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Kraft Heinz (KHC) Buys 85% Stake in Just Spices to Boost Growth

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The Kraft Heinz Company (KHC - Free Report) is committed to accelerating its international growth strategy, which focuses on the Taste Elevation platform. In this regard, the company concluded the previously-announced acquisition (On Dec 10, 2021) of 85% stake in Germany-based Just Spices GmbH (“Just Spices”).The other 15% stake will be retained by Just Spices’ founders.

Just Spices — an innovative start-up — is pioneering growth across the taste elevation category with yearly sales of almost €60 million. It boasts a solid product portfolio, including spice blends, salad dressings and organic offerings, among others. Kraft Heinz expects to leverage its scale and agility to accelerate Just Spices’ growth across the rapidly-growing taste elevation market beyond its German base and latest market entries in Spain, Austria and Switzerland. The buyout will enhance Kraft Heinz’s direct-to-consumer operations and go-to-market expansion. The combination of Just Spices’ innovation and brand power with Kraft Heinz’s team and scale bodes well.

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Shares of the Zacks Rank #3 (Hold) company have increased 13.6% in the past year compared with the industry’s growth of 6.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

What Else Should You Know?

Kraft Heinz has been committed to its goal of becoming one of the best players across the taste elevation category worldwide. Management acquired sauces-focused business — Assan Foods — from privately-held Turkish conglomerate Kibar Holding in October 2021. Through this buyout, the company expects to accelerate its retail and foodservice growth across Europe, the Middle East and Africa. In September 2021, the company signed an agreement to buy the Brazil-based condiments and sauces company — Companhia Hemmer Indústria e Comércio ("Hemmer"). The move will widen consumers’ taste options in Brazil and diversify Kraft Heinz’s product portfolio. The buyout will further accelerate growth in the company’s condiments and sauces category. Further, the company made investments in BR Spices in Brazil in the past year.

Several other companies in the food space like Post Holdings, Inc. (POST - Free Report) , Hormel Foods Corporation (HRL - Free Report) and McCormick & Company, Incorporated (MKC - Free Report) are benefiting from acquisitions.

In fourth-quarter fiscal 2021, Post Holdings’ top line included $99.8 million in net sales from the acquisitions made in fiscal 2021. The buyouts include Private label ready-to-eat cereal business Egg Beaters liquid egg brand, Almark Foods business and related assets and Peter Pan nut butter brand.

Hormel Foods is strengthening its business through strategic acquisitions. In June 2021, HRL acquired the Planters snacking portfolio. Prior to this, the company acquired Texas-based pit-smoked meats company Sadler’s Smokehouse in March 2020. The buyout is in sync with Hormel Foods’ initiatives to strengthen its position in the foodservice space.

McCormick strategically increased its presence through acquisitions, which have been strengthening its portfolio. In December 2020, McCormick bought a 100% stake in FONA International, LLC and some of its affiliates. FONA’s diverse portfolio helps McCormick bolster its value-add offerings and expand the flavor solutions segment into attractive categories. In November 2020, McCormick acquired the parent company of Cholula Hot Sauce — a premium Mexico-based hot sauce brand.