Enterprise Investors to become majority shareholder of Zielona Budka, the strongest Polish ice cream brand

PEF IV recently acquired shares in Zielona Budka from Paribas Affaires Industrielles, the company’s financial investor and a minority shareholder since 1998.

Consumer goods represent one of the primary target sectors in EI’s investment strategy. EI has been investing in strong local brands since 1990 and will continue this strategy in other CEE countries as well.

Zielona Budka – Zbigniew Grycan SA has the longest tradition of ice cream production in Poland, having been founded in 1947. The company started as a small, private ice cream parlor located in Warsaw. Zbigniew Grycan, its owner since 1980, has successfully transformed Zielona Budka from a local mom-and-pop operation into a large-scale business with an estimated 11% market share and one of the strongest brands in Poland. Brand recognition is the company’s most important asset – with a spontaneous brand awareness of 57%, Zielona Budka is by far the most widely recognized Polish ice cream brand. And, with a 68% acceptance level among Polish consumers, the company is comparable to other leading brands in the world.

Last year Zielona Budka moved its production facility to one of the most advanced ice cream plants in Europe, located in a tax-exempt zone in southeast Poland. The plant has a production capacity of 20,000 tons annually and maintains the highest quality standards. Zielona Budka distributes its products through its 33,000 own branded freezers located in retail points throughout Poland. Its products are also sold in all the major supermarket chains present in Poland as well as through the larger restaurant chains such as TelePizza. Zielona Budka recently developed a chain of franchised cafes – a unique concept in Poland. The current number of 26 cafes will be extended to 100 by 2002.

Following the capital increase, Zielona Budka intends to strengthen its territorial presence, increase market penetration, enter new distribution channels, and provide sales and marketing support to its distributors and franchisees. In 2000 the company sold 15 million liters of ice cream with a value of PLN 72.5 million ($18 million). In the 2001 ice cream season Zielona Budka will launch new impulse products and anticipates sales of 17 million liters.

“Enterprise Investors has been investing in and developing strong Polish brands since inception. I am convinced that our experience will add value to the company and will help Zielona Budka maintain and capitalize on its number one position among Polish ice cream brands,” said Ryszard Wojtkowski, a partner at Enterprise Investors who is responsible for EI’s investments in the FMCG sector.

Prior to coming to EI, Ryszard Wojtkowski was a member of the management board of Novartis Consumer Health (Switzerland), deputy general director of Coca-Cola’s Polish operations and president of Alima-Gerber, which created the well-known Frugo juice brand.

“Zielona Budka has been expanding rapidly for the last decade and has come to the point where it needs a strong business partner to take the company to the next level of development. Enterprise Investors is the ideal partner for us,” said Zbigniew Grycan, founder of Zielona Budka – Zbigniew Grycan.

Enterprise Investors has been active in Poland and the CEE region since 1990. The four funds managed by Enterprise Investors – Polish Enterprise Fund IV, the Polish Enterprise Fund, Polish Private Equity Funds I & II, and the Polish–American Enterprise Fund – have invested almost $600 million in 81 companies across all economic sectors in Poland and Romania.

EI has participated in the development of several other Polish companies representing the consumer goods sector, including Polar, Krosno, Sonda and W.Kruk. The funds have exited 37 investments (including Polar and Krosno) and returned over $400 million to investors.