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Diving overview:
- TreeHouse Foods is acquiring the private label tea business of Harris Freeman & Co (Harris Tea) for approximately $205 million.
- The acquisition includes Harris Tea’s manufacturing facilities in Moorestown, NJ and Marietta, GA. About 300 Harris employees will join Treehouse.
- TreeHouse’s purchase comes as the private label giant buys and sells food and beverage products to improve margins and generate higher growth.
Dive Insights:
Over the past three years, Treehouse has acquired a condiment brand, a pretzel manufacturer, and a coffee production facility. At the same time, the Illinois-based company sold much of its snack bar business and meal preparation business for about $1 billion.
The acquisition will help TreeHouse expand the scale of its already existing business, while a sale could slow growth or eliminate non-core operations. The tea deal with Harris is a further escalation of its recent M&A strategy.
According to the Tea Association of the USA, tea is the second most widely consumed beverage in the world after water. Last year alone, Americans consumed nearly 86 billion cups, or nearly 4 billion gallons, of tea. The trade group notes that more than half of the U.S. population drinks tea. Demand for the beverage has grown as more people become interested in tea’s versatility, convenience, and healthful properties.
TreeHouse CEO Steve Oakland said the acquisition of Harris Tea “strengthens our competitiveness in the fast-growing tea sector.” He said TreeHouse will add unique blending and sourcing capabilities while increasing depth and scale.
“This acquisition is consistent with our long-term strategy to build capabilities in high-growth, high-margin sectors,” he added.
While TreeHouse is adding new production capacity to its portfolio, it also continues to deal with the fallout from the recall of frozen toaster waffles, Belgian waffles and pancake products that occurred in October due to possible listeria contamination at its facility in Ontario, Canada. I’m struggling. This is the second major recall to affect TreeHouse Foods in the past two years. The company began recalling the broth in September 2023.
