Canada’s largest trade show and convention focused on the produce industry, organized by the Canadian Produce Marketing Association (CPMA), was held in Toronto, Ontario. This annual event, which rotates through major Canadian cities, is where leading North American producers, packers, shippers and processors, along with nearly everyone involved throughout the supply chain, connect with their retail and food service customers to showcase their latest products and innovations.
At the 2017 CPMA Convention & Trade Show, we met with numerous CEOs and their senior management teams to explore, learn and share our respective thoughts and opinions on the mergers and acquisitions trends in the produce industry. There certainly was some talk about Bonduelle’s announced acquisition of fresh-cut produce and salad mix producer, Ready Pac Foods for 11x EBITDA. Many were curious to hear about SDR Ventures’ experience with Hollandia Produce’s leveraged ESOP and private equity deal. While the specifics of this transaction are confidential, suffice it to say, representing such a respected company, and obtaining such a favourable outcome for its owner, has made us very excited for the mergers and acquisitions opportunities in the produce industry. We also believe the produce industry is “ripe” for further consolidation, as companies look to diversify their supply base to lower risk and gain year round supply for their major retail customers.
One common product theme that seemed to permeate throughout the CPMA Convention was “snack-size” packaging that’s designed to drive and meet growing demand for the “on-the-go” healthy eating lifestyles. We observed lots of variations of grape or cherry tomatoes in snack-size packages that can been thrown in a school lunch or in some cases, the tomatoes were combined with mini cucumbers, or mini sweet peppers. Also, some were combined with dips, such as hummus or nuts. The marketing emphasis seems to be on freshness, healthiness and convenience.
Finally, we noticed some companies promoting interesting “meal kits,” such as Sunset’s 15-minute pasta kit. The kit contains all the spices, the pasta and of course Sunset’s Mizzano® saucing tomatoes to make your own fresh pasta sauce.
We plan to attend the upcoming United Fresh Expo and Conference in Chicago next month as we continue to expand our capabilities in the produce space.