Auga Group’s Grybai LT acquisition opens new market avenues for Kauno Grūdai
Global food trends in the aftermath of the Covid-19 pandemic and the cost-of-living crisis have highlighted shifting customer demands for ready-to-eat, and sustainable meals. Due (in part) to these circumstances, the global ready meals market has already grown from $154.5bn (£127bn) in 2022 to $169bn (£138.9bn) in 2023 at a compound annual growth rate of 9.4%.
Following suit, Kauno Grūdai, one of the largest food manufacturing companies in Lithuania, has acquired shares of Auga Group, one of the largest producers of organic products in the Baltic States. Under the terms of the agreement, the buyer will acquire the shares of Auga Group’s soup and canned products production unit Grybai LT.
The acquired company Grybai LT operates a modern robotic factory covering an area of around 3,600 sq. meters. The main products include ready-to-eat organic soups, curries, cereal meals, and organic vegetables in packets – around 70 product names. The annual production is eight-to-nine million packets of various products which are exported to more than 30 countries. In 2022, Grybai LT’s revenue totalled €7.1m (£6.2m).
Andrius Pranckevičius, CEO of AB Kauno Grūdai, said: “We have agreed that for 18 months we will be able to use the Auga brand 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.”
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 previously 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 assume leadership and continue expanding its operations.
The acquisition of Grybai LT holds great significance for Kauno Grūdai, as it complements the company’s production with a section of organic, ready-made food products. Furthermore, it provides an opportunity to explore new markets for other products produced by the company, such as instant noodles, instant porridges, and others.
The company decided to go ahead with the deal because it is interested in growing in the food products market and adapting to consumer demands.
Pranckevičius added: “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.”