Swedish snacks manufacturer Cloetta has agreed to hand off its Nutisal roasted nuts label to Dutch peer The Monchy Food Company.
The business is to be sold for around €5 to €6m ($5.4m – €6.5m), the Plopp chocolate bar maker said in a statement.
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Cloetta’s decision to dispose of Nutisal comes as the group looks to remain focused on its “core confectionery” brands and works towards a “long-term goal” of hitting over 14% adjusted EBIT margin.
Nutisal makes up around half of Cloetta’s nuts segment and 2% of the company’s total net sales. The company will continue to produce nuts as part of its pick-and-mix line.
The Jelly Bean Factory brand maker said it expects to book a non-cash impairment of €7-8m in its second-quarter results, following the handover.
It also predicts the deal to generate around €6-7m in “positive cash flow”.
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By GlobalDataSolna-based Cloetta snapped up Nutisal in 2013. The manufacturing of the product was outsourced in 2020 to a third party as it looked to boost competitiveness. The brand’s Helsingborg plant was later shut in 2021.
The move comes as Cloetta continues to grapple with sky-high cocoa prices. Cocoa represents around 8% of the company’s total raw material costs.
At the start of this year, the company announced further price increases to its confectionary and chocolates range in light of record-high raw material costs for cocoa and sugar.
Cloetta booked net sales of Skr2.1bn ($199.3m) for the first quarter of 2024, an increase of 6.1% year-on-year. Adjusted operating profit was down 4% to Skr192m.
The group produces confectionery brands including The Jelly Bean Factory, Läkerol pastilles, Plopp chocolate toffee bites and King mints.
Its main markets include Sweden, Finland, the Netherlands, the UK, Germany, and Denmark.
Cloetta also sells to Switzerland, as well as countries in the Asia-Pacific and Baltics regions via third-party distributors.
The company manages seven production sites across Sweden, the Netherlands, Belgium and Slovakia. In 2023, Cloetta produced around 101,300 tonnes of chocolates and confectionery, pastilles, nuts and chewing gum at its facilities.
