Kraft Heinz (KHC) Buys Hemmer to Grow Taste Elevation Platform
The Kraft Heinz Company KHC is committed to accelerating its international growth strategy, which focuses on the Taste Elevation platform. On similar lines, the company acquired a majority stake in a Brazil-based condiments and sauces company — Companhia Hemmer Indústria e Comércio ("Hemmer"). KHC had announced the deal in September 2021.
The buyout will widen Kraft Heinz's International Taste Elevation platform with its focus on condiments and sauces. The move will also fuel the company’s strategy to enhance its presence across emerging markets. Hemmer will gain from Kraft Heinz's distribution network and go-to-market model across Brazil, which includes the budding foodservice channel. The acquisition of Hemmer will support Kraft Heinz's plan to become one of the biggest food players in Brazil.
Shares of the Zacks Rank #3 (Hold) company have increased 7.7% in the past six months compared with the industry’s growth of 4.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Acquisitions Driving Growth
Kraft Heinz is committed to its goal of becoming a major player across the taste elevation category worldwide. In January 2022, Kraft Heinz acquired an 85% stake in Germany-based Just Spices GmbH (“Just Spices”). The buyout enhanced its direct-to-consumer operations and go-to-market expansion. Management acquired sauces-focused business — Assan Foods — from privately-held Turkish conglomerate Kibar Holding in October 2021. Through this buyout, the company expects to accelerate its retail and foodservice growth across Europe, the Middle East and Africa.
Several other companies in the food space are benefiting from acquisitions like Post Holdings, Inc. POST, Hormel Foods Corporation HRL and The Hershey Company HSY. During the first quarter of fiscal 2022, Post Holdings’ top line included $97.8 million in net sales from acquisitions. This includes the Private label ready-to-eat (PL RTE) cereal business, Egg Beaters liquid egg brand, Almark Foods business and related assets as well as the Peter Pan nut butter brand.
Hormel Foods is strengthening its business on the back of strategic acquisitions. In June 2021, the company acquired the Planters snacking portfolio. Prior to this, the company acquired Texas-based pit-smoked meats company Sadler's Smokehouse in March 2020. The buyout is in sync with Hormel Foods’ initiatives to strengthen its position in the foodservice space.
Hershey is undertaking buyouts to augment portfolio strength and boost revenues. In December 2021, Hershey acquired Dot’s Pretzels LLC — the owner of Dot’s Homestyle Pretzels — a leading brand in the pretzel category. The addition of Dot’s Pretzels is a perfect match for Hershey’s growing salty snacking portfolio. The company also acquired Pretzels Inc. from an affiliate of Peak Rock Capital. The acquisition expands Hershey’s snacking and production capabilities.
Coming back to Kraft Heinz, we believe that the abovementioned buyout is likely to help the company keep its growth story going.
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