USA – Japan based seasonings producer, Ajinomoto Group has signed a share purchase agreement to acquire a 50.1 percent equity stake in US-based French sauces and stocks producer More Than Gourmet Holdings (MTG).
The agreement is facilitated in a strategic partnership through Ajinomoto Co.’s consolidated subsidiary Ajinomoto Health & Nutrition North America (AHN).
The transaction, which is expected to close by the end of August 2019, is part of the company’s strategy to expand Ajinomoto’s Integrated Food Solutions business in North America.
Ajinomoto plans to maintain MTG’s current management structure after the share acquisition. The company noted that the impact of the acquisition on Ajinomoto’s consolidated business results for fiscal 2019 will be immaterial.
Ajinomoto has been pushing for food business growth with a stronger regional portfolio as a key strategy of its FY 2017-2019 Medium-Term Management Plan.
Through the expansion of its Integrated Food Solutions business, Ajinomoto said that it will continue to offer high added value products adapted to local eating habits and food culture in the prepared take-out foods, food service and restaurant markets.
According to Ajinomoto estimates, the size of the B-to-B market for prepared take-out foods, food service and restaurants in the US is US$18.3 billion.
This represents about 40 percent of the global market, and steady growth at a rate of 3.2 percent is expected during the period from 2011 to 2025, the company said.
“In the U.S. food service and restaurant market, the popularity of liquid seasonings (stocks, broths and sauces, etc.) is increasing in comparison to powdered seasonings due to their convenience for in-store preparation and their high-quality image.
“In addition, there have been notable moves by food ingredients manufacturers to shift their business models through collaborative efforts with liquid seasonings manufacturers, Ajinomoto said in statement.
Specifically, Ajinomoto cited that there is a trend for food ingredients manufacturers to add a liquid seasoning manufacturer to their corporate group and incorporate its knowledge of various manufacturing methods, tastes and other matters.
Combining this knowledge with the group’s parent company’s own ingredients is a way to provide customized menu proposals as a means to strengthen relationships with specified customers, the seasoning major says.
Ajinomoto highlights that MTG’s liquid seasonings business, encompassing broths and sauces, is familiar with the trends and preferences of US consumers and has strong connections across major segments.
Ajinomoto plans to utilize the brand’s menu customization capabilities in the food service and restaurant market, as well as the direct sales channel to food service and restaurant companies it will acquire through this partnership, and combine them with its own ingredients and taste and texture technologies.