Dutch food group Wessanen has bought local organic business Kroon as it begins a strategic push into the sector at home and in European markets.
Wessanen, which has set out its stall to be the "organic-plus champion" in Europe, revealed the acquisition after posting widening first-quarter losses today (29 April).
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The company secured the acquisition of Kroon for an undisclosed sum. Kroon is a supplier of organic fresh produce to retail outlets in the Netherlands and the company also runs the Puur health-food chain in the country.
Wessanen CFO Frans Eelkman Rooda said the company wanted to use its relationships with customers in the Netherlands to build the Kroon business, which generates annual sales of EUR10m.
"The key advantage that we see is that we are combining the perishable offering to the grocery products that we sell to health food stores," Rooda said.
Wessanen said it remained on the look-out for plugging "gaps" in its portfolio with further acquisitions despite a bottom line that was hit by finance costs in the first quarter of the year.
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By GlobalDataWhile Wessanen remains keen to sell its remaining businesses in the US, including speciality foods firm Panos and drinks unit ABC, the company reported flat sales and earnings in Europe as weak consumer confidence dampened demand.
Rooda said the long-term outlook for organic food in Europe remained "attractive", with per capita consumption remaining relatively low.
However, he admitted that the recession had made it difficult to grow revenues from organic and natural products.
"I don't think we are seeing any development on the pricing premium that organic products can demand," Rooda said.
