Hearthside Food Solutions (www.hearthsidefoods.com), a Downers Grove, Ill.-based private label baker and holding company, on Aug. 25 announced two definitive agreements that will enable the company to expand in fast-growing bar categories in the Americas and Europe.
Under one agreement, Hearthside is acquiring a nutritional supplement bar production facility in Boise, Idaho, from a subsidiary of Post Holdings Inc. In the other deal, Hearthside is acquiring VSI, the largest European producer of nutrition, diet and functional bars.
These two transactions will enable the rapid scaling of VSI’s formulations, R&D, product development and full-scale production in the Americas, the company said. Terms were not disclosed. Both transactions are expected to close in September.
“This is both a category and geographic expansion, putting Hearthside into the three fastest-growing bar categories as well as in the European market, where VSI is a leader,” said Rich Scalise, Hearthside's founder and chairman. “The R&D and production expertise of VSI in the fast-growth categories of nutrition, diet and functional bars enables Hearthside to take a quantum leap forward, providing our customers with the most complete offerings in the industry.”
The acquisition of a recently idled nutritional supplement bar production facility in Boise, Idaho, enables Hearthside to begin production of these new categories in the Americas quickly. This facility, plus the three VSI operations, expands Hearthside’s network to 23 facilities.
“It takes two years from greenfield to operational bar plant,” said Dwayne Hughes, Hearthside's senior vice president of supply chain. “We wanted VSI capacity in the North American mix more quickly. This facility is ready to go today. The timing, the location, and the state-of-the-art equipment provide a perfect solution that makes us competitive in more bar categories immediately.”
Both Hearthside and VSI are contract manufacturers for premier food companies and global brands. The companies see no redundancies or conflicts in complementary customers and product offerings.
In 2014, Hearthside was acquired by the Merchant Banking Division of Goldman Sachs and Vestar Capital Partners.
U.S. bar growth predictions from market research firm Mintel Group show continued category strength driven by convenience, snacking occasions and meal replacement trends, Hearthside noted. The strongest growth is in health-related bar categories, including sports, functional, diet and nutrition.