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November 15, 2021

George Weston completes bakery exit with ambient sale to Hearthside Food Solutions

The deal marks the end of the Canadian group’s near-140 years in the bakery sector.

The remaining assets of Canada-based baker Weston Foods have been sold to US contract manufacturing group Hearthside Food Solutions.

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  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
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George Weston Ltd., the owner of Weston Foods, had been looking for buyers for its bakery business to focus on its interest in retail and real estate. Three weeks ago, the group announced the sale of Weston Foods’ fresh and frozen businesses to “affiliated entities” of Canadian baker FGF Brands.

The CAD1.2bn (US$958.5m) deal with FGF Brands left Weston Foods’ ambient assets still on the block. Today (15 November), a deal was announced between George Weston Ltd. and Hearthside Food Solutions, a co-manufacturer with operations in North America and Europe.

A sum of CAD370m is being paid for the businesses, which sell products like biscuits and crackers to retail and foodservice customers in North America. The division also makes cones and wafers for the ice-cream industry.

“The Weston Foods acquisition is an ideal complement to our existing production network and business, bringing baking capacity, a roster of premier customers, expanded capabilities, and enhanced geographic coverage. These synergies benefit our current and new customers alike,” Chuck Metzger, Hearthside Food Solutions’ CEO, said.

Six factories – five in the US and one in Canada – are included in the deal, taking the number of Hearthside Food Solutions’ manufacturing facilities to 43. Some 1,100 staff work for the Weston Foods businesses that are part of the transaction.

Baking is one of Hearthside Food Solutions’ four “primary production categories”. The others are bars, food packaging, plus fresh and frozen entrées.

The deal remains subject to competition approval but the companies said they expect to complete the deal by the end of March.

Weston Foods had sales of CAD2.06bn and adjusted EBITDA of CAD200m in 2020, down, respectively, from CAD2.15bn and CAD223m in 2019. The assets sold to Hearthside Food Solutions accounted for around a quarter of sales in 2020.

“We have two high-quality buyers that are well-positioned to carry on the proud legacy of the Weston Foods business,” Galen G. Weston, the chairman and CEO of George Weston Ltd., said.

In 1882, an apprentice baker in Toronto named George Weston bought a bread-delivery route from his manager and set out on his own, the spark for Weston Foods, which has approximately 6,000 employees working across 33 facilities in Canada and the US.

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Free Report
img

What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

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