Hearthside Announces Two Strategic Acquisitions; Expands to Europe and into New Bar Categories

bars-proteinHearthside Food Solutions Acquires VSI, Europe’s Largest Sports / Energy Bar Manufacturer; Also Acquires Additional U.S. Bar Production Facility

DOWNERS GROVE, IL — August 24, 2015 — Hearthside Food Solutions (“Hearthside”) today announced two separate, definitive agreements enabling the company to expand rapidly in the fastest-growing bar categories in the Americas and Europe. Under one agreement, Hearthside is acquiring VSI, the largest European producer of nutrition, diet, and functional bars. In a separate agreement, Hearthside is acquiring a nutritional supplement bar production facility in Boise, Idaho from a subsidiary of Post Holdings, Inc. (“Post”). These two transactions will enable the rapid scaling of VSI’s formulations, R&D, product development, and full-scale production in the Americas. Terms were not disclosed. Both transactions are expected to close in September of 2015.

Hearthside, with 19 U.S.-based facilities, is currently North America’s largest contract manufacturer of bars and baked goods. The VSI acquisition adds three European manufacturing facilities for nutrition, diet, and functional bars as well as best-in-class R&D, formulation, and innovation capabilities.

U.S. bar growth predictions from market research firm Mintel show continued category strength driven by convenience, snacking occasions, and meal replacement trends. The strongest growth is in health-related bar categories, including sports, functional, diet, and nutrition.

“This is both a category and geographic expansion, putting Hearthside into the three fastest-growing bar categories as well as in the European market, where VSI is a leader,” said Rich Scalise, Hearthside Founder and Chairman. “The R&D and production expertise of VSI in the fast-growth categories of nutrition, diet, and functional bars enables Hearthside to take a quantum leap forward, providing our customers with the most complete offerings in the industry.”

The acquisition of a recently idled nutritional supplement bar production facility in Boise, Idaho, enables Hearthside to begin production of these new categories in the Americas quickly. This facility, plus the three VSI operations, expands Hearthside’s network to 23 facilities.

“It takes two years from greenfield to operational bar plant,” said Dwayne Hughes, Hearthside SVP of Supply Chain. “We wanted VSI capacity in the North American mix more quickly. This facility is ready to go today. The timing, the location, and the state-of-the-art equipment provides a perfect solution that makes us competitive in more bar categories immediately.”

Both Hearthside and VSI are contract manufacturers for premier food companies and global brands. The companies see no redundancies or conflicts in complementary customers and product offerings.

“This is the right move for VSI at the right time,” said Gerard Janssens, CEO of VSI. “Our people, our leadership team and our customers all benefit from this acquisition. We will be able to do more things for more customers in more places. For example, we can design, formulate, and commercialize a new bar, then produce it for customers in Europe and the Americas. This combined bar development and delivery platform sets new standards in the contract manufacturing industry.”

In 2014, Hearthside was acquired by the Merchant Banking Division of Goldman Sachs and Vestar Capital Partners.

About Hearthside Food Solutions

Hearthside Food Solutions, headquartered in Downers Grove, Illinois, is the largest independent baker in the U.S. and a full-service contract manufacturer of high quality, grain-based food and snack products for some of the world’s leading premier brands. Prior to these acquisitions, Hearthside operated 19 food-manufacturing facilities in eight states. For more information on Hearthside Food Solutions, visit www.hearthsidefoods.com.

Contacts

For Hearthside Food Solutions
Carl Melville, 760-671-1110
carl.melville@melvillegroup.com

 

Hearthside investing $10.7M, adding 91 Grand Rapids jobs

mibizJune 24, 2015 – MiBiz – Downers Grove, IL -based food processor Hearthside Food Solutions LLC intends to invest $10.7 million and add 91 jobs over three years at its Kentwood facility on 32nd Street.

The contract manufacturer and bakery plans to invest in both building renovations, equipment and capacity to meet customer demand, according to a statement from Grand Rapids-based economic development agency The Right Place Inc. Hearthside is the largest contract food manufacturer in North America.

The company was awarded a $450,000 performance-based grant from the Michigan Business Development Program, administered by the Michigan Economic Development Corporation.

“West Michigan continues to be part of Hearthside’s long-term strategy of providing superior independent baking services for the world’s premier consumer brands,” said Matthew Sagendorf, vice president of engineering at Hearthside in the statement.

Hearthside operates 19 facilities in seven states and has four in the Grand Rapids area. In 2014 the company was acquired by the private equity arm of Goldman Sachs Group Inc. and Vestar Capital Partners Inc.

