FOOD & BEVERAGE INDUSTRY 2021 REVIEW OF CORPORATE ACTIVITY
2021 was another challenging year for the food and beverage industry. The coronavirus pandemic continued to adversely impact food and beverage businesses in the second year since the pandemic started. In 2021, businesses had to meet many challenges including labour shortages and pressure on the supply chain. Businesses had to incur additional costs to comply with COVID-19 regulations, including cleaning costs, running dual teams, etc. Within this challenging operational environment, it is pleasing to note that corporate activity in the food and beverage industry remained high with quality food and beverage businesses attracting high levels of acquisition interest. Comet Line Consulting’s review of transactions in the food and beverage industry and the key trends for 2021 are summarised below.
More transactions and fewer large transactions
In 2021, three transactions with values in excess of $400 million were announced compared to four transactions in 2019 and seven transactions in 2019. Large transactions in 2021 include the acquisitions of Huon Aquaculture ($546 million), Gourmet Food Holdings ($400 million) and Ziwi Peak (NZ$1.5 billion). The total number of transactions in 2021 amounted to 75, including 10 transactions in the alcoholic beverage category which was not covered in previous years. Excluding alcoholic beverages there were 65 transactions in 2021, an increase from 50 transactions in 2020 and an increase from 59 transactions in 2019.
Reduction in financial investor participation
2021 witnessed an increase in participation in transactions by financial investors (private equity and family office investors). 22 of the 75 transactions announced in 2021 (29%) involved financial investors. This compares to 20% of transactions in 2020, 24% of transactions in 2019, 36% of transactions in 2018 and 30% of transactions in 2017.
IPO volumes at an all-time low
There was only 1 IPO in the food and beverage industry in 2021 compared to 4 IPOs in 2020, 5 IPOs in 2019, 3 IPOs in 2018 and 8 IPOs in 2017. In 2021, $32 million was raised by the company that listed on the ASX, compared to $95 million raised in 2020 ($90 million in 2019, $93 million in 2018 and $80 million in 2017). The capital raised via IPOs over the past 4 years is significantly less than the $1 billion that was raised by food and beverage companies that listed on the ASX in 2016.
For the purposes of this review, we classified transactions in 2021 as Primary Production, Processed / Packaged Foods or Other.
We hope you get value from reflecting on the 2021 transactions. If you have any questions, please do not hesitate to contact us at www.cometlineconsulting.com.au.
DAIRY & VALUE-ADDED DAIRY
|31 Mar 2021||The Cashew Creamery||Pure Foods Tasmania|
|15 Apr 2021||Emerald Foods (NZ Natural)||Walter & Wild|
|12 May 2021||five:am yoghurt||Barambah Organics|
|31 May 2021||Van Dairy Group||Prime Value Asset Management|
|27 July 2021||Nepean River Dairy||Nature One|
The dairy sector had a subdued year with 4 transactions announced in the year compared to 11 transactions in 2020 and 13 transactions in 2019.
Barambah Organics, a portfolio company of Tanarra Capital, acquired five:am yoghurt from PZ Cussons. PZ Cussons acquired the five:am yoghurt business from the founders in 2014.
Prime Value, an Australian investment company, acquired 2,200 hectares of dairy land in north-west Tasmania and 5,000 heads of cattle from Van Dairy Company. Prime Value paid $62.5 million for the land and cattle.
Nature One acquired Nepean River Dairy for $36.5 million. Nepean River Dairy sells a range of milk products including cows milk, flavoured milk and long-life milk. The processing assets and product portfolio of Nepean River Dairy will be merged under the Nature One Dairy brand.
FRESH PRODUCE & SALADS
|10 Mar 2021||Murphy Fresh & Tatura Fresh (merger)||Flavorite|
|10 May 2021||Pacific Coast Produce Marketing||Perfection Fresh|
|23 June 2021||2PH Farms||Costa Group|
|23 July 2021||Fruit Master Australia||Perfection Fresh|
|23 July 2021||Comfresh Group (20% acquisition)||Far East Group|
|31 Dec 2021||Salad World||Bidfood|
The fresh produce and salads sector attracted strong investor interest in 2021, with five deals announced in 2021.
