Private label, acquisitions and manufacturing value, at a glance:
- Private label is increasingly competing with major brands on quality, choice and innovation – and can sometimes respond to new trends faster.
- Acquisitions allow manufacturers to add capacity, expertise, customer relationships and market access that could take years to build organically.
- Food groups risk losing valuable technical capabilities and flexibility when factories and other apparently non-core assets are sold.
Private-label food manufacturers are becoming increasingly acquisitive. Their names rarely appear on supermarket shelves, but they make the biscuits, cereal bars, snacks and ice creams sold by major retailers and global brands – and they’re using deals to add production capacity, enter new markets and broaden their technical capabilities.
Cem Karakaş understands both sides of that equation. As founding CEO of pladis from 2016 until September 2018, he led the snacking group behind McVitie’s and Godiva before stepping down for family health reasons. He’s now co-founder and partner at Afendis Capital Management, a London-based, EMEA-focused investment firm specialising in manufacturing businesses, with €500m in assets under management. Rather than building another branded empire, Afendis is backing the companies that manufacture for several of them.
The strategy can be seen across Afendis’ investments in platform acquisitions, corporate carve-outs and operational turnarounds. Spanish-headquartered Cerealto operates 10 manufacturing sites across four countries and produces biscuits, cereals and snack bars for major retailers and global brand owners. London-headquartered Glacier, meanwhile, has brought together Gelato d’Italia and Belgian private-label producer YSCO to create Europe’s largest pure-play private-label and co-manufacturing ice-cream producer, with five factories, 50 production lines and net sales of €582m in 2025.
Having worked across brands, factories, retailer relationships and investments, Karakaş has a valuable view of the contest now taking place. Retailers are becoming stronger product developers, private label is reaching trends faster and food groups are questioning which factories they still need to own. Specialist manufacturers can serve every side of that market, while acquisitions allow investors to assemble capabilities that would take decades to build from scratch.
Private label is beating brands to the trend
Private label was once positioned primarily as the cheaper, often less appealing alternative to branded products. Brand owners led product development and spent heavily on marketing, while retailers followed with versions designed principally to compete on value.
Price remains crucial, particularly while household budgets are stretched, but retailer-owned ranges now extend across mainstream, premium, health-led and indulgent tiers. Manufacturers are consequently expected to provide product development and category insight alongside cost-efficient production.
“Private label has changed enormously,” says Karakaş. “Price still matters, but retailers’ own brands now compete on quality, innovation and choice, too. Trends such as high fibre and high protein have moved rapidly into private-label ranges and, in some cases, private label has moved faster than brands.”
Speed is changing the economics of private-label manufacturing. Producing high volumes efficiently remains fundamental, but a manufacturer capable of interpreting a trend, creating several propositions and commercialising them for different retailers becomes involved much earlier in the development process.
The danger is assuming all complexity is a cost. In food, a factory or specialist capability may look inefficient in isolation but be critical to customer relationships, flexibility or innovation.
Cem Karakaş
“That demonstrates how quickly retailers and their innovation and manufacturing partners can respond to changing consumer demand,” Karakaş says. “This means manufacturers need to invest ahead of trends to ensure they have the capabilities to deliver for their clients.”
Cerealto develops and launches more than 200 products a year, while Glacier is investing in emerging formats including ice-cream bites and ice-cream sandwiches. Product development on that scale makes the manufacturer more than a recipient of specifications drawn up elsewhere; it becomes part of the retailer’s or brand owner’s innovation operation.
“It shows how quickly private label is evolving, and we will only see more demand for this as retailers look for new ways to attract consumers,” adds Karakaş.
Branded companies retain the advantages of familiarity, distribution and consumer trust, although those strengths must continually be defended. “Having spent many years in branded food, I’ve seen first-hand how powerful brand familiarity, consistency and scale can be. Strong brands can build enormous consumer loyalty but maintaining that position depends on continuing to deliver against consumers’ expectations and staying ahead of changing tastes.”
Private label’s growing sophistication is increasing the pressure. “That challenge is becoming more intense as private label portfolios offer increasingly broad and innovative ranges, driving standards higher across the entire industry.”
Building scale without owning the brand
Afendis’ strategy doesn’t depend on private label displacing branded food. Its portfolio companies also manufacture for leading brands, allowing the same production platform to draw business from both parts of the market.
“I don’t think value has shifted away from brands – some of our portfolio companies’ biggest clients are major brands,” says Karakaş. “What has changed is the increasing recognition of the value that sophisticated manufacturing and innovation partners can bring – unlocking scale, speed and innovation.”
A manufacturer supplying several retailers and brand owners is less exposed to the performance of one consumer name, although managing multiple customers, markets and formats introduces considerable technical and operational demands.
