Already a formidable player in the bakery category, TreeHouse Foods is making moves to solidify its stance in other popular retail sectors. The company recently announced the signing of a definitive agreement with Farmer Brothers Company, revealing plans to acquire its Northlake, Texas, coffee facility and the Farmer Brothers non-Direct Store Delivery coffee business (referred to as Direct Ship) for approximately $100 million.
"The state-of-the-art Northlake facility strengthens TreeHouse Foods' category depth in coffee as a focused, private label leader and is consistent with our strategy to pursue opportunities that drive category growth and deliver attractive financial returns," said Steve Oakland, Chief Executive Officer and President of TreeHouse Foods. "As we continue to execute our long-term growth initiatives, we're pleased to add new capabilities, particularly in roasting and grinding, which make us a more vertically integrated coffee manufacturer able to further penetrate this high-growth, high-margin category."
The acquisition is expected to create greater profit capture in the provider's supply chain. The transaction is expected to close within the next 60 days and is subject to customary purchase price adjustments.
The facility will bring cutting-edge roasting, grinding, flavoring, and blending capabilities to the TreeHouse Foods portfolio to complement the supplier's existing single-serve pod and ready-to-drink coffee businesses, a press release explained. Through this deal, TreeHouse Foods will be able to deliver greater category depth in an end-to-end private label coffee offering for its customers.
This is an extension of a strong alliance, as Farmer Brothers has historically been a bulk ground coffee supplier to TreeHouse Foods for its single-serve pods and ready-to-drink beverages.
TreeHouse Foods will also assume select customer relationships and retain approximately 180 team members from Farmer Brothers to support operations at the facility.
With category growth on its mind, where will we see TreeHouse Foods' ambitious strategies in play next? Keep reading DMN as we report.
