Organic Food Industry Undergoing Consolidation

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The global organic food industry is undergoing consolidation. In the last week,
three major deals have involved established organic food companies in Europe and North
America. Ecovia Intelligence (formerly known as Organic Monitor) expects more such
deals as rationalisation continues.

Royal Wessanen, one of the largest and oldest organic food enterprises in Europe, has
just been acquired by an investment consortium. With headquarters in Amsterdam, the
company owns a portfolio of European organic and free-from food brands, including
Bjorg, Kallo, Allos, Whole Earth, Clipper, Alter Eco, Tartex and Isola Bio. The investors
have paid EUR 885 million (USD 1 billion) for the company with the aim of
strengthening its position in the sustainable & organic food market.

Earthbound Farm, the leading organic salads company in North America, has been
purchased by Taylor Farms for USD 400 million. Established in 1984, the Californian
company has grown into an international supplier of organic fruits, vegetables and salads.
Bought by Whitewave Foods in 2013, it came under the ownership of Danone USA in

2016. The French multinational has divested the company as it plans to focus on plant-
based dairy alternatives.

Another sale involves Bolthouse Farm, a leading supplier of organic and natural
beverages, in North America. Campbell Soup purchased the company in 2012, and has
now sold it to the private equity firm Butterfly for USD 510 million. Bolthouse Farm
organic carrots, juices, smoothies and dressings are a feature in natural food shops across
the US.

Ecovia Intelligence (www.ecoviaint.com) sees more such ‘sell-offs’ on the horizon as the
organic food industry undergoes consolidation. The industry has traditionally been
fragmented with many operators involved in production and distribution. Rationalisation
is occurring with large companies looking to take significant positions. Apart from large
food companies and retailers, recent years has seen the entry of unconventional operators;
Whole Foods Market was bought by the online retail giant Amazon for USD 13.7 billion
in June 2017. In Europe, the healthcare company Midsona has purchased leading organic
food enterprises in Scandinavia (Urtekram) and Germany (Davert).

However, acquiring successful organic food companies is no guarantee of market
success. Ecovia Intelligence sees competition and integration as major challenges.
Although healthy growth rates are continuing, the organic food market is becoming

increasingly competitive. For instance, Organic Valley, a leading organic food enterprise
in North America, has just reported its second year of losses. In spite of achieving USD
1.1 billion sales in 2018, it reported a loss of USD 6.9 million.Organic brands do not always fit well into conventional portfolios, as many large food companies have discovered. There is also a concern that consumers will shun organic /
sustainable brands if they are no longer true to their ‘green roots’.

The latest trends and developments in the global organic food market (including
consolidation) will be given at the following events organised by Ecovia Intelligence.