Private equity firm, Grey Mountain Partners has acquired Illinois-based Mediterranean food manufacturer and distributor, Kronos Foods, through its third fund for an undisclosed amount.

Founded in 1975 by Greek immigrant, Chris Tomaras, Kronos has grown over the years to become one of the largest Mediterranean food companies in the U.S. with sales of nearly $130 million per year.

The company, which was sold to Grey Mountain by Chicago-based Prospect Partner, makes gyro meat, pita, yogurt, baklava, hummus, and other Mediterranean-focused foods that are primarily sold to food service customers.

“We are delighted to partner with Grey Mountain in the next stage of our growth,” said Howard Eirinberg, CEO of Kronos. “Grey Mountain shares our excitement for the Mediterranean food space. We look forward to their support as we execute on an array of growth opportunities that are driven by innovative, market-leading new products.”

Grey Mountain currently has $700 million of assets and is investing through its third fund which was raised in 2013. This move by the firm, which invests in a range of companies in the small end of the middle market, is indicative of the recent push into ethnic foods by private equity.

Food Processing reports that 88 percent of Americans eat at least one ethnic food per month, while 17 percent eat ethnic food at least seven or more times per month. In addition, almost one-third of all U.S. consumers have eaten an ethnic food that was new to them over the past year, according to data from the National Restaurant Association.

Driven by population growth, demographic shifts, and a broadening of consumer tastes, sales of ethnic foods in the U.S. reached $11 billion in 2013 and are on pace to reach a value of $12.5 billion by 2018, according to Statista.

“…consumers’ appetite for specialty and ethnic foods continues to grow,” said Brian P. O’Connor, managing director of Vestar Capital Partners. “Demographic trends also support a bright outlook for specialty foods. Specialty foods are on trend in a big way.”

Indeed, this deal for Kronos is the third ethnic food acquisition reported on by GAI News within a week following ConAgra’s acquisition of specialty Mexican packaged food business, Frontera Foods which includes Red Food LLC, and the Frontera, Red Fork, and Salpica brands for an undisclosed amount, and US Foods’ acquisition of Italian food manufacturer and distributor, Jeraci Foods.

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Lynda Kiernan