Click here for full MiBiz story

Hearthside investing, expanding Grand Rapids operations

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June 24, 2015 – Grand Rapids MI – Grand Rapids  Business Journal – A maker of baked goods and snacks is planning a $10.7-million expansion in the area that’s expected to create at least 91 jobs.

Hearthside Food Solutions in Downers Grove, Ill., a contract food maker, plans to expand its facility in Kentwood, at 3225 32nd St. SE, according to The Right Place, a regional economic development nonprofit, today.

Expansion project

Hearthside Food Solutions will invest in building renovations and equipment over the next three years. The expansion will address the need for more capacity due to continued customer demand.

West Michigan “continues to be part of Hearthside’s long-term strategy” of providing services for “the world’s premier consumer brands,” said Matthew Sagendorf, VP of engineering, Hearthside Food Solutions. Hearthside has four facilities in metro Grand Rapids and additional operations located throughout the Midwest and East Coast.

Megan Sall, business development manager at The Right Place, said the investment and expansion project was as much a business-retention project as it was an expansion initiative. “West Michigan’s food processing industry is one of the strongest in the Midwest, and we are pleased that Hearthside will continue its growth story in the region,” Sall said.

Site selection

During the process of deciding where the Illinois-based company should expand, The Right Place collaborated with Minneapolis-based Hickey & Associates, which serves as Hearthside’s site selection agency.

John Kerr, associate at Hickey & Associates, said the expansion project was “very competitive,” and there were “a variety of opportunities” for Hearthside.

Kerr said The Right Place provided an “excellent” level of prompt service and support throughout the process, “ensuring the Hearthside team had all the information they needed to make the best decision for their company.”

Incentive

Hearthside was approved for a $450,000 performance-based grant through the Michigan Business Development Program to support its expansion in Kentwood.

Stephen Kepley, mayor of the city of Kentwood, said the city recognizes businesses have many options for expansion and appreciates Hearthside’s decision to keep jobs in the area.

“We are happy to be a partner in its success,” Kepley said.

Hearthside

Hearthside Food Solutions, established in 2009, includes a network of 19 production facilities in seven states, with more than 7,500 full-time employees. In 2014, the company was acquired by Goldman Sachs and Vestar Capital Partners.

For the full story, click here.

Hearthside F4SS Outsourcing Excellence Award Recipient

f4ss-hfs-gmi-awardAwarded for Collaborative R&D New Product Development.

Hearthside Food Solutions and General Mills were presented with a 2015 F4SS Outsourcing Excellence Award. The awards, presented at the recent F4SS CONNECT Conference in San Diego, showcase outstanding collaboration between CPG companies and suppliers. F4SS (Foundation for Strategic Sourcing) membership consists of leading CPG companies, contract manufacturers, and contract packagers.

Both Hearthside and General Mills earned the award based on an actual case study submitted to F4SS by General Mills. It was one of five case studies recognized by F4SS.  The submitted case study (available for download at the F4SS website) focused on R&D collaboration and new product innovation between Hearthside Foods and General Mills.

Bob Scalia, Sr. VP of strategy and Brian McNamara, VP sales & marketing of Hearthside Foods, and Al Rodrigues, director of external supply chain innovation for General Mills were on hand to accept the Outsourcing Excellence awards for their respective companies. The awards were presented by Steve Weinstein, Sr. Director of Global Supply Chain for Johnson & Johnson, and current F4SS Chairman.

Video of Al Rodrigues describing the case study which resulted in the Outsourcing Excellence award.

“Simply being a highly competent contract manufacturer is no longer enough.” said Bob Scalia following the award. “Our customers are demanding innovation. By working with their teams we can deliver 360 degree innovation, finding new ways to add value, lower costs, and help them gain a competitive advantage at retail.”

Hearthside and General Mills are active members of F4SS (Foundation for Strategic Sourcing). F4SS membership is open to all CPG companies, contract manufacturers, and contact packagers. F4SS is where leading CPG companies and contract manufacturers collaborate. More information on F4SS can be found on their website www.f4ss.org 

 

Investing in Front Line Leadership

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The following story, published in Baking Business on January 20, 2015, quotes several CEOs, including Rich Scalise of Hearthside Foods. The story speaks to the value companies place, or should place, on training their front line leadership. For Hearthside, a contact manufacturer, it is an essential.

Commenting on the story, Rich Scalise added, “My quote [in the story] speaks to several specific roles. In fact all our front line leaders contribute to our success. Their input is constantly sought. It enables us to move quickly to correct issues or take advantage of new opportunities for productivity savings or quality improvements. Our front line leaders enable us to deliver on our promise to be faster and more flexible while adding more value for customers.”

To read the full story in Baking Business, click here.