Dive Brief:
- Bangkok-based Charoen Pokphand Foods (CPF) has announced its plan to acquire Bellisio Foods, Inc. for $1.075 billion, Food Business News reported.
- Bellisio manufactures and distributes single-serve frozen entrees under the Atkins, Boston Market, Chili’s, EatingWell, Eat! and Michelina’s brands, as well as co-manufactures private label and food service products
- The companies expect the deal to close in December.
Dive Insight:
"This transaction marks the first step of our entry into the world’s largest food market, where we see significant growth and synergy opportunities," CPF CEO Adirek Sripratak said in a statement. While many American and European companies eye China as a major growth opportunity, many Chinese companies see the U.S. as an important market to break into.
CPF's decision to acquire a frozen foods company also makes sense from a logistical standpoint. If CPF brings some of its production to China and then ships the products to the U.S. and other parts of the world, the frozen meals will not face the risks of perishable foods during prolonged shipping. However, refrigerated shipping across the world could be costly, so the company would have to balance out labor considerations with supply chain logistics.
This acquisition could also be seen as a vote of confidence in the frozen foods market by the Chinese company. U.S. frozen food brands have struggled in recent years, with sales and volumes declining. But brands like Lean Cuisine, Birds Eye and Green Giant have made strides to turn the industry around through better alignment with healthy ingredient trends and strategic marketing investments.