The restaurant group Teresa Carles Healthy Foods decided to broaden its focus to mass consumption with the arrival of the pandemic, through the manufacture of kombucha, plant-based protein products, and flexitarian ready meals. The new strategy has been consolidating, achieving presence in almost all major supermarket chains, and, this year, it will represent 40% of total revenue, with the remaining 60% for the restaurant business, which in 2019 represented 100%. By 2023, the weight of income from this new area is expected to surpass the traditional one and reach 66%. The increasing prominence of healthy food products in Flax & Kale's revenue is accompanied by a 250% growth this 2022 compared to the previous year. In total, the company will earn 17 million euros this year, a 70% increase.
With the aim of continuing to boost its diversification and take advantage of the boom in healthy eating, the company has raised about 22 million euros to accelerate its growth and export its model beyond Spain. After a trajectory of more than 40 years, dating back to 1979 when Teresa Carles and Ramón Barri opened their first vegetarian restaurant in Lleida, the group has closed a financing round led by Javier Rubió (managing partner of Galdana Ventures and former president of Cluster Consulting) and the entrepreneur and investor Dídac Lee, through the investment vehicle Barlon Capital; and by Inderhabs, the investment firm led by Pere Botet, one of the former owners of Caprabo. After the operation, the founding family maintains "a very solid majority" of the capital, according to its CEO, Jordi Barri.
The resources obtained in the first round in the history of the Lleida-based company will be used to gain productive muscle that will allow it to replicate its business model developed so far in Spain in Europe. The United Kingdom, the Netherlands, and France are the chosen countries for the initial landing of Flax & Kale, which will begin with the export of its star product, kombucha, and will continue with the opening of its own restaurants in cities such as London, Amsterdam, and Paris. In the first two, they are already looking for premises.
To this end, the company will invest a total of 14 million euros in its two plants in Spain over the next two years. In the Bell-lloc d'Urgell factory, seven million euros will be injected to convert its 6,500 square meters and dedicate them solely to the production of kombucha, with a capacity to manufacture 150,000 hectoliters annually, which will make the town one of the main producers of this fermented tea-based drink in Southern Europe.
The other high-consumption products marketed by Flax & Kale will be manufactured in a plant in Fraga (Huesca) that it has just acquired. It belonged to the company Precocinados Ángel Bosch, owner of the Tento restaurants and currently in bankruptcy proceedings. The Lleida business group has allocated four million euros to the purchase of the factory, with 8,000 square meters, and will also absorb the workforce of 55 workers, reaching a total of 350 employees. In it, it will invest three million euros to adapt it to the production of plant-based protein meat and cheese and flexitarian ready meals.
The commitment to the line of high-consumption products will also mean that the original business of Teresa Carles Healthy Foods, that of restoration, "will continue to grow but will not be the focus," remarks its CEO. Currently, the group has six own restaurants: Teresa Carles on Jovellanos street, Flax & Kale on Tallers street, Flax & Kale on Sant Pere Més Alt street (Barcelona); Flax & Kale at La Roca Village, and Flax & Kale Trafalgar (Madrid). It also has one franchised in Lleida.
Closure of Flax & Kale at H&M on Paseo de Gràcia
The group's reorientation has coincided with the closure of the Flax & Kale they had at H&M on Paseo de Gràcia, after the five-year lease contract ended and it was decided not to renew it. This space will be occupied by H&M, which has just begun works to partially reform its flagship store in Barcelona.
Flax & Kale has also closed a similar establishment it had in Madrid. According to Jordi Barri, they have found that smaller venues like the two they have closed did not work as well for them compared to the rest, which are larger format and offer the full brand experience. "They were more functional, and we competed with other options on price," he points out. Therefore, new openings will be large restaurants.
Agreement with Lidl and Vicio
Flax & Kale's kombucha has positioned itself as one of the main ones in the Spanish market, Barri states, which has been more challenging for plant-based protein products and flexitarian ready meals, considering there are more competitors. For this reason, the company is studying the possibility of offering these products in white-label format for supermarket chains, with the aim of "gaining volume and becoming the specialized manufacturer of reference". In fact, with kombucha, they already offer this option, with an agreement to manufacture this type of beverage for Lidl, marketed under the Solevita brand and focused on more classic flavors compared to those in the Flax & Kale range. This agreement, currently in force in Spain, will now be launched in nine more European countries.
They also want to reach agreements with delivery restaurants that want to incorporate plant-based protein. According to their CEO, they are finalizing an agreement with Vicio.