiers, stabilizers, and refined sugars.
Founders Jason H. Karp and siblings Jordan Brown and Jessica (Brown) Karp transitioned the business into a consumer brand selling its products online and in the natural retail channel where its simple ingredient deck resonated with consumers.
“Jordan, Jessica and I started Hu Kitchen because there was a need to trust and understand every ingredient in our food,” said Jason Karp.
Mark Ramadan (former CEO of Sir Kensington’s which sold to Unilever in 2017) became CEO of the brand in 2019. During Ramadan’s tenure he has focused on enhancing the purpose and values of the company and set the pathway for continued sales growth.
Over the past few years, Hu has extended its chocolate line into new segments including baking and snacking chocolate while also entering entirely new categories such as grain-free crackers.
Each new addition to its portfolio must uphold the brand's strict ingredient guardrails, said Hu. Read more about Hu's ingredient philosophy.
"In our future innovation, we aim to look deeper into the categories we currently play in, as well as categories that we believe are ripe for renovation and where our unique benefits are not currently present which could be preventing some people from enjoying these categories.
"Just like we saw an opportunity to make a chocolate without things like cane sugar and soy lecithin, we similarly saw an opportunity to make crackers that weren't just grain free, but were also free of refined starches or sunflower oil," Hu told FoodNavigator-USA.
Most important, said Hu, is the opportunity to grow and live up to the brand's 'Get Back to Human' mission which is based on the founders' belief in the healing power of food made from minimally-processed, responsibly-sourced ingredients.
"We will follow this mission in growing our distribution with our current products in the US and also launch new products that live up to this truth -- and this is precisely what Mondelēz International wants to help us achieve."