Tattooed Chef to accumulate Mexican meals maker for $35M

Dive Temporary:

  • Plant-based frozen meals maker Tattooed Chef is buying New Mexico Meals Distributors, Inc. and Karsten Tortilla Manufacturing facility, which function collectively as Meals of New Mexico, for $35 million, in keeping with a press launch. The transactions are anticipated to shut in early Could. 
  • Meals of New Mexico at the moment produces ready-to-eat Mexican dishes for retail and foodservice at its Albuquerque, New Mexico, facility together with quesadillas, burritos and sauces. A brand new plant in Karsten, New Mexico, makes tortillas. Mixed, the 2 amenities complete 118,000 sq. toes.
  • Tattooed Chef plans to make use of the acquisitions to develop deeper into the $20 billion Hispanic and Southwest meals phase, in addition to ambient meals and snacks, in keeping with the press launch. The offers are happening as frozen meals gross sales have elevated in the course of the COVID-19 pandemic, whereas plant-based meals proceed to seize customers’ curiosity.

Dive Perception:

The frozen meals aisle is making a comeback throughout COVID-19 as customers spend considerably extra time eating at dwelling and on the lookout for merchandise that they’ll stockpile. Frozen meals gross sales jumped 17.4% between November 2020 and the identical month in 2019, in keeping with information from IRI and the Worldwide Dairy Deli Bakery Affiliation. 

Tattooed Chef, fashioned via a SPAC deal final 12 months, noticed a 363% enhance in income over the previous 12 months, in keeping with the corporate. It is hoping to merge customers’ rekindled curiosity in frozen dishes with plant-based consuming and Mexican delicacies. A number of the Tattooed Chef’s present choices embrace an enchilada bowl with riced cauliflower and Mexican model road corn, in addition to zucchini spirals, acai and smoothie bowls, and frozen cauliflower pizza crusts. Buying an organization that already has experience in frozen meals manufacturing and Mexican delicacies affords the Tattooed Chef a faster growth into the phase.

“We see a possibility to introduce nostalgic innovation into the plant-based meals house and we imagine we will leverage Meals of New Mexico’s manufacturing capabilities to take action,” stated Sarah Galletti, chief artistic officer and the “Tattooed Chef” behind the model, in a press release. “We’re assured in creating new merchandise, pushing previous our present product line and into new areas and we’re comfy producing meals in any class.” 

Frozen meals gross sales are anticipated to stay elevated even after pandemic subsides. In line with a survey from American Frozen Meals Institute, many customers view ready frozen meals as a cost-effective, handy possibility. And as customers develop uninterested in cooking three meals a day at dwelling, ready-to-eat choices develop into much more enticing. A February survey commissioned by Nestlé discovered as soon as customers return to the workplace, 35% are prone to deliver a frozen meal to work for lunch, together with 49% of millennials.

Together with frozen meals gross sales, plant-based meals are experiencing a surge in recognition, with 57% of U.S. households buying plant-based merchandise throughout 2020, in keeping with SPINS information launched by the Good Meals Institute and the Plant Primarily based Meals Affiliation, up from 53% in 2019. COVID-19 has solely spurred curiosity in plant-based meals as customers buy extra better-for-you gadgets and discover new manufacturers on retailer cabinets. 

As Tattooed Chef expands it portfolio, it should face competitors from a lot of different meals producers eyeing the frozen plant-based and Hispanic meals segments. These embrace privately owned Amy’s Kitchen, which affords frozen vegetarian and vegan burritos, enchiladas and bowls. Conagra’s lineup consists of Evol Meals’ plant-based burritos and burrito bowls, Gardein Southwest-inspired bowls and skillet meals, and Wholesome Alternative vegan and vegetarian Energy Bowls. Candy Earth has debuted greater than 50 vegetarian and plant-based merchandise because it was acquired by Nestlé in 2017, together with bowls and burritos. Different manufacturers with plant-based frozen choices embrace MorningStar Farms and Kellogg’s Kashi.

 

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