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June 18, 2021

Meat giant BRF to buy pet-food firm Hercosul

BRF said in December it wanted to expand its business in the “promising, high added-value” pet-food market.

BRF, one of the world’s largest consumer meat suppliers, is moving to expand its pet- food business with the acquisition of Brazil’s Hercosul Group.

Pet food is one of the sectors the Brazil-based pork and poultry supplier had earmarked for growth as part of its Vision 2030 strategy, through which the processor wants to triple group revenue.

BRF said the acquisition of Hercosul, which makes dog and cat food, would make the company “one of the largest players” in the sector in Brazil. It cited data from ABINPET, the Brazilian Association of the Pet Products Industry, which said the deal would give it a market share of 4%.

“The Hercosul Group has a solid growth trajectory in this market, launching innovative products, which are recognised for quality, safety and performance,” BRF said in a statement today (18 June) to announce the deal.

Hercosul sells dog and cat food under brands including Biofresh, Three Dogs, Three Cats and Primocão.

BRF has not revealed how much it plans to pay for Hercosul. It said the purchase price would be disclosed when the transaction is finalised.

In December, BRF had set a target to triple its sales revenues over the next decade by focusing on areas such as plant-based proteins, ready-meals and pet food.

Publicly-listed BRF is aiming for BRL100bn (US$19.93bn) in revenues between 2027 and 2030, to be achieved in stages, from the BRL33.45bn reached in the fiscal year to 30 September. The company is also seeking to boost EBITDA by 3.5 times from the most recent annual print of BRL5.3bn and increase profit margins from 15.9%.

BRF’s CEO Lorival Luz said at the time the company is about to embark on “a new growth cycle over the next decade”.

He continued: “We intend to further establish ourselves as a global food company with high added-value, with a portfolio of strong brands and increasingly practical, tasty, high quality and reliable products whenever our clients and consumers want, wherever they want and however they want. Our intention is to operate sustainably, taking the main lead and being agents of transformation.”

 

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