An increasing number of big CPG brands are buying their way into health & wellness. And more specifically, they’re looking to stake a claim in gluten free. Last week, Archer Daniels Midland (ADM) announced the acquisition of pasta maker Caterina Foods of Pine Bluff, Illinois. Caterina specializes in gluten-free and high-protein pastas made from corn, lentils, peas, rice, quinoa and other grains and legumes.
“The addition of the Caterina business gives us yet another way in which to meet the needs of health-conscious consumers—in this case expanding our ability to produce specialty pastas from legumes and grains other than wheat,” stated President of ADM’s WILD Flavors and Specialty Ingredients business Vince Macciocchi in the company press release.
Big CPG Brands Acquire Gluten Free
The ADM/Caterina deal is just the latest in a string of “healthy” acquisitions. Other high-profile examples include:
Pinnacle Foods purchased Boulder Brands in January 2016, substantially expanding its health and wellness footprint. Boulder Brands – best known in gluten-free circles for its Udi’s and Glutino brands – generated an estimated $500 million in 2015. Boulder Brands portfolio also includes frozen-food brand Evol and vegan brand Earth Balance. The acquisition is expected to accelerate Pinnacle’s long-term growth. In April, Pinnacle announced that Boulder Brands had already contributed more than $100 million in sales for the 10 weeks it owned the company in the first quarter.
Mondelez International (maker of Oreos) acquired allergy-friendly snack maker Enjoy Life Foods in 2015. Just last month, Enjoy Life Foods opened a new state-of-the-art manufacturing facility in Jeffersonville, Indiana. It also continues to innovate on the product front. Some recent new product introductions include single-serve packs of Mini Cookies, Mini Chip Snack Packs and ProBurst Bites, a chocolatey, truffle-like snack made with up to 7 grams of plant-based protein. Mondelez also has announced its intention to expand the Enjoy Life Foods business beyond North America.
GF Retail HQ Take
- Amid slowing growth across the center store aisles, anticipate big CPGs will increasingly invest where the growth is: health and wellness, which includes gluten-free and other free-from categories.
- Watch for a pickup in acquisition activity, venture capital funding and ongoing grassroots efforts as more big CPGs make a play for gluten free.
- The emergence of small-batch “healthy” upstarts – and related new product introductions – will eventually lead to increased consolidation in food manufacturing. Expect some shake-out will occur in the long run.
- Meanwhile, the deep pockets of the big CPGs will continue to pump capital into the newly acquired companies to create even bigger and more formidable brands going forward.