Private equity firm invests $10M in Sonoma Creamery
- Sonoma Creamery, a California cheese and snack company, received a $10 million equity investment from private equity firm Svoboda Capital Fund IV, L.P., according to Food Business News.
- The company said it intends to use the money to support growth initiatives, including new product development, hiring and adding production capacity.
- “We have been impressed with Sonoma’s ability to innovate and grow in the exciting healthy snack category,” Jeff Piper, managing director at Svoboda Capital, told Food Business News. “We are looking forward to collaborating with the Sonoma management team to enhance the long-term growth and success of the company.”
Based in California's famed wine country, Sonoma Creamery has been making cheese since 1931 and claims to have been the first to make hot pepper jack cheese. It's made shelf-stable gluten-free baked cheese snacks since 2014.
The company, previously owned by a subsidiary of South Korean food giant Pulmuone, has been in private hands since 2011, when Sonoma Creamery President and CEO John Crean led a group of about a dozen investors to purchase the company. Crean was co-founder of private label wine branding and bottling house Winery Exchange. As Crean brought grocery retail experience to the table, Sonoma Creamery focused on both its artisan cheeses and snacks sold at stores such as Amazon, Costco, Target, Kroger, Safeway/Albertsons, Wegmans and Sprouts.
Founded in 1998, Chicago-based Svoboda Capital Fund is a relative newcomer with diverse holdings throughout value-added distribution, business services, and consumer products and services sectors. Currently, it does not appear to have any other food companies in its portfolio. However, the investment reflects the trend analysts see of more private equity firms getting into the food and beverage business. Private equity firms have been longtime players in the grocery business. As debt pressures lessen and the economy rebounds, many are beginning to venture more into food and drink as well, A.T. Kearney Principal Bahige El-Rayes told Food Dive.
Lately, private equity investments have been in food niches. Last month, private equity funded Sovos Brands purchased premium pasta sauce maker Rao's Specialty Foods. The savory snack niche is becoming more popular, with recent Euromonitor research showing it as 40% of all snacks in North America.
The terms of Svoboda Capital Fund's investment in Sonoma Creamery were not disclosed, but it will be interesting to see how the funds help grow the company. Soon after Crean and his investors took over the creamery, it quadrupled staff size and added a new distribution line. With management willing to try new things and take risks, the future for this partnership seems bright.
- Food Business News Sonoma Creamery secures $10 million investment
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