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US: Whole Earth Brands plots further M&A in clean-label sweetener and baking categories

Nasdaq-listed sweetener manufacturer looks to diversify its product offering as recent acquisitions are fully integrated into the business
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Whole Earth Brands seeks to carry out more M&A

Clean-label sweetener manufacturer Whole Earth Brands is plotting a new round of M&A as it looks to delve into adjacent baking and nutrition categories, including chocolate, jam and spreads.

Speaking during the company’s Q1 earnings call on 14 May, chief executive Albert Manzone told investors that M&A remained an “important part of our growth” as Whole Earth brands intends to “increase penetration in the better-for-you sweetener and adjacent categories through organic and M&A initiatives.

“These categories include baking mixes, chocolates, bars, jams and spreads, to name a few, and represent over $30 billion in addressable market with a projected 8% CAGR in the coming years,” Manzone told investors.

The Nasdaq-listed company went public via a special purpose acquisition company in June 2020 as it sought to accelerate growth and fund M&A.

In November last year Whole Earth Brands acquired competing plant-based sweetener manufacturer Swerve for $80 million in cash.

The company went on to purchase Wholesome Sweeteners for $180 million in cash in February via a deal that granted Whole Earth Brands a 76% market share of the organic sugar segment of the organic and natural channel.

Both acquisitions were completed and fully integrated into the business in the first quarter this year.

“Our ability to complete the integrations of Swerve and Wholesome at a fast pace is evidence of the M&A being a core competency of Whole Earth Brands,” Manzone said.

“Still, what excites me the most is the durable nature of the wellness opportunities we’re solving.

“What we’re experiencing is more than a positive trend, it is a lifestyle shift where food plays a central role in our health and wellness goals, helps manage various health problems, provides a range of lifestyle choices including keto, gluten-free, low calorie, low-carb or vegan to name a few,” he added.

Whole Earth Brands reiterated its full-year 2021 consolidated product revenue forecast of $493m to $505m, reflecting year-on-year growth of more than 78%.

The brand closed the quarter with $27.8 million in cash and cash equivalents on its balance sheet, as well as $389 million in debt net of issuance costs.

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