April 8, 2021

By Lynda Kiernan, Global AgInvesting Media

Blue Road Capital has acquired Natural American Foods (Sweet Harvest), a Minnesota-based natural sweeteners platform and one of the largest honey processors in North America, from an affiliate of Peak Rock Capital. 

Based in Cannon Falls, Sweet Harvest operates three BRC AA rated facilities in Minnesota, California, and Michigan, working within a direct-sourcing model, which enables it to maintain levels of traceability, safety, and quality standards that its retail, distributor, and consumer packaged goods customers look for.

Led by John Duryea, Blue Road focuses on making control investments in North American companies primarily in agriculture, the food supply chain, and their related industries, with equity investment per transaction totaling $75 million, or greater.

Together, Blue Road’s partners, who have worked together for more than 13 years and have more than 70 years of experience in investing in private equity in these sectors, have raised and invested over $2.5  billion in equity.

“We’re excited to join the Blue Road portfolio of companies,” said Ken Stickevers, CEO, Sweet Harvest. “Blue Road has deep expertise in natural foods and agricultural markets, and we are looking forward to collaborating with their team to drive growth and innovation in the natural sweeteners category.”

Sweet Success

With growing focus by consumers on their physical and mental wellbeing, and the intersecting role food can play in their overall health, the natural food segment held the largest share of the market with more than 36 percent in 2017. Taking a forward view, between 2018 and 2022, the global health and wellness food market is expected to continue to grow, seeing a CAGR of approximately 6 percent, according to Technavio.

Within this shift, consumers have turned their attention to sugar, which 33 percent of Americans identify as likely being the main cause of weight gain and behind a range of health issues including diabetes, cancer, and heart disease, according to IFIC data.

And as obesity becomes a serious global issue, professionals in the healthcare field, as well as policy makers and consumer advocates, are scrutinizing sugar content in foods and beverages more and more.

These factors, together with issues connected with some non-nutritive artificial sweeteners, drove the global natural sweeteners market to a value of $2.8 billion last year, according to Markets and Markets, which forecasts a CAGR of 6.1 percent for the category, with market value expectations of $3.8 billion by 2025. 

However, it’s honey – an ancient clean and natural ingredient including vitamins, minerals, and calcium, with a reputation for benefiting cholesterol levels, blood pressure, metabolic activity, and being used as an antimicrobial and anti-fungal agent – that has possibly benefited most from health-conscious consumers turning on sugar.

Last year, the global honey market was valued at $9.21 billion, with an expected CAGR of 8.2 percent, according to Grand View Research, while Statista concluded that the global honey market will be worth more than $11 billion by 2027. 

John Duryea, founding partner of Blue Road, stated that within this massive market, the firm anticipates partnering with Sweet Harvest in its growth objectives and in add-on opportunities.

“Sweet Harvest represents an exciting opportunity to invest in a category leader within the attractive honey and natural sweeteners industry,” said Duryea. “We are incredibly impressed with the Company’s production expertise and its ability to deliver highly tailored product solutions to customers through a complex global supply chain.”

“We look forward to partnering with Sweet Harvest’s management team to pursue growth and add-on opportunities in a large addressable market. This transaction further exemplifies Blue Road’s interest in natural food and ingredient companies.”

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan@globalaginvesting.com.