McCormick acquires flavor manufacturer FONA International
Founded more than 30 years ago and headquartered in Geneva, Illinois, FONA’s expected 2020 annual sales are approximately $114m and are projected to grow at mid- to high-single digits in 2021, according to McCormick. McCormick also expects the transaction to be neutral to adjusted earnings per share in 2021 and accretive in 2022, excluding transaction and integration costs.
“FONA's portfolio is highly complementary to McCormick's and will provide our customers with an even more comprehensive product offering to meet the growing demand for clean and flavorful eating, drinking and nutrition experiences,” stated Kurzius.
"FONA will be the cornerstone for accelerating McCormick's flavor platform in the Americas."
The acquisition also bolsters McCormick’s leadership position in clean label, organic, natural extracts and better-for- you solutions as roughly 75% of FONA’s flavor portfolio is natural.
McCormick shifts focus to health & wellness categories
Over the past several years, McCormick has expanded beyond its portfolio of well-known dry seasonings and into other high-growth flavorful eating categories such as hot sauce with the acquisition of Frank’s RedHot hot and spicy sauces (which it purchased from in 2017 from Reckitt Benckiser’s Food Division along with French’s and other brands for $4.2bn), and in 2020, the purchase of Cholula hot sauce for $800m.
With the acquisition of FONA, the company is now eyeing more of the performance nutrition and health and wellness product categories – a new market for McCormick, noted Kurzius.
McCormick said it is augmenting its capabilities with FONA's established research and development team and extending its technology platform with additional proprietary encapsulation and modification methods. The added technical expertise will assist McCormick in the flavoring of health and performance nutrition products across a variety of applications and advance McCormick's health and wellness portfolio.
According to McCormick, FONA will increase the “depth and breadth” of its value-added, better-for-you product applications across several categories including dairy, snacks, savory, bakery/confectionery, beverage (e.g. performance nutrition dairy and non-dairy alternatives), and health and wellness (e.g. allergy, antacid & pain relief, chews/liquid, gummy vitamins & cough drops).
“By combining the portfolios and infrastructures, McCormick adds manufacturing capacity as well as greater scale and expects to accelerate its global flavor growth,” said the company.
"We are excited to see the next generation of FONA flourish as part of McCormick. We are confident McCormick will further enable FONA's forward momentum by continuing to make investments in growth initiatives, capabilities and people. Fueled by the power of McCormick, FONA's success will be accelerated. FONA, in turn, will be a key driver in advancing McCormick's global flavor leadership," added Joseph Slawek, founder, CEO & chairman of FONA International.
