Greencore, after a rocky start, has steadily built business in US

Greencore, after a rocky start, has steadily built business in US

Ireland-based private-label group Greencore has moved to expand its business in the US with the acquisition of food-to-go supplier Lettieri's.

Greencore said Lettieri's manufacturers products including breakfast sandwiches, stuffed baguettes and wrap dogs for sale in US convenience stores.

Lettieri's, which is based in Minnesota, generated revenue of US$36.4m and "attributable EBITDA" of $4.7m in the 12 months to the end of March 2013, Greencore said. The US firm operates from a site in Shakopee and employs around 130 staff.

Greencore announced the acquisition, struck for an undisclosed sum, alongside plans to invest around $10m in its plant in Jacksonville in Florida to make frozen food-to-go products.

"We have been working since 2011 to build a focused, growing, food to go business in the US," Greencore CEO Patrick Coveney said. "Today's announcement represents an important further step on that journey. Both the Lettieri's acquisition and the capital investment into Jacksonville deepen our manufacturing capability and widen our product range to more fully serve the food to go needs of our customers in the small store channels."

Greencore first entered the US in 2008. In early 2012, the company warned its US business was potentially under review if its performance did not improve. Greencore decided to exit its Cincinnati test facility following the termination of the lease. It also quit production of WeightWatchers ready meals.

The company shifted to a "tighter food-to-go proposition" through customers like 7-Eleven and, more recently, Starbucks.

Click here for an interview with Patrick Coveney, published in November, on Greencore's US business.

Show the press release

25 February 2014

Greencore Group plc - Strategic investments in Greencore USA

Acquisition of Lettieri's, LLC

Greencore Group plc ("Greencore", the "Group") today announces that it has acquired Lettieri's, LLC ("Lettieri's").

Lettieri's is a leading manufacturer of food to go products for the US convenience store channel. It operates from a modern, purpose-built facility in Shakopee, Minnesota and employs approximately 130 staff. For the year ended March 2013, it generated revenue of $36.4m (£21.9m) and attributable EBITDA of $4.7m (£2.8m). The transaction will be funded from existing debt facilities and is expected to be modestly earnings accretive in the current financial year.

Lettieri's products are manufactured frozen but served hot via roller grills and heated cabinets.  They form a primary component of the food to go offering in convenience stores, alongside chilled food to go items such as fresh sandwiches.  The product range includes assembled products (e.g. breakfast sandwiches), extruded products (e.g. stuffed baguettes and breadsticks) and enrobed products (e.g. wrap dogs) for the roller grill.

Investment in Jacksonville

Greencore also confirms that it is investing approximately $10.0m (£6.0m) in its Jacksonville, Florida facility in order to create the capability to manufacture frozen food to go products.  The investment will provide capacity to support up to $100m (£60m) of revenue in products designed for hot eating at both the breakfast and lunchtime occasions.  The Group anticipates that the first such products will come to market in the final quarter of FY14.

Commenting on these investments, Patrick Coveney, Chief Executive Officer of Greencore, said:

"We have been working since 2011 to build a focused, growing, food to go business in the US.  Today's announcement represents an important further step on that journey.  Both the Lettieri's acquisition and the capital investment into Jacksonville deepen our manufacturing capability and widen our product range to more fully serve the food to go needs of our customers in the small store channels.  Both investments are consistent with our long-term approach of developing high quality manufacturing facilities to meet the specific growth strategies of our key US customers."

Original source: Greencore