Swiss dairy group Emmi has expanded its presence in Brazil with the acquisition of a majority stake in Verde Campo from The Coca-Cola Co.
The stake amounts to 70% in a deal struck by Emmi’s Brazil-based “subsidiary” Laticínios Porto Alegre in which the Swiss business owns the same shareholding. That was increased in 2019 from the 40% Emmi first obtained in a 2017 deal.
Alessandro Rios Carvalho, the founder of Verde Campo, and Álvaro Gazolla, the company’s former marketing and sales chief, retain the remaining 30%.
“This arrangement affirms Emmi’s conviction that the company can take Verde Campo to sustainable, profitable growth,” the Switzerland-listed business said in a statement today (16 April).
Financial terms of the transaction were not disclosed, with completion of the deal subject to competition approval in Brazil.
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Emmi added the stake in Verde Campo strengthens its position in a “strategic” market. The Americas were the dairy group’s second-largest geographical business division last year, which as well as the US and Canada, includes Brazil, Chile and Mexico, along with Tunisia and Spain.
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By GlobalDataRicarda Demarmels, Emmi’s CEO, said: “The shareholding in Verde Campo will allow us to improve our position on the strategically important Brazilian market, while reinforcing the value of our portfolio with a strong brand and a focus on functional premium dairy products.
“We are confident that by joining forces with Verde Campo’s former founding team, we can take the brand to profitable growth.”
Verde Campo can trace its roots back to 1968 but was formally set up by Carvalho in 1999. Based in Lavras in Minas Gerais state, the company supplies its own brand of natural whey yogurts and shakes.
The portfolio also features cheese and lactose-free variants, and probiotic and lactose-free yogurts.
“In line with its aim of continual portfolio transformation, Verde Campo will complement Emmi’s position in Brazil with a strong brand and focus on functionality,” the Swiss group said.
“Emmi perceives further growth potential in the important Brazilian market given that the acquisition of Verde Campo will speed up the transformation of the portfolio through the addition of innovative brands and differentiated premium concepts.”
Coca-Cola acknowledged the sale of the stake in Verde Campo, saying in a statement: “The agreement is the result of a strategic decision, part of the ongoing assessment of the company's assets. The company remains committed to supporting employees, customers and partners as we move forward in this period of change.”
Publishing its 2023 annual results in January – with organic growth up 3.5% at SFr4.24bn ($4.64bn) – Emmi said the year was characterised by a “demanding market environment that continues to be driven by inflation”.
Reported revenue for the 12 months to 31 December climbed 0.8%, with Switzerland accounting for 41.5% of the group total and the Americas 40.1%. The rest of Europe stood at 15.6%, with the remainder coming from the company’s other international business.
The contribution from the Americas division climbed 1.8% to SFr1.7bn while Switzerland increased 3.5% to SFr1.76bn. Europe was down 9.4% at SFr661m.
In terms of group profits, EBITDA fell 0.9% to SFr375.8m. EBIT increased 2% to SFr258.2m and net profit rose 2.1% to SFr186.3m.
Emmi anticipates 2024 organic growth of 1-2%, according to its annual report.
“The Emmi Group expects the generally challenging economic conditions – characterised by a strong Swiss franc, geopolitical tensions, high input costs and subdued consumer sentiment – to continue during 2024. Emmi is responding with strict cost discipline and group-wide efficiency programmes, while consistently working to transform its portfolio.”
