Freedom Foods Group has completed the acquisition of Popina Foods, a major Australian manufacturer of oat-based cereals and snacks.
Popina Foods is a recognised leader in cluster format cereal and snacks in Australasia, with manufacturing operations based in Dandenong, Victoria. The acquisition will allow Freedom to have dual manufacturing capability in both allergen free and nut based capabilities and integration opportunities across its milling and ingredients operations.
The purchase price for Popina Foods was approximately $AUD35 million. The acquisition is expected to be accretive to earnings in its first full year of operations and is expected to provide operational efficiencies in the medium term.
Existing oat based manufacturing capabilities at Popina are at capacity, reflecting increased market demand for cluster format cereal and snacks in Australasia and recognition of Popina as a leading manufacturer in this area.
To provide additional capacity to meet the growing demands of existing Popina customers and its branded portfolio as well as capability to grow into China and SE Asia, Freedom Foods has committed to a significant expansion of cereal oven capabilities at Popina’s facility in Dandenong, Victoria.
Freedom Foods is also reviewing options to fast track volume, format and efficiency opportunities across its combined snacking capabilities.
The market for oat based cereal products including cluster and premium muesli porridge formats is expected to grow at a fast pace, driven by demand for better quality oats in existing consumption formats and also changing consumption patterns.
The demand for high quality Australian origin oats will also be further developed by consumers accessing product through China’s cross border free trade zones and the China Australia Free Trade Agreement that will reduce tariffs on oat based products over the next five years.
With the newly acquired Popina product range and capabilities, Freedom Foods has fast tracked the launch into China of Freedom Foods “Arnolds Farm” cluster and muesli products to coincide with the upcoming 12/12 and Chinese New year promotional periods.