How Greenyard Foods grew from a locally known food brand into a global food juggernaut
How do you find sustainable growth opportunities in a flat market? It’s a dilemma Europe’s food brands have been grabbling with for decades, and one that Belgium’s Greenyard Foods (www.greenyardfoods.com) appears to have solved in recent years. Here’s their story:
During the past half-century, Europe’s ever-shifting eating habits have helped extend life expectancy. To be sure, the shift has been brutal for some, killing off the occasional supermarket food product that couldn't adapt to the heightened demand for nutritious food. Today, Greenyard Foods sees a competitive edge in consistency. It delivers the highest quality and highly nutritious frozen vegetables, preserved foods, and fresh fruit and vegetables to consumers. That’s the driving force behind a recent string of mergers it’s undertaken, with the support and expertise of Gimv, to build a global food group specialising in healthy food options with the scale to grow in a challenging market. The plan has its challenges. For one, Greenyard Foods must sell time-strapped consumers on the message to include more fruit and veg in their diet.
Scana Noliko to Greenyard Foods: from local player to global force
A merger strategy bears fruit in a challenging market
To better understand where Greenyard Foods is heading, we must revisit its origins. The brand name is only two years old, but its roots date back to the 1960s when Europe’s preserved foods market began to take off and brands like Pinguin and Noliko in Belgium turned loyal customer bases into early gains. In 2011, those storied brands came together when PinguinLutosa Food acquired Scana Noliko. Scana Noliko, which was majority controlled by Gimv at the time, was a particularly enticing target; Gimv helped guide it to a surge in sales, cash flow and staffing at a pace that outperformed competitors over much of the previous decade. Later that year, Gimv acquired a stake in Greenyard Foods. Then, in 2012, came a pivotal move for the food group, one that would set in motion Greenyard Foods’ impressive local-to-global growth strategy. The Lutosa potato business (once a key part of PinguinLutosa) was sold off to McCain for EUR 225 million. The move shed debt and bolstered Greenyard Foods’ books for future acquisitions, including the deal last July to acquire Univeg and Peatinvest, two agro-based businesses controlled by Belgian entrepreneur Hein Deprez. Again here Gimv played a prominent role, supplying the capital and expertise to help the entrepreneurs’ acquire-and-grow strategy achieve lift-off. For Greenyard Foods, the merger of these specialist businesses created new market opportunities, and strengthened existing ones, building a fruit and vegetables powerhouse with EUR 3.9 billion in sales and distribution across 90 countries.
The merger's impact has been transformative, says CEO Marleen Vaesen. “We are the only ones who can take a stand for fruit and vegetables as a whole, and convey the message that we should be eating fruit and vegetables every day, irrespective of whether these are frozen, preserved or fresh.”
That message is backed by a four-pronged plan to re-define the nutritious food market:
Can a logistics overhaul really get us to eat more fruit and veg?
a) Spur demand through consistent messaging
It’s an unsavoury fact. In our busy lives, we don’t eat enough fruit and vegetables. Health statistics bear this out. According to the World Health Organization, low fruit and vegetable intake is a top-10 risk factor for global mortality. Public health officials are doing their part to keep citizens informed of the benefits of a healthier diet filled with fruit and vegetables. Greenyard Foods believes they will be able to play a significant role in leading this charge too. “We have a solution for every occasion and circumstance,” says Vaesen. “That’s the key rationale behind this merger. We want to communicate a consistent message, deliver a better, more comprehensive assortment of products and thereby make a real and positive impact on the consumption of fruit and vegetables as a whole.”
b) From pumpkins to profits: Reinvent an entire product category
Consumers are accustomed to fresh, frozen and canned fruits and vegetables separated into independent sub-categories, often spread across the aisles of a supermarket. Such categorical choices between fresh, tinned and frozen do not help consumers in their meal planning. Post-merger, Greenyard Foods plans to close this gap through a more seamless merchandising approach in which a consumer can choose between a range of product offerings that are more closely tied to her needs, tastes and budget. For example, in the fresh aisle of a supermarket a consumer may be tempted to make pumpkin soup but be put off by the size of the fresh pumpkin and the work involved in chopping it up, but not realise that on the other side of the supermarket there are frozen pumpkin cubes available, equally healthy, but far more convenient for his or her needs. In other words, no longer will its products compete against each other.
We should be eating fruit and vegetables every day, irrespective of whether these are frozen, preserved or fresh.
c) Rethink the supply chain for just-in-time
Freshness sells. And so Greenyard Foods is rapidly scaling its new logistical platform for ripening, packaging and distributing products to its retailer partners across the world. This is the big advantage of the Univeg merger, a specialist in just-in-time logistics. In this market, JIT is crucial for reducing wastage, improving margins and boosting overall demand. According to Deprez, such logistical prowess is the company’s main growth driver: “Innovation in the logistical chain helped us grow from zero to number one in a market that isn’t growing. And now we’re looking at the next step, to nudge the entire market forward and increase consumption of fruit and vegetables.” With its new logistical heft, the Greenyard Foods product portfolio is greatly expanded. “We have built 31 distribution centres in Europe where an increasing range of products can be ripened, packaged and distributed on a JIT basis to retailers across the continent,” says Deprez. “The investment has been made, the footprint exists. Now we need to drive up demand because we have the technology and capability to produce far more on the existing infrastructure.”
d) Strengthen existing markets and forge new ones
Aside from strengthening its logistics, communications and category management strategy, the merger also means new markets. One is potting soil, courtesy of the merger of Peatinvest, a vertically integrated business with activities in peat fields, processing, packaging and distribution. Peatinvest has strong ties to the horticulture and hobby garden markets. As Deprez explains: “We have close relationships with fruit and vegetable producers. We buy their products but we also want to add value through knowhow, and substrates are key in that regard.” And with the newly merged Univeg, Greenyard Foods now has ties to new markets beyond Europe, including to India, Brazil and South Africa.
Gimv reveals how companies can plot growth even in the most challenging markets
Vision is the key to growth
For Deprez and Vaesen, the new Greenyard Foods is nothing less than a platform for growth. Post-merger, the company is able to reimagine its product portfolio, creating new categories and new business opportunities capable of surmounting the market’s most deep-rooted challenges. The merger also unlocks expertise and market knowhow that once sat siloed in each division, delivering new insights on innovation and market opportunities.
Gimv takes a remarkably long-term perspective in its investments. That is an important benefit because it creates stability in the company and enables you to take on long term projects.
To be sure, the new Greenyard Foods has set itself ambitious goals. The company seeks organic growth in a traditionally flat market where margins are tight. But now that the merger has been fully integrated, management feels it finally has the breadth in product portfolio, plus the logistical depth to deliver the right product at the right time and the right place. To execute this vision, Greenyard Foods has one final advantage: a one-of-a-kind team headed by the founders and Gimv.
Gimv and Greenyard Foods: a decade-long relationship built on growth
Gimv’s Connected Consumer platform invests in companies that understand the needs of tomorrow’s consumers and have the capability and vision to address those needs. We look for companies with a clear growth perspective, typically driven by product innovation but also by innovative channels and business models. And we commit to this growth for the long run.
Our relationship with Greenyard Foods illustrates this approach perfectly. We first invested in the group 11 years ago through a participation in ScanaNoliko, a producer of tinned/canned foods. Ever since, we have played an active role at board level and in various management committees. Hein Deprez: “As an investor myself, I can acknowledge that Gimv takes a remarkably long-term perspective in its investments. That is an important benefit because it creates stability in the company and enables you to take on long term projects.” Marleen Vaesen affirms: “In the 50-year history of Noliko, Gimv has been with us for more than 10 years and supported all the major steps in our growth trajectory. They helped navigate this journey, and also provided extra support and expertise in domains where we did not always have the knowledge or manpower.”
For Gimv, the investment has worked out well. Peter Maenhout, Head Connected Consumer: “It has been a rewarding opportunity to support such entrepreneurial talent in Belgium and to have an opportunity on several occasions to take the company to the next level. Also looking ahead, Greenyard Foods is an exciting platform for growth. The company has a bold vision on what it will take to ignite growth in the market and it has the infrastructure and management capability in place to deliver on that vision.”