Coffee distributor Farmer Bros. will acquire new business
Coffee roaster and wholesaler Farmer Bros. announced plans acquire the U.S. direct-store delivery Foodservice coffee business from Sara Lee Corp., according to the company
The $45 million purchase will broaden Farmer Bros. scope to every state in the lower 48, and is expected to nearly double its revenue. The definitive acquisition agreement is expected to close in the first quarter of 2009 and will be financed with cash and debt.
Chief Executive Officer Rocky Laverty said in a statement the acquisition will allow the company to expand its portfolio to meet every taste and price point, while forming a national network for distribution and service.
"This acquisition will allow us to quickly achieve our long-term goals of coast-to-coast market penetration, cost reductions and margin improvements as a result of economies of scale, and improved returns on our invested capital," he said.
Torrance, Calif.-based Farmer Bros. produces and sells coffee, teas and other café-related products directly to the food service industry and private-label retailers.
Speaking on background, a Farmer Bros.
spokesperson discussed the Foodservice coffee business acquisition with WinmoEdge.
He said the company is forming, and will later announce, an integration team led by Farmer Bros. Executive Vice President and Chief Operating Officer Drew Webb. Several members of Sarah Lee’s current management team for the Foodservice coffee business will join the company and become part of the team. A lead marketer for the group has not yet been named.
Through the Foodservice coffee business, Farmer Bros. will gain 10 coffee brands, and expects to add more than 20,000 customers. It will also take over the group’s sales and distribution staff, including 60 branch facilities.
The spokesperson said Farmer Bros. has traditionally focused on institutional food service, specifically restaurants and hospitals. The Foodservice coffee business and its brands have specialized in casinos and hotels. He said the company hopes to expand.
“The national reach will allow us to compete better for national accounts. We’ll have a more robust portfolio to reach more customers,” he said. “It gives us more tools and will strengthen management.”
The spokesperson said it was too early to comment on any particular impact or changes the acquisition will have on marketing strategies and was not able to comment on the company’s interest level concerning outside agency needs.
According to The List database, Farmer Bros. has no creative agency relationships. The company works with the Los Angeles office of New York-based Abernathy MacGregor Group for corporate communications duties.
Farmer Bros. focuses on business-to-business marketing through its direct-store delivery methods and its soon-to-be Foodservice coffee business. Agencies that can offer assistance getting them in touch and winning accounts with these kinds of companies should introduce themselves to build a relationship that could lead to work once Webb’s integration team and plan is in place.
Farmer Brothers Co.
20333 South Normandie Avenue
Torrance, CA 90502
Executive Vice President, Chief Operating Officer
President & Chief Executive Officer