A relatively unknown 92-year-old Belgian company is climbing up the global snackmaker rankings, outshining rivals and captivating Gen Z on social media as it seeks to transform itself into a global brand.
Lotus Bakeries, the company behind the Biscoff caramelised biscuit and spread, has experienced a revival in the past decade after years of sleepy growth. Group sales have risen three-fold since 2013, while those of Biscoff-branded goods have almost quadrupled as recipes ranging from Biscoff cheesecake to Biscoff espresso martinis proliferate on social media, particularly on TikTok, where they garner millions of views.
“It’s a bit too good,” said one user Aaron Middleton in a video of him making a Biscoff cheesecake, which garnered 18.9mn views.
“You just want to slather it all over your face,” said another user.
The newfound popularity has propelled Biscoff into the top five biscuit maker globally by sales, according to the company, as the pandemic-accelerated snacking boom continues despite inflation pinching consumers’ budgets.
The group, whose brands also include Nakd snack bars and Trek flapjacks, reported a 21 per cent rise in annual sales last year helping it surpass €1bn in revenue for the first time. Within this, sales of Biscoff-flavoured products hit a €500mn milestone, having also risen a fifth.
Shares of Lotus Bakeries, which have more than tripled in four years rallied 20 per cent in a day earlier this month to a record high.
“It’s the darling of the industry at the moment,” said Alexander Craeymeersch, equity research analyst at Kepler Cheuvreux.
A brand version of Belgium’s speculoos — a spiced shortcrust biscuit — Lotus Bakeries has been based in Lembeke, a town close to the Dutch border, since 1932.
Its recent burst of success can be traced back to 2009, when chief executive Jan Boone, then managing director, partnered with Christophe De Vusser, his schoolmate and former colleague at Bain & Co and now the incoming chief executive of the consulting group, to develop a business plan focused on internationalising the Biscoff brand.
They were convinced that it could go further than traditional Belgian market because of its unique taste, long shelf life and low-cost production process.
“Back then as a company, we said, ‘If we can create one global brand, I think we’ve done a good job,’” Boone, the grandson of the founder, told the Financial Times. “We obsessively managed Biscoff . . . and you see that focus really works out for the company.”
In 2019 Lotus Bakeries opened its first US factory for Biscoff in Mebane, North Carolina, freeing up capacity in its Lembeke facility to pursue more markets in Europe including Germany and France.
Starting with founder Jan Boone Sr, Lotus has long marketed its biscuits as a good accompaniment for coffee with Biscoff being a portmanteau of the words biscuit and coffee. “If somebody thinks about a coffee, we want them to think about Biscoff,” said Isabelle Maes, chief marketing officer at Lotus Bakeries.
Its popularity has soared in recent years, boosted by increased demand during the pandemic for snacks and at-home baking as well as the explosion of user-made videos suggesting recipes.
Boone said content on TikTok has helped convert the nearly century-old company into a “young and interesting” brand which it has capitalised on through partnerships with global brands including McDonald’s, KitKat, and Krispy Kreme.
While the company acknowledges that its TikTok success with Gen Z was accidental, it plans to increase its marketing budget this year and has hired an agency to work on its media strategy, including partnerships with TikTok influencers.
The next frontier is the Asian market. In 2022, the group announced plans to open a Biscoff factory in Bangkok.
Boone wants Biscoff to become the third-biggest biscuit brand in the world by sales, behind Mondelez’s Chips Ahoy! and Oreo, but admitted in a recent earnings call that this would “take some years” to achieve.
Biscoff is often handed out as a snack on flights, and Lotus Bakeries deploys a similar playbook in each new market, focusing on getting consumers to taste the biscuits and spreads before convincing them to move to other products such as Biscoff ice creams and cookie sandwiches.
The company has primarily focused on in-store displays for marketing, including Diwali-themed showcases in India and Ramadan ones in the Middle East.
Maxime Stranart, equity analyst at ING, said the group “wants to become the new Oreo” but cautioned that the company still had plenty of market share to gain before it could come close to large players such as Mondelez. While Lotus Bakeries’ revenue was about $1.1bn last year at current exchange rates, Mondelez reported $36bn.
The popularity of Biscoff on social media has raised concerns over whether its rapid growth and newfound fame can be sustained.
“When products get a big boom on TikTok, sometimes they ride that wave and they ride it, and they forget they have to keep re-engaging,” said Sally Lyons Wyatt, executive vice-president at consumer research firm Circana.
The company’s steep share price increase and the challenge of cracking the Asian market have also worried analysts, with Berenberg, BNP Paribas and ING having downgraded the stock in recent months despite the company’s stellar performance.
“The current share price is unsustainable considering it leaves no margin for error,” said Craeymeersch, with Kepler having reduced its rating to sell in 2022.
Lotus Bakeries dismissed concerns about its ability to sustain its momentum given fickle customer tastes. “If you’re a consumer of Biscoff, you eat it and you don’t get tired of it,” said Maes. “We’re not just a hype on TikTok.”
The group acquired the UK maker of Nakd and Trek bars in 2015 as part of a push into healthier snacks.
“We have now found the size where we can grow independently, so we don’t need a merger,” Boone said. He added that the company would continue to be independently run and family-owned, with his family owning more than 50 per cent.
It has a rule that executives must retire at the age of 65 and fears of losing the biscuit’s unique taste to competitors has kept its recipe under a tight lid, with only six members of the company knowing the chemistry.
“We think as a company we’re quite nicely built for the future,” said Boone.
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