- Private equity firm Vestar Capital Partners acquired a majority stake in Dr. Praeger's Sensible Foods, one of the pioneers in the plant-based and better-for-you food space. Terms of the deal were not disclosed.
- The second-generation family members who owned Dr. Praeger's — CEO Larry Praeger and President Adam Somberg — will retain their positions and still have a significant stake in the company, a release said. Jeffrey Ansell, a consumer industry veteran and senior advisor to Vestar, will become chairman of Dr. Praeger's board. Ansell, who is also chairman for data insights firm IRI — another Vestar portfolio company — was previously CEO of Pinnacle Foods. He also led Sun Products and had leadership roles at Procter & Gamble.
- Dr. Praeger's was founded in 1994 by a pair of cardiologists, Dr. Peter Praeger and Dr. Eric Somberg. The doctors got into the food business through a patient, who introduced them to the owner of Ungar’s Heimeshe Gefilte Fish Company, which needed business help. The doctors transformed the company into one that made healthy and tasty frozen products. Dr. Praeger's is still family-controlled, and has a large portfolio of plant-based foods, as well as frozen fish and better-for-you bowls and veggie sides.
While Dr. Praeger's is a relatively old brand in the plant-based and better-for-you food niche, both of those areas have never been hotter with consumers. Dr. Praeger's products fit into almost every trend that consumers are looking for during the pandemic: healthy, plant-based and convenient food.
As a privately-owned company, Dr. Praeger's does not report sales figures, but CEO Peter Praeger told the online publication Observer in 2019 that the company had about $100 million in annual revenues. As this sector is getting more crowded, Dr. Praeger's long life in this niche brings a high degree of brand recognition, which means there are consumers excited to try whatever new items the company puts on shelves, Peter Praeger told the publication.
Even though Dr. Praeger's already has a portfolio of products that fit into consumer trends, the company is active on the innovation front. Earlier this month, it launched a line of plant-based meat pizza toppings for foodservice. In October, it debuted new refrigerated veggie burgers, a departure from the more commonplace frozen variety. In 2019, it entered the plant-based, meat alternative burger realm with its veggie-packed Perfect Burger, and it expanded on that with the September launch of the plant-based Perfect Turk'y Burger.
Vestar has had an eye for lucrative investments, and Dr. Praeger's may be one of them. Many of its investments are in the food area, and its current portfolio has both big names and rising stars. They include IRI, which is one of the top data and analytics firms in the CPG realm, artisanal baked goods brand Nonni's and flour company Simple Mills.
Vestar also has a history of acquiring, investing in and reselling some brands that became CPG giants. In 1988, it bought Celestial Seasonings from Kraft. The brand went on to a 1994 IPO and eventual merger worth $390 million with Hain. Vestar also bought frozen food pioneer Birds Eye from agricultural collective Agrilink in 2002. In seven years of ownership, the firm helped tighten and revamp the business. Birds Eye was sold to the former Pinnacle Foods in 2009 for $1.3 billion, bringing Vestar a 30% rate of return.
The combination of a brand that checks many consumers' boxes and is not afraid to innovate, and a private equity owner with a reputation for helping brands grow is a good deal for Dr. Praeger's. Prior to the acquisition, the company was already in a great position. With the new majority ownership, it's likely there will be much more to see from the brand in the future.