Flavorite, a portfolio company of ROC Partners and the largest hydroponic grower of tomatoes in Victoria, merged with Murphy Fresh and Tatura Fresh. Murphy Fresh and Tatura Fresh is a leading tomato grower which operates a 15-hectare state-of-the-art hydroponic farm in Mansfield, Victoria. The merger positions the Flavorite Group as the largest owner and operator of glasshouse tomatoes in Australia.
Perfection Fresh completed two transactions in the year. Perfection Fresh’s first transaction was the acquisition of sustainable banana marketing business Pacific Coast Produce Marketing. The acquisition includes licensing rights to The Red Tip Ecoganic banana, which complements two other recently licensed banana varieties: Little Gem and Havana Bananas.
ASX-listed Costa Group acquired a Central Queensland-based citrus grower, 2PH Farms, for an upfront consideration of ~$200 million. Costa Group will pay an additional $31 million in July 2023 for the purchase of a property where a new citrus crop is being planted by 2PH.
Perfection Fresh also acquired full ownership of Fruit Master Australia. Perfection Fresh obtained a shareholding in Fruit Master Australia in 2016, when the companies merged their table grape businesses. The acquisition of Fruit Master Australia expanded Perfection Fresh’s presence and capability in export markets.
|9 June 2021||Rivalea Australia||JBS Australia|
|2 July 2021||Hardwick’s Meats||Kilcoy Global Foods|
Two deals were announced in the meat processing sector in 2021. JBS Australia acquired Rivalea Australia, the largest pork processor in Australia, for $175 million. The acquisition of Rivalea Australia resulted in JBS Australia becoming the largest processor of beef, lamb and pork in Australia.
Kilcoy Global Foods acquired Victorian beef and lamb processor Hardwick’s Meats. Hardwick’s will continue to trade as a separate brand under Kilcoy ownership and will operate as a division of Kilcoy Global Foods.
|17 June 2021||Huon Aquaculture (7.33%)||Tattarang Agrifood|
|28 July 2021||Cameron of Tasmania||Yumbah Aquaculture|
|8 Aug 2021||Huon Aquaculture||JBS Australia|
|4 Nov 2021||Paramount and Brunswick brands||Tempo Group|
JBS Foods’ second acquisition in 2021 was the takeover of salmon farmer, Huon Aquaculture. The deal valued Huon Aquaculture at $546 million on an enterprise value basis. Huon is JBS’ first investment in the salmon industry and the Huon operations will make up ~2% of JBS’ global operations. JBS has foreshadowed further investment in aquaculture in Australia.
Listings on the ASX
|Date||Entity name||Capital raised||Issue price||31 Dec 2021 price|
|29 July 2021||East 33||$32 million||$0.20||$0.21|
East 33 raised $32 million from investors and listed on the ASX on 26 July 2021. East 33 is a grower of NSW rock oysters that it sells direct to customers and distributes to the foodservice channel.
SNACKING & CONFECTIONERY
|10 Feb 2021||Diver Foods||Arnott’s Group|
|9 Mar 2021||Gourmet Food Holdings||Mondelez International|
|30 Apr 2021||Annex Foods||Five V Capital|
|30 Apr 2021||Table of Plenty||Five V Capital|
|7 May 2021||180 degrees||Arnott’s|
|30 July 2021||Universal Robina Oceania (60%)||Intersnack|
|30 Aug 2021||Lucky and Sunsol brands||Prolife|
|9 Sept 2021||Metro Food Co||Five V Capital|
|15 Sept 2021||Blue Dinosaur||Forbidden Foods|
The snacking and confectionery categories were active with nine transactions announced in 2021 compared with the three transactions in 2020 and four transactions in 2019.
Arnott’s Group acquired a 75% shareholding in Diver Foods, a cereal and snacking manufacturer based in Scoresby, Victoria. Diver Foods became part of the new cereals and snack division at Arnott’s which includes the Freedom Foods cereal and snacking assets acquired by Arnott’s Group in December 2020. Comet Line Consulting advised the shareholder of Diver Foods on the disposal to Arnott’s Group.
Arnott’s followed up the investment in Diver Foods with the acquisition of New Zealand artisan biscuit marker, 180 Degrees. 180 Degrees distributes a range of sweet and savoury crackers through a distribution network in New Zealand. In Australia the 180 Degree product is sold through Coles.
