As we say in the specialty biz, cheese is life. And this coming from someone who is lactose intolerant! I may be paraphrasing a bit, but cheese certainly makes the world go round here at Deli Market News, so naturally, news of Kraft Heinz’s sale of its Natural, Grated, Cultured, and Specialty cheese businesses turned heads. In a $3.2 billion deal, the food giant sold these operations to a U.S. affiliate of Groupe Lactalis.
“We believe these cheese and dairy businesses will thrive in the hands of a global dairy company like Groupe Lactalis,” said Kraft Heinz CEO Miguel Patricio. “At the same time, the transaction will enable us to build sustainable, competitive advantage in businesses where we have stronger brand equity, greater growth prospects, and can use our manufacturing scale and consumer-based platforms approach. This is a great example of agile portfolio management at work.”
According to a press release, the transaction includes Kraft Heinz’s Natural, Grated, Cultured, and Specialty cheese businesses in the United States. Grated cheese business in Canada, and the entire International Cheese business outside these two countries, including the following brands: Breakstone’s, Knudsen, Polly-O, Athenos, Hoffman’s, Cracker Barrel in the U.S. only, and Cheez Whiz outside the U.S. and Canada only.
Kraft Heinz will partner with Groupe Lactalis on a perpetual license for Kraft in Natural, Grated, and International cheeses and Velveeta in Shredded and International cheeses.
The transaction does not include the sale of the following: Philadelphia Cream Cheese, Kraft Singles, Velveeta Processed Cheese, and Cheez Whiz Processed Cheese businesses in the U.S. and Canada, the Kraft, Velveeta, and Cracker Barrel Mac & Cheese businesses worldwide, and the Kraft Sauces business worldwide.
Under the terms of the agreement, Kraft Heinz will sell production facilities located in Tulare, California; Walton, New York; and Wausau, Wisconsin, as well as a distribution center in Weyauwega, Wisconsin. These facilities and their employees will continue to operate in ordinary course. Approximately 750 employees will be transferred from Kraft Heinz to Groupe Lactalis.
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