- Post Holdings is buying Almark Foods, a provider of hard-cooked and deviled egg products, for an undisclosed amount, the food conglomerate said in a statement. The transaction is expected to close in the first quarter of 2021.
- Almark Foods, which was founded in 1990, sells its products to foodservice distributors as well as retail outlets, including in the perimeter-of-the-store and the deli counter.
- The purchase of Almark Foods marks the second purchase for Post this month. The company, which has been built largely through acquisitions, announced last week it would buy Peter Pan peanut butter from Conagra Brands for an undisclosed amount.
After adding to the fold British cereal brand Weetabix, egg products maker Michael Foods, packaged food brand Bob Evans and ready-to-eat cereal producer MOM Brands during the last several years, Post has been busy again in 2020. In the course of a week, it purchased one of the country's most popular peanut butters and is now expanding its egg operations with Almark.
While Michael Foods is one of the largest providers of egg products to restaurants and foodservice in the U.S., these segments have seen sales tumble during the pandemic. Almark sells its products to both retail and foodservice channels.
Almark is not the first company with egg products Post has bought this year. In July, Post purchased Henningsen Foods, a manufacturer of value-added egg, meat and poultry products. It also announced a partnership in May with Eat Just to make its plant-based Just Egg available to thousands of foodservice establishments.
For Post, Almark builds on a commodity in eggs that the St. Louis-based company is already intimately familiar with — and likely an overlap in some of the same customer base — while providing a much-needed boost on the retail side that could help iron out at least some of the volatility it's facing in foodservice.
Post has built a meaningful presence in several diverse food segments, but a lion's share of its business is in breakfast products like Honey Bunches of Oats, Shredded Wheat, Malt-O-Meal, Weetabix and Bob Evans' bacon and ham, eggs, breakfast bowls, sausages and other offerings. With consumers spending more time working from home, this side of Post's business has prospered. Adding Almark will allow Post to grow in this category while benefiting from the tailwind as its foodservice business eventually sees consumer traffic rebound to pre-COVID levels.
The food and beverage space has been focused exclusively on deals like Post's where a large manufacturer acquires brands that are smaller and often complementary to its existing operations. Most recently, TreeHouse Foods purchased the majority of the U.S. branded pasta portfolio of Riviana Foods; Nestlé purchased Freshly, a provider of fresh-prepared meal delivery services in the U.S.; McCormick & Co. added hot-sauce maker Cholula from private equity company L Catterton; and J.M. Smucker announced plans to sell its Crisco oils and shortening business to B&G Foods.
Large CPGs are likely to continue these smaller, bolt-on deals rather than take on more debt or expand into nonadjacent categories by purchasing a larger company. It's also possible the disruptive marketplace brought on by the coronavirus could make some companies more willing to be acquired, or in need of a buyout to survive. That could be advantageous for deep-pocked buyers looking to make a deal.