Mondelez International acquired Gourmet Food Holdings, a leading manufacturer of premium crackers and biscuits, with brands including OB finest, Olina’s Bakehouse and Crispbic, from CPE Capital. Gourmet Food Holdings had revenue of $200 million and EBITDA of $40 million, with Mondelez acquiring the business for $400 million. The transaction implied a 10x EBITDA multiple for the Gourmet Food Holdings business.
Private equity firm Five V Capital acquired two breakfast and snack food manufacturers, Annex Foods and Table of Plenty, as part of a health food roll-up strategy. In August 2021, Five V Capital expanded its health food portfolio with the acquisition of Metro Food Co, a distributor of health food products.
Germany-based Intersnack acquired full control of Universal Robina Oceania by acquiring the remaining 60% shareholding in the joint venture from Philippines-based Universal Robina Corporation. The acquisition strengthens Intersnack Group’s coverage of the salty snack category in Australia and New Zealand. Universal Robina Oceania operates through two subsidiaries: Snack Brands Australia and Griffin’s Foods (New Zealand).
New Zealand-based Prolife acquired the Lucky and Sunsol snack brands from Select Harvests for $1.5 milion.
ASX-listed Forbidden Foods acquired snack bar company, Blue Dinosaur for an upfront consideration of $3.2 million and an earnout consideration of $0.8 million.
BAKED GOODS & PREPARED MEALS
|22 Mar 2021||Fitness Outcomes||Patties Foods|
|13 July 2021||Youfoodz||HelloFresh|
|24 Aug 2021||Sara Lee||South Island Office|
|30 Sept 2021||Lorrie’s Pies||Bakery Investment Group|
|25 Nov 2021||Laurent Bakery||BGH Capital|
|21 Dec2021||Chefgood||Marley Spoon|
Fitness Outcomes, a ready-to-eat meal manufacturer that operates a direct-to-consumer delivery service was acquired by Patties Foods.
Youfoodz, a meal manufacturer that was listed on the ASX, was acquired through a takeover offer by HelloFresh. Youfoodz listed on the ASX in December 2020 and shares were issued at $1.50 per share during the IPO. The 93 cents per share takeover offer placed a value of $125 million on Youfoodz.
South Island Office, a Christchurch-based investor group, acquired the Sara Lee brand and business from McCain Foods. South Island Office’s first investment in 2019 was Original Foods Baking Co. The acquisition of the Sara Lee business creates opportunities to cross sell Original Foods branded product to stockists of Sara Lee product.
BGH Capital acquired a material shareholding in Laurent Bakery. Melbourne-based Laurent Bakery owns a chain of bakeries that sell French-inspired cakes, bread and pastries and supplies sourdough and artisan bread to Coles.
|1 Mar 2021||Foundation Foods||GreenMount Foods|
|1 June 2021||Krio Krush Basic Foods||Atlantic Growth Capital|
Krio Krush, a leading manufacturer and supplier of value-added premium herbs and spices to the foodservice channels was acquired by Atlantic Growth Capital. Krio Krush complements the other two businesses in the Atlantic Growth Capital portfolio: Tasty Foods and Mexex. Comet Line Consulting advised the shareholders of Krio Krush on the sale to Atlantic Growth Capital.
Listing on the ASX
|Date||Entity name||Capital raised||31 Dec 2021 price|
|11 Aug 2021||Cobram Estate Olives||None||$1.97|
Cobram Estate Olives, Australia’s largest olive oil producer, listed on the ASX in August 2021. The company did not raise any capital as part of the IPO.
|11 May 2021||True Protein||F45 Training|
|19 Nov 2021||Eco Superfoods||Flavour Makers|
|11 Jan 2021||Two Birds Brewing||Fermentum|
|16 Mar 2021||Veritas Winery||Accolade Wines|
|26 Mar 2021||Plantagenet Wines||Wisdom Family|
|6 Apr 2021||McWilliam’s Wines (2 transactions)||Calabria Wines / Medich Family Office|
|10 June 2021||Adelaide Hills Group||Mighty Craft|
|30 Aug 2021||Boujee Wine||80 Proof Liquor|
|9 Sept 2021||Fermentum Group||Lion|
|18 Oct 2021||Shene Distillery||Lark Distilling Co|
|29 Dec 2021||Jetty Road Brewery (32.5%)||Mighty Craft|
Fermentum Group, owner of the popular craft beer brand, Stone & Wood, was acquired by Lion. The value of the acquisition was not disclosed and media reports estimated the transaction to be valued at $300 million. Fermentum Group’s product portfolio includes Stone & Wood, Sunly Seltzer, Two Birds, Fixation and Little Dragon. As part of the transaction Lion plans to build on Fermentum’s Stone & Wood brand and the legacy created by the company’s founders.