Afendis and Davidson Kempner invested in Cerealto in June 2022, when the Spanish manufacturer was facing severe financial and operational pressure. The business has since expanded through acquisition and reported revenue of €526m before its latest US deal.
Cerealto acquired Ashton-under-Lyne-based Hill Biscuits in July 2024, adding a manufacturer of private-label and branded Bourbons, Custard Creams and Digestives to its UK operations. In October 2025, it completed a majority investment in Colorado-based Fresca Foods, a co-manufacturer of natural and organic snack bars, granola, breakfast cereals, crackers and cookies. North America is expected to account for approximately 20% of Cerealto’s revenue following the transaction.
Glacier has pursued the same buy-and-build logic. Gelato d’Italia, acquired in 2022, bought fellow Italian producer Gelati Giuntoli in February 2024. YSCO joined the platform in January 2025 through a carve-out from Belgian dairy cooperative Milcobel, adding factories in Belgium and France capable of producing around 200 million litres annually. The combined group now manufactures approximately 298 million litres of ice cream a year.
“I’ve always been attracted to businesses that can be overlooked because they aren’t necessarily the most fashionable parts of the industry,” Karakaş says. “Manufacturing is a good example. These businesses often have deep expertise, long-standing customer relationships and capabilities that have taken years to build, but there can still be significant untapped potential.”
Afendis is buying more than equipment and production capacity. An acquisition can bring retailer accounts, technical processes, category expertise, new formats or access to another country. Integrating those elements into a larger platform can expand its offer to customers and support further investment in automation, capacity and innovation.
“That creates an opportunity for an investor with real operating experience to help unlock that value. It’s helping to create a more dynamic environment that can react to trends more quickly, cost-effectively and deliver greater choice for consumers across both brands and private label.”
When Big Food sells the wrong asset
Large food groups simplifying their operations are helping to feed the acquisition pipeline. Factories and divisions judged peripheral to the main portfolio are being separated or sold, creating opportunities for specialist investors that believe those assets can perform better within a focused manufacturing platform.
Karakaş warns the drive to reduce complexity can also encourage executives to treat strategically important operations as dispensable costs. “The danger is assuming all complexity is a cost,” he says. “In food, a factory or specialist capability may look inefficient in isolation but be critical to customer relationships, flexibility or innovation.”
A site’s standalone financial performance may not capture its full commercial importance. It might manufacture a technically difficult product, provide capacity during seasonal peaks or enable the company to accept smaller and more experimental briefs. Recreating that flexibility after a disposal or closure could demand substantial capital and years of technical development.
Karakaş says Afendis assesses assets according to the value they contribute and how difficult they would be to replace. “We look at what genuinely adds value and, crucially, what would be difficult to rebuild once it’s gone. Simplification can create value, but only if you protect the capabilities that make a business competitive in the longer term.”
His experience at pladis taught him that investors often concentrate on the assets with the greatest public visibility. “The most visible sources of value are often the brand and the end product. But my experience has taught me that some of the greatest value can sit beneath the surface.”
Manufacturing networks, agile innovation structures, retailer relationships and experienced operational teams can take decades to assemble. Acquirers must consider the cost, risk and time involved in recreating them, rather than focusing exclusively on a factory’s immediate returns.
What does Afendis mean?
Afendis says its name is inspired by efendi, a traditional term used across the Levant and Balkans associated with dignity, character and respect. The name is intended as a modern interpretation of that heritage, rooted in the belief that respect and distinction are earned rather than claimed.
“At Cerealto and Glacier, we are showing how manufacturing expertise, innovation capabilities and long-standing client relationships can fundamentally strengthen a business and deliver growth,” he says.
Acquiring the local knowledge to expand
International expansion provides another reason to buy rather than build. Production may be scalable, but food preferences, retail structures and routes to market remain stubbornly local.
“One of the things I learned from running an international food business is that food remains an incredibly local business, even at global scale,” Karakaş says. “Tastes, retailers and routes to market vary significantly, so you cannot simply take a successful model and replicate it elsewhere.”
That principle can be seen in Cerealto’s controlling investment in Fresca Foods, a Colorado-based contract manufacturer and product development specialist for natural and organic snacks. The deal provides more than a US manufacturing footprint: Cerealto gains an established operation, closer proximity to customers and deeper knowledge of this fast-growing market. Fresca’s existing leadership team, meanwhile, has retained a significant shareholding and continues to manage the US business.
“The challenge is to capture the benefits of global scale while remaining genuinely local in how you operate,” Karakaş says.
His move from running pladis to investing in food manufacturing isn’t evidence that he abandoned brands for private label. His record since then nevertheless shows why investors are paying closer attention to the businesses behind the label. Retailers want own brands to innovate faster, branded groups want flexible production partners and acquisitive manufacturers want scale, technology and access to new markets.
The next major snacking group may not be assembled from household names. It could be built by acquiring the companies already making their products.
