September 23, 2024

By Gerelyn Terzo, Global AgInvesting Media

Private equity firm Manna Tree has commenced a Latin American expansion push by striking a strategic partnership with Grupo Herdez, a leading food company in Mexico. The companies are interested in scaling health and wellness-based brands along the food value chain. Overseeing more than $600 million in AUM, Manna Tree specializes in global nutrition and wellness, a $1.8 trillion global market opportunity being fueled largely by the U.S. and Mexico markets. The collaboration is considered a harbinger of more dealflow for the PE firm in Latin American markets as Manna Tree makes its debut in the region.

Ross Iverson, co-founder and managing partner at Manna Tree, told GAI News, “This partnership indeed represents a new expansion push for Manna Tree in Mexico. In general, Mexico and South America are attractive markets due to their growing consumer interest in health and wellness. The timing aligns with our strategic growth plans and the increasing global focus on innovative food systems. We see ample opportunity in making healthier options more widely available across North America, and at Manna Tree we’re focused on helping build that ecosystem.”

Nevertheless, the PE industry’s dry capital remains elevated, hovering at a record $2.62 trillion, per S&P Global Market Intelligence. Manna Tree’s Iverson shared what sets the firm apart, saying,

“At Manna Tree, we believe we differentiate ourselves through our sector-focused approach, deep operating expertise, and commitment to driving financial returns. We see tremendous opportunity in the growing consumer demand for products and services that contribute to better, longer lives.”

With over a century of operating history under its belt, Grupo Herdez is far from being a new kid on the block, overseeing U.S. brands such as Chi-Chi’s, Wholly Guacamole and its flagship Herdez products, among others. Manna Tree is looking to harness the company’s extensive industry expertise and distribution network, including an established U.S. presence, for its current lineup of portfolio companies.

“This partnership has the potential to enhance our portfolio companies’ market expansion capabilities and operational efficiencies. The insights gained from collaborating with an established player like Grupo Herdez will be valuable in navigating the complexities of scaling health-focused brands globally, not just in the U.S.,” Iverson explained.

Manna Tree points to several benefits of the deal, not least a cultural fusion of Herdez’s Mexican culinary heritage with Manna Tree’s emphasis on health and wellness, paving the way for innovative products that reflect a blending of these areas of focus. Additionally, Grupo Herdez’s brands can be found in nearly all Mexican households while its presence is apparent in the U.S. market through MegaMex Foods.

The value of U.S. agricultural imports from Mexico hovered at $8 billion in early Q1 2024, fueled by chocolate, coffee, mango, cattle and more, while comprising nearly 90 percent of the Latin American nation’s export marketplace. Canada and China round out the top three countries for Mexico’s ag exports.

Grupo Herdez CFO Gerardo Canavati Miguel stated, “Together with Manna Tree, we can drive innovation and uncover new opportunities in the food industry.”

Manna Tree, whose recent investments include a majority stake in organic, grass-fed beef company Verde Farms alongside other portfolio companies such as good culture, The New Primal and TruFoodMfg, recognizes a global opportunity in health and wellness. In its latest white paper, the PE firm cited McKinsey data revealing that the the women’s health segment, in particular, could become a trillion-dollar opportunity by 2040, as evidenced by a 1,000 percent increase in the number of businesses dedicated to women’s health over the past decade.

Also included in Manna Tree’s current portfolio investments is Health Ade Kombucha, which recently received a ringing endorsement from Ryan Seacrest, host of famous TV gameshow Wheel of Fortune. Seacrest demonstrated his support of the brand with a bottle of his favorite kombucha in hand.

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