Alongside our daily news coverage, features and interviews, the Just Food team sifts through data sets to bring you a round-up of the week in numbers.
Manuka honey featured this week in the camps of Nestlé and Comvita in the major producing country of New Zealand, where bees feed on the native Manuka tree flowers and transport the nectar to their hives.
Disposals were at the heart of the story as Nestlé eyes the sale of its Egmont Honey brand in the Asia-Pacific country and Comvita mulls a takeover approach from an unnamed overseas party amid yet another profit warning.
On the shores of Ireland, food-to-go and convenience foods supplier Greencore revealed progress in its profit-recovery endeavours but also had a sour note with plans to close a soup factory in the UK.
Sweet indulgence featured in New Zealand’s neighbour, Australia, where confectionery manufacturer Darrell Lea has reportedly been put on the market by its private-equity owner.
In South America, Minerva Foods' purchase of meat-plants in Uruguay, part of a multiple asset deal with Brazil peer Marfrig Global Foods, was blocked by regulators.
Nestlé honey misfit
Even as global sales of Manuka honey are forecast to surpass the $1bn mark in the next few years, Nestlé said the Egmont brand of the bespoke honey “does not fit within our strategic direction” as the food giant mulls its future.
Nestlé bought Egmont in 2022 when it acquired The Better Health Company (TBHC) in a deal that also included the supplement brand Go Healthy.
At the time, an executive at the world’s largest food company said the two brands sat nicely within its “portfolio of active lifestyle and health-and-wellness nutrition” lines. But times have changed.
Financial advisor Rothschild and investment bank Cameron Partners have been hired to explore a sale of Egmont, The Australian Financial Review reported.
Set up in 2015, Egmont manufactures table Manuka honey, honey-based lollipops and lozenges, as well as flavoured honey spreads.
The business supplies Woolworths in New Zealand but also exports to retailers globally: Costco and Walmart in the US; Holland & Barrett and Ocado in the UK; Aldi in Europe; Coles in Australia; Hyundai in South Korea; and Life Pharmacy in the UAE.
Comvita attracts interest
New Zealand-based Manuka honey supplier Comvita moved forward into the due diligence phase with a potential overseas buyer after receiving a takeover approach in February.
Chairman Brett Hewlett said the takeover interest via a non-binding indicative offer (NBIO) came from a “credible offshore party” at a premium to the market share price.
“Comvita has provided the interested party with confidential access to the company and its information in order to undertake due diligence,” he said.
The development was revealed in twin announcements, the other being yet another warning for subdued profits linked to unforeseen missed sales opportunities in China, and to a lesser extent weakness in North America.
Comvita lowered its 2024 revenue guidance to NZ$211-218m ($129-133m) from the February outlook of NZ$225-235m. Its adjusted EBITDA forecast was also cut to NZ$23-28m, compared to NZ$30-35m previously.
At the same time, the publicly-listed business said a target to reach NZ$50m in EBITDA in 2025 is “now considered to be unachievable”.
Reflecting on the downgrade, Comvita CEO David Banfield said: “It’s really disappointing to provide a further update to guidance, given the progress we have made on our strategic plan to grow value and lift performance since 2020. We have created a platform for growth over the last four years that will enable us to thrive once conditions improve.”
Meanwhile, chairman Hewlett added that during the potential takeover talks the board has “maintained a tight focus on maximising value for shareholders to enable the potential acquirer to appraise both the near-term and longer-term outlook for the company in its global markets”.
Greencore boon and bane
The private-label supplier to major UK retailers and convenience food outlets painted some bright spots for operating profit as the metric swung into the black during the first six months of the year.
However, despite what amounted to a 5% profit upgrade and a major ready-meals contract win with Aldi, the Dublin-based business had some bleaker news as jobs are set to be lost due to the closure of a Greencore soup production plant in the UK.
Dalton Philips, who became Greencore’s CEO in September 2022, said there are three factories on the affected Kiveton site, with the other two manufacturing quiche and ready meals. The latter will serve the new Aldi order when it comes on stream in September.
Philips returned Greencore to profitability in the first half, a key objective under his three-pronged Horizon strategy to get to annual pre-pandemic levels.
Adjusted operating profit rose to £28.3m ($35.9m), compared to £11.8m in the comparative period of the 2023 financial year. He aims to achieve the upgraded adjusted operating profit goal of £86-88m over the course of 2024.
Under Horizon one, Phillips set out to stabilise the business, an endeavour he met last year, followed by the second objective to return Greencore’s adjusted operating profit to the 2019-era of £105m.
The third phase involves weighing up new channels and categories.
“The group managed a very active commercial agenda with customers in H1-24 and launched approximately 184 new products, within the group’s total SKU range of more than 2,000 products,” according to Greencore’s results commentary.
You can review Just Food’s full-length interview with Dalton Philips here.
Darrell Lea ‘on block’
Darrell Lea, the owner of confectionery brands Rocklea Road, Bullets and BB’s chocolate, has reportedly been put up for sale by Quadrant Private Equity.
A deal for the Sydney-based business could fetch as much as A$1bn ($669m), according to unnamed sources of The Australian Financial Review (AFR).
Darrell Lea produces a range of liquorice, chocolate bars and chocolate-covered confectionery distributed to retailers in Australia, including Coles and Woolworths. It also exports to the UK, the US and Canada.
Quadrant is understood to have acquired a majority share in the company in 2018 for around A$200m. Darrell Lea’s owner Tony Quinn reportedly holds a minority share in the business.
Quadrant was said to be looking to put Darrell Lea on the market in the second half of the year, the AFR reported.
In 2012, Darrell Lea went into voluntary administration, eliminated hundreds of jobs and shut down all of its retail stores, ABC News reported in 2018, when Quadrant acquired the majority interest in the business.
Minerva asset deal hits roadblock
Months after Minerva Foods agreed a deal to buy multiple South America plants from meat peer Marfrig Global Foods, the Uruguay portion has been blocked by regulators.
La Comisión de Promoción y Defensa de la Competencia (Coprodec), Uruguay’s competition watchdog, opposed the sale of three facilities owned by Brazil-based Marfrig that would have amounted to 675m reais ($131.2m).
Minerva said in a statement: “The company highlights that it is evaluating the terms of Coprodec’s decision, which is not final and remains subject to appeal both administratively and judicially, which should be finalised in the coming days.”
Last August, Minerva agreed to pay Brazil’s Marfrig a total of 7.5bn reais for facilities located in Argentina, Brazil, Chile, and Uruguay, along with a lamb plant in Chile.
At the time, Minerva said it would have 40 beef cattle slaughter and deboning plants following the completion of the transaction: 21 units in Brazil, five in Paraguay, six in Argentina, six in Uruguay, and two in Colombia. Its lamb business would have five – four in Australia and the new site in Chile.
When the purchase was agreed last year, it was reported the deal would expand Minerva’s cattle slaughtering and deboning capacity by 44% to 42,439 head a day.
Meanwhile, revenue generated from the acquired plants would take Minerva’s annual net revenue above 50bn reais, compared to an all-time high of 31bn reais in 2022.
In the opening quarter of Minerva’s 2024 financial year, net revenue jumped 12.6% to 7.19bn reais, while EBITDA increased 18.2% to 629m reais. However, the group posted a net loss of 186m reais, compared to net income of 114m reais in the first quarter of 2023.
