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Kellogg Agrees to Purchase Controlling Shareholder of Brazil's Parati Group

By Lauren R. Hartman, Product Development Editor

Oct 17, 2016

292965KelloggLOGOKellogg Co., Battle Creek, Mich., has made its largest acquisition in Latin America. On Oct. 13, the company agreed to acquire Ritmo Investimentos, the controlling shareholder of iconic Brazilian food company Parati Group, a leading manufacturer of iconic biscuit, powdered beverage and pasta brands in Brazil. The acquisition furthers two of Kellogg's strategic priorities — becoming a global snacking powerhouse and expanding its presence in emerging markets.

Parati Group offers an array of iconic regional brands, including Parati, Pádua, Minueto, Zoo Cartoon and Hot Cracker biscuits, which make up approximately half of its business. The rest of the business comprises Trink powdered beverages, Parati Lamen instant noodles and Parati dried pasta. Parati Group net sales are expected to be approximately $190 million (U.S.) at current exchange rates.

"With its outstanding portfolio of popular consumer brands, Parati Group is an excellent strategic fit for Kellogg and our business in Latin America," said John Bryant, Kellogg's chairman and CEO. "Brazil is the largest economy in Latin America, and this acquisition will allow us to accelerate our growth and improve our margins in the region. This means more growth for the core Parati Group business and our well-loved Kellogg brands."

Parati Group has 3,200 employees, including a sales force of roughly 1,300 people serving about 60,000 customers directly. This includes a strong presence in small to medium – or high-frequency – retail stores in Brazil. The company also has five distribution centers and two production facilities with room for expansion.

"The combination of Parati's portfolio and sales and distribution capabilities with Kellogg's global resources – including innovation expertise, extensive shopper insights and customer marketing strength – provides tremendous opportunity," said Maria Fernanda Mejia, president of Kellogg Latin America.

The purchase also marks Kellogg's fourth emerging market acquisition in the last two years. In that time, it has acquired companies in each of its international regions, including Europe (Bisco Misr and Mass Food Group in Egypt) and Asia Pacific (a 50-percent stake in Multipro in Nigeria and Ghana).