Dive Brief:
- Mantrose-Haeuser Co., Inc., a subsidiary of RPM International Inc., has acquired Holton Food Products Co., maker of food stabilizer and dry egg white products for bakery and prepared foods manufacturers. Terms of the deal were not released.
- RPM is expecting to see an earnings boost within a year. Holton has produced net sales of $7 million per year.
- While Mantrose is expanding its portfolio of specialty ingredients and food coatings with this acquisition, parent company RPM is best known as a manufacturer of industrial and commercial coatings, sealants, and building materials.
Dive Insight:
That a company like RPM would want to expand its reach to include specialty food ingredients demonstrates confidence in the growth of these markets. This trend is backed by the influx of investors and venture capitalists that are now embracing the food and beverage industry.
In a statement, RPM chairman and CEO Frank C. Sullivan called the acquisition "a key entry into the bakery market." The segment is expanding with the introduction of startups and smaller companies creating baked goods and baking mixes with natural ingredients. But as a whole, the baking industry is suffering as consumers look for products they deem more convenient or healthier, such as those without gluten, grains, or sugar.
Baking mix sales saw a 6.4% decline in 2015, after a 4.6% drop the year before, according to IRI. General Mills, a leader in the baking market, reported a 6% sales decrease for its baking business, which includes Betty Crocker baking mixes, Pillsbury refrigerated dough, and Toaster Strudel, in its last fiscal year. However, after lowering its prices to be more competitive, that decline has leveled off for General Mills to only a 1% drop in sales in the past six months as compared to a year ago.