Italian coffee giant Lavazza announced it has acquired an 80 percent stake in Kicking Horse Coffee, Canada’s top producer of organic and fair trade coffee, from private equity firm Swander Pace in a deal that values Kicking Horse at C$215 million (US$160 million). Kicking Horse Founder Elana Rosenfeld will retain the remaining 20 percent stake in the company and will continue in her role as CEO.
Swander Pace has held the investment since 2012 when it acquired the stake in partnership with Jefferson Capital and United Natural Foods. Since that time, Kicking Horse has seen notable double digit growth in both the Canadian and U.S. markets.
Antonio Baravalle, CEO of the Lavazza Group, said, “Kicking Horse represents one of those local jewels that the Lavazza Group continues to seek in its strategy of globalisation [sic] and premium positioning. Today, organic fair-trade coffee is one of the fastest-growing trends at the international level, and in North America in particular. Kicking Horse Coffee leads this segment with a brand that is perfectly complementary to the Lavazza portfolio.”
Although Italy-based Lavazza is a major global player in the coffee space with a presence in more than 90 countries and turnover in excess of €1.9 billion (US$2.1 billion) this acquisition of Kicking Horse will expand the company into its key targeted regions of both the U.S. and Canada, while also broadening its exposure to the dynamic organic and fair trade segment of the industry.
Between 2013 and 2015 the coffee industry saw a slowing of deal activity, with only three sponsor-backed deals with a value of $160 million occurring in 2015. However, JAB Holdings, the investment arm of Germany’s Riemann family kept up a constant pace of deals.
In July 2015 the group announced a deal for the purchase of the Danish coffee-bar chain, Baresso Coffee A/S, after acquiring Berkeley, California-based Coffee roaster Peet’s Coffee & Tea Inc. in 2012, and D.E. Master Blenders 1753 BV in 2013.
Other recent developments include Mondelez International Inc. combining its coffee business with D.E. Master Blenders in July 2015 to form the pure-play coffee joint venture company Jacobs Douwe Egberts, with €5 billion in annual revenue.
In July 2016, Coca-Cola announced that it was entering the coffee sector in Brazil – a move that will not only expand its non-carbonated portfolio and expand its presence in Latin America, but also will give the company a foothold in the growing breakfast category.
CAVU Venture Partners led a $4 million Series A-2 for Austin-based High Brew Coffee in August 2016, before the company went on to close a $17 million Series B led by Boulder Investment Group Reprise (BIGR) at the end of May of this year.
Meanwhile at the same time as High Brew Coffee was closing its Series B, CAVU Venture Partners led a Series B in excess of $19 million for Bulletproof 360 – a maker of high-performance foods and beverages whose cornerstone product is Bulletproof Coffee – a mix of single-origin Rainforest Alliance Certified black coffee with grass-fed butter.
Looking ahead, Lavazza intends to continue to develop its strategy in the North American market through increasing the “brand equity” of Kicking Horse while “sharing key respective competencies and values,” according to the company.
“Kicking Horse Coffee has always distinguished itself for its unrelenting commitment to quality coffee, along with strong sustainability values,” said Rosenfeld. “The Lavazza Group shares this vision and we now have the perfect partner to assist us in growing and connecting the world with our coffee. I am thrilled and honored we now share this beautiful adventure with the Lavazza Group.”
-Lynda Kiernan
Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com
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