Spyros Theodoropoulos, an Athens-born and bred entrepreneur, has closed on a $2 billion deal to sell the packaged food company Chipita to the Chicago based behemoth Mondelez (formerly the Kraft company).
“Opportunities are always there because the market is there,” the Chipita CEO stated in an interview at the 2020 Delphi Economic Forum. Theodoropoulos said there are endless opportunities.
“I believe Greek ethnicity is a well-known brand,” the 64-year-old entrepreneur stated. “Although our reputation struggled through a decade of Greece’s economic crisis, it has come back strong.
“We need to learn to produce. We need to teach our children how to produce, to adopt an attitude that if they don’t produce, they won’t consume,” Theodoropoulos stated.
“Today the country is dependent on tourism, not bioproduction. If tourism falters, the country falters,” the CEO said.
Today’s youths dream of making fast, easy money through online start ups, believing it is the only way to earn a profit, according to Theodoropoulos. “We need to change these attitudes through education. They must be taught to value production.”
“Chipita, for more than 40 years, based on quality and innovation, has created a new category of snacks that consumers loved internationally,” he stated about the cash out. “I am confident that the acquisition of Chipita by Mondelez International, one of the world’s leading snack companies, will create new prospects for its people and products.”
A product of Athens’ notable neighborhoods of Exarchia, Leoforos Alexandras and Lycabettus, Theodoropoulos’ introduction to business started at an early age. His family ran Recor, a small dairy. As a college student he assisted with the work until he graduated from Athens University of Economics and Business.
Theodoropoulos had his first introduction to the modern food industry when he went to work for a confectionary and ice cream company, Aligel SA. In 1981, he became the General Manager of the importing company.
Theodoropoulos also literally played with fire for a time. He began importing matches from Italy, when the Greek state abolished the monopoly on the sale of products in this category. The imported matches that were traded in the Greek market were so easily lit that their release was banned almost a year and a half later, for security reasons.
Chipita Savory Cheese Puffs to Croissants
In 1986 he became the General Manager of Interia, a company producing hazelnut cream with significant export activities. During the same year, he acquired 50 percent of Chipita, a company specializing in snacks. Three years later he acquired the remaining 50 percent.
In 1987, with funds he had saved from his previous business and a small loan, Theodoropoulos bought a cheese puff production company. In Greece, the orange colored cheese puffs are known as “garithakia” because they look like shrimp.
The company — housed on the floor of an apartment building in Moschato — employed 45 people. With a vision to grow his company, he decided to “experiment” with a new category of snacks, the packaged croissant.
The idea was so pioneering at the time that most of the investors he turned to refused to fund it. “We presented my idea for croissants to 14 investors until the investment scheme that supported it was finally found,” Theodropoulos said. He began to produce individual croissants and rolls that “conquered” the markets with great success.
The demand was so great that in the process, in order to cope, the company teamed up with Pepsico, to utilize its network and export its products to international markets.
In 1990, the Eurohellenic Fund, made up of Olayan, De Benedetti, Alpha Finance and Titan, invested in Chipita, coinciding with the beginning of the croissant production. In 1994 the company was listed on the Athens Stock Exchange.
A milestone was achieved in 2006 when Chipita merged with Delta Dairy, Goody’s and Barba Stathis to form Vivartia. The new company was then valued at $480 million. Four years later, Spyropoulos launched a takeover of Nikas ABEE, a cured-meat production company.
Today, Chipita’s products are produced in 13 factories and distributed to more than 50 countries with a consumer market of nearly 2 billion people.
Nikas was not part of the Mondelez acquisition. Theodoropoulos will now focus on the meat-curing company.
Primary Production for Future Economic Opportunity
“We need to impress on our youth that money is not only to be made in the electronics or online industries. We need to make them understand that they can look back at the basics,” said Theodoropoulos. Production is an under-developed industry in Greece, he said.
Theodoropolos stated that “production is challenging because it means a long term commitment.” He added that in Greece, excuses are made for the lack of the production industry. The most common rationalization is that Greece is a small country with a limited market that cannot sustain an operation.
However, “across Europe, there is a potential of 500 million consumers,” he stated.
“We have been non-competitive in terms of wages, energy and bureaucracy in Greece,” he said. But slowly that is changing. “We need to create positive role models for youth to want to emulate,” he added.
“Why are we still importing lemons, tomatoes, onions in Greece,” Theodorpoulos stated. “Our neighbors Italy and Turkey, produce 98 percent of the globe’s hazelnuts. We produce none. All our hazelnuts are imported. Yet our climates are identical,” he added.
Production is not an easy industry, “but it is a beautiful journey,” according to the CEO. “The best part of my journey is seeing a product you created in an airport on the other side of the globe.”
Chipita Mondelez Acquisition Needs Approval
Mondelez is an American multinational confectionery, food and beverage and snack food company based in Chicago, Illinois.
Mondelez International said the acquisition was financed through a combination of new debt and existing cash and added that the transaction will contribute to the direct increase of earnings per share.
Competition authorities need to approve the transaction, which does not include Nikas ABEE and Chipita’s minority stakes in a joint venture in India.
Mondelez has an annual revenue of about $26 billion and operates in approximately 160 countries. It ranked number 117 in the 2018 Fortune 500 list of the largest United States corporations by total revenue.