M&A

Resurgent Australian chocolate maker Darrell Lea sold to Quadrant Private Equity

By Oliver Nieburg contact

- Last updated on GMT

Darrell Lea was saved from adminstration by the Quinn family in 2012. Photo: Flickr/Peter Konnecke
Darrell Lea was saved from adminstration by the Quinn family in 2012. Photo: Flickr/Peter Konnecke

Related tags: Darrell lea, Fudge, Confectionery, Compound annual growth rate

Australian confectioner the Darrell Lea Group has been acquired by Quadrant Private Equity, five years after it was saved from administration.

The Quinn family - which bought the confectioner in 2012​ when it entered administration - has sold a stake in the business, but will remain significant shareholders.

Rescued from administration

Sydney-based Quadrant Private Equity and the Quinn family were formerly partners in The Real Petfood Company (previously know as VIP Petfood).

Quadrant divested its majority state in the pet food business in October 2017 for A$1bn (US $801m).

Jonathon Pearce, partner of Quadrant, said the Quinn family had helped grow Darrell Lea into one of the largest private confectionery companies in the world.

The family - which generated its wealth from VIP Petfoods - scrapped Darrell Lea’s loss making retail network and restructured operations, making 46 permanent and 172 casual employees redundant, when it acquired the firm in 2012.

Darrell Lea has since gained market share in chocolate, according to Euromonitor.

“The confectionery industry is an attractive, resilient and growing market with continuing trends to premiumization and innovation, we believe Darrell Lea is well poised to benefit,”​ said Pearce.

200 employees

Darrell Lea employs around 200 people. It operates two manufacturing sites, which produce 14,000 tons of chocolate, sugar confectionery and licorice products annually.

The Sydney headquartered firm, founded in 1927, has distribution in Australia, New Zealand, the UK, Canada and the US.

Darrell Lea said on its Facebook page: “Our production will remain in Australia at our Ingleburn factory.”

Chris Hadley, executive chairman of Quadrant, said: “We are excited to be investing in the business and believe there are significant opportunities to implement growth and strategic initiatives to enhance the brand and product in Australia and throughout the world.”

Australia’s chocolate market

Retail value sales in the Australian chocolate market grew 4% in 2017, driven by premium products, according to Euromonitor International.

The market research provider expects the market will grow at a compound annual growth rate of 3% in the next five years.

It anticipates pressure from promotions and discounters such as Aldi, which may aim to protect themselves from potential new entrants Amazon and Kaufland.

Darrell Lea gained market share in 2017 to make up 5% of retail value sales in the Australian chocolate market, the same share as Lindt.

Cadbury owner Mondelēz dominates the market with a 37% share, according to Euromonitor.

Related topics: Business, Confectionery, Oceania

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