Hearthside Food Solutions sold to private equity firms for more than $2.4bn
Hearthside Food Solutions, the largest independent bakery, has been sold to private equity firms Partners Group Holding AG and Charlesbank Capital Partners in a deal valued at more than $2.4bn.
The US-based snacks manufacturer produces products such as cookies, crackers, pretzels and granola bars for major food and beverage firms such as Kellogg and PepsiCo Inc.
Due to the growing popularity of snack products, Hearthside Food Solutions reportedly has earnings of around $120n before interest, tax, depreciation and amortization (EBITDA), according to sources at Reuters.
The deal showcases the growing appeal of food manufacturing companies to private equity companies, as many major food and beverage brands rely on manufacturers like Hearthside for their operations.
- EXCLUSIVE: The latest edition of FDF World magazine
- McCain foods invests in vertical farming company TruLeaf Sustainable Agriculture
- Marfrig Global Foods acquires majority stake in US-based National Beef Packing Company
"Under Rich Scalise's leadership, Hearthside has revolutionized food contract manufacturing, bringing scale to the industry,” said Chris Russell, Managing Director of Private Equity Americas, Partners Group.
“We see strong potential for the Company to continue on its growth path as its business model is supported by global transformative trends, such as increased outsourcing, which show no signs of flagging. We look forward to working with Rich and the rest of the Hearthside team."
Rich Scalise, Co-founder, Chairman and CEO of Hearthside, added: "By combining flexibility and innovation with quality and scale, we have been able to achieve our vision of transforming Hearthside into one of the leading and fastest-growing companies in the food industry.
“Today, we are delighted to be welcoming Partners Group and Charlesbank as partners for the next chapter of our success story and would like to thank Goldman and Vestar for their valuable partnership over the last few years."
SokoFresh's cold storage units will stop food waste in Kenya
A foodtech company in Kenya is using solar energy to help smallholder farmers keep harvested produce cool to prevent food waste.
SokoFresh is a member of The Circulars Accelerator, an initiative to help entrepreneurs scale innovations that will help the world move towards a circular economy – in which waste is eliminated and resources are used again and again.
New cold storage units to prevent food waste
Small-volume farmers who grow avocados, mangos and French beans in Kenya, are helping to test the model from SokoFresh, which manages mobile cold storage units, that run on 100% solar energy.
By paying a small amount (1 Kenyan shilling) per kilogram on a pay-as-you-go basis, farmers or produce buyers can affordably access cold storage, when they need it.
SokoFresh plans for 400 cold storage units, in five years, to boost income for 35,000 farmers.
Cold storage units will support Kenya’s farmers
About 90% of Kenya’s agricultural produce comes from smallholders, who don’t have the kind of cold storage solutions available to large-scale producers. This means lots of produce perishes in outside temperatures after being harvested.
“More than 30% of all food produced in the world for human consumption gets lost or wasted”, said a representative from SokoFresh says. “Food loss in Africa occurs almost entirely in the production and distribution stages.”
Farmers using the model can earn up to 50% more on their harvest, while buyers receive more and better quality produce.
The cost of logistics is also reduced, because trucks are picking up full loads that have been stored in the cold storage units by multiple farmers.
Enviu, the Netherlands-based impact venture organization behind SokoFresh, hopes to have a network of 400 cold storage units in the next five years. This would help 35,000 farmers, creating 3,000 new jobs in rural areas and reducing greenhouse gas emissions.
Sokofresh supports UN Sustainable Goal 12
Around 14% of food is lost after harvest on farms and at the transport, storage, processing and wholesale stages, according to the Food and Agriculture Organization of the United Nations. This food has a value of more than $400b a year.
UN Secretary-General António Guterres last year described food loss and waste as an “ethical outrage.”
By 2030, UN member states have pledged to halve food waste and reduce food loss as part of Sustainable Development Goal 12.
SokoFresh is a part of the solution to food security and ending food waste.