ASX listed Mighty Craft acquired the Adelaide Hills Group for $47 million settled through the issues of shares and a cash payment. The acquisition includes the Adelaide Hills Distillery, Mismatch Brewing and Hills Cider.
ASX-listed Lark Distilling Co acquired Tasmanian whiskey maker, Shene Distillery for $40 million. Shene Distiller is based at Pontville, north of Hobart.
|21 Apr 2021||Made Group (controlling stake)||TPG Capital|
|19 Nov 2021||Lyre’s Spirit ($37 m capital raise)||Several investors|
|29 Nov 2021||Heaps Normal ($8.5m capital raise)||Several investors|
TPG Capital acquired a 45% shareholding in Made Group from The Coca-Cola Company. TPG Capital also acquired a 15% shareholding from the founders of Made Group. Following the two transactions TPG Capital owns a 60% stake in Made Group.
Two non-alcoholic beverage brands announced successful capital raises during November. Non-alcoholic spirits brand Lyre’s Spirit raised $37 million from investors with the capital raise led by D Squared Capital and Morgan Creek Capital. Heaps Normal, a non-alcoholic beer brand, raised $8.5 million in Series A funding from new investors in the company.
|30 Apr 2021||Allpress Espresso||Asahi Beverages|
|15 June 2021||Campos Coffee||JDE Peat’s|
|24 Sept 2021||Seven Miles Coffee Roasters||Liverpool Partners|
|22 Oct 2021||Sensory Lab (retail operations)||Peter Rowland Group|
Four deals were announced in the roast and ground coffee category in 2021.
JDE Peet’s acquired Campos Coffee from the founder and other shareholders of the business. Campos Coffee is a leading specialty coffee roaster with distribution to more than 600 cafés and restaurants in Australia. Campos’ distribution footprint extends across multiple channels and includes direct-to-consumer, corporate retail and flagship cafés. Comet Line Consulting advised JDE Peet’s on the acquisition of Campos Coffee.
Asahi Beverages acquired Allpress Espresso, a coffee roaster with distribution in Australia, New Zealand and the United Kingdom. The Allpress acquisition expanded the non-alcoholic portfolio range of Asahi Beverages with a product offering to a diversified customer base spread across the café, restaurant, pub and supermarket channels.
Private equity firm Liverpool Partners acquired coffee equipment company Australian Beverage Corporate and a majority shareholding in Seven Miles Coffee Roasters.
VITAMINS, SUPPLEMENTS & NUTRACEUTICALS
|12 Apr 21||Voost||Procter & Gamble|
Procter & Gamble acquired Voost, the marketer of effervescent vitamins, sports hydration and electrolyte tablets. The acquisition of Voost is in line with Procter & Gamble’s strategy to strengthen its presence in the vitamins, minerals and supplements category.
|2 May 2021||Prime 100 (controlling stake)||Quadrant Growth Fund|
|2 May 2021||Natural Pet Food Group||KKR & Co|
|5 July 2021||Lyka ($6.5m capital raise)||Shearwater and Wattle Hill|
|19 Sept 2021||Ziwi Peak||FountainVest Partners|
The pet food category attracted significant acquisition interest in 2021, driven by a surge in pet ownership and increasing demand for premium, high quality petfood and accessories.
Four transactions were announced in the petfood category in 2021. The most significant transaction was the acquisition of New Zealand pet food company Ziwi Peak by Chinese private equity firm FountainVest Partners. The value of the acquisition was not disclosed but media reports estimated the transaction to be valued at NZ$1.5 billion.
Quadrant Growth Fund acquired a controlling stake in Prime 100, a premium pet food manufacturer. Prime 100 specialises in single protein products designed to assist dogs and cats with food sensitivities. Prime 100 will explore growth opportunities in export markets and leverage Quadrant’s pet food industry experience.
