MamaMancini’s Holdings Inc. of East Rutherford signed definitive agreements on Dec. 29 to acquire T&L Creative Salads Inc. and Olive Branch LLC, two affiliated gourmet food manufacturers based in New York, for a total of $14 million. T&L has been a supplier to retail food chains and club stores, delis, bagel stores, caterers and distributors for decades, offering meats, seafood and vegetables. The company operates a facility in Farmingdale, N.Y., and counts about 250 retail outlets and food distributors in the New York metropolitan area as customers.
An announcement of the agreements detailed that T&L and Olive Branch are positioned to generate more than $30 million in sales in calendar 2021, have the potential to drive sales of $35 million in 2022 and significantly increase the buyer’s net income.
MamaMancini’s CEO Carl Wolf said that T&L and Olive Branch make products that are attractive additions to his company’s portfolio, which includes more than 40 items, such as meatballs, meat loaf, chicken parmesan, sausages and pasta bowl kits sold at over 45,000 locations nationwide. The deals mark the first move in the company’s growth-through-acquisition strategy and MamaMancini’s continues to examine promising targets, he added.
“We continue to see attractive multiples in the food space with complementary food product companies generating positive EBITDA with a product that is symbiotic to their existing distribution network,” Wolf explained .
Wolf’s no food industry newbie. He and his wife started low-fat, low-sodium cheese company Alpine Lace in Maplewood in 1983 and expanded its brand presence into 93% of supermarkets nationwide. Low-fat diets and foods were king at the time—the U.S. Department of Agriculture shifted to a pro-skim stance on dairy in the mid-1980s, and low-fat milk sales exceeded whole milk sales for the first time ever in 1988.
Wolf said it was the second most recognized cheese brand behind Kraft. The couple sold the outfit to Land ‘O Lakes in 1997 for $62 million, and Land ‘O Lakes continues the brand today in several national retailers.
With MamaMancini’s, Wolf stays on trend. Beyond growth through acquisition, he sees two vehicles for expansion: newly launched ready-to-eat meals that grocery customers can serve as fresh-made, and a soon to be released grab and go item dubbed Meatballs-in-a-Cup.
The former addresses labor shortages grocery stores are facing in the current market by relieving grocer kitchens of cooking responsibilities. MamaMancini’s staff make the meals—various types of pasta with different meat options—freeze them and ship them out to be reheated in-store.
The latter latches on to the trend toward convenience that experienced steady growth in recent years and sharper growth during the pandemic. Nielsen reported in July 2020 that prepared foods marketed as “ready to eat” had 51% higher sales year-over-year for the 17-week period ending June 27.
It also latches onto the trend toward better-for-you products. In a 2019 survey by market researcher Mintel Group of adults snackers in the United States, 68% report fresh ingredients as the most important snack claim, followed by low/no sugar at 61% and high protein at 60%.
Market researcher FMCG Gurus in 2019 found that 51% of global consumers have switched from traditional snack products like chocolate and confections to high protein, low sugar alternatives.
“There’s a whole segment of the market that’s looking for a protein grab-and-go. For customers going into convenience stores, you have a traditional customer who is not concerned with nutritional content or preservatives, but then you have a whole other segment that’s very nutritionally oriented. That’s why the health bars section is now bigger than the candy section in the convenience stores,” Wolf said.
“The trend is toward higher quality food,” Wolf added. “There’s a continuation for trends toward simple foods, fresher foods … What attracts [our customers] is the quality of our products and the profile. A lot of people read labels, and that’s helpful for us. Our nutritional profile and ingredient profile is very attractive.”
“For customers going into convenience stores, you have a traditional customer who is not concerned with nutritional content or preservatives, but then you have a whole other segment that’s very nutritionally oriented. That’s why the health bars section is now bigger than the candy section in the convenience stores.”
– Carl Wolf, MamaMancini’s CEO