Hero increases babyfoods presence in growing Turkish market
babyfood sector with the acquisition of ülker Gida's infant biscuit
business.
Ulker, the largest consumer foods company in Turkey with a strong position in biscuits, has sold the Bebe brand for an undisclosed sum to a joint venture that it set up with Hero in 2002.
The infant biscuit business, said to generate annual revenues in excess of $25 million, has a more than 50 per cent market share in the Turkish market, with a growing position in the surrounding regional markets.
This deal marks the third acquisition in infant foods by Hero this year.
"We have a clear strategy to increase our share in baby foods," chief financial officer Marco Gadola, told NutraIngredients.com, "and become a significant international infant-feeding player."
Infant foods currently make up around 12 per cent of the company's annual SF1.4 billion turnover but the activities have been targeted for growth, with divestment of 'all our industrial, b2b business' in the last couple of years.
Turkey, along with Portugal and the Middle East, are markets with good potential for this expansion, said Gadola.
Growth in infant foods is estimated at around 15 per cent in Turkey compared to an average 5 per cent in Western European markets, he explained.
"This is being driven by increased distribution, with more point of sales as a result of us teaming up with Ulker. There is also more disposable income for people to buy babyfoods," he said.
"We have already seen this trend in Spain, for example, where people move from making their own baby food to purchasing it instead."
In Spain, Hero's infant food business has seen double-digit growth rates in recent years and is now market leader ahead of Nestle and Numico.Hero also has leading or number two positions within infant feeding in Portugal, Switzerland, Central Asia, Saudi Arabia and the Gulf States and is looking to develop the North African market further.
However Gadola noted that the increasingly international baby food business still faces challenges from the local natural of the industry.
"To build a brand takes generations - mothers want to buy brands that they know and trust. This makes it difficult to globalise the market and local companies still have a strong presence in their home markets."
The Hero-Ulker joint venture has also announced plans to open a baby food factory in Ankara this month, with an initial production capacity of 3,000 tons.
In April Hero announced that it was purchasing the Sunar family of infant feeding brands, among the strongest brands in the Czech and Slovak Republics, from Heinz for an undisclosed amount.
The company also makes jams and muesli bars."It [the infant foods business] actually fits pretty nicely with our other activities, such as cereal bars, which has a strong link to baby cereals, and jams and spreads, which have synergies with baby jars," added Gadola.
