Kauno Grūdai acquires production unit for market growth
A food manufacturing giant from Lithuania has acquired the shares of Auga Group’s Grybai LT production unit to expand its organic, ready-made food production and access the UK.
AB Kauno Grūdai’s move is in response to shifting customer demands for ready-to-eat and sustainable meals where the global ready meals market has grown from $154.5 billion in 2022 to $169.01 billion in 2023 at a compound annual growth rate of 9.4%.
Under the terms of the agreement, AB Kauno Grūdai will acquire the shares of Auga Group’s soup and canned products production unit, Grybai LT.
Grybai LT operates a modern robotic factory, covering an area of around 3,600 sq meters, producing ready-to-eat organic soups, curries, cereal meals, and organic vegetables in packets. Annual production is 8-9 million packets of various products, which are exported to more than 30 countries. In 2022, Grybai LT’s revenue totalled €7.1 million.
To meet the demand for quick and inexpensive meals, Andrius Pranckevičius, CEO of AB Kauno Grūdai says agreement has been reached to use the Auga brand for 18 months for ready-to-eat soups, stews, and cereals.
“Afterward, we will replace it with our own brand — Activus, which is aimed at active and busy people who take care of themselves, especially the younger generation,” Pranckevičius adds.
Offering customers a line of organic and eco-conscious soups, stews, cereal dishes, and organic vegetables in packets will not only help meet growing interest in sustainable products — an entirely new segment for Kauno Grūdai — but will also lead the company to unexplored markets such as North America and Asia.
Grybai LT has already established itself as a market player in the UK, Sweden, France, Spain, and Germany, where Kauno Grūdai aims to continue expanding its operations.
The acquisition also provides an opportunity to explore new markets for other products, such as instant noodles, instant porridges, and others.
”Our goal is to expand by diversifying our activities, and the most appealing option appears to be expansion in the ready-made food segment following the acquisition of Grybai LT, three new product groups will be added to our portfolio,” Pranckevičius explains.
The company aims to achieve sales of soups, stews, and other packaged meals. Kauno Grūdai hopes to expand manufacturing to 24 hours a day and sell additional goods to clients who already buy its instant porridges and instant noodles in the EU.
To accomplish these goals, Kauno Grūdai plans to invest an additional €4.4 million over the next five to six years to boost its maximum manufacturing capacity to 33 million packets or 11,000 tonnes per year.
