Weekly Roundup: FAO and Canada address Ukraine grain storage deficit, US$30M raised for Japanese food tech deal
05 Aug 2022 --- This week in industry news, the Food and Agriculture Organization of the United Nations (FAO) launched a US$40 million Canada-funded project to address grain storage shortages in Ukraine. PepsiCo and Celsius announced a long-term distribution agreement, and vertical farming start-up Spread raised US$30 million to accelerate the Japanese food tech scene. Meanwhile, Darling Ingredients completed the acquisition of FASA Group.
In brief: Food crop highlights
The FAO initiative will allow storage of an additional 2.4 million metric tons of grain between 2022-2023, along with related technical support and equipment. This complements the support of US$17 million recently provided by the Government of Japan to cover 1 million metric tons of grain storage. This season, with the harvest of winter crops starting in July and spring crops beginning later in the year, Ukraine expects to harvest up to 51.1 million metric tons of cereal. Out of a total storage capacity of 75 million metric tons, 14% of storage facilities are damaged or destroyed, 10% are located in Russian-occupied territories, and around 30% remain filled with 22 million metric tons of last year’s harvest awaiting export – according to the Government of Ukraine.
Aqua Carpatica’s premium sparkling natural mineral water is nitrate- and sodium-free and provides natural electrolytes.In brief: Business moves
PepsiCo and Celsius Holdings, the maker of global fitness energy drink Celsius, have revealed a long-term strategic distribution arrangement. PepsiCo will invest in Celsius to support its growth plan and nominate a director to serve on Celsius’ Board. The long-term US distribution agreement became effective at the start of this month and includes retail and foodservice channels. As part of the transaction, PepsiCo will make a net cash investment of US$550 million to Celsius in exchange for convertible preferred stock.
PepsiCo has also entered into a strategic agreement with premium Romanian spring water Aqua Carpatica under which PepsiCo will own a 20% equity stake in Aqua Carpatica. Under the agreement, PepsiCo will have the right to distribute the spring water in Romania and Poland with opportunities to expand into other markets, including the US.
In brief: Plant-based highlights
Japan-based start-up Spread has secured approximately US$30 million in series A round from multiple business companies and angel investors in the largest-ever single fundraising in the Japanese food-tech scene. Starting from developing new technologies for the world’s largest automated vertical farm, Techno Farm Fukuroi *1, Spread will also invest in marketing its sustainable vegetable brand Vegetus, R&D in the new fields of strawberry and alternative meat, and global business development.
Shanghai-based alternative protein start-up 70/30 Food Tech is set to launch its ready meal products using its in-house biomass fermented protein. This protein, the key component developed by the R&D team of the start-up, serves as a meat replacement that mimics the texture and nutrition profile of shredded chicken. The company will be the first to launch a mycelium protein product onto the Chinese market.
MeaTech 3D became Steakholder Foods Ltd. Beginning in 2019, the company developed the technology and scientific processes to produce whole cuts of meat sustainably using animal cell cultivation and 3D bioprinting.
In brief: Acquisitions
70/30 Food Tech is set to launch its ready meal products using its in-house biomass fermented protein.
Darling Ingredients has completed the acquisition of Brazil’s largest independent rendering company, FASA Group. The company first announced the acquisition in May 2022 for a purchase price of approximately US$542.6 million, plus or minus various closing adjustments and a contingent payment based on future earnings growth. As part of the transaction, Darling Ingredients has acquired 14 plants that process more than 1.3 million metric tons annually, with an additional two plants under construction.
Dairy Farmers of America (DFA) has acquired two extended shelf life processing facilities from SmithFoods. The processing plants, located in Richmond, Ind., and Pacific, Mo., (US) produce a variety of extended shelf life dairy and non-dairy beverages, ice cream and shake mixes for retail and foodservice customers. The facilities will become part of the DFA Dairy Brands division and operate as Richmond Beverage Solutions and Pacific Dairy Solutions.
Del Monte Foods has completed the acquisition of Kitchen Basics, a line of ready-to-use stocks and broths from McCormick & Company. Kitchen Basics will join Del Monte’s brand portfolio as the company expands its national retail presence in the category. The purchase of the brand supports the company’s overall growth strategy, as Del Monte Foods focuses on innovation, renovation and customization of its brand portfolio and expands the geographic reach of its stocks and broths business.
In brief: Appointments & retirements
Defra has announced that John Shropshire will chair the Independent Review Into Labour Shortages in the Food Supply Chain. Shropshire is an industry veteran who stepped down from his role as CEO of major horticulture producer G’s Fresh Group last year. He will be supported by an expert panel that draws in expertise from the supply chain’s farming, fisheries, processing and manufacturing aspects.
In brief: Other highlights
British pork is heading to Chile this month to fulfill the first commercial order since market access was granted earlier this year. The UK’s largest pork processor, Cranswick, is preparing the first shipments, which will leave its plant in Preston, Hull, early next week. It follows a new agreement announced in March, which granted market access to 27 pork processing sites in the UK, enabling the first-ever exports of pork products to this new and potentially lucrative market. The Agriculture and Horticulture Development Board estimates market access could be worth up to £20 million (US$24 million) over the first five years of trade.
By Elizabeth Green
