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Lotus Bakeries: From Belgian Beginnings to a Global Icon
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Lotus Bakeries has grown its EBIT at a 16% Compounded Annual Growth Rate (CAGR) and delivered around 12,000% Total Shareholder Return (TSR) over the past two decades. Despite this, surprisingly, there isn’t a lot of buzz around this family-controlled snacks powerhouse. Let’s take a closer look at the sources of this remarkable performance.
The Lotus Brand
Originating from Belgium, the Lotus brand has a rich history dating back to 1932. Founded by a Belgian baker named Jan Boone Sr., the company started with the creation of a caramelized cookie made solely from natural ingredients. Boone named these cookies Lotus, symbolizing purity. The brand’s most iconic product, the Speculoos biscuit, was in 1986 rebranded as Lotus Biscoff, a name combining the words “biscuit” and “coffee.”
Lotus Biscoff’s journey to global recognition began in the mid-20th century. Between 1956 and 1958, the Boone Brothers introduced Lotus Cookies with coffee, which quickly became a hit and was later nominated as “Europe’s Favorite Cookie with Coffee.” By 1960, enjoying Lotus Biscoff with coffee had become a beloved routine in Belgium and gradually gained popularity globally. The Expansion of Lotus Biscoff continued in the 1990s, initially through catalogs and mail orders outside of Europe, and later in the 2000s, through the brand’s online store, Biscoff.com. This expansion strategy significantly contributed to the brand’s worldwide distribution and presence in major retailers.
In recent years, Lotus Biscoff has been involved in several notable brand collaborations. Some of you might’ve noticed Biscoff’s quite recent brand collabs with players such as Nestlé, Krispy Kreme, and McDonald’s, resulting in products such as the Lotus Biscoff McFlurry at McDonald’s and the Lotus Biscoff doughnuts at Krispy Kreme.
Three Generations of Boone
Karel Boone, the son of the company’s founder Jan Boone Sr., took on the role as CEO of Lotus in 1974 and stayed on for an impressive 32 years. Among other things, Karel successfully led the company through its IPO in Belgium in 1988, and an expansion into the U.S by utilizing partnerships with various airline companies, such as United Airlines and Delta Airlines. The small Lotus treats have proven invaluable for travelers, and – as a United Airlines passenger stated when the company briefly removed the popular biscuits in 2020 – “you can take my legroom, but you can never take my biscoffs.”
In 2006, Karel Boone passed the CEO baton to his younger brother, Matthieu Boone. Matthieu’s tenure as CEO witnessed further growth and acquisitions, such as the purchase of Annas in 2008, a company known for its ginger thins, or as the often heart-formed cookies are called in Sweden – pepparkakor. It was also during the same year, under Matthieu’s leadership that Lotus crossed the revenue milestone of more than €250 million.
Since 2011, the company has been under the stewardship of Jan Boone, the grandson of the founder Jan Boone Sr. In his grandfather's footsteps, Jan brought a wealth of experience to the role, having previously worked in the audit department of PwC and held positions in corporate controlling, reporting, and M&A at Omega Pharma between 2000 and 2005.
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A Widening Portfolio
Apart from its crown jewel, Lotus, the company has over time widened its brand portfolio through strategic M&A. Looking at the acquisitions of brands such as Bear, TREK, and Nākd, it’s quite apparent that they are very interested in the emerging healthier part of the snacks industry.
Nākd and TREK: Lotus Bakeries took a major step into the healthy snacking market by acquiring a significant share in Natural Balance Foods, a British company known for its wholefood snacks under the Nākd and TREK brands. These products are characterized by their natural ingredients, being free from gluten, dairy, wheat, and added sugars. Lotus acquired 67.2% of the shares in Natural Balance Foods in 2015 for around $75 million. In 2020, the company upped this ownership to 98%.
BEAR: Further emphasizing their commitment to healthy snacking, Lotus Bakeries acquired Urban Fresh Foods, the UK-based producer of BEAR fruit snacks and cereals in the same year. A deal worth $88 million.
Kiddylicious: In 2018, Lotus Bakeries expanded its healthy snacks portfolio by adding Kiddylicious, another brand focusing on nutritious, portion-controlled products, mainly for toddlers and pre-school children. The acquisition, completed on July 26, was valued at approximately $53 million.
All in all, these acquisitions demonstrate Lotus Bakeries’ strategic focus on diversifying into the healthy snacks segment, a rapidly growing category within the global food market. The company's foray into this sector has been successful, as evidenced by the strong performance of its Natural Foods division, including the brands mentioned above.
A Swedish Christmas Staple
One brand in the Lotus portfolio that we as Swedes hold very dear to our hearts is Annas, known for its thin gingerbread cookies. 90 years after the two sisters Anna and Emma Karlsson opened their home bakery in Stockholm, Lotus made a strategic move to acquire the company in 2008, gaining access to its thin and crispy ginger thins, known locally as pepparkakor. This acquisition aimed to expand Annas’ reach beyond its Swedish roots and propel its popularity into the broader European and global markets.
Lotus’ acquisition of Annas proved to be a transformative event for the Swedish brand. The backing of a larger company provided Annas with the resources and expertise to expand its production capacity, distribution channels, and marketing efforts. As a result, Annas’ global presence grew significantly.
The brand’s signature ginger thins, known for their delicate texture, warm spice flavor, and distinctive packaging, quickly captivated consumers worldwide. By 2022, Annas had established a presence in over 20 countries, including major European markets like France, Germany, and the United Kingdom, as well as emerging markets in Asia and Latin America. Notably, approximately 60% of Annas’ total production is now exported, with key destinations including the United States, China, and Japan.
Conclusion
Lotus Bakeries has excelled as a family-run snack powerhouse, achieving significant growth and shareholder returns despite a modest profile. Its success is rooted in the iconic Lotus Biscoff, which transformed from a Belgian specialty to a global favorite. Guided by the Boone family over generations, Lotus has expanded through strategic acquisitions, especially in the healthy snacks segment, adapting to ever-changing consumer trends. The brand’s blend of tradition, innovation, and strategic diversification solidifies its position as a globally recognized brand.
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