US cheese major Sargento Foods is targeting demand for more on-the-go products with the acquisition of local peer Baker Cheese Factory.
In a statement announcing the deal, privately-owned Sargento, one of the largest cheese suppliers in the US, said “cheese snacking” had become the “one of the fastest-growing sections of the cheese category and shows no sign of slowing”.
Wisconsin-based Baker Cheese Factory sells mozzarella string cheese across the US. Sargento, headquartered in the same state, said the new asset’s cheese production had “grown aggressively” in recent years.
“This is a great opportunity and will allow us to continue our industry-leading growth in the marketplace,” Louie Gentine, Sargento’s CEO, said, without specifying the company’s recent growth rate. The business does disclose annual net sales of US$1.5bn.
Baker Cheese Factory employs 250 people at its St. Cloud base. Sargento has more than 2,000 employees at its four sites in Wisconsin, as well as a remote sales team across the U.S. The company said the takeover “will not displace any employees”.
Brian Baker, the chief executive of Bakery Cheese Factory, said: “We believe Sargento has the right culture, capabilities, and commitment to innovation to grow our business for generations to come. Our award-winning string cheese and commitment to service and quality aligns with everything Sargento seeks to accomplish. We welcome this important step toward our future.”
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Financial terms were not disclosed.
According to research published in November, GlobalData said the value of the US cheese category was $23.9bn in 2020. The UK-based data and analytics group is forecasting the category will hit $30.2bn by 2025, representing a compound annual growth rate of 4.8% between 2020 and 2025.
In volume terms, the category sold 1,882.6 million kg in 2020. GlobalData expects volumes in 2025 to be 1,925.2 million kg, translating as a CAGR of 0.4% during the period.
The researcher said the Sargento cheese brand accounted for 7.1% of value sales in 2020, behind only the Kraft brand.