A Peak Rock Capital portfolio company has acquired a rival in an attempt to consolidate its position within a natural sweeteners industry being shaped by growing health-consciousness and consumer demand for non-caloric sugar alternatives.
Natural American Foods announced Wednesday that it has acquired Sweet Harvest Foods Company for an undisclosed sum.
Sweet Harvest is a family-owned Minnesota supplier of honey, peanut butter and syrups and was founded in 1923. Its honey is marketed under the MEL-O brand and its peanut butters are sold under the PB Crave brand.
Peak Rock acquired Natural American Foods, one of the largest US processors of pure all natural honey, in 2014, and executives at the time labeled the company a promising platform for future acquisitions. Based in Michigan, Natural American focuses on minimizing processing and improving supply chain traceability, according to its website.
“The acquisition of Sweet Harvest is a great example of the kind of strategic transaction that Natural American Foods continues to seek in the natural sweetener industry,” Peak Rock managing director Robert Strauss said in a statement.
The natural sweeteners market in which honey currently competes with sugar alternatives – such as those derived from stevia and monk fruit – has undergone a significant change in recent years. According to a recent report by Global Market Insights, demand for non-caloric sweeteners is likely to grow by more than 5 percent annually through 2023.
“Shift in consumer preference towards adopting food and beverages based on natural ingredients are likely to favor market growth. In 2013, approximately 20 percent of newly-launched non-caloric soft drinks in the market were based on natural sweeteners and this share is likely to witness significant gains during the forecast period,” analysts wrote in the report, which noted that Coca-Cola and PepsiCo have announced plans for soft drinks containing stevia leaf extract.
Peak Rock is a mid-market focused private equity firm pursuing equity and debt investments in North America and Europe. Headquartered in Austin, Texas, the firm also maintains an office in Brussels, Belgium.
In addition to Natural American, Peak Rock’s other food-related investments include Savannah, Georgia-based food-service food and beverage supplier Diamond Crystal and Chicago-based Berner Food and Beverage, which sells private label cheese dips, salsa con queso, alfredo sauce, aerosol cheese products, coffee and protein based beverages.
In the fall of 2013, the firm closed its inaugural fund on $700 million, exceeding its initial target of $400 million with investments from public and private pensions, foundations, sovereign wealth funds and other institutional investors.