KKR & Co announced the acquisition of New Zealand-based premium pet food company, Natural Pet Food Group. Natural Pet Food Group owns multiple pet food brands including K9 Natural, Feline Natural and Meat Mates. KKR will support the international growth plans of Natural Pet Food Group which currently distributes product in New Zealand, Australia, China, Japan, Canada and the United States.
|4 Mar 2021||KB Food Co’s foodservice distribution||Superior Food Services|
|27 Apr 2021||Elite Food Co||New West Foods|
|31 May 2021||Craven Foods||Bidfood|
|1 Dec 2021||The Dreaming Food Group||Hudson Food Group|
|9 Dec 2021||Quality Food & Beverages||Superior Food Services|
Superior Food Services acquired KB Food Company’s foodservice distribution business in Western Australia. The divestment allows KB Food Company to focus on its seafood business which includes the sourcing, processing and wholesaling of fresh and frozen seafood. The acquisition strengthens Superior Food Services’ presence in Western Australia.
Hudson Food Group made a $20 million investment in The Dreaming Food Group for a minority stake. The Dreaming Food Group is a national food manufacturing and foodservice distribution business.
Superior Food Services acquired Brisbane-based Quality Food & Beverages (QFB). QFB is a broadline foodservice distributor with a footprint across Southeast Queensland and a strong presence in the school canteen market.
FRUIT & VEG PROVIDORES
|23 June 21||Select Fresh||Costa Group|
|5 Oct 21||In2Food Australia||Produce Republic|
Costa Group acquired Perth-based Select Fresh, a leading fruit and vegetable wholesale distribution business specialising in the supply of fresh produce to the foodservice and independent retail channels in Western Australia. Comet Line Consulting advised the shareholder of Select Fresh on the sale to Costa Group.
GIFTING, ECOMMERCE & MARKETPLACES
|30 Mar 2021||Hampers & Gifts Australia||Maggie Beer Holdings|
|15 July 2021||Parton Wine Distribution||Digital Wine Ventures|
|29 July 2021||Foodbomb ($4.5m capital raise)||Various investors|
|8 Aug 2021||Ordermentum (minority disposal)||Various investors|
|10 Oct 2021||Kaddy||Digital Wine Ventures|
|23 Dec 2021||Get Wines Direct||BoozeBud|
ASX listed Maggie Beer Holdings acquired Hampers & Gifts Australia for a consideration of $40 million. Hampers & Gifts Australia operates through two businesses: The Hamper Emporium and Gifts Australia. Maggie Beer Holdings settled the purchase consideration through the issue of shares in Maggie Beer Holdings and a cash payment.
Sydney-based Foodbomb, a fresh produce wholesale marketplace, raised $4.5 million in a series-A capital raise. The $4.5 million will fund Foodbomb’s existing operations in NSW and Victoria and an expansion of operations to Brisbane. The Foodbomb platform enables hospitality outlets to order fresh produce at bulk buying prices.
ASX-listed Digital Wine Ventures made two acquisitions in 2021. Digital Wine Ventures acquired Parton Wine Distribution in a script-settled deal. DWS also acquired wholesale beverage marketplace, Kaddy Australia, for $34 million.
PLANT BASED FOODS
|15 Jan 2021||EVR Foods Inc (25% interest)||Health Plant Protein Group|
|12 Feb 2021||Lauds Plant Based Foods||Pure Foods Tasmania|
|14 Apr 2021||Australian Plant Proteins (minority stake)||Bunge|
|13 July 2021||Harvest B ($3.5m seed funding)||Woolworths and Aura Ventures|
|17 Aug 2021||Fable Foods ($6.5m capital raise)||Various investors|
|15 Dec 2021||ProForm Foods (minority stake)||Harvest Road|
|17 Dec 2021||The Australian Superfood Co||Sustainable Nutrition Group|
Bunge, an international grain trader and agri-food company, paid $45.7 million for a minority stake in Australian Plant Proteins (APP). APP manufactures high protein plant-based powders from Australian grown legumes. The investment from Bunge will accelerate the expansion of their plant protein isolate fractionation facility.
Harvest Road, a subsidiary of the Andrew Forrest-backed Tattarang, acquired a minority shareholding in plant-based meat producer, ProForm Foods. ProForm Food will use the investment to accelerate growth and expand its existing production facilities in North Sydney.
|23 Dec 21||Prydes Easifeed||Sunrice||Animal feed|
Sunrice acquired Prydes’ EasiFeed business for a consideration of $38 million.