Good Food Partners: New player emerges in Australia’s $2.8bn better-for-you breakfast cereal and snacks sector
Arnott’s Group has bought 75% of Melbourne-based Diver Foods, the largest producer of branded and private label muesli and better-for-you snack bars in Australia.
Diver Foods counts the likes of Kellogg’s, Nestle and Woolworths among its contract manufacturing client base and posted AU$96.4m in sales for the 12 months to 30 June 2020. Founder and MD Chris Diver will retain 25% of the shares of the 18-year-old company.
The Diver acquisition comes hot on the heels of Arnott’s agreement to buy Freedom Foods’ cereal and snacks brands in December. The brands, which include Arnold’s Farm, Heritage Mill and Messy Monkeys, generate sales of around $100m annually. The $20m deal is expected to be completed in March.
Building on 150+ year legacy
Arnott’s CEO George Zoghbi said the Group has a 150-plus year legacy of manufacturing food in Australia and has made no secret of building on that legacy.
After more than a decade under the full ownership of the Campbell Soup Company, Arnott’s was procured in a $3.2bn deal by US private equity firm Kohlberg Kravis Roberts (KKR) in 2019.
“Our intention is to create a new cereal and snacks division that will bring the Diver Foods and Freedom Foods businesses together when the transactions are complete,” said Zoghbi.
“Diver Foods presents a fantastic strategic growth opportunity for us, with products and capability that will complement our existing brands while helping to diversify our iconic product portfolio and drive our entry into new categories.
“We are currently working closely with Chris on how best to integrate their operations into The Arnott’s Group family and look forward to sharing more detail about these exciting plans when they are finalised.”
Diver added, “We see huge potential for the future and are excited at the prospect of joining with a business like The Arnott's Group that has similar values and strong Australian heritage.
“Together, we will remain focused on quality, local ingredients, investing in sustainable supply chains and partnering with the communities.”