Kraft Heinz takes over German spice start-up Just Spices

Founder of Just Spices

Just Spices is to be continued as an independent company by the founders Ole Strohschnieder, Florian Falk and Béla Seebach (from left).

(Photo: obs)

Dusseldorf At that time they wanted to cook an Indian Dal dish in their flat share, but the manageable selection of spices on the supermarket shelf left them at a loss. And so three students from ISM Dortmund became founders themselves. “The spice market was not very inspiring and innovative back then, we wanted to change that,” report Florian Falk, 34, Ole Strohschnieder, 36 and Béla Seebach, 36. In 2014 they went on a world tour to India, the USA, Italy and Mexico with locals to develop the first authentic mixes. Their heads can now be found on the characteristic spice jars of their company Just Spices.

The colorful spice mixes such as “Chocolate Banana Oatmeal Spice” for muesli or scrambled egg spice are particularly popular with young customers. The cans are now in many supermarkets in Germany, Austria and Switzerland. However, most customers buy online from Just Spices. 1.6 million spice fans are reached with recipes via social media channels.

The success of Just Spices aroused the interest of the US food company Kraft Heinz. The ketchup and cheese manufacturer is now taking over the majority in the Düsseldorf start-up with 150 employees. Kraft Heinz will acquire 85 percent of the shares from the old investors, both companies announced on Friday. These include, for example, Five Season Ventures, Bitburger Ventures, Döhler Ventures and Trivago founder Rolf Schrömgens.

So far, Just Spices had raised 15 million euros in capital. Neither side gave any information about the amount of the deal. The three founders Falk, Strohschnieder and Seebach keep 15 percent of the shares. You want to continue to run Just Spices as an independent company.

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In order to be able to grow faster, Just Spices completely outsourced its production at the beginning of 2019. The rate of growth is rapid. In 2021, sales are expected to double to around 60 million euros compared to the previous year. On request, Just Spices did not provide any information on earnings and profitability. According to the latest public information in the Federal Gazette, the start-up made a turnover of EUR 17.3 million in 2019 and an after-tax loss of EUR 2.5 million.

Start-ups are stirring up the dusty spice market

For decades, the retail herb and spice market has seen little growth or innovation. The industry leader is by far the family company Fuchs from Dissen, to which the Ostmann brand also belongs. The group had a turnover of 557 million euros in 2020.

Start-ups have shaken up the dusty market for spices in recent years. “It was only the newcomers Ankerkraut and Just Spices who succeeded in revitalizing this market and reaching a young target group,” states Werner Motyka, partner of the Munich Strategy consultancy.

Ankerkraut, founded in Hamburg in 2013, made its breakthrough with the founding TV show “Die Höhle der Löwen”. At that time, investor Frank Thelen joined the start-up for spice blends. The founding couple Anne and Stefan Lemcke now employs around 200 people. The turnover was most recently in the mid double-digit million range.

In the meantime, Germans are increasingly cooking and seasoning themselves – the pandemic has given the trend a further boost. In 2020, private households spent 964 million euros on spices, 16.5 percent more than in the previous year. This is what the consumer researcher GfK found.

Spices from Just Spices

The seasoning mixes from the Düsseldorf start-up are particularly popular with young customers.

(Photo: obs)

Organic spices are particularly popular. Fixed products, for example for Bolognese or Asian pan, are experiencing a renaissance. With its organic fix mixes “In Minutes” and its salad dressings, Just Spices competes with traditional brands such as Maggi (Nestlé) and Knorr (Unilever).

According to consultant Motyka, the start-ups score with original, special seasoning mixes in innovative packaging. “The building blocks for the success of the spice start-ups are online-based business models that reach consumers directly and bypassing the grocery store.”

Attempts by the established players to copy the pattern of success with online sales and innovations in the range were largely unsuccessful, observes the market expert. Corporations often tried to compensate for their own failures through takeovers. “The constellation Kraft Heinz and Just Spices is almost like something out of a textbook.”

The founders of Just Spices see many advantages with the new investor: “With Kraft Heinz, we have one of the largest food producers in the world at our side, who supports us on our further growth path with its strong sales power and international expertise.” The founders have ambitious Goals: “We want to make Just Spices a global brand together.”

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