Mars Enters Agreement To Buy Kevin’s Natural Foods

Mars, Inc. has signed an agreement to acquire Kevin’s Natural Foods, adding the ready-to-eat meal business to its portfolio of better-for-you brands. The acquisition is expected to close during the third quarter of 2023.

Financial terms of the deal were not disclosed but a representative of Kevin’s said that the purchase includes the company’s Kevin’s California production facility.

“We have been hugely inspired by Kevin’s, a business whose mission fits squarely with our purpose: Better Food Today. A Better World Tomorrow,” Mars Food & Nutrition President Shaid Shah said in a statement. “We look forward to drawing on our experience of nurturing and scaling founder-led brands to help bring their products to even more people.”

Following the sale, Kevin’s will operate as a standalone business within Mars’ Food & Nutrition segment, reporting up to Shah. The sale will also enable an exit for the brand’s minority partners, investment firms TowerBrook Capital Partners L.P. and NewRoad Capital Partners.

The company declined to comment on whether its founders, Kevin McCray and Dan Costa, will continue on in their respective roles as COO and CEO after the sale has been completed.

“As a standalone business within Mars Food & Nutrition, we’ll be able to maintain the entrepreneurial spirit and authenticity of our brand while getting the support and capabilities to continue our long-term growth journey,” said CEO and co-founder Dan Costa in a company press release.

McCray launched Kevin’s as meal kit company Chef’s Menu in 2012, which evolved both its name and business model in 2019 alongside investment partners Dan Costa and Kelsie Costa-Olson of Innov8 Partners. The concept was inspired after McCray changed his own diet as a result of an auto-immune disorder. All of Kevin’s Natural Foods products are keto- and paleo-certified as well as dairy-, gluten- and soy-free.

Interest in the ketogenic diet has declined in recent years as brands have pivoted away from marketing themselves as keto-based. Kevin’s has increasingly leaned into its paleo-diet credentials expanding its refrigerated meals as well as shelf-stable sauces in the last year.

Rumors about an exit began to circulate in January when Axios reported that the company was seeking an IPO or a buyer for the business. Initially, the company rejected the claims. Last month, an anonymous source tipped Bloomberg that the ready-to-eat meal business was seeking a valuation between $700 million to $800 million.

In the four years since it was founded, Kevin’s has experienced “double-digit growth,” according to the company, and is available in over 17,000 retail locations in the U.S., U.K., Canada and Mexico, according to the company.

The multinational food maker has been building out its better-for-you snack portfolio with the acquisition of KIND in 2020, and subsequently Nature’s Bakery, and whole-fruit snack maker Trü Frü last December.