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June 27, 2022updated 28 Jun 2022 7:11am

TreeHouse Foods ‘in talks to sell meal-prep unit to private-equity firm’

The unit houses dressings, sauces, pickles, dips and salsa, creamers, dough and pasta.

By Andy Coyne

US private-label heavyweight TreeHouse Foods is reported to be in exclusive talks to sell its meal preparation unit to private-equity firm Investindustrial.

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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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New agency Bloomberg, quoting unnamed sources familiar with the situation, said if a deal is agreed it may value the TreeHouse Foods unit at about US$1.3bn, including debt.

TreeHouse Foods’ meal-prep business houses dressings, sauces, pickles, dips and salsa, creamers, dough and pasta.

The firm announced last November it was looking at “strategic alternatives” that could include “a possible sale of the company or a transaction to allow the company to focus on its higher growth snacking and beverages business by divesting a significant portion of its meal-prep business”.

In March this year, TreeHouse Foods ruled out a sale of the whole company but reiterated that it was reshaping its business around “higher growth, higher margin” snacking and beverage operations in a “group of categories”.

It added then that disposal options for the meal preparation division were being considered “either in a single transaction or in a series of transactions”.

In April, meanhwile, TreeHouse Foods reached an agreement with Jana Partners that saw the activist investor get a seat on its board.

Jana took a 7.3% stake in TreeHouse Foods early last year as it sought to evaluate “avenues to resolve the issuer’s undervaluation and total stockholder return”, including a potential sale of the company. The pressure arose despite a strategy under president and CEO Steven Oakland entailing asset disposals and acquisitions and slashing SKUs to boost profit margins.

When contacted by Just Food, a spokesperson for London-based Investindustrial said it has no comment to make on the Bloomberg story.

TreeHouse said; “We do not comment on rumours or market speculation.”

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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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