Bounty Brands makes its first international acquisition and also enters the local food industry
Consumer brands business Bounty Brands has made its first international acquisition, buying Sonko, a leading producer of rice, groats and dry bread products in Poland.
According to Stefan Rabe, Bounty’s CEO, Sonko has a dominant market position in Poland. “Sonko is a fantastic business with a 20-year track record. Not only is it the market leader in rice, rice cakes and crisp bread, but it is also making a name for itself in the fast-growing Healthy Snacks category.”
Sonko produces under the Sonko, Risana, Albaris and PopCool brands, but also does some private label business with major Polish retailers. Its products are exported to 22 countries throughout the world, including South Africa, where Sonko rice cakes and crisp breads are sold through leading retailers. “Sonko has focused on becoming the market leader in Poland, but having achieved this, it is well positioned to grow its exports significantly,” adds Rabe.
Rabe says Bounty is upbeat about investing in Poland. “We are certainly not the first local business to invest there. In fact, Poland has been somewhat of a success story for South African businesses. It is well situated geographically and presents the right combination of opportunity and infrastructure.” Coast2Coast and Bounty Brands will now set up an office in Europe to pursue complementary acquisitions.
Bounty’s international expansion is part of a well-defined strategy to diversify its earnings. While the focus on growth in South Africa remains, Bounty and Coast2Coast Investments have teams active in selected international markets, searching for opportunities. “We look for profitable and defensible businesses, with a long track record of selling trusted brands. In Sonko we have found a business that ticks all the boxes. The fact that it is in Europe is an added bonus,” adds Rabe.
Sonko is not the only food company to be added to the Bounty portfolio. The company has also acquired its first South African food business, Liberty Foods. With branches in Johannesburg, Cape Town and Durban, Liberty Foods is a leading supplier into the local food services industry. “With food services growing at 10% over the past five years, Liberty is an excellent investment for Bounty in a fast-growing and defensive sector,” says Rabe.
Liberty imports the bulk of its products under the owned Liberty Select and Chef brands. Due to its significant distribution capabilities, it has also been awarded a number of long-term exclusive distribution agreements from brands such as Heinz, Wellington and Appletiser. Established in 2003, Liberty distributes as far afield as Kenya, Zimbabwe and Zambia. “With such a broad product portfolio and well-established distribution network, Liberty is the ideal platform for future food brand acquisitions,” adds Rabe.
Together, the two food acquisitions are expected to add R850-million a year to Bounty’s annual revenue, bringing total revenue to just short of R2-billion. The deals form part of the company’s strategy to grow revenue to over R5 billion in the next two years in the run-up to an eventual listing.