Sector News

Lactalis to acquire portfolio of Kraft Heinz branded foods

September 17, 2020
Food & Drink

Lactalis Group is positioned to acquire a portfolio of Kraft Heinz brands, expected to close in the first half of 2021. The dairy supplier will also be partnering with the food giant for a perpetual license of Kraft’s Natural, Grated and International cheeses and Velveeta’s Natural and International cheeses.

With this acquisition, Lactalis will acquire brands including Cracker Barrel, Breakstone’s, Knudsen, Polly-O, Athenos, Hoffman’s and – outside the US and Canada only – Cheez Whiz.

Under the agreement, Lactalis will acquire three Kraft Heinz production facilities based in California, New York and Wisconsin, US. The deal also includes a distribution center in Wisconsin.

“This combination of complementary offerings is a clear strategic and cultural fit that will create important new opportunities for domestic and international expansion, product innovation and positive community and employee impact,” says Thierry Clément, CEO of Lactalis North America.

“We look forward to continuing our collaborative strategy for expansion: to invest, to include, to support and to grow.”

Lactalis has a strong presence in the US with eight plants in New York, Vermont, New Hampshire, Wisconsin, Idaho, Arizona and California.

The group’s portfolio of brands includes Président, Galbani, Parmalat, Stonyfield Organic, siggi’s, Karoun, rondele and Black Diamond.

Approximately 750 Kraft Heinz employees will be joining Lactalis and the company expects to add additional jobs to support this business following the closing of the transaction.

These developments follow Lactalis’ July 2019 acquisition of Kraft Heinz’s Canadian natural cheese business for a purchase price of US$1.2 billion, through its subsidiary Parmalat.

FoodIngredientsFirsthas reached out to both companies for comment on the future targets of this enterprise.

Lactalis business developments
Lactalis’ US arm purchases nearly 3.2 billion pounds of milk annually from US dairy farmers, and the company’s products are exported to global markets.

Last year, Lactalis acquired Ehrmann Commonwealth Dairy, the US yogurt subsidiary of Ehrmann AG, a German-based dairy company. The deal was the fourth acquisition that Lactalis made in two years, under its US growth strategy.

Lactalis established itself as the largest player in Brazil’s dairy industry through its acquisition of the Itambé cooperative in July 2019 via Lactalis do Brasil, a subsidiary of the Lactalis Group.

In May 2019, Lactalis bought the entire share capital of Nuova Castelli, 80 percent of which is held by the British investment fund Chartherhouse Capital Partner. Nuova Castelli specializes in the production and distribution of Italian dairy products and Appellation d’Origine Contrôlée (AOC) cheeses such as Parmigiano Reggiano, Mozzarella di Bufala Campana and Gorgonzola.

In other previous moves, Lactalis snapped up Nestlé Malaysia’s chilled dairy business. Lactalis established Malaysia as the operations hub of its Dairy business in Association of Southeast Asian Nations (ASEAN) markets.

Lactalis looked to further expand in the infant formula market in 2018 with the acquisition of the infant nutrition business of South African company Aspen Pharmacare for €739.8 million (US$878 million).

By: Benjamin Ferrer

Source: Food Ingredients First

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