The food and beverage industry saw a significant amount of mergers and acquisitions this year, with companies seeking to expand their businesses internationally.
FoodBev compiled a list of 2022 top ten mergers and acquisitions stories.
BASF to sell baking enzymes business to Lallemand
Towards the end of August, BASF agreed to sell its Nutrilife baking enzymes portfolio and business to Lallemand subsidiary, Danstar Ferment.
The acquisition is aimed to further broaden Lallemand’s product portfolio and geographical footprint. The company recently entered into the development and production of enzymes.
“Baking enzymes is not a strategic fit for BASF,” said Michael de Marco, BASF’s VP of global business management enzymes. “With Lallemand, we have found an excellent partner to strategically continue and strengthen our baking enzymes business and to be a reliable supplier. We will accompany the transaction to ensure a smooth handover for our customers.”
Kraft Heinz agrees to sell B2B powdered cheese business to Kerry
In the same month, Kraft Heinz entered into a definitive agreement to sell its B2B powdered cheese business to Kerry Group.
The transaction involves the divestiture of Kraft’s B2B powdered cheese products, which are sold through its ingredients business. It also includes the company’s manufacturing facility in Albany, Minnesota.
Kraft will transfer its Albany employees to Kerry. Kraft said the sale reflects the company’s “ongoing and active portfolio optimisation”.
DSM and Firmenich announce merger agreement
Back in May, DSM and Firmenich entered into a merger agreement to become a leading supplier of nutrition, beauty and wellbeing products.
The new company, called DSM-Firmenich, will bring together DSM’s Food & Beverage and Firmenich’s Taste & Beyond businesses. DSM-Firmenich will help to further accelerate innovation and generate new growth opportunities for customers.
The combined companies anticipate organic sales growth of 5% to 7% per year and pretax synergies of around €350 million in adjusted EBITDA per year by 2026. This includes a €500 million annual revenue profit, particularly from combining DSM’s Food & Beverage and Firmenich’s Taste & Beyond businesses.
In total, DSM shareholders will own 65.5% of DSM-Firmenich, while Firmenich’s shareholders will own the rest of the shares and will receive €3.5 billion in cash, which is subject to potential adjustments.
Coca-Cola HBC agrees to acquire ESM Effervescent Sodas for €45m
Coca-Cola Hellenic Bottling Company (Coca-Cola HBC) acquired ESM Effervescent Sodas Management (ESM) from SICC Holding, a wholly-owned subsidiary of Ideal Holdings, a publicly-listed company in Greece.
The acquisition was agreed upon for an enterprise value of €45 million, subject to certain closing adjustments.
ESM is the owner of premium sparkling beverage and mixer brand, Three Cents, which offers artisanal products crafted without preservatives or artificial colourings designed for use in long drinks and cocktails. As part of the acquisition, Three Cents’ founding team will remain with Coca-Cola HBC and will continue to promote the brand, providing leadership and vision.
Nestlé to acquire Brazilian natural food producer Puravida
Earlier this year, Nestlé Health Science reached an agreement to acquire Brazilian nutrition and health lifestyle brand, Puravida, for an undisclosed sum.
Nestlé Health Science said that it shares the belief with Puravida that nutritional supplements, vitamins and minerals play a key role in supporting health and wellness – whether for people with an active lifestyle or for those facing health challenges.
The acquisition enables Nestlé to expand its consumer health portfolio in Brazil. Puravida’s mix of products is said to complement Nestlé Health Science’s offering, which includes oral nutritional supplements, protein powders and ready-to-drink nutritional beverages.
Campari acquires minority stake in Catalyst Spirits’ Howler Head bourbon
Following a series of acquisitions, Campari Group announced the closing of an agreement with Catalyst Spirits to acquire a 15% interest in Howler Head Kentucky bourbon whiskey, with a route to total ownership and exclusive distribution rights.
Available in the US, Canada and recently expanded to the UK, Howler Head’s premium whiskey is aged for two years in oak barrels, and then blended with natural banana flavour.
Campari has initially agreed to pay $15 million in cash for a 15% interest in the brand. The group will have the option to buy 100% of the brand – subject to future results – which can be exercised from 2025.
Simon Hunt, CEO of Catalyst Spirits, said: “In our second full year in market, we are witnessing incredible demand for this product and see endless opportunity for growth as we maximise Campari’s established route-to-market expertise, including its vast sales organisation and distributor relationships, both in the US and internationally”.
Arva Flour Mills acquires Red River Cereal from JM Smucker
In July, Arva Flour Mills has acquired the Red River Cereal brand from Smucker Foods of Canada, a subsidiary of JM Smucker Co.
The acquisition sees Arva Flour Mills revert Red River Cereal’s, which was discontinued in 2020, recipe back to its original ingredients to include cracked wheat and rye. In 2011, the brand slightly altered the cereal’s recipe to include steel-cut wheat and rye.
At the time, Arva Flour Mills said that the brand is “in the process of acquiring a hammer mill to crack the wheat, rye and flax ingredients,” which would result in “a more creamy texture and restore the cereal to its original way”.
Nestlé Health Science to buy The Better Health Company
Nestlé Health Science agreed to purchase The Better Health Company from CDH Investments and its founding shareholders.
The deal includes the manuka honey brand Egmont, the Go Healthy supplement brand and New Zealand Health Manufacturing, an Auckland facility that produces vitamins, minerals and supplements.
With the acquisition, Nestlé Health Science aims to strengthen its health and nutrition portfolio in New Zealand, which includes brands like Solgar supplements.
“Go Healthy and Egmont are trusted brands with a track record of strong growth, which complement our global portfolio of active lifestyle and health and wellness nutrition brands very well,” said Nestlé Health Science’s head of Oceania, Asia, Middle East and Africa region, Paul Bruhn. “We also see the opportunity to accelerate growth in the region through the manufacturing facility in Auckland, which will enable us to bring new products to local markets faster.”
Nestlé New Zealand CEO, Jennifer Chappell, added that the deal would help solidify the company’s position in nutrition, health and wellness, while underscoring its commitment to New Zealand.
Fever-Tree acquires cocktail mixer brand Powell & Mahoney for $5.9m
In September, Fever-Tree acquired US non-carbonated cocktail mixer brand, Powell & Mahoney, for $5.9 million, announcing the purchase as part of its interim results.
Tonic water producer Fever-Tree acquired Powell & Mahoney in August 2022. The strategic move is part of Fever-Tree’s ambitions to capitalise on additional opportunities in the US market and extend its bottling capacity.
Charles Gibb, CEO North America at Fever-Tree, said: “Alongside extending our range of carbonated mixers, we are also extending into the significant opportunity within the non-carbonated cocktail mixer category in the US. This segment of the mixer market is the same size as the tonic water and ginger beer markets combined and is growing and premiumising at pace.”
OFI completes acquisition of Club Coffee for CAD 150m
Lastly, in July, OFI (formerly Olam Food Ingredients) completed the acquisition of Club Coffee for CAD 150 million (approx. $116.5 million).
Club Coffee is said to be one of Canada’s largest coffee roasters and packaging solution providers to the at-home sector. The company serves private label customers and retail brands from its facilities in Toronto.
The acquisition is part of OFI’s strategy “to deliver sustainable, natural, value-added food and beverage ingredients and solutions through a diverse channel mix, to customers across the globe”.