Dairy giant invests C$187m in strategic M&A, including a value-added ingredients manufacturer’s speciality protein facility
Dairy giant Saputo has acquired the dairy-alternative manufacturer of vegan cheese brand Sheese, Bute Island Foods, as part of a C$187m (£109.5m) investment into strategic M&A.
Saputo CEO Lino Saputo said the acquisition marked an important milestone that allowed the company to expand its footprint in the dairy alternatives space and meet the changing demands of its customers.
As part of the deal, Saputo pledged to invest C$5m (£2.9m) over five years to support local Bute Island community initiatives.
Bute Island Foods is located on the Isle of Bute, off the West Coast of Scotland, and employs approximately 180 people.
Saputo also entered into a second deal to acquire the Reedsburg facility of Wisconsin Specialty Protein, a value-added ingredients manufacturer which produces goat whey, organic lactose and other dairy powders.
The transaction is expected to close at the end of May and will enable the wider group to increase the value of its ingredients offering.
Daring dairy-alternative ambitions
On the group’s dairy-alternative cheese ambitions, Saputo president and COO Kai Brockmann told analysts and investors during its fiscal Q3 earnings call in February the company was trialling a new product produced at its UK innovation centre.
“We strongly believe that we are in a great position to establish a first-mover advantage to roll out a product that performs well on a pizza, one that could serve as a substitute for cheese made from dairy for those consumers that prefer a non-dairy alternative,” Brockmann said.
“The category today is very, very small, but the potential we feel is tremendous [and] although we are playing in the plant-based beverage space, that part of the business has become saturated with a large number of players and brands and looks to become largely commoditized.
“Non-dairy cheese on the other hand has relatively few players and is a space we feel we can be successful in,” Brockmann added.
Saputo is also on-course to complete the development of a large-scale fluid and future plant-based facility by the end of next summer.
Date published: 28 May 2021