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September 20, 2022

Japan’s House Foods expands US plant-based portfolio with Keystone Natural Holdings buy

The deal means House Foods will grow its North America manufacturing facilities from two to eight.

By Jessica Broadbent

Japanese tofu firm House Foods has acquired US plant-based food manufacturer Keystone Natural Holdings (KNH).

The deal, announced on 16 September, will expand House Foods’ portfolio of value-added tofu and plant-based food products.

It means House Foods will grow its North America manufacturing facilities from two to eight.

KNH, with a product range that includes US plant-based food brand Nature’s Soy, was established by Chicago-based private investment firm Keystone Capital in 2016.

It produces and sells tofu, meat alternatives and other plant-based products in the US and Canada.

The range also includes plant-based food brand Franklin Farms and Canadian tofu Superior Natural.

KNH bought WestSoy’s tofu, seitan and tempeh assets from natural and organic foods giant Hain Celestial in 2019.

Keystone Capital managing director Chaoran Jin said: “We are proud of the work we have done at KNH.

“During our partnership, we invested significantly to expand KNH’s brand presence, manufacturing capacity, product development capabilities, as well as the leadership team in order to provide a broad range of healthy, innovative plant-based food products for grocery, club, and food service customers.”

House Foods Group was founded in 1913 and is now one of Japan’s largest food suppliers.

As well as North America, it is also looking to expand its business in Europe and other regions.

In the 2021 financial year the group’s net sales were up 1.3% to JPY253.4bn (US$1.76bn) while its operating profit dipped 1% to JPY19.2bn.

Kenny Sung, KNH chief executive, said: “Keystone Capital helped us successfully expand into additional strategic segments, which has positioned us to better serve our retail and foodservice customers in the ethnic and mainstream channel.

“We look forward to working with House Foods to continue our growth trajectory.”

House Foods said it sees “the driving force” of its growing plant-based market as Millennials and Gen Z, who “have a keen interest in climate change and tend to choose food with a low environmental impact”.

The proposed transaction, for an undisclosed sum, is expected to close at the end of the month.

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