US – American food manufacturer, Del Monte Foods has closed a US$99 million deal to acquire Kitchen Basics, a line of ready-to-use stocks and broths, from McCormick & Company.
The purchase for an undisclosed amount supports Del Monte’s growth strategy as the 136-year-old company focuses on innovating and broadening its iconic brand portfolio.
The assets acquired include intellectual property and inventory and exclude any property, plant, and/or equipment, according to Del Monte.
The owner of the iconic brand Del Monte said the accession expands the geographic reach of its stocks and broths business, currently led by College Inn.
Furthermore, Kitchen Basics provides additional scale to help Del Monte grow the category across its North American footprint.
Del Monte Foods, a US subsidiary of Del Monte Pacific, which is listed in the Philippines and Singapore, noted that Kitchen Basics’ products are only distributed nationally in the US.
They range from organic stocks and broths, which are used to make soups, stews, and sauces in varieties including traditional chicken and beef as well as newer items such as creamy beans and vegetables.
Greg Longstreet, president, and CEO of Del Monte Foods said: “Del Monte Foods has gone through a positive transformation over the past five years, and we have become a leading innovative consumer packaged goods growth company.”
As we plan for the next decade of growth, we’re committed to strengthening our branded product portfolio to meet consumers’ changing needs.
The acquisition of Kitchen Basics will enable us to leverage synergies across our business to scale our broth and stock portfolio across North America.”
Bibie Wu, chief marketing officer of Del Monte Foods was excited to bring Kitchen Basics into the Del Monte family of brands to help people create healthful meals they love.
He commented that the company has seen heightened interest in broth and stocks over the last few years as consumers double down on home meal preparation, health, and wellness.
Accordingly, Research and Markets projects the global Stock and Broth market valued at US$3.35billion in 2020, to reach US$4.08 billion growing at a CAGR of 2.86 % during the forecast period of 2021 to 2027.
To take advantage of the trend and growth in the category, Bibie Wu said Kitchen Basics which is well-known for its culinary quality would be the best scorecard for the company to make an outreach before the market becomes saturated.
This market segment also includes offerings from Campbell Soup’s Swanson and Pacific Foods, Unilever’s Knorr, and upstart brands such as Kettle & Fire.
The deal for McCormick has marked a rare divestiture for a Maryland-based company that has focused on broadening its already robust portfolio of flavors, spices, seasonings, and condiments through a series of acquisitions.
Early last year, McCormick purchased natural flavorings provider FONA International for US$710 million, boosting its reach into categories such as performance nutrition and health and wellness.
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