September 30, 2021

By Lynda Kiernan-Stone, Global AgInvesting Media

Two large-scale deals were announced in the flavors segment this month, with Thai Union Group and the Netherlands’ Royal DSM making moves to gain a share of this high-potential business. 

Thai Union Invests $90M in R&B Food Supply

Thai Union Group announced it has made a strategic investment in R&B Food Supply PCL (RBF)  – the leading food ingredients company specializing in flavors, colors, and coatings – investing THB 3 billion (US$89.9 million) for a 10 percent stake in the company. 

Thai Union and R&B are not unacquainted. This deal follows a multi-year relationship between the two through which RBF has been a supplier of high-quality ingredients for Thai Union products.

Through this deal, Thai Union is tapping into the increased sophistication of ASEAN consumers as it accelerates its growth opportunities in the adjacent food ingredients industry. Noting that RBF’s innovative natural flavors and hemp extracts have the potential to enhance both Thai Union’s existing core offerings and newer alternative protein and pet care products. 

“One of Thai Union’s strategic priorities is to expand our portfolio into new, growing and higher margin areas, and this investment is fully aligned with that,” said Thiraphong Chansiri, CEO, Thai Union. “For over three decades, RBF has stood out as a leading ingredients supplier to the food and beverage industry in Thailand, and we are excited to be a part of their journey.”

For RBF, the ability to integrate into Thai Union’s supply chain and to leverage its global footprint for its own global expansion is very valuable. Together, both companies can leverage their respective capabilities to generate value for not only their customers, but their stakeholders as well.

“We believe that this partnership will leverage and strengthen both companies’ competitive advantages,” said Somchai Ratanapoompinyo, CEO, RBF. “RBF’s expertise and extensive experience of over 35 years in the food ingredients business will enhance Thai Union’s product offerings. In return, Thai Union’s global presence and reputation as a global player will help unlock RBF’s potential and accelerate our transition seamlessly from a regional player to become a global player in the food ingredients business.”

Chansiri added, “We look forward to working closely with the RBF team to unlock growth as, together, we continue to provide consumers with nutritious, tasty and innovative products across the globe.”

Royal DSM to Acquire First Choice Ingredients for $453M

Royal DSM, a global science-based company focusing on the three pillars of Nutrition, Health, and Sustainability, announced that it has agreed to acquire U.S.-based First Choice Ingredients, a top supplier of dairy-based, savory flavorings for $453 million. 

Headquartered in Germantown, Wisconsin, with three local manufacturing facilities, First Choice Ingredients has over the years established a lead position in the U.S. taste market, developing clean label, fermented dairy and dairy-based savory flavorings for functional solutions across a range of applications.

Leveraging its R&D and application expertise, First Choice ferments and blends natural dairy products with cultures and enzymes to create clean label solutions integrating sensory and functional benefits, and works as an innovation partner with food companies, flavor houses, and food service suppliers in the production of soups, snacks, salad dressings, sauces, prepared meals, sweet baked goods, dairy products, plant-based meats, and dairy alternatives.

Royal DSM dominates global solutions for the food and beverage industries – particularly in nutritional ingredients such as vitamins, lipids, and premixes – and controls a vast portfolio of specialty ingredients such as enzymes, yeast extracts, cultures, texturing agents, and flavors.

By way of this deal, First Choice will be able to access not onlyRoyal DSM’s extensive portfolio, but will be able to achieve scale and seize value in untapped market segments through the inclusion of its products in DSM’s offerings.

“We look forward to welcoming the First Choice Ingredients people to DSM,” said Geraldine Matchett and Dimitri de Vreeze, co-CEOs, Royal DSM. “Our companies are a great fit, with a shared passion for science-based solutions for delicious, nutritious, and sustainable food and beverage products. This acquisition is an attractive next step for DSM as we continue to build our health, nutrition, and biosciences capabilities.”

Patrick Niels, president, DSM Food Specialties, added, “We are very pleased with the addition of First Choice Ingredients and its skilled workforce to our business. It will enable us to extend our integrated solutions offering in food and beverage, and provide our customers with innovative taste solutions for the new and improved end-products today’s discerning consumers continually demand.”

Jim Pekar, president, First Choice Ingredients, noted that now is the point in First Choice’s journey to become part of DSM, noting, “This will enable us to accelerate our growth by adding our taste solutions to DSM’s broad portfolio of global products and integrated offerings to meet the needs of our customers and create new opportunities. This combination will allow access to DSM’S powerful toolbox of fermentation technology.”

– Lynda Kiernan-Stone 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-stone@globalaginvesting.com.