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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.

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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
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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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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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