Food and beverage sector mergers and acquisitions comment – May 2008


The frozen category has been unloved over the past few years amongst retailers and consumers alike.

With deep discounting by the multiples and the perception of frozen food products as poor quality by consumers, the market has experienced very little growth in terms of volume or value. This has started to change as producers such as Bird’s Eye and McCain have sought to educate customers about the quality and freshness of frozen food. In March, Amoy moved into the category, launching a range of Straight to Wok frozen stir fry and rice meals, with a marketing budget of £500k. These are the pull factors which should help to reinvigorate frozen food, but there are also push factors at work, not least an economic outlook which may make value-for-money frozen products look increasingly attractive as food bills rise.

Deals completed in the UK

Pepsico, the soft drinks company, has acquired V Water, the UK-based vitamin-infused water brand, for an estimated £10m. Pepsico believes that V Water will provide it with a strong platform for expansion into a fast growing market.

Lantmännen Unibake Denmark A/S, a Danish manufacturer of fresh and frozen bakery products has acquired the family-owned UK industrial bakery, Eurobuns. Terms of the deal were not disclosed. The acquisition is in line with Lantmännen’s global expansion and growth strategy and will provide it with production capabilities in the UK together with exploring new markets in the frozen products segment.

Greencore, the food and agribusiness group, has acquired Home Made Brand Foods (HMBF) for £27m (including an earnout of up to £5m). HMBF is an American supplier of upmarket of prepared salads and desserts for the retail and foodservice sectors. The acquisition will enable Greencore to enter and expand into the convenience food market in North America.

Country Fresh Produce of Norfolk has acquired D Laurie & Sons, a Diss-based supplier of fresh cut herbs.

Marston’s, the Midlands pub and brewing group, has acquired Refresh, the owner of the Wychwood Brewery in Oxfordshire, for undisclosed terms.

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