Smucker’s adds two leading Hispanic coffee brands to portfolio
Steve’s breakdown: To quote a Smucker’s VP “These brands are particularly strong in Florida and New York and we expect to grow these brands both within and beyond these regions by expanding distribution and marketing.” What else do you need to hear? Make the call.
We reported on big changes at Smucker’s in March including the hiring of their new President, U.S. Retail Coffee.
ORRVILLE, OH: The J.M. Smucker Co. acquired the coffee brands and business operations of Rowland Coffee Roasters headquartered in Miami for $360 million.
Rowland, a privately-held company, has the leading Hispanic coffee brands, Cafe Bustelo and Cafe Pilon, with distribution in retail and food service channels concentrated in southern Florida and the northeastern U.S. Rowland is a leading producer of espresso coffee in the U.S., generating net sales in excess of $110 million last year. The acquisition includes a manufacturing, distribution and office facility in Miami.
According to Richard Smucker, executive chairman and co-chief executive officer, the acquisition, announced Monday, “strengthens and broadens the breadth of our leadership in the U.S. retail coffee category. The addition of the Cafe Bustelo and Cafe Pilon coffee brands, each with a rich heritage, provides us with a unique opportunity to establish a strong presence in coffee with Hispanic consumers in the U.S.”
Vince Byrd, president and chief operating officer, called the acquisition “an exciting bolt-on transaction and a good strategic fit for our company,” providing Smucker’s coffee business with “greater scale and reach. Our proven ability to leverage our existing infrastructure will provide additional growth opportunities for these trusted brands.”
According to Maribeth Badertscher, vice president of corporate communications, the acquisition “fits well with our strategy to and market leading brands in their respective categories. These brands are particularly strong in Florida and New York and we expect to grow these brands both within and beyond these regions by expanding distribution and marketing.”
Badertscher said the company intends to leverage its existing coffee infrastructure to expand distribution and marketing support for the acquired brands. Manufacturing operations will be rolled into Smucker’s coffee facilities in New Orleans within about three years as a money-saving measure.
Badertscher said, “There are currently roughly 200 employees throughout the Rowland Coffee operations. We expect to consolidate manufacturing operations into our existing coffee manufacturing facilities in New Orleans, La., in approximately three years.” She said there are about 55 employees at the manufacturing facility.
Badertscher said other functions, such as marketing, distribution facilities beyond Miami, international and U.S. retail sales will “eventually be folded into other Smucker’s functions.”
She said, “Employees who will ultimately be impacted by the integration will be treated in accordance to our ‘basic beliefs’ and will be provided severance, out-placement services and additional retraining support.”
A percentage of Smucker’s top-line growth, said Badertscher, “is expected to come from acquisitions, so we continue to look for opportunities to add to our portfolio of brands.”