WhiteWave Foods to buy SO Delicious Dairy Free in $195m deal to expand its plant-based foods empire

17-Sep-2014 - Last updated on 18-Sep-2014 at 18:51 GMT

So Delicious Dairy Free has notched up a compound annual growth rate of 30%+ over the past five years

UPDATED: WhiteWave Foods has struck a deal to buy SO Delicious Dairy Free for $195m in cash in a bid to expand its presence in the fast-growing plant-based foods category.

Best known for its non-GMO Project verified plant-based beverages, creamers, cultured products and frozen desserts, Oregon-based So Delicious generated net sales of $115m in the year ended June 30, 2014.

“The acquisition of SO Delicious represents a great addition to the WhiteWave portfolio and fits squarely within our strategy of driving growth in our core businesses,” said WhiteWave chairman and CEO Gregg Engles.

“SO Delicious is also recognized as the #1 plant-based frozen dessert brand in the United States, and it will provide WhiteWave entry into the growing, plant-based frozen dessert category.

“[The deal] builds on our platform of Silk and Alpro branded products by expanding plant-based capabilities and providing new category opportunities.

Furthermore, in addition to compelling growth and product expansion potential, the extension of the SO Delicious business across WhiteWave’s existing business platform, capabilities and infrastructure, is also expected to provide significant cost saving opportunities.”

What happens next?

Asked about its plans for SO Delicious, a WhiteWave Foods spokeswoman told FoodNavigator-USA: "Once the deal closes, we will want to get to know So Delicious’ people, business, brand and culture before we make any assumptions or plans for the future. It is too early to discuss specifics regarding locations, facilities and staffing. We are still operating as two separate businesses and have not finalized any plans, but we can tell you that So Delicious will remain its own brand, one that WhiteWave intends to grow and expand."

But will CEO Chuck Marcy and the SO Delicious senior management team stay on post the acquisition?

Said the spokeswoman: "Again, it is too early to discuss specifics."

From an operational perspective, she said: "We have not even begun to determine what the combined companies will look like from a production standpoint."

Silk almond milk range — Speaking on WhiteWave's second quarter earnings call, CEO Gregg Engles said: “Almond now represents almost 70% of the total plant-based beverage category and Silk almond milk continues to be a key driver of this growth as our sales grew by 45% in Q2 off an already sizeable base."

Rapid growth

SO Delicious Dairy Free has notched up a compound annual growth rate of 30%+ over the past five years, and the brand is now worth close to $200m at retail.

So Delicious non gmo — While multiple players in the dairy-alternatives space are enjoying strong growth in almond and coconut-based products right now, So Delicious has always occupied a unique place in the market with strong connections with consumers via social media and its focus on organic and non-GMO, says SO Delicious

VP marketing and R&D Mike Murray told FoodNavigator-USA in a recent interview that the brand is now in multiple categories from beverages to non-dairy creamers, frozen desserts, cultured products (yogurt-type products), and culinary products (coconut milk for cooking).

It has also experimented with new plant-based products such as cashew milk, which is generating positive feedback in the natural retail channel, but has yet to hit mainstream grocery stores, he said.

“We’ve been around for 25 years focusing exclusively on dairy-free. But in the past five or six years, we’ve seen phenomenal growth. Gluten-free is what everyone talks about, but it’s our belief that dairy free is one of, if not the biggest growth opportunity in food right now.”

WhiteWave Foods - which sells plant-based products under the Silk brand in the US and the Alpro and Provamel brands in Europe - also makes products under the Horizon Organic, TruMoo, Land O Lakes and Earthbound Farm brands. Net sales for the quarter ended June 30 were up 36% to $838m. Operating income rose 53% to $88m.

The deal is expected to close in the next few months.

More to follow...