Acquisition is on-trend to support rising consumer demand for Mexican flavours.
Olam Food Ingredients (OFI), the new operating group created after the reorganisation within Olam International earlier this year, has expanded its Spices portfolio to meet the rising demand for “bold, authentic” flavours with the acquisition of a supplier of premium green chiles, jalapeños and enchilada sauces.
Olam International, through its subsidiary, Olam Americas, has agreed to acquire the US-based chile pepper business (CPB) of major maker of condiments and sauces, Mizkan America, for US$108.5 million. This marks the first major acquisition of OFI after the reorganisation, and is in line with its strategy to provide customers with on-trend food products and sustainable, natural, value-added ingredients and solutions.
Based in Deming, New Mexico, CPB is known for its New Mexico green chiles as well as other specialty chile peppers. These are sought after by CPB’s manufacturing, retail, private label and foodservice customers.
Greg Estep, CEO for Olam Spices, said: “Formerly known as Border Foods, CPB has been the leading chile pepper business in the US for nearly 50 years. Combining CPB’s specialty and green chile range with our red chile portfolio – which includes paprika, chile powder and chile pepper – means we can deliver a wider range of ingredient solutions for customers looking to satisfy the rising demand for authentic Mexican flavours – already the third most popular cuisine in the country.
“We are further pleased that in operating CPB, Mizkan shares the same focus on sustainable agriculture and quality control, maintaining close farmer relationships and fully integrated supply chains. This also allows Olam Spices to strengthen and expand our chile sourcing network – notably in Hatch Valley, New Mexico. With the CPB senior executive leadership at the helm, supported by a group of employees committed to excellence, we will continue to grow the business even further.”
Olam Spices is a supplier of dried garlic, onion and chile-based ingredients as well as pepper, tropical spices, purées and parsley. With its facility in Las Cruces, New Mexico, it is one of the largest organic chile grower and processor in the US, with full traceability from seed to delivery. It is one of Olam International’s five leading food ingredient businesses, which along with Cocoa, Coffee, Nuts, and Dairy, have come together the OFI banner to co-create applications and solutions for its customers and their consumers.
A. Shekhar, CEO for OFI, added: “This is the first fitting acquisition for OFI, as CPB fulfills OFI’s vision to help its customers meet consumer preferences for health, nutrition, natural and authentic ethnic flavours, as well as their increasing demands for understanding the provenance and environmental impact of their food choices.
“CPB’s chile operations are second-to-none, with a strong heritage, steady financial performance and leading shares for all its products. Further, CPB supplies grocery and retail channels that offer increasing co-manufacturing opportunities in the US and Asia for many our other products. The addition of CPB’s range of premium chiles will also broaden and strengthen OFI’s portfolio in plant-based solutions, which continue to gain popularity among customers. For example, working with OFI’s innovation team we can produce a nut-based cheese that has the jalapeño flavour kick.”
The CPB operations in Deming are less than 60 miles from Olam Spices’ red chile manufacturing facility in Las Cruces, New Mexico. The close proximity will enable a combination of established green and red chile market capabilities, and allow for even stronger manufacturing and product development, coupled with taste and flavour innovation. It also supports deeper grower relationships in the region, particularly with those growing specialty varieties.