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Westrock Coffee to Buy S&D Coffee & Tea from Cott

Late last week Westrock Coffee entered into an agreement to purchase North Carolina-based S&D Coffee & Tea from Cott Corporation. The transaction is expected to close within the next several weeks and will create the leading integrated coffee company serving the needs of the retail, restaurant, convenience store, and hospitality industries. 

“This strategic combination will create the nation’s premier coffee, tea, and extract supplier that is capable of serving the most complex and demanding customers across the country and around the world. We intend to use the scale of the new company to offer the most innovative beverage solutions with competitive pricing to our global clients while simultaneously providing a premium price to our farmer partners at origin. Our unmatched commitment to customer service, product quality, and our industry-leading sustainability and transparent sourcing practices will remain a cornerstone of our business,” said Scott Ford, Westrock Coffee Co-founder and Chief Executive Officer. “Our combined organization will seek to lead the industry with our sustainability program and to accelerate the development of a broadening array of innovative products.”

The companies will continue to serve customers under their respective brand names for the foreseeable future. Westrock Coffee will remain headquartered in Arkansas, with its recently enlarged roasting and packaging plant in North Little Rock already earmarked for further expansion. Likewise, the S&D organization in Concord, NC will continue as a major center of operations with plans to continue expansion of these facilities.

The new company will employ approximately 1,700 people globally and can roast, grind, and package more than 220 million pounds of coffee annually. The company will also continue to be one of the largest tea suppliers in the US and the leading premium extract supplier to global foodservice and consumer product companies.

Ford added, “We are very pleased that following the closing of the transaction, S&D President and CEO Ron Hinson will remain as an advisor to the new, combined organization as Chairman Emeritus. We value Ron’s extensive industry knowledge and deep relationships amassed over his 41 years at S&D. We admire how S&D has grown and evolved during his tenure as President and CEO.”

“Participating in S&D’s growth and success during the past four decades has been incredible. We achieved industry leadership by innovating to serve our customers. We invested in job and career growth for employees and our community, and I look forward to working with Scott and the newly combined leadership team to see these achievements go even further. The highly complementary product and customer focus S&D brings to Westrock Coffee makes this a terrific event for our business, our employees, and especially our customers,” Hinson said.

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FTC Opposes Post’s Acquisition of Treehouse Private Brand Cereal Business

Late last week the Federal Trade Commission filed an administrative complaint challenging Post Holdings, Inc.’s proposed acquisition of TreeHouse Foods, Inc.’s private label ready-to-eat cereal business. Post and TreeHouse are two of only three significant manufacturers and distributors of private label ready-to-eat cereal in the United States. The acquisition would give Post more than a 60% share of an already highly concentrated market and eliminate the vigorous competition between them to serve grocers across the country. The proposed merger would remove the competitive pressure that has driven higher quality and lower priced cereals for American families.

Ready-to-eat cereals are a staple of American breakfasts. These cereals do not require any preparation before consumption. Nearly every grocer offers a selection of ready-to-eat cereals in their stores. In addition to carrying national brands of ready-to-eat cereals, many stores offer private label ready-to-eat cereals, with the retailer’s own trade name.

“Households nationwide benefit from the robust competition between Post and TreeHouse, and a merger between these companies would likely lead to higher prices and reduced quality of the store-brand cereals that consumers enjoy today,” said Ian Conner, Deputy Director of the FTC’s Bureau of Competition.

The Commission also authorized FTC staff to seek a temporary restraining order and a preliminary injunction in federal court, if necessary, to prevent the parties from consummating the merger, and to maintain the status quo pending the conclusion of the administrative proceeding.

The Commission votes to issue the administrative complaint and to authorize staff to seek a temporary restraining order and preliminary injunction were both 5-0.  The administrative trial is scheduled to begin on May 27, 2020.

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Treehouse Sells Snacks Division for $90million

\"\"TreeHouse Foods announced today that it has entered into a definitive agreement to sell the Company\’s Snacks Division to Atlas Holdings LLC.  Atlas owns and operates 19 manufacturing and distribution businesses, which collectively employ more than 17,000 associates at over 150 facilities worldwide.  Atlas has agreed to pay $90 million for the Division, subject to certain post-closing adjustments.  TreeHouse projected the Snacks Division to generate net sales of approximately $670 million in 2019. TreeHouse plans to use the net proceeds of the sale to pay down debt. The transaction is subject to customary closing conditions and is expected to close in the third quarter of 2019. TreeHouse plans to update its full-year guidance to reflect this transaction in its second-quarter earnings announcement.

The Snacks Division, with more than 800 employees, is one of the largest manufacturers and distributors of private label healthy snacks to premier retail customers in North America. It is a leader in the nuts and trail mix categories.  The Division operates three plants, located in Robersonville, North Carolina; El Paso, Texas; and Dothan, Alabama.  A fourth plant, in Minneapolis, Minnesota, is scheduled to close by the end of the third quarter as previously announced. The Minneapolis plant, and the manufacturing-related employees located there are not included in this transaction. Both companies are committed to a smooth transition for employees, customers, and consumers.

\”The sale of the Snacks Division is a key step in optimizing TreeHouse\’s overall product portfolio.  It is the culmination of TreeHouse\’s strategic review of its Snacks business,\” said Steve Oakland, CEO, and President of TreeHouse Foods. \”This transaction allows the Snacks Division to unlock its potential and serve its customers even better under Atlas\’ ownership. We are grateful for the hard work put forth by the Snacks team during these last several years.\”

\”This Snacks business will be a welcome addition to the Atlas family of manufacturing and distribution companies,\” said Michael Sher, Partner of Atlas Holdings.  \”Customers are consistently choosing private label brands, and this business is a premier manufacturer with unique growth potential.  We\’re excited to partner with this team to deliver the finest healthy, private label snacks in the industry.\”

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HowGood Partners With S4RB to Deliver Sustainability Data

\"\"Brooklyn based sustainable food rating company HowGood has partnered with Solutions for Retail Brands (S4RB) to bring environmental and labor risk analysis into the hands of retailers looking to avoid common ethics- and transparency-related pitfalls in their private brands. This partnership will leverage the unique HowGood approach to benchmark risk across categories, based on industry comparisons.

The solution helps to reduce risks that can lead to negative consumer feedback and damage to reputation. The technology-driven solution is able to determine which ingredients or ingredient sources are associated with areas of risks, and to continually benchmark these against industry averages.

HowGood’s data examines the sales performance of products against 127 different sustainability attributes, ranging from animal welfare risk to greenhouse gas emissions. The assessments tie into consumer trends to help retailers stay ahead of the curve in a new values-based economy.

The partnership will make HowGood’s risk analysis data available on the S4RB Affinity platform, which enables retailers to access a complete view of product performance alongside other product and supplier KPIs. As a result, retailers will now be able to easily share key sustainability insights with private brand suppliers, powering strategic decisions on sourcing and formulation.

“This approach allows private brand teams to leverage information in existing recipe or specification management systems to provide risk analysis in the key areas which matter to consumers and drive brand performance, and we are excited to add the unique HowGood technology to the scope of supplier and product KPIs available in Affinity,” explained James Butcher, CEO at S4RB.

The Connect module of Affinity provides interfaces to many common private brand PLM systems, such as Oracle ORBC, Bamboo Rose and Trace One. Affinity will now allow key product or supply attributes to be used with the HowGood industry data models to provide new insight and direct activity to both mitigate risk and to leverage brand advantage.

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“S4RB understands how to engage private brand teams and suppliers to work as one team around winning strategy for private brand, and has a proven track record to help retailers drive change across their private brand portfolio around ingredients, nutrition and responsible sourcing,” said Ethan Soloviev, EVP Research at HowGood.  “Our collaboration with S4RB will make HowGood’s extensive industry data and risk analysis models more accessible and configurable to meet specific brand objectives”.

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Petco to Streamline Private Brand Product Development with CBX Software

\"\"San Diego, CA-based pet specialty retailer Petco has selected CBX Software’s Product Lifecycle Management (PLM) solution. Petco required a solution to manage and streamline product development workflow while strengthening information sharing between internal private brand team members, external vendors, and compliance service providers. The retailer intends to deploy CBX Cloud across multiple internal teams within the U.S. and Asia, as well as to connect all product vendors worldwide.

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“We are thrilled to announce that Petco has selected CBX Cloud,” says Eric Linxwiler, Senior Vice President, of CBX Software. “We are humbled and proud to be invited on this journey with one of the world’s most well-known and respected pet specialty retailers. We look forward to partnering closely with Petco, contributing to the expansion of their private label assortments and the growth of their direct import sourcing operations for many years to come.”