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Private equity firm Cinven recently acquired a majority stake in agri-food company, Planasa, a supplier of berries and fresh produce to retailers in Europe, Asia and the Americas. The deal, worth $530 million, is Cinven’s opportunity to take a bite…

Private equity firm Cinven recently acquired a majority stake in agri-food company, Planasa, a supplier of berries and fresh produce to retailers in Europe, Asia and the Americas. The deal, worth $530 million, is Cinven’s opportunity to take a bite out of the booming healthy-snack market, as an increasing number of consumers adopt healthy, on-the-go lifestyles.  The UK berry market alone has grown over a hundred and thirty percent in the last ten years. The packaged fruit snacks market is set to grow at a CAGR of twelve percent over the next four years.

The growing interest in berries and other consumer staples such as nuts, artisanal snacks, and all-natural snack bars is owed in large part to food companies who are driving innovation to bring healthier options and multicultural flavours to the consumer, who is spoilt for choice. Single serve, portable snacks which are packaged for ease of consumption are finding favour with millennial consumers who are abstaining from sugar-laden and processed snacks, and picking berries and artisanal crackers instead.  According to a Nielsen report, the ‘snackable’ fruit and vegetable category alone has seen sales of $16.3 billion last year. Between 2012 and 2016, nine hundred new snack foods were added to American grocery shelves, out of which six hundred were individual-servings of fresh cut fruit in different forms.

Financial, as well as strategic buyers have been chasing snack producers in the middle-market. Kellogg bought protein bar company RXBar for $600 million; Vestar Capital bought artisanal biscotti maker, Nonni’s Food Group; and B&G Foods Inc. acquired granola maker Back to Nature Foods for $162.5 million. In May earlier this year, private equity firm Gerbera Capital invested in Green Gold Farms, a producer and exporter of avocados and berries. The Riverside Company recently acquired Ontario-based Kii Naturals Inc, a manufacturer of artisanal crackers, which it plans to add to its NuStef Baking platform. For Strategics, acquisitions like these not only help fill gaps within their existing product offerings, but also provide access to new markets. At the same time, Private Equity’s interest in targeting investments in specialty food companies has only increased. Niche, stable, middle-market food companies as well as food-service companies could remain on the private equity buyers’ radar over the course of the next year as well.

 

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