GERMANY—German confectionery company Katjes Group has acquired UK gluten-free baked goods firm Genius Foods through its venture-capital arm Katjes Greenfood with the aim to expand its gluten-free product market.

Explaining the thinking behind its acquisition, Katjes Greenfood said the market for gluten-free products is growing at double-digit rates from year to year. According to Allied Market Research, the gluten-free products market size was valued at $4.3 billion in 2019 and is estimated to reach $7.5 billion by 2027, registering a CAGR of 7.2% from 2020 to 2027.

Tobias Bachmüller, managing partner of Katjes Greenfood, said: “This makes gluten-free an ideal category for Katjes Greenfood, which, as a legally independent part of the Katjes Group, is investing in the future of nutrition outside of confectionery.

Founded in 2009, Genius Foods has a product portfolio of rolls, bagels, loaves, wraps, and pittas sold in the major retailers and in the food service channel. Last year, the firm achieved US$42.7million in sales.

“The opportunity to become the market leader in a future category purchase is a unique opportunity for us”, Bachmüller added.

Katjes Greenfood described Genius Foods as a “market leader in UK and France, but also increasingly [present] in the USA, Australia, and Germany”. The Genius Foods business includes two production facilities in the UK.

Genius Foods’ CEO Dr. Peter Quinn said: “We believe that we have found a strong investor in Katjes Greenfood, which can not only open up great markets and [create] brand potential in the short term but, at the same time, [build on] the long-term and sustainable values of a family business”.

Genius was backed by Verlinvest following a significant injection of capital in 2014, with the European investment firm now exiting the business.

Katjes Greenfood was set up to invest in sustainable businesses and usually acquires minority stakes, most recently backing vegan start-ups Unmilk and Ohso Lecker.

The terms of the deal remain undisclosed but Katjes Greenfood said it is its largest acquisition to date.

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