Dive Brief:
- Archer Daniels Midland Co. announced its full acquisition of Amazon Flavors, a Brazilian producer of natural extracts, emulsions, and compounds, after previously owning a 40% equity stake.
- The deal includes Amazon Flavors' production facilities in Manaus and product development and application laboratories in Manaus and São Paulo.
- The acquisition solidifies ADM's commitment to expansion in the Brazilian market, the largest in South America, along with expanding ADM's ports in Santos and Barcarena and building a new protein facility in Campo Grande.
Dive Insight:
ADM has been aggressively expanding its WILD flavors and specialty ingredients portfolio, including acquiring Eatem Foods, a majority stake in Harvest Innovations, and adding Superb to its protein and fiber ingredient portfolio. ADM also recently celebrated the grand opening of its flavor creation, application, and customer service facility in New Jersey.
To add to that growing portfolio, Amazon Flavors manufactures natural extracts derived from the guarana plant and açai berries, and it produces cola, energy, and other compounds for the Brazilian beverage market. This purchase will strengthen WILD’s position as a global purveyor of natural flavors, flavor systems, colors, and ingredients.
The Brazilian market hasn't been a reliable source for growth for all food and beverage manufacturers, as AB InBev lost market share and beer volumes dropped 10% in the country, which contributed to a revenue decline overall for the latest quarter. But ADM's strategy of acquiring a high-performing company based in the region could help solidify the company's presence there